Notes to the Group financial statements

for the year ended 30 June

  R million   2014   2013  
12.   INTANGIBLE ASSETS      
  Net carrying value      
  Computer software   280   67  
  Sun International brand   72   72  
  Bid costs   113   130  
  Management contracts   4   4  
  Goodwill   132   120  
  Lease premiums   14   15  
  Restraint of trade   1   2  
  Capital work in progress   105   84  
    721   494  
    Cost  
  2014  
R million  
Opening   Additions   Acquisition  
of  
subsidiary  
Disposals   Reclassi-  
fication  
Exchange  
rate  
adjustments  
Closing  
  Asset type                
  Computer software   182   178   18   (33)  64   –   409  
  Sun International brand   72   –   –   –   –   –   72  
  Bid costs   582   6   –   –   –   –   588  
  Management contracts   5   –   –   –   –   –   5  
  Goodwill   228   –   14   –   –   (2)  240  
  Lease premiums   37   –   –   –   –   –   37  
  Restraint of trade   10   5   –   –   –   –   15  
  Capital work in progress   84   21   –   –   –   –   105  
    1 200   210   32   (33)  64   (2)  1 471  
                 
      Accumulated amortisation and impairments  
  R million     Opening   Amortisation   Disposals   Reclassi-  
fication  
Exchange  
rate  
adjustments  
Closing  
  Asset type                
  Computer software     (115)  (46)  23   9   –   (129) 
  Bid costs     (452)  (23)  –   –   –   (475) 
  Management contracts     (1)  –   –   –   –   (1) 
  Goodwill     (108)  –   –   –   –   (108) 
  Lease premiums     (22)  (1)  –   –   –   (23) 
  Restraint of trade     (8)  (6)  –   –   –   (14) 
      (706)  (76)  23   9   –   (750) 
                 
                 
      Cost  
  2013  
R million  
  Opening   Additions   Disposals   Reclassi-  
fication  
Exchange  
rate  
adjustments  
Closing  
  Asset type                
  Computer software     159   14   (12)  19   2   182  
  Sun International brand     72   –   –   –   –   72  
  Bid costs     579   –   –   –   3   582  
  Management contract     5   –   –   –   –   5  
  Goodwill     196   –   –   –   32   228  
  Lease premiums     37   –   –   –   –   37  
  Restraint of trade     10   –   –   –   –   10  
  Capital work in progress     66   18   –   –   –   84  
      1 124   32   (12)  19   37   1 200  
                 
      Accumulated amortisation and impairments  
  R million     Opening   Amortisation   Disposals   Reclassi-  
fication  
Exchange  
rate  
adjustments  
Closing  
  Asset type                
  Computer software     (89)  (27)  11   (9)  (1)  (115) 
  Bid costs     (423)  (28)  –   –   (1)  (452) 
  Management contract     (1)  –   –   –   –   (1) 
  Goodwill     (108)  –   –   –   –   (108) 
  Lease premiums     (21)  (1)  –   –   –   (22) 
  Restraint of trade     (3)  (5)  –   –   –   (8) 
      (645)  (61)  11   (9)  (2)  (706) 
 
Sun International brand
The Sun International brand is classified as an indefinite life intangible asset as the Group believes that it will benefit from the name for an indefinite period. The brand 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 opening balance relates to the acquisition of San Francisco Investment Resorts SA (SFIR) on 20 August 2008. Goodwill comprises intellectual property and the casino licence. The R14 million addition to goodwill relates to the acquisition of Powerbet Gaming Proprietary Limited (Powerbet).  

Goodwill was tested for impairment by performing a 'value-in-use' valuation by applying a discount rate that ranges from 8% to 12%. The recoverable amount of all cash generating units has been determined based on value-in-use calculations. These calculations use pre-tax cash flow projections based on financial budgets approved by management covering a five year period. Cash flows beyond the five year period are extrapolated using the estimated growth rates stated above. The recoverable local territory tax rates were applied and a terminal growth rate based on local inflation plus a premium. The difference between the 'value-in-use' valuation and the net asset value of the cash generating unit (including goodwill) is R106 million for SFIR and R17 million for Powerbet.