2014
(in EUR 1,000) Goodwill Customer
base
Techno-logy Brand Software
Intangible assets under
construc-tion
Other intangible
assets Total ACQUISITION COSTS
As of 1 January 2014 35,446 26,668 6,472 2,287 4,666 1,178 27 76,744
Acquisition of subsidiaries (note 29) 2,319 2,719 0 0 7 0 0 5,045
Additions 0 0 0 0 543 6 0 549
Cost capitalized 0 0 0 0 0 0 0 0
Disposals 0 0 0 0 (30) 0 0 (30)
Transfer to other category 0 0 0 0 347 (347) 0 0
Currency translation differences 347 321 81 25 43 3 0 820
As of 31 December 2014 38,112 29,708 6,553 2,312 5,576 840 27 83,128
ACCUMULATED AMORTIZATION
As of 1 January 2014 0 (9,867) (3,420) (1,097) (3,243) 0 (22) (17,649)
Additions 0 (2,024) (507) (337) (814) 0 (5) (3,687)
Disposals 0 0 0 0 30 0 0 30
Transfer to other category 0 0 0 0 0 0 0 0
Currency translation differences 0 (152) (62) (17) (30) 0 0 (261)
As of 31 December 2014 0 (12,043) (3,989) (1,451) (4,057) 0 (27) (21,567)
ACCUMULATED IMPAIRMENT
As of 1 January 2014 0 0 0 0 0 (498) 0 (498)
Additions 0 0 0 0 0 0 0 0
Disposals 0 0 0 0 0 0 0 0
Transfer to other category 0 0 0 0 0 0 0 0
Currency translation differences 0 0 0 0 0 0 0 0
As of 31 December 2014 0 0 0 0 0 (498) 0 (498)
Net book value as of 1 January 2014 35,446 16,801 3,052 1,190 1,423 680 5 58,597
Net book value as of 31 December 2014 38,112 17,665 2,564 861 1,519 342 0 61,063
EXCEET GROUP CONSOLIDATED FINANCIAL STATEMENTS 058
The amortization expense of EUR 3,687 (2013: EUR 3,926) has been charged in “cost of sales”.
The impairment amount of EUR 498 in 2013 is related to a software development project within the ESS segment.
The realizable economic benefit of the project was reduced in 2013 due to equally advanced technology develop-ments which are now available in the market.
2013(in EUR 1,000) Goodwill Customer
base
Techno-logy Brand Software
Intangible assets under
construc-tion
Other intangible
assets Total ACQUISITION COSTS
As of 1 January 2013 35,726 27,059 6,537 2,303 3,737 892 12 76,266
Acquisition of subsidiaries (note 29) 0 0 0 0 0 0 0 0
Additions 0 0 0 4 339 942 15 1,300
Cost capitalized 0 0 0 0 0 0 0 0
Disposals 0 (133) 0 0 (23) (18) 0 (174)
Transfer to other category 0 0 0 0 635 (635) 0 0
Currency translation differences (280) (258) (65) (20) (22) (3) 0 (648)
As of 31 December 2013 35,446 26,668 6,472 2,287 4,666 1,178 27 76,744
ACCUMULATED AMORTIZATION
As of 1 January 2013 0 (7,552) (2,960) (762) (2,651) 0 (7) (13,932)
Additions 0 (2,430) (503) (345) (633) 0 (15) (3,926)
Disposals 0 22 0 0 23 0 0 45
Transfer to other category 0 0 0 0 0 0 0 0
Currency translation differences 0 93 43 10 18 0 0 164
As of 31 December 2013 0 (9,867) (3,420) (1,097) (3,243) 0 (22) (17,649)
ACCUMULATED IMPAIRMENT
As of 1 January 2013 0 0 0 0 0 0 0 0
Additions 0 0 0 0 0 (498) 0 (498)
Disposals 0 0 0 0 0 0 0 0
transfer to other category 0 0 0 0 0 0 0 0
currency translation differences 0 0 0 0 0 0 0 0
As of 31 December 2013 0 0 0 0 0 (498) 0 (498)
Net book value as of 1 January 2013 35,726 19,507 3,577 1,541 1,086 892 5 62,334
Net book value as of 31 December 2013 35,446 16,801 3,052 1,190 1,423 680 5 58,597
058 EXCEET GROUP CONSOLIDATED FINANCIAL STATEMENTS
Impairment tests for goodwill
Management reviews the business performance on entity and segment level by reflecting the lowest opera-tional level of cash-generating units (CGUs). Due to the significantly increased project cooperation between the IDMS-Segment entities, as well as the shift of activities between the companies to focus on a center of excel-lence structure, the composition of the generated entity
cash flow changed substantially and is distorting the relevant cash flow for the impairment tests. As a conse-quence management has decided to regard the IDMS-segment as one cash-generating unit.
Summary of the goodwill allocation and movements:
2014(in EUR 1,000) Opening Acquisition Transfer
Currency translation
difference Closing
GS Swiss PCB AG 4,167 88 4,255
ECR AG 3,316 70 3,386
exceet electronics AG 1) 9,058 189 9,247
Contec Steuerungs & Automation GmbH 793 793
as electronics GmbH 3,280 3,280
ECMS Segment 20,614 0 0 347 20,961
exceet Secure Solutions AG 2) 380 380
Lucom GmbH Elektrokomponenten und Systeme 0 2,319 2,319
ESS Segment 380 2,319 0 0 2,699
IDMS Segment 14,452 0 0 0 14,452
Total 35,446 2,319 0 347 38,112
2013(in EUR 1,000) Opening Acquisition Transfer
Currency translation
difference Closing
GS Swiss PCB AG 4,238 (71) 4,167
ECR AG 3,372 (56) 3,316
exceet electronics AG 1) 9,211 (153) 9,058
Contec Steuerungs & Automation GmbH 793 793
as electronics GmbH 3,280 3,280
ECMS Segment 20,894 0 0 (280) 20,614
exceet Secure Solutions AG 2) 380 380
ESS Segment 380 0 0 0 380
IDMS Segment 14,452 0 0 0 14,452
Total 35,726 0 0 (280) 35,446
1) former Mikrap AG
2) former Authentidate International AG
EXCEET GROUP CONSOLIDATED FINANCIAL STATEMENTS 060
The recoverable amount of all CGUs is determined based on value-in-use calculations. These calculations use pre-tax cash flow projections based on financial budgets cov-ering a five-year period. Cash flows beyond the five-year period are extrapolated using an estimated growth rate.
Key assumptions used for value-in-use calculations:
The estimated recoverable amount for all cash generating units exceeds the carrying amount. Management consid-ers the assumed gross margin will not change so signifi-cantly as to eliminate this excess. See also note 2.7 for the impact of changes in estimations.
Compound annual volume growth / Gross margin growth Budgeted volumes and gross margins are based on past performance and the expectation for the market and customer developments (medium-term planning) over the course of the next five years. The gross margin varies depending on the operating function of the companies and their customer mix.
Long term growth rate
The long term growth rate is estimated at 1% (2013: 1%) and used to extrapolate cash flows beyond the forecast period of five years.
CASH-GENERATING UNIT (CGU)
Compound annual volume growth rate (av. next five years)
Gross margin growth rate
(av. next five years) Long term
growth rate Pre-tax Discount rate
2014 2013 2014 2013 2014 2013 2014 2013
GS Swiss PCB AG 4% 3% 3% 2% 1% 1% 6.6% 8.4%
ECR AG 9% 7% 9% 7% 1% 1% 6.6% 8.4%
exceet electronics AG 5% 6% 6% 5% 1% 1% 6.6% 8.4%
Contec Steuerungstechnik & Automation GmbH 9% 6% 11% 14% 1% 1% 8.1% 10.1%
as electronics GmbH 8% 7% 9% 7% 1% 1% 8.7% 11.1%
exceet Secure Solutions 10% 7% 18% 7% 1% 1% 8.7% 11.1%
Lucom GmbH Elektrokomponenten und Systeme 6% n/a 5% n/a 1% n/a 8.7% n/a
IDMS Segment 3% 5% 2% 6% 1% 1% 8.5% 10.5%
Pre-tax Discount rate
Discount rates are used on a pre-tax basis and represent the current market assessment of the risks specific to each CGU. The discount rate calculation is based on the specific circumstances of the Group and its operating segments and is derived from its weighted average cost of capital (WACC) depending on the country in which the Group operates. The WACC takes debt and equity into account. The cost of equity is derived from the expected return on investment by the Group’s investors. The cost of debt is based on the interest-bearing borrowings the Group is obliged to service in the different countries of operation. Segment-specific risk is incorporated by ap-plying individual beta factors. The beta factors are evalu-ated annually based on publicly available market data.
060 EXCEET GROUP CONSOLIDATED FINANCIAL STATEMENTS
Income taxes
Reconciliation of tax expense
In the current year, the increase of the average of do-mestic tax rates was the result of the change in the mix of the profit and loss of the different Group companies.
Deferred taxes
The gross movement on the deferred income tax ac-counts is as follows: