Annual - Johnson Electric

9. Intangibles (Cont’d)
A segment-level summary of the goodwill allocation is presented below:
NOTES TO THE ACCOUNTS
2006 2005
Total Total
US$’000 US$’000
Asia 42,288 39,513
Unallocated 324,343 –
366,631 39,513
In accordance with HKAS 36 “Impairment of Assets” the Group completed its annual impairment test for goodwill
to the Group’s various cash generated units (“CGUs”) by comparing their recoverable amounts to their carrying
amounts as at the balance sheet date. The recoverable amount of a CGU is determined based on a value-in-use
calculation. These calculations use cashflow projections based on financial forecasts covering the first five-year
period together with cash flows beyond the five-year period which are extrapolated using the estimated growth
rates for the respective CGUs in the range of 0% to 1%. Future cash flows are discounted at the rate of 10%. This
growth rate does not exceed the long-term average growth rate for the business in which the CGU operates. There
was no evidence of impairment arising from the review.
Goodwill of US$324,343,000 arising from the acquisitions of Saia-Burgess and Parlex during the year is shown as
“unallocated” in the segment analysis. The Group is in the process of assessing the synergistic effect that the
acquisitions of Saia-Burgess and Parlex will bring to the respective CGUs of the Group and may allocate the
goodwill to those respective CGUs after such assessment is completed by March 2007.
10. Subsidiaries
Company 2006 2005
(Restated)
US$’000 US$’000
Unlisted shares, at cost 1,008,580 479,075
Amounts due from subsidiaries 462,831 457,579
1,471,411 936,654
Amounts due to subsidiaries (457,531) (396,431)
Balances with subsidiaries are not repayable within the next twelve months.
Details of principal subsidiaries are shown in note 47.
1,013,880 540,223
Johnson Electric Holdings Limited 77