Annual Report 2006 - Venture Corporation Limited

notes to financial statements
December 31, 2006
16 GOODWILL (Cont’d)
The group prepares cash flow forecasts derived from the most recent financial budgets approved by management for
2007 and extrapolates cash flows for the following four years based on estimated growth rates for each CGU. The
growth rate used to extrapolate the cash flows of the respective CGUs beyond the five year forecast is between 2% and
3%, which does not exceed the long term growth rates for the relevant markets.
(a)
(b)
The rate used to discount the cash flows from GES International Ltd and its subsidiaries is 9.3% (2005: NA).
Revenue is expected to achieve an average annual growth rate of 9.3% over the next 5 years.
The rate used to discount the cash flows from Univac Precision Engineering Pte Ltd and its subsidiaries is
12.1% (2005: 14.6%). Revenue is expected to achieve an average annual growth rate of 35.8% for medical &
packaging products, 10% for automotive & industrial products, 5.3% for computers & peripherals and 28% for
digital & consumables over the next 5 years.
(c) The rate used to discount the cash flows from Venture Electronics Solutions Pte Ltd is 12.7% (2005: 15.3%).
Revenue is expected to achieve an average annual growth rate of 3% over the next 5 years.
(d)
The rate used to discount the cash flows from Scinetic Engineering Pte Ltd is 12.1% (2005: 15.3%). Revenue is
expected to achieve an average annual growth rate of 4.5% over the next 5 years.
Based on the cashflow projections, no impairment loss has been recognised.
17 BANK OVERDRAFT AND LOANS
The Company
The Group
2006 2005 2006 2005
$’000 $’000 $’000 $’000
Current liabilities
Bank overdraft (unsecured) - - - 31
Bank loans 600,000 - 631,196 5,813
600,000 - 631,196 5,844
Non-current liabilities
Bank loans - - - 236
The short term bank loans of the company and the group bear floating interest rates ranging from 3.63% to 3.83%
(2005: Nil) per annum and 3.63% to 8.25% (2005: 1.63% to 7.15%) per annum respectively. The effective interest
rates for the company is 3.73% (2005: Nil) and the group is 3.77% (2005: 4.10%).
The bank loans in 2006 are unsecured. The long term bank loan of a subsidiary in 2005 bore a floating interest rate of
2.75% per annum. This loan, together with a portion of the short term bank loan was repaid during 2006.
The short term bank loan in 2005 of certain subsidiaries was covered by proportionate guarantees provided by the
shareholders of the subsidiaries.
72 venture corporation limited