NOTES TO THE ANNUAL FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2007

   
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5.  GOODWILL AND TRADE MARKS 
               
  2007  2006 
    Accumulated      Accumulated   
  Cost or  impairment/  net  Cost or  impairment/  net 
  valuation  amortisation  value  valuation  amortisation  value 
  R million  R million  R million  R million  R million  R million 
Goodwill  342  –  342  316  –  316 
Trade marks  146  75  71  99  63  36 
  488  75  413  415  63  352 
             
          2007  2006 
Amortisation rates are as follows:          %  % 
Trade marks          5 – 100  5 – 6 
             
Reconciliation of carrying    Trade      Trade   
value at the beginning and  Goodwill  marks  2007  Goodwill  marks  2006 
end of the year  R million  R million  R million  R million  R million  R million 
Balances at the beginning of the year  316  36  352  379  7  386 
Additions  19  37  56  –  41  41 
Amortisation  –  (14) (14) –  (8) (8)
Businesses acquired  7  2  9  9  –  9 
Medi-Clinic*  –  –  –  (44) (4) (48)
Other  –  10  10  (28) –  (28)
Balances at the end of the year  342  71  413  316  36  352 
* Since 1 January 2006, Medi-Clinic has been accounted for as an associated company, while it was consolidated previously. 
               
  Goodwill is tested annually for any possible impairment and for this reason allocated to the respective cash-generating units as indicated below.
               
        Tsb Sugar     
      Holdings  Wispeco 
    Rainbow  (Pty) Holdings 
    Chicken  Limited  Limited   
    Limited and  and its  and its  2007 
    its subsidiaries  subsidiaries  subsidiaries  Total 
Goodwill allocated (R million)   291  35  16  342 
Basis of valuation of cash-generating units    Fair  Directors’  Directors’   
    value/  valuation  valuation   
    value       
    in use       
           
R287 million of the goodwill relating to Rainbow Chicken and its subsidiaries relates to the acquisition of Vector Logistics (Pty) Limited in 2005. In determining the value in use of the cash-generating unit to which this goodwill was allocated, the following assumptions we reused: 
           
Discount rate    12.81%       
Growth rate    5.0%       
Period    5 years       
Sensitivity analysis of assumptions used in the goodwill impairment test: 
           
Assumption  Movement  Impairment       
Discount rate  +5%  Nil       
Growth rate  –5%  Nil       
           
During the year under review no impairment of goodwill occurred.