The intangible asset is an integral part of the Slovenian operations
becoming the Group’s main cash generating unit (CGU),
being established as its rst fully operational, producing and
manufacturing unit, with GMP certication issued to produce API
grade products. Accordingly for impairment testing purposes the
Slovenian Operation is considered to be the CGU.
The intangible asset was tested for impairment at reporting date
using a value in use model and following this assessment it was
determined that the recoverable amount of the intangible asset was
in excess of its carrying value. In making this assessment signicant
assumptions, estimates and judgements were made in relation to
the growth of the three revenue streams being botanical, cosmetic
and medicinal pertaining to the CGU. A conservative discount rate
of 10% was applied to net cashows which is in excess of the Group’s
current cost of capital. In addition to the forecast generation of
revenues from contracted agreements as reected in the Group’s
cashow forecast, other matters were considered, including the
Group’s net asset position in comparison to its market capitalization
and the ability of the Group to continue to raise capital.
The impairment assessment also included a sensitivity analysis. The
Directors believe the forecast net cashows are achievable from
current, contracted distribution agreements in place and the expected
market share of medicinal products, in line with announced market data.
4. APPLICATION OF NEW AND REVISED ACCOUNTING
a) New or revised standards and interpretations that are rst
effective in the current reporting period
The Group has adopted all of the new, revised or amending Accounting
Standards and Interpretations issued by the Australian Accounting
Standards Board (“AASB”) that are mandatory for the current
reporting period. The adoption of these Accounting Standards and
Interpretations did not have any signicant impact on the nancial
performance or position of the Group during the nancial year.Any new,
revised or amending Accounting Standards or Interpretations that are
not yet mandatory have not been early adopted.
b) Accounting standards issued but not yet effective
Australian Accounting Standards and Interpretations that have
recently been issued or amended but are not yet effective and have
not been adopted by the group for the annual reporting period
ending 30 June 2018, are set out below.
| Annual Report 2018
Notes to the Financial Statements