4 - Refresco.de

Impairment testing for cash-generating units containing goodwill
For the purpose of impairment testing, goodwill is allocated to the business units of the Group, being the lowest
level within the Group at which goodwill is monitored for internal management purposes.
The aggregate carrying amounts of goodwill allocated to each unit are as follows:
EUR’000
2009 2008
Refresco Benelux 93,716 92,293
Refresco France 65,910 65,910
Refresco Germany 39,859 39,859
Refresco Iberia 35,716 35,716
Refresco Poland 12,796 13,553
Refresco UK 12,022 11,190
Refresco Scandinavia 11,314 11,314
271,333 269,835
The recoverable amounts of the cash-generating units are based on value-in-use calculations.
Value-in-use was determined by discounting the future pre-tax cash flows generated from the continuing use of the
unit using a pre-tax discount rate and was based on the following key assumptions:
Cash flows were projected based on the current operating results and the 3-year business plan. Future cash
flows were extrapolated using a growth rate which is based on the growth expectations of the private label
segment in the total local market. These growth expectations are retrieved from researches from independent
external sources. Management believes that this forecast period was appropriate to the long-term nature of
the business.
A pre-tax discount rate of 10% was applied in determining the recoverable amount of the units. This rate was
based on a weighted average cost of capital applicable to the industry.
The values assigned to the key assumptions represent management’s assessment of future trends in the industry
and are based on both external and internal sources (historical data). With the exception for Poland, the recoverable
amounts of the units were determined to be higher than their carrying values and accordingly no impairment
charges have been recognized. The impairment of EUR 975,000 in Poland is mainly caused by a reduced expected
growth of our activities in the local market.
Sensivity analysis
If the undiscounted cash flow per cash-generating unit had been 10% lower than management’s estimates, that
would have led to an additional reduction in Poland of the book value of goodwill by EUR 4.1 million at December
31, 2009. If the estimated pre-tax discount rate applied to calculate the present value of future cash flows had been
one percentage point higher than management’s estimates, then that would have led to an additional reduction of
the book value of goodwill in Poland by EUR 4.7 million at December 31, 2009.
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