12 Intangibles (continued)
Te Group tests goodwill for impairment on an annual basis, or more frequently if there are indications that the goodwill may be impaired. Te recoverable amounts of the cash generating units are determined from value in use calculations. Te key assumptions for the value in use calculations are the discount rate used for future cash flows and the anticipated future changes in revenue, direct costs and indirect costs. Te assumptions used reflect the past experience of management and future expectations.
Te Group prepares cash flow forecasts based on the most recent financial budgets approved by management and extrapolates these forward for the next five years with a residual value at the end of the five years. Changes in revenue and direct costs are based on past experience and expectations of future changes in the market.
Te revenue growth rate used for impairment tests at 28 June 2014 was 3% (2013: nil) for all cash generating units. Tis inflation rate of 3% (2013: nil) has been applied to the 2015 budget and for the following 5 years on costs of sales, variable costs and indirect costs. Te five year cashflow is taken along with a residual value at the end of the five year period.
A pre-tax discount rate of 10% (2013: 10%) has been used in these calculations. Te Group has considered the economic environment and higher level of return expected by equity holders due to the perceived risk in equity markets when selecting the discount rate.
Te discount rate used for each cash generating unit has been kept constant as the market risk is deemed not to be materially different between the different segments of the bakery sector, nor over time.
Sensitivities have been carried out by the Directors and they are comfortable that at reasonable discount levels there are no indications of impairment. 13 Property, Plant and Equipment
Land and buildings £000
Cost
Balance at 1 July 2012 Exchange adjustments Additions Transfers Disposals
Balance at 29 June 2013 Balance at 30 June 2013
Exchange adjustments Additions Transfers Disposals
Balance at 28 June 2014
Depreciation and impairment Balance at 1 July 2012 Exchange adjustments
Depreciation charge for the financial period Disposals
Balance at 29 June 2013 Balance at 30 June 2013
Exchange adjustments
Depreciation charge for the financial period Disposals
Balance at 28 June 2014
Net book value 30 June 2012
At 29 June 2013 At 28 June 2014
14,503 -
74 -
10,046 -
894 - -
10,940
28,795 -
3,282 91
(4,531) (11,134) 10,046
21,034 21,034 5,050
226 (185) 26,125
(3,874) (14,796) -
- (290) 1,058
(2,375) 5,963
(3,106) (11,208) (3,106) (11,208) (233)
- -
-
(2,390) 185
(3,339) (13,413)
10,629 6,940 7,601
13,999 9,826
12,712 -
2,210 8
177 -
(155)
2,240 2,240
(11) 194 -
(122) 2,301
(1,641) (2)
(223) 149
(1,717) (1,717) (211)
12 120 (1,796)
569 523 505
8 - - -
(8) -
- - - - - -
(5) - -
5 -
- - - - -
3 - -
340 -
671
(91) -
920 920 29
-
(226) -
723
- - - - -
- - - - -
340 920 723
45,856 8
4,204 -
(15,828) 34,240
34,240 6,167
40,089
(20,316) (2)
(2,888) 7,175
(16,031) (16,031) (2,834)
12 305 (18,548)
25,540 18,209 21,541
(11) -
(307)
Plant and Fixtures and equipment £000
fittings £000
Vehicles £000
Assets under construction £000
Total £000
43
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