NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2015
96
THE STRAITS TRADING COMPANY LIMITED
17.
GOODWILL/OTHER INTANGIBLE ASSETS
(a)
Goodwill arising on consolidation
Group
2015
2014
$’000
$’000
At cost
At 1 January
20,247
20,603
Exchange adjustment
(2,643)
(356)
At 31 December
17,604
20,247
The carrying amount of goodwill is allocated to Resources segment.
(i)
The recoverable amount of the resource subsidiary in Malaysia is determined based on value in use using
5-year cash flow projections based on financial forecasts. Management has considered and determined the
factors applied in these financial budgets, which included tin prices, exchange rates and fuel costs. The key
assumptions made reflect past experience. The pre-tax discount rate applied to the cash flow projections
at 9.8% (2014: 8.2%) per annum was based on the estimated weighted average cost of capital. The pre-tax
discount rate was adjusted upwards to reflect the current market condition. The terminal growth rate applied
at 2.3% per annum was based on the Malaysia Consumer Price Index. There is no impairment in the carrying
amount of goodwill arising from this review.
(ii)
Sensitivity to changes in assumptions
For the financial year under review, Management has identified that a reasonably possible change in two
key assumptions could cause the carrying amount to exceed the recoverable amount. The discount rate
and terminal growth rate would need to change individually by 0.2% and 0.4% respectively for the estimated
recoverable amount to be equal to the carrying amount. Please refer to Note 42a(i) for more details.
(b)
Other intangible assets
Group
2015
2014
$’000
$’000
(i)
Mining rights
2,367
3,058
Corporate club memberships
215
257
2,582
3,315
(ii)
Deferred mine exploration and evaluation expenditure
1,935
1,500
Mine properties
2,138
2,835
4,073
4,335
6,655
7,650
