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352 NEDBANK GROUP Limited INTEGRATED REPORT 201036 INTANGIBLE ASSETS ... continued36.1 Analysis of goodwillRm CostAccumulatedimpairmentlosses2010 2009CarryingamountCostAccumulatedimpairmentlossesCarryingamountFairbairn Private Bank (Jersey) Limited/Fairbairn Trust Company Limited (Guernsey) 372 (138) 234 408 (138) 270Peoples Mortgage Limited 198 (198) – 198 (198) –Imperial Bank Limited 285 (25) 260 285 (25) 260Nedbank Limited 3 938 (1 114) 2 824 3 938 (1 114) 2 824Old Mutual Bank 206 206 206 206BoE (Pty) Limited 725 725 725 725Nedgroup Life Assurance Company Limited 401 401 401 401Nedbank Namibia Limited 134 (2) 132 134 (2) 132Capital One 82 82 82 82American Express 81 81 81 816 422 (1 477) 4 945 6 458 (1 477) 4 981Goodwill is allocated to individual CGUs based on business activity. Impairment testing is done on a regular basis by comparing the netcarrying value of the CGUs to the estimated value in use. The value in use is determined by discounting estimated future cashflows of eachCGU. The discounted-cashflow calculations have been performed using Nedbank’s cost of equity, which is calculated using the Capital AssetPricing Model. No impairments resulting from impairment testing have been effected for the reporting periods presented. Managementregards the useful lives of all CGUs to be indefinite.The value in use of the various CGUs were based on the following assumptions:2010 2009Risk-free rate range (%) 3,92 – 7,22 4,34 – 8,45Beta range 0,50 – 1,76 0,53 – 1,51Equity risk premium (%) 5,00 6,00Terminal growth rate range (%) 0,00 – 4,00 0.00 – 5,00Cashflow projection (years) 3 3Discount rate range (%)* 9,23 – 12,72 9,81 – 13,41* Management would not anticipate an impairment of goodwill if the discount rates applied increased by 20%.Geographical split is based on the area in which the CGU operates:– Africa 4 711 4 711– Europe 234 2704 945 4 981The value in use is estimated as follows:– Africa 165 643 142 840– Europe 618 737166 261 143 577Net estimated recoverable amounts:– Africa 160 932 138 129– Europe 384 467161 316 138 596See note 3 for key assumptions used when assessing goodwill impairment.2010Rm2009Rm
353Reports andcertificationsConsolidatedannual financialstatementsShareholdermeeting mattersDefinitions andabbreviationsInstrumentcodesContactdetailsnotes to the financial statements for the year ended 31 December 201037 ACQUISITIONS37.1 Acquisition of remaining stake in Imperial Bank LimitedOn 5 February 2010 (the effective date of the transaction) the group obtained approval from the South African Reserve Bank (SARB) for theacquisition of the remaining 49,9% shareholding in Imperial Bank Limited from non-controlling shareholders.The merging entities are Nedbank Limited and Imperial Bank Limited. Imperial Bank’s businesses have been combined with the followingsegments:– The Motor Finance Corporation, Supplier Asset Finance and Professional Finance have been included in Nedbank Retail.– Property Finance has been included in Nedbank Corporate.The purchase price was R1 853 million [R1 775 million plus a Johannesburg Interbank Agreed Rate (JIBAR) factor applied up to5 February 2010], which excludes total transaction costs of R6 million that was recognised in the statement of comprehensive income.These transaction costs exclude costs associated with the integration of the above business units into the group and tax on the transferof securities.The SARB granted a section 54 approval in terms of the Banks Act to Nedbank Limited for the transfer of the banking assets from ImperialBank Limited, a fully consolidated subsidiary, to Nedbank Limited effective 1 October 2010.38 SHARE CAPITAL38.1 Ordinary share capitalAuthorised600 000 000 (2009: 600 000 000) ordinary shares of R1 each 600 600Issued514 891 827 (2009: 498 671 016) fully paid ordinary shares of R1 each 515 499Treasury shares arising from share repurchases by subsidiaries of 66 327 716 (2009: 62 937 839)fully paid ordinary shares of R1 each (66) (63)449 436Subject to the restrictions imposed by the Companies Act, 61 of 1973, as amended, the unissuedshares are under the control of the directors until the forthcoming annual general meeting.The treasury shares held are used mainly for the purpose of fulfilling the options and share awardsoutstanding in terms of the share schemes (for both employees and third parties).38.2 Preference share capital and premiumNedbank Limited preference share capital and premiumAuthorised1 000 000 000 (2009: 1 000 000 000) non-redeemable non-cumulative preference shares ofR0,001 each 1 1Issued358 277 491 (2009: 349 082 721) non-redeemable non-cumulative preference shares ofR0,001 each * *Preference share premium 3 560 3 4833 560 3 483Imperial Bank Limited preference share capital and premiumAuthorised8 000 000 (2009: 8 000 000) non-redeemable non-cumulative non-participating preferenceshares of R0,0005 each * *Issued3 000 000 (2009: 3 000 000) non-redeemable non-cumulative non-participating preferenceshares of R 0,0005 each * *Preference share premium 300 300Shares held by group entities (300) (297)– 3Total preference share capital and premium 3 560 3 486* Represents amounts less than R1 million.2010Rm2009Rm
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