Over the past few years DSM has acquired several entities in business combinations that have been accounted for by the purchase method, resulting in recognition of goodwill and other intangible assets. The amounts assigned to the acquired assets and liabilities are based on assumptions and estimates about their fair values. In making these estimates, management consults independent, qualified appraisers if appropriate. A change in assumptions and estimates could change the values allocated to certain assets and estimated useful lives, which could affect the amount or timing of charges to the income statement, such as amortization of intangible assets.

The carrying amount of goodwill as at 31 December 2007 mainly includes an amount of €6 million relating to the acquisition of DSM Japan Engineering Plastics in 1997, an amount of €295 million (31 December 2006: €329 million) relating to the acquisition of Catalytica in 2001, an amount of €358 million
(31 December 2006: €358 million) relating to the acquisition of NeoResins in 2005, an amount of €9 million relating to the acquisition of Syntech in 2005, an amount of €14 million (31 December 2006: €14 million) relating to the acquisition of Lipid Technologies Provider in 2006, an amount of €6 million (31 December 2006: €6 million) relating to the acquisition of CRINA in 2006, and an amount of €31 million relating to the acquisition of Pentapharm in 2007. For impairment testing reasons, goodwill has been allocated to the following cash-generating units: the goodwill related to CRINA and Pentapharm to the DSM Nutritional Products business group, the goodwill related to Catalytica to the DSM Pharmaceutical Products business group, the goodwill related to NeoResins and Syntech to the DSM Resins business group, the goodwill related to Lipid Technologies Provider to the DSM Food Specialties business group and the goodwill related to DSM Japan Engineering Plastics to the DSM Engineering Plastics business group.

The annual impairment tests of goodwill are performed in the fourth quarter. The recoverable amount of the cash generating units concerned is based on a value-in-use calculation. The cash flow projections for the first five years are derived from DSM’s business plan (Annual Strategic Review) as adopted by the Managing Board. Cash flow projections beyond the 5-year planning period are extrapolated. The terminal value for the period after ten years is determined with the assumption of no growth. The pre-tax discount rate is between 7 and 10% depending on the risk profile of the cash generating unit.

The other intangible assets are listed in the table below: