NOTES TO THE FINANCIAL STATEMENTS l NOTE 9


9.

Goodwill

 
  GROUP
June 2014
R000
  GROUP
June 2013
R000
  COMPANY
June 2014
R000
  COMPANY
June 2013
R000
 
Goodwill arising on acquisition                
Word4Word Marketing (Proprietary) Limited 12 059   12 059          
Impairment — current year (7 779)              
Balance 4 280   12 059          

The group tests goodwill annually for impairments.

The valuation of Word4Word Marketing (Proprietary) Limited was determined using the discounted cash flow method over five years and was based on the following key inputs and assumptions:

Budgets and forecasts prepared by management of Word4Word
Income and expenses were increased by an average rate of 5% per annum (2013: 7%)
Future cash flows were discounted at 18% (2013: 18%) which is a comparable rate for companies of this nature.

The determination of the recoverable amount of goodwill was based on its value in use. Refer to note 5.


NOTES TO THE FINANCIAL STATEMENTS l NOTE 9