NOTES TO
THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 MAY 2015
100
GKE CORPORATION LIMITED
ANNUAL REPORT 2015
14.
INVESTMENTS IN SUBSIDIARIES (cont’d)
Name of subsidiaries
(Country of incorporation and
principal place of business)
Principal activities
Effective percentage
of equity held by Group
2015
2014
%
%
Held through PT GKE Investment
PT GKE Indonesia
iii
(Indonesia)
Provision of freight forwarding
and transportation services
100
100
Held through GKE Holdings (HK) Co., Ltd
Wuzhou Xing Jian Readymix Co., Ltd
ii
(People’s Republic of China)
Producing and manufacturing
of environmental friendly
lightweight brick, building
materials and cement products
100
100
Ever Flourish Development (HK)
Co., Ltd
v
(Hong Kong)
Investment holding
100
100
i
Audited by Ernst & Young LLP.
ii
Not required to be audited during the financial year.
iii
Not required to be audited in the country of incorporation.
iv. Audited by Shanghai Yinhu Certified Public Accountants.
v. Audited by Lui Siu Tang & Company Certified Public Accountants.
(a) Impairment of investment in subsidiaries
During the financial year, the Company carried out a review of the recoverable amounts of its
investment in GKE Express Logistics Pte Ltd, GKE & Mohseng Pte Ltd and GKE China Investment Pte
Ltd as these subsidiaries had been persistently making losses. Consequently, the Company recorded
an impairment loss of $4,190,000 (2014: $875,000) representing the write down of its investments in
these subsidiaries to their recoverable amounts.
The recoverable amounts of the investment in GKE Express Logistics Pte Ltd and GKE China Investment
Pte Ltd have been determined based on a value in use calculation using cash flow projections from
financial budgets approved by management covering a five-year period. The pre-tax discount rate applied
to the cash flow projection and the forecasted growth rate used to extrapolate cash flow projections
beyond five-year period range from 10% to 12% (2014: 10% to 12%).
GKE & Mohseng Pte Ltd had ceased operations during the year, management had determined the
recoverable amounts to be $Nil (2014:$809,000).
