Annual Report 2011 年 報 - Neo-Neon LED Lighting International Ltd

NotES to tHE CoNSoLIDAtED
fINANCIAL StAtEMENtS
19. INTANGIBLE ASSETS (Continued)
The trademarks, of carrying values HK$69,587,000 as at 31st March, 2011, have legal lives of 3 to 8 years
but are renewable every 3 to 8 years at minimal cost. The directors of the Company are of the opinion that
the Group would renew the trademarks continuously and has the ability to do so. Various studies including
product life cycle studies, market, competitive and environmental trends, and brand extension opportunities
have been performed by management of the Group, which supports that the trademarks have no foreseeable
limit to the period over which the trademarked products are expected to generate net cash flows for the
Group.
The trademarks are considered by the management of the Group as having an indefinite useful life. The
trademarks will not be amortised until their useful lives are determined to be finite. Instead they will be tested
for impairment annually and whenever there is an indication that they may be impaired. Particulars of the
impairment testing are as follows:
The recoverable amount of the trademarks has been determined based on a value in use calculation. That
calculation uses cash flow projections based on financial budgets approved by management covering a
5-year period, and discount rate ranging from 15.09% to 16.77%. Cash flows beyond the 5-year period
are extrapolated using a steady 3% growth rate. This growth rate is based on the relevant industry growth
forecasts and does not exceed the average long-term growth rate for the relevant industry.
Since the recoverable amount of the trademarks are higher than their carrying amount, the directors consider
that the carrying amount of trademarks at the end of the reporting period is not impaired.
20. INTEREST IN AN ASSOCIATE
31.3.2011 31.12.2009
HK$’000
HK$’000
Unlisted shares, at cost 7,753 7,753
Gain on changes in interest in associate 13,186 13,186
Share of post-acquisition losses (6,714) (6)
14,225 20,933
ANNUAL REPORT 2011 89