68
JUMBO GROUP LIMITED
Notes to the Combined
Financial Statements
As at 30 September 2015
11
AVAILABLE-FOR-SALE INVESTMENT
Group
2015
2014
$
$
Unquoted equity shares, at cost
75,000
75,000
The investment in unquoted equity investments represents 15% unquoted equity interest in Slappy Cakes (Singapore) Pte Ltd, a company
incorporated in Singapore.
The management of the Group is of the view that the fair value of unquoted equity shares cannot be measured reliably as there is a wide
range of reasonable fair value estimates and the probabilities of the various estimates cannot be reasonably assessed.
12
GOODWILL
Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units (CGU) that are expected to benefit
from that business combination.
The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired.
The recoverable amount of the CGU, relating to Ng Ah Sio Investments Pte. Ltd. and its business in Ng Ah Sio Bak Kut Teh, is determined
on a value in use calculation. The key assumptions for the value in use calculations are those regarding the discount rates, growth rates
and expected changes to selling prices and direct costs during the period. Management estimates discount rates using pre-tax rates that
reflect current market assessments of the time value of money and the risks specific to the CGU. The growth rates are based on industry
growth forecasts. Changes in selling prices and direct costs are based on past practices and expectations of future changes in the
market.
The calculation uses cash flow projection based on a financial budget approved by management for the next 5 years based on an
estimated growth rate of 3% (2014 : 3%) and at discount rate of 15% (2014 : 15%) per annum.
For the years ended 30 September 2015 and 2014, management has assessed that no allowance for impairment was required.
As at 30 September 2015, any reasonably possible change to the key assumptions applied not likely to cause the recoverable amounts
to be below the carrying amounts of the CGU.
