Annual - Aramex

Notes (Continued)
14- Goodwill
2008 2007
AED’000 AED’000
Opening balance 803,399 803,731
Acquisitions through business combination
- On acquisition of GDA Singapore business (refer note 5) - 1,533
Acquisition of minority interest
- On additional acquisition in Aramex Lanka (refer note 5) - 5,625
- On additional acquisition in Two Way Holland (refer note 5) 2,044 -
Adjustment on reversal of contingent consideration
of Two Way (refer below) - (7,530)
Adjustment to Freight Professionals - 11
Adjustment to Docman - 29
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Closing balance 805,443 803,399
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Annual
Report 2008
The cost of acquisition of Two Way Freight and Logistics Group (“Two Way”) in 2006 included an estimated contingent consideration of AED
10.35 million, the payment of which was dependent on the achievement of agreed future earnings of the subsidiary. As at 31 December
2007, management did not consider the achievement of these agreed earnings probable and accordingly the cost of acquisition was reduced
by reversing balance of the contingent consideration. Refer note 36.
Annual impairment testing for goodwill has been carried out by management at 31 December 2008. The impairment test is based on the
“value in use” calculation. These calculations have used cash flow projections based on actual operating results and future expected
performance. Cash flow projections beyond five years have been extrapolated using a 4% growth rate. This growth rate is considered
appropriate considering the nature of the industry and the general growth in economic activity being witnessed in the location/region
where these entities operate. A discount rate of 11% has been used in discounting the cash flows projected. Also refer note 36.
15- Other intangible assets
Other intangible assets represents list of customers bound by contracts and web site costs. The Group is amortizing these intangible
assets over a period between three to ten years. The amortization is recognized in the general and administration expenses in the income
statement.
The movement during the year is as under:
2008 2007
AED’000 AED’000
Opening balance 3,493 3,613
Payment for website acquired - 742
Amortization during the year (717) (862)
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Closing balance 2,776 3,493
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