Annual Report 2012 - ecoWise Holdings Limited

ecoWise Holdings Limitedannual report 201210131 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS15. INTANGIBLE ASSETS (CONTINUED)15A. Impairment Testing for Cash-Generating Units (“CGUs”) Containing GoodwillFor the purpose of impairment testing, goodwill is allocated to the Group’s CGUs identified through operatingsubsidiaries as follows:2012 2011$’000 $’000Name of subsidiarySunrich Resources Sdn. Bhd. (Resource Recovery segment) 277 282The recoverable amount of goodwill allocated to the CGU, Sunrich Resources Sdn. Bhd., was based on itsvalue in use and was determined by discounting the future cash flows to be generated from the continuinguse of the CGU. These calculations use cash flow projections based on financial budgets.Key assumptions used in value in use calculation2012 2011Growth rate 5% to 15% 5% to 16%Discount rate 12% 12%The growth rate used is based on management’s expectations on market performance. The discount rateused is pre-tax and reflects specific risks relating to the specific industry in which the entity operates inand cash flows beyond the periods covered by the financial budgets are projected on the assumptions ofconstant revenue growth and gross margins.