10 . Intangible assets

Notes to the financial statements (continued)

10 . Intangible assets

Non-current assets

At 1 January 2018

Cost Accumulated depreciation and impairment

Net book amount

Year ended December 2018

Opening net book amount Reclassifications from tangible assets Reclassifications from goodwill to development costs Additions Additions - through acquisition Transfer from capital work in progress Disposals Exchange differences Amortisation charge Impairment charge for the year

Closing net book amount

At 31 December 2018

Cost Accumulated amortisation and impairment

Net book amount

At 1 January 2019

Cost Accumulated amortisation and impairment

Net book amount

Year ended 31 December 2019

Opening net book amount Additions Transfer from capital work in progress Disposals Exchange differences Amortisation charge Impairment charge for the year

Closing net book amount

At 31 December 2020

Cost Accumulated depreciation and impairment

Net book amount Goodwill £’000 Development costs £’000

Website purchased £’000 IP & IP rights £’000

Capital work in progress £’000 Total £’000

37,824 21,887 153 - - 59,864 (22,314) (17,246) (148) - - (39,708) 15,510 4,641 5 - - 20,156

15,510 4,641 5 - - 20,156 - 303 - - - 303

118 8 - 1,887 2,013 - - 8,873 - 8,873 - 1,856 31 - (1,887) - (103) - 2 - (101) (65) (21) - 5 - (81) - (2,681) (4) (395) - (3,080) (3,860) - - - - (3,860)

11,585 4,113 40 8,485 - 24,223

37,759 20,987 192 8,880 - 67,818 (26,174) (16,874) (152) (395) - (43,595) 11,585 4,113 40 8,485 - 24,223

37,759 20,987 192 8,880 - 67,818 (26,174) (16,874) (152) (395) - (43,595) 11,585 4,113 40 8,485 - 24,223

11,585 -

4,113 40 8,485 - 24,223 - - 546 2,054 2,600 573 - - (573) - - - - (64) - (34) - (98) - (2,448) (13) (1,149) - (3,610) (3,951) - - - - (3,951)

7,634 2,174 27 7,848 1,481 19,164

37,759 21,496 192 9,426 1,481 70,354 (30,125) (19,322) (1,165) (1,578) - (51,190) 7,634 2,174 27 7,848 1,481 19,164

Notes to the financial statements (continued)

Non-current assets

At 1 January 2020

Cost Accumulated amortisation and impairment

Net book amount

Year ended 31 December 2020

Opening net book amount Additions Transfer from capital work in progress Disposals Exchange differences Amortisation charge

Closing net book amount

At 31 December 2020 Goodwill £’000 Development costs £’000

Website purchased £’000 IP & IP rights £’000

Capital work in progress £’000 Total £’000

37,759 21,496 192 9,246 1,481 70,354 (30,125) (19,322) (165) (1,578) - (51,190) 7,634 2,174 27 7,848 1,481 19,164

7,634 2,174 27 7,848 1,481 19,164 - - - - 4,958 4,958 - 3,391 - - (3,391) (3,371 45 (2) - - (3,328) 191 - 54 (65) 180 - (2,186) (10) (1,164) - (3,360) 4,263 3,615 15 6,738 2,983 17,614

Cost 37,759 24,887 190 9,426 3,048 75,310 Accumulated amortisation and impairment (33,496) (21,272) (175) (2,688) (65) (57,696) Net book amount 4,263 3,615 15 6,738 2,983 17,614

Impairment tests for goodwill Goodwill is monitored by management at the level of the cash generating units identified in note 2.:

Newtel Worldstone

Net book amount 2020 £’000 2019 £’000 2018 £’000

4,262 4,262 4,262 - 2,862 7,323

4,262 7,124 11,585

Significant estimate: key assumptions used for value-in-use calculations The group tests whether goodwill has suffered any impairment on an annual basis. For the 2020, 2019 and 2018 reporting periods, the recoverable amount of the CGUs were determined based on calculations to assume an equity value which require the use of assumptions. The calculations use cash flow projections based on financial budgets approved by management covering a five-year period. Cash flows beyond the five-year period are determined through the use of a terminal multiple and discounted to their present value.

Notes to the financial statements (continued)

The following table sets out the key assumptions for those CGUs that have significant goodwill allocated to them:

2020

EBITDA % Annual capital expenditure Terminal multiple Pre-tax discount Newtel

-1% £1.5m 6 10.20%

2019

EBITDA % Annual capital expenditure Terminal multiple Pre-tax discount Newtel Worldstone

-1%

1% £1.5m £0.05m 6 10.20% 9 12%

2018

EBITDA % Annual capital expenditure Terminal multiple Pre-tax discount Newtel Worldstone

-1%

1% £1.5m £0.05m 6 10.20% 8 12%

Assumption

EBITDA

Annual capital expenditure

Terminal multiple

Pre-tax discount rate

Approach used to determining values

Forecasted EBITDA takes into account expected growth/decline in revenues, cost of sales and operating expenses based on past performance and management’s expectations for the future. Operating expenditures are forecasted based on the current structure of the business

Expected cash costs in the CGUs. This is based on the historical experience of management.

This the terminal multiple used to extrapolate cash flows beyond the forcasted 5 year period. The multiples are consistent with the telecommunications industry.

A Weighted Average Cost of Capital (WACC) is used to discount the future cash flow to assume a present value, or an alternative rate considered appropriate for the business and the environment and market in which it operates.