Connecting the nation. and Beyond. - ChartNexus

216 / MRCB annual report 2011 /
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2011
19 PROPERTY DEVELOPMENT ACTIVITIES (cont’d)
19 (a) Land held for property development (cont’d)
Land held for property development comprises land costs, deemed land cost in respect of the KL Sentral development
project and infrastructure costs incurred to date in respect of future development projects.
Included in the carrying value of land held for property development is an amount of RM495,179,220 (2010: RM494,031,740)
relating to the KL Sentral development project undertaken by Kuala Lumpur Sentral Sdn. Bhd, a subsidiary of the Company.
This development comprises commercial and residential properties and a transportation hub. The expected completion
date of the entire development is 2018. The subsidiary’s directors have reviewed and approved a seven (7) year period
cash flow projection in deriving the value in use calculation. The cash flow projections were based on financial budgets
approved by the subsidiary’s directors. Key assumptions used in the cash flows/value in use calculations are as follows:
(i) Discount rate at 7.7%
(ii) The projects will be launched on the assumed due dates and the project cash flows will occur as projected.
(iii) Proceeds from sales will be received as projected.
(iv) The subsidiary will be engaged in property development.
Based on the value in use calculation, no impairment loss is required.
The Group reviews annually whether the land held for property development has suffered any impairment in accordance
with the accounting policy stated in Note 2.21 to the financial statements.