58
JUMBO GROUP LIMITED
Notes to the Combined
Financial Statements
As at 30 September 2015
3
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (cont’d)
(e)
Impairment of goodwill
Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating unit to which
goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise
from the cash-generating unit and a suitable discount rate in order to calculate present value of the future cash flows. At the end
of the financial years, no provision for impairment loss is considered necessary by the management. The carrying amount of the
goodwill is set out in Note 12 to the financial statements.
(f)
Provision for reinstatement costs
Provision for reinstatement costs represents costs to reinstate the Group’s leased premises to its original state upon expiry of
the lease. The provision was made based on management’s best estimates of the expected costs which are to be incurred to
reinstate the leased premises for its restaurant outlets. Details of the provision for reinstatement costs are provided in Note 19
to the financial statements.
4
FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT
(a)
Categories of financial instruments
The following table sets out the financial instruments as at the end of the financial year:
Group
2015
2014
$
$
Financial assets
Loans and receivables at amortised cost:
Cash and bank equivalents
60,060,873 47,437,976
Trade and other receivables
4,538,468 4,291,854
Structured fixed deposit
–
200,000
Subtotal
64,599,341 51,929,830
Available-for-sale investment
75,000
75,000
Fair value through profit or loss (comprising short-term investments)
329,202 3,390,814
Total
65,003,543 55,395,644
Financial liabilities
At amortised cost:
Trade and other payables
12,888,594 12,426,793
Provision for reinstatement costs
1,476,967 1,569,350
Finance leases
135,000
314,583
Bank borrowings
696,076
790,994
Total
15,196,637 15,101,720
(b)
Financial risk management policies and objectives
Risk management is integral to the whole business of the Group. The Group has a system of controls in place to create an
acceptable balance between the costs of risks occurring and the cost of managing the risks. The management continually
monitors the Group’s risk management process to ensure that an appropriate balance between risk and control is achieved. The
Group does not hold or issue derivative financial instruments for speculative purposes.
