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15. INTANGIBLE ASSETS (continued)
Sun International name
for the year ended 30 June
NOTES TO THE GROUP FINANCIAL STATEMENTS continued
The Sun International name is classified as an indefinite life intangible asset as the group believes that it will benefit from the name for an
indefinite period. The name was tested for impairment by discounting five years of projected cash flows on relevant operations and
management contracts. Discount rates were based on the risk free rate of the appropriate country, a standard risk premium and a country risk
premium and ranged from 7% to 13%. In determining the growth rates applied in the impairment calculations, consideration was given to
the location of the business, including economic and political facts and circumstances. Based on these calculations, there is no indication of
impairment.
Goodwill
The goodwill relates to the acquisition of SFIR on 20 August 2008. Goodwill comprises intellectual property and the casino licence. Goodwill
was tested for impairment by performing a ‘value in use’ valuation and applying a discount rate of 9.73% (2009: 12.47%) to the directors’
estimated future operating cash flows. Local territory tax rates were applied and a terminal growth rate based on local inflation plus a margin
premium was used.
16. AVAILABLE-FOR-SALE INVESTMENT
Cape Town International Convention Centre Company (Proprietary) Limited (CTICC) 48 48
Movement on available-for-sale investment:
Balance at beginning of year 48 44
Fair value adjustment – 4
2010
Rm
2009
Rm
48 48
Directors’ valuation 48 48
The 24.8% (2009: 24.8%) investment in the unlisted CTICC was part of the group’s bid commitments
in the Western Cape. The investment was stated at fair value based on the latest available statutory
financial statements, prepared on a going concern basis and in accordance with IFRS, of the CTICC,
being 30 June 2009. The group has no significant influence over the company, therefore the
investment was designated as available-for-sale.
Effective 1 July 2009, the group adopted amendments to IFRS 7 for financial instruments that are
measured in the statement of financial position at fair value. This requires disclosure of the fair value
measurements by the following hierarchy:
– Quoted prices (unadjusted) in active markets for identical assets and liabilities (level 1)
– Inputs other than quoted prices included with level 1 that are observable for the asset or liability,
either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2)
– Inputs for the asset or liability that are not based on observable market data (that is, unobservable
inputs) (level 3)
The available-for-sale investment is classified as level 3.
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