Question 6

Does the company have any intangible assets? What are these? What are the
accounting policies regarding amortization or impairment of these intangible assets?

Yes, Stamford Tyres Corporation Limited has intangible assets, which are
i. computer software
ii. goodwill
iii. preliminary, pre-operating expenses
iv. research and development costs

For computer software, they are stated at cost less accumulated amortization and any
impairment loss. Commencing from the date the software is available for used, the cost is
amortized on a straight line basis over a period of 3 years.

Goodwill is regarded as the excess of the fair value of the consideration given over the
fair value of the identifiable net assets of the subsidiary, joint venture and associated
companies when acquired.
Positive goodwill is amortized through the consolidated profit and loss account on a
straight line basis over its useful economic life up to a maximum of 20 years, determined
on individual basis. Goodwill which is assessed as having no continuing economic value
is written off to the consolidated profit and loss account.

Preliminary, pre-operating expenses and research and development costs are

expensed as incurred, except for development costs which are expected to generate future
economic benefits. Such development expenses are capitalized and amortized through
profit and loss account on a straight line basis over a period of 5 years upon
commencement of operations.