TAN CHONG MOTOR HOLDINGS BERHAD
Annual Report 2014
78
NOTES TO THE FINANCIAL STATEMENTS
6.
Intangible assets (continued)
(i)
The impairment test in respect of Malaysia property was based on fair value of the property which is determined
by external, independent property valuer, having appropriate recognised professional qualifications and recent
experience in the location and category of property being valued. Valuation is performed with sufficient regularity
to ensure that the carrying amount does not differ materially from the fair value of the land at the reporting date.
(ii) The impairment test in respect of Vietnam vehicles distribution network was based on value in use and was
determined by discounting the future cash flows generated from the continuing use of the unit and was based on
the following key assumptions:
%
Cash flows were projected based on 5-year business plan.
%
Total Industry Volume is projected to grow at the following rates per annum:
- FY 2015
- 18%
- FY 2016
- 12%
- FY 2017 to 2019
- 13%
%
Market share to grow gradually from 3% to 7% with the introduction of new models and increase in dealer’s
network.
%
A pre-tax discount rate of 6% was applied in determining the recoverable amount. The discount rate was
estimated based on the average Vietnam inflation rate issued by the General Statistics Office of Vietnam.
The above estimates are particularly sensitive in the following areas:
%
An increase of 3 percentage point in the discount rate used would not result in any impairment loss.
%
A 5 percentage point decrease in future planned revenues would not result in any impairment loss.
7.
Investments in subsidiaries
Company
2014
2013
RM’000
RM’000
Unquoted shares in Malaysia, at cost
1,525,051 1,397,636
Less: Impairment loss
(20,638)
(20,638)
1,504,413 1,376,998
Details of the subsidiaries are in Note 35.
Although the Group owns less than half of the ownership interest in TC Express Auto Services and Spare Parts (Thailand)
Company Ltd and TC Sri Amar Sdn. Bhd. and less than half of the voting power of these entities, the Directors have
determined that the Group controls these two entities. The Group has
de facto
control over these entities because the
Group has held significantly more power over these entities than any other equity holders and that remaining voting
rights in the investees are widely dispersed and that there is no indication that all other shareholders would exercise their
votes collectively.
