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Annual Report - QuamIR

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Notes to the Consolidated Financial Statements (Continued)<br />

<br />

19 Intangible assets (Continued)<br />

Impairment tests for goodwill<br />

Goodwill is allocated to the Group’s cash-generating units identified<br />

according to country of operation and business segment. For the<br />

purpose of impairment testing, the recoverable amount of the<br />

business unit is determined based on value-in-use calculations. The<br />

key assumptions adopted for growth rates and discount rates used in<br />

the value-in-use calculation is based on management best estimates.<br />

In 2010, the calculation used pretax cash flow projections based on<br />

financial budgets approved by management covering a 12-year period<br />

cash flow and based on a discount rate of 5.75% to 10.04% taking into<br />

account the risk level of the business unit. Growth rates with range from<br />

3% to 10% were determined by considering both internal and external<br />

factors.<br />

20 Properties under development<br />

19 <br />

<br />

<br />

<br />

<br />

<br />

<br />

<br />

<br />

<br />

5.75%10.04%<br />

3%10%<br />

<br />

20 <br />

Group<br />

<br />

2011 2010<br />

<br />

HK$ Million HK$ Million<br />

<br />

Properties under development comprise: <br />

Construction costs and capitalised expenditure 870.4 431.8<br />

Amortisation of prepaid land lease payments 46.7 24.5<br />

917.1 456.3<br />

The properties under development are all located in the Mainland<br />

China.<br />

At 31 December 2011, properties under development with carrying<br />

value of HK$490.0 million (2010: HK$211.8 million) was pledged as<br />

securities for the Group’s borrowings (Note 36).<br />

<br />

<br />

490,000,000 <br />

211,800,000<br />

36<br />

146 HKC (Holdings) Limited • <strong>Annual</strong> <strong>Report</strong> 2011

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