AMPER, SA and Subsidiaries Consolidated Financial Statements for ...

The Group carries out tests on impairment of goodwill at least annually, or when there is evidence of
impairment.
A change has been made to the definition of the lines of business in 2011, creating a change in the
composition of the cash-generating units. During the 2010 financial year, the cash flows were
generated independently within the Telecommunications business lines on one hand and the Security
business lines on the other due to the change in the approach policy to market, from the product
approach to the client approach, the separate entry of cash flows cannot be distinguished within these
activities. Due to this fact, both lines of business, which were previously known as "Security" and
"Telecom Spain," have been integrated into a new unit and shall hereafter be known as
"Communication and Security Spain." A joint managing director has been appointed. The flows
generated in the Telecom Spain and Security Cash Generating Units have been unified and cannot
generate flows independently. They also use the same resources and therefore it is not possible to
distinguish one from another.
Since 1 January 2011, the management of the Company has been analysing information on the basis
of four business units: “Communication and Security Spain”, “Communication and Security Brazil”
(previously called “Telecom Brazil”), “Communication and Security Latam” and “Defense”, together with
the residual unit "Corporate”.
In 2010, this information was analysed in four business units: "Security”, “Telecom Spain”, “Telecom
Brazil”, and “Defense” plus the residual unit "Corporate”.
This information, analysed by the Group's Management and the Board of Directors, is reported to the
market quarterly or at any other time they consider necessary: presentation to analysts of the evolution
of the Company, new business plan 2012-2016, etc.
During the course of the 2011 financial year, it is noteworthy to indicate that the unification of the
general management enables the optimisation of the management and the efficiency in processes and
the costs of the resulting unit hereafter known as "Communication and Security Spain."
While this unit is similar in terms of operation, sector and clients with those of the units "Communication
and Safety Brazil" and "Communication and Security Latam," all are units which operate in geographic
segments that are totally different from one another. They are Spain, Brazil and the rest of Latin
America, along with the South Pacific respectively, and therefore the Directors of the Company
consider that these are three Cash Generating Units which are totally different from one another.
The corporate assets managed by the Group are taken into consideration when carrying out an
impairment test in the cash-generating units.
Whenever the book value of an asset exceeds its recoverable value an impairment loss is recorded.
This involves reducing the book value of the asset until it reaches the recoverable value, and it is
entered in the statement of comprehensive income under "Result through impairment/reversion of
impairment of assets (Net)".
The recoverable values of the cash-generating units “Communication and Security Spain”,
“Communication and Security Brazil” and “Communication and Security Latam”, are determined on
value in use, calculated using future cash flows.
An impairment analysis is made on the basis of estimates and projections available to the Group's
Administrators and expected cash flows of cash-generating units (or groups of them) to which the
goodwill is assigned. Below we outline the steps the Company takes to determine the value in use of
each cash-generating unit:
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