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Grupa LOTOS S.A. - Integrated Annual Report 2012
14. Goodwill
| PLN '000 | Dec 31 2012 | Dec 31 2011 | Jan 1 2011 |
|---|---|---|---|
| Carrying amount of goodwill arising on the acquisition of: | |||
| - LOTOS Partner Sp. z o.o. | 1,862 | 1,862 | 1,862 |
| - Energobaltic Sp. z o.o. | 1,126 | 1,126 | 1,126 |
| Total | 2.988 | 2,988 | 2,988 |
| Carrying amount of goodwill arising on the acquisition of an organised part of business: | |||
| - LOTOS Gaz S.A. (1) | 10,009 | 10,009 | 10,009 |
| - ESSO service stations network (2) | 31,759 | 31,759 | 31,759 |
| - Slovnaft Polska service stations network (2) | 1,932 | 1,932 | 1,932 |
| Total | 43,700 | 43,700 | 43,700 |
| Total goodwill | 46,688 | 46,688 | 46,688 |
(1) The goodwill relates to an organised part of LOTOS Gaz S.A.’s business (wholesale of fuels) acquired by LOTOS Paliwa Sp. z o.o.
(2) The goodwill relates to ExxonMobile Poland and Slovnaft Polska service station networks acquired by LOTOS Paliwa Sp. z o.o. The Group determines the recoverable amount of goodwill for the service station networks acquired from ExxonMobile Poland and Slovnaft Polska based on their values in use, using the discounted cash flow method. Future cash flows were calculated based on five-year cash-flow projections. The residual value for the discounted cash flows was calculated using the growing perpetuity formula. A fixed growth rate of 1.94% (2011: 1.84%) was used to extrapolate cash-flows projections beyond the five-year period. The extrapolation was based on a quantitative forecast of the fuel consumption growth rate in Poland in 2009–2015. To test goodwill for impairment, the Group assumed net weighted average cost of capital (WACC) of 7.53% (2011: 8.73%). Discounted cash flows calculated separately for each cash-generating unit were grossed up.
As at December 31st 2012 and December 31st 2011, the Group carried out impairment tests of goodwill allocated to individual cash-generating units. No impairment losses on the goodwill were recognised as at December 31st 2012 and December 31st 2011 (no need to recognise impairment losses was identified following the impairment tests performed).
