136 / 248
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS
CONTINUED
For the year ended 31 May 2015
134
BLUE LABEL INTEGRATED ANNUAL REPORT 2015
6.
INVESTMENTS IN AND LOANS TO ASSOCIATES AND JOINT VENTURES continued
Investments in associates and joint ventures include goodwill to the value of R260 million (2014:
R273 million).
There was no impairment of investment in associates and joint ventures. This was tested by
comparing the recoverable amount against the carrying value of the investment in associates and
joint ventures.
The recoverable amount, which is the higher of fair value less cost of disposal and the value-in-use,
has been determined based on value-in-use calculations. These calculations use cash flow projections
based on financial budgets approved by the Board of Directors for the forthcoming year and forecasts
for up to five years which are based on assumptions of the business, industry and economic growth.
Cash flows beyond this period are extrapolated using terminal growth rates, which do not exceed the
expected long-term economic growth rate.
The key assumptions used for the value-in-use calculations are as follows:
2014
Growth
rate
%
Terminal
value price
multiple
x
Discount
rate
%
Oxigen Services India
Private Limited
5
21
*
7.4
29
Supa Pesa Africa
(Mauritius) Limited
4
17.38
—
—
—
Blue Label Mexico S.A.
de C.V.
3.5
18.46
3.5
*
17.44
* Not applicable.
For Supa Pesa Africa (Mauritius) Limited, if one or more of the inputs were changed to a reasonable
possible alternative, there would be no impairments that would have to be recognised.
For the remaining companies, the inputs used when calculating the value-in-use would need to be
increased or decreased by the following amounts before any impairment would need to be
recognised:
2014
Growth
rate
%
Terminal
value price
multiple
x
Discount
rate
%
Oxigen Services India
Private Limited
(9)
4.1
*
(5.1)
31.5
Blue Label Mexico S.A.
de C.V.
(3.56)
2.25
(4.6)
*
2.8
* Not applicable.
2015
Growth
rate
%
Discount
rate
%
2015
Growth
rate
%
Discount
rate
%