Impairment of Deposit – Golden KoalaIn 2018, JAT’s 51%...

Impairment of Deposit – Golden KoalaIn 2018, JAT’s 51% subsidiary, Golden Koala Group Pty Limited (GK), paid a total of $2.5 million to Nutritional Choice Australia Pty Ltd (“NCA”) for the production of infant milk formula for Chinese consumers. NCA holds a Chinese Food and Drug Administration licence (now referred to as “SAMR” approval) for the production of the GK products. Subsequent to the payment made by GK, legal proceedings were commenced in the Federal Court of Australia against NCA. The effect of the court proceedings was to prevent NCA supplying GK with the contracted products. As a result, GK exercised its security over the assets of NCA and appointed a receiver to NCA to protect its position. The Federal Court proceedings have now been completed. The directors of JAT have been advised that the business of NCA is in the process of being sold. In order to complete the sale, GK’s security over the assets of NCA will need to be discharged. Accordingly, GK expects to recover its receivable of $2.5 million at settlement of the sale.Given there remains some uncertainty about the recoverability of the receivable and taking a prudent approach, the directors of JAT have made a decision to fully provide for the deposit of $2.5 million at 31 December 2019.


Why dont they buy this place?