8. Intangible assets (cont’d)
Patented technology relates to patented dredger technology that was acquired in a
business combination.
Customer relationships and order backlogs acquired in a business combination are carried
at fair value at the date of acquisition and amortised on a straight-line basis over the
period of expected benefits.
Brand relates to the “Vosta” brand name acquired in a business combination.
Useful lives of other intangible assets
These intangible assets are amortised on a straight-line basis over the estimated useful
lives of the assets as disclosed in Note 2.11(b).
Amortisation expense
The amortisation of intangible asset is included in the “Administrative expenses” line item
in profit or loss.
Impairment testing of goodwill and other intangible assets
Goodwill acquired through business combinations and other intangible assets have been
allocated to one cash generating unit (“CGU”) within the Engineering segment.
The recoverable amounts of the CGU associated with goodwill and other intangible assets
have been determined based on value in use calculations using cash flow projections
from financial budgets approved by management covering a five-year period. The pre-
tax discount rate applied to the cash flow projections and the forecasted growth rate to
extrapolate cash flow projections beyond the five-year period are 10.4% and 1.5% per
annum respectively.
Gross margins used in the value in use calculations were based on budgeted gross margin
derived from past performance and management’s expectations of market developments.
The pre-tax discount rate reflects the current market assessment of the risks specific to
the CGU. The forecasted growth rate did not exceed the long-term average growth rate for
the engineering business in which the CGU operates.
9. Inventories
Group
2015 2014
$’000 $’000
Statement of financial position:
Raw materials and consumables
15,677 12,470
Work-in-progress
197,670 56,704
Finished goods
3,529
3,481
Total inventories at cost
216,876 72,655
NOTES TO THE FINANCIAL
STATEMENTS
For the financial year ended 30 June 2015
ASL Marine Holdings Ltd. /Annual Report 2015
122
