96
96
SINGAPORE SHIPPING CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended 31 March 2016
10. GOODWILL
The Group
2016
US$’000
2015
US$’000
Balance at beginning of the year
687
757
Effects of movements in exchange rates
15
(70)
Balance at end of the year
702
687
Impairment assessment on goodwill
For the purpose of impairment assessment, goodwill is allocated to the individual entity acquired during
the financial year. The aggregate carrying amounts of goodwill allocated to each CGU are as follows.
The Group
2016
US$’000
2015
US$’000
Agency business
356
348
Logistic business
346
339
702
687
The recoverable amounts are determined based on the value in use calculation. Value in use was
determined by discounting the future cash flows generated from the business and was based on the
following key assumptions:
(i) cash flows were projected based on the five-year business plan, covering the period from the
financial years ending 31 March 2017 to 31 March 2021;
(ii) the anticipated annual revenue growth included in the cash flow projections was 1.0% with no
significant changes to the customers base; and
(iii) pre-tax discount rate of 4.5% (2015: 5.3%) was applied in determining the recoverable amount of
the business. The discount rate was estimated based on past experience and computed based
on cost of debt assuming debt leveraging of 56% (2015: 30%) of a market interest rate of 3.0%
(2015: 3.2%).
At the reporting date, based on the above key assumptions, management believes that the recoverable
amounts exceed their respective carrying amounts.
