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Tiger Brands Limited integrated annual report
2015 147
13
Impairment testing of non-financial assets
continued
13.4 Specific impairments in the current year
GROUP
2015
2014
Nigeria – TBCG property, plant and equipment (refer note 11.6)
(1 371,1)
(105,2)
Nigeria – Deli Foods goodwill and intangible assets (refer note 12.1 and 12.3)
(250,4)
(48,0)
HPCB – Indefinite life intangible asset (refer note 12.3)
(29,6)
(15,7)
Grains – Property, plant and equipment (refer note 11.6)
(22,4)
–
Nigeria – Deli Foods property, plant and equipment (refer note 11.6)
(11,8)
–
International operations – Eastern Africa property, plant and equipment (refer note 11.6)
(5,6)
–
Nigeria – TBCG goodwill and related intangible assets (refer note 12.1 and 12.3)
–
(848,7)
Consumer Brands – property, plant and equipment (refer note 11.6)
–
(40,1)
HPCB – write-off of non-core domestic trademarks (refer note 12.3)
–
(4,0)
Total
(1 690,9)
(1 061,7)
Impairments were recognised in the current year as a result of the annual impairment assessments performed on
goodwill, other intangible assets, as well as property, plant and equipment. The impairments noted in TBCG arose
mainly as a result of macro-economic factors. In addition, the value of these impairments was increased at a Tiger
Brands level as a result of the decision taken to discontinue funding to TBCG as noted in note 39. Given these factors
and since the group is unlikely to derive any benefit from TBCG’s business through continued use, the recoverable
amount of the respective CGUs to the group has been determined as the fair value less cost of disposal. As a result, an
impairment of R1,4 billion has been recognised against the affected CGU’s property, plant and equipment and the
remaining value of the CGU has been assessed as minimal. In determining this fair value, a capital asset pricing model
was used to perform the valuation taking into consideration 10-year forecasts and the additional capital requirements of
the business. In addition, the inputs into the model were mainly level 3 in terms of the fair value hierarchy and based on
a WACC rate of 19,7% (2014:15,5%). The impairments recognised in the prior year within the TBCG business, arose
due to overcapacity within that business. Furthermore, the carrying value of the company’s investment in TBCG has also
been evaluated and an impairment of R678,8 million recognised at a company level.
13.5 Changes in key assumptions
The determined value in use of each CGUs is most sensitive to the discount rate. No reasonably probable change in
any of the above key valuation assumptions would cause the carrying amount of CGUs to materially exceed their
recoverable amounts.
COMPANY
GROUP
2015
2014
(R’million)
2015
2014
14
Interest in subsidiary companies
(Annexure A)
2 931,5
3 604,4
Shares at cost less amounts written off
2 606,8
2 561,4
15
Amounts owed by subsidiaries
(Annexure A)
Refer to the related parties note 38 for additional
information
16
Investments in associated companies
(Annexure B)
967,6
442,1
Listed, at cost
1 472,1
946,7
421,1
421,1
Unlisted, at cost less amounts written off
1 005,8
1 005,8
Share of accumulated profits and reserves since
acquisition
1 672,8
1 114,4
1 388,7
863,2
4 150,7
3 066,9
6 570,6
4 606,3
Fair value of listed investments
6 570,6
4 606,3