Indofood Agri Resources Limited - Annual Report 2015 - page 108

106.
INDOFOOD AGRI RESOURCES LTD
ANNUAL REPORT 2015
NOTE S TO
TH E FIN ANC IAL STATEMENTS
For the financial year ended 31 December 2015
15. GOODWILL (CONT’D)
The following key assumptions had been used:
Cash generating units
Carrying
amount of
goodwill
Pre-tax Discount Rate
Growth Rate After
Forecast Period
31
October
2015
31
October
2014
31
October
2015
31
October
2014
Recoverable amount assessment
based on value-in-use
Integrated plantation estates of
Lonsum 2,909,757 14.73% 14.54% 5.30% 5.50%
Plantation estates of PT LPI 37,230 13.61% 12.95% 5.30% 5.50%
Plantation estates of PT IBP 8,319 15.47% 14.59% 5.30% 5.50%
Plantation estates of PT SBN 234 15.20% 15.07% 5.30% 5.50%
Sub-total 2,955,540
Recoverable amount assessment
based on FVLCD
Plantation estates of PT GS 8,055 16.18% 15.67% 5.30% 5.50%
Plantation estates of PT MPI 2,395 15.66% 14.94% 5.30% 5.50%
Plantation estates of PT KGP 29,140 15.82% 15.07% 5.30% 5.50%
Integrated plantation estates of PT CNIS 7,712 15.84% 15.13% 5.30% 5.50%
Plantation estates and research facility
of PT SAIN 113,936 16.54% 15.36% 5.30% 5.50%
Plantation estates of PT RAP 3,388 15.60% 14.80% 5.30% 5.50%
Plantation estates of PT JS 1,533 15.21% 14.30% 5.30% 5.50%
Integrated plantation estates of PT MISP 34,087 16.46% 15.25% 5.30% 5.50%
Plantation estates of PT SAL 86,996 11.03% 9.76% 5.30% 5.50%
Plantation estates of PT WKL 4,750 9.27% 9.97% 5.30% 5.50%
Plantation estates of PT MLI 6,105 14.19% 12.95% 5.30% 5.50%
Sub-total 298,097
Grand total 3,253,637
The recoverable value calculation of the CGU applied a discounted cash flow model based on cash flow projections
covering a period of 10 years for plantation estates in early development stage and 5 years for established plantations.
The primary selling prices used in the cashflowmodel are projected prices of CPO, rubber, sugar and logs. The projected
prices of the CPO are based on the World Bank forecasts for the projection period. The projected prices of rubber
(RSS1 and other rubber products of the Group) over the projection period are based on the extrapolation of historical
selling prices and the forecasted price trend from the World Bank. The sugar prices used in the projection are based on
the extrapolation of historical selling prices and the forecasted price trend from the World Bank or the minimum sugar
price imposed by the Ministry of Trade of Indonesia, whichever is higher. The projected prices of logs are based on the
extrapolation of historical selling prices published by the International Tropical Timber Organization and the forecasted
price trend from the World Bank.
The cash flows beyond the projected periods are extrapolated using the estimated terminal growth rate indicated above.
The terminal growth rate used does not exceed the long-term average growth rate of the industry in countries where
the entities operate. The discount rate applied to the cash flow projections is derived from the weighted average cost of
capital of the respective CGUs.