2011 Annual Report - TOM Group

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88 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 14 Fixed assets (Continued) The Group’s interests in properties at their net book values are analysed as follows: 2011 2010 HK$’000 HK$’000 Outside Hong Kong, held on Leases of over 50 years 18,317 9,728 Leases of between 10 to 50 years 12 37 18,329 9,765 15 Goodwill Group 2011 2010 HK$’000 HK$’000 Net book value, at 1 January 2,682,513 2,643,106 Exchange adjustment 94,636 48,141 Provision for impairment (note 5) (421,201) (2,614) Deconsolidation of a subsidiary (note 37(c)) – (6,120) Net book value, at 31 December 2,355,948 2,682,513 At 31 December: Cost 4,679,050 4,552,408 Accumulated amortisation and impairment (2,323,102) (1,869,895) Net book value 2,355,948 2,682,513 TOM Group Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 15 Goodwill (Continued) (a) Impairment tests for goodwill Goodwill is allocated to the Group’s CGUs identified according to business and geographical segments. A segment level of the goodwill allocation is presented below. 2011 2010 Taiwan Taiwan and other and other Mainland Asian Mainland Asian China country Total China country Total HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Internet 1,365,840 – 1,365,840 1,699,867 – 1,699,867 E-Commerce 146,181 – 146,181 139,050 – 139,050 Publishing 116 509,508 509,624 116 509,601 509,717 Outdoor Media 264,197 – 264,197 263,773 – 263,773 Television and Entertainment 70,106 – 70,106 70,106 – 70,106 1,846,440 509,508 2,355,948 2,172,912 509,601 2,682,513 The recoverable amount of each CGU in the Internet Group is determined based on the higher of fair value less costs to sell and value-in-use. Fair value less costs to sell is the amount obtainable from the sale of an asset or CGU in an arm’s length transaction between knowledgeable and willing parties, less the cost of disposal. Fair value less costs to sell can be determined based on the combination of the Income Approach, Market Approach and Adjusted Net Asset Value Method. Discounted Cash Flow Analysis is used in the Income Approach; combination of the Guideline Companies Method and Guideline Transactions Method is used in the Market Approach; and the asset based approach is used by summing up the individual components of assets and liabilities in the Adjusted Net Asset Value Method. Value-in-use is the present value of the future cash flow expected to be derived from an asset or CGU. The valuation was performed by American Appraisal China Limited on 31 October 2011 and the recoverable amount determined based on the fair value less costs to sell was considered appropriate for each CGU in the Internet Group. Before arriving at the valuation, the following principal factors were considered: – The nature of the business and the history of the enterprise since its inception – The economic outlook in general and the condition and outlook of the specific industry in particular – The book value of the stock and the financial condition of the business – The earnings capacity of the CGU – The dividend paying capacity – Whether or not the enterprise has goodwill or other intangible value – Sales of the stock and the size of the block of stock to be valued – The market price of stocks of corporations engaged in the same or a similar line of business having their stocks actively traded in a free and open market, either on an exchange or over-the-counter Annual Report 2011 89
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CONTENTS CONTENTS 19 11 21 11 47 37
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2 CORPORATE PROFILE TOM Group Limit
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4 FINANCIAL HIGHLIGHTS For the year
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6 MANAGEMENT’S DISCUSSION AND ANA
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8 MANAGEMENT’S DISCUSSION AND ANA
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10 MANAGEMENT’S DISCUSSION AND AN
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12 DIRECTORS’ PROFILE Ip Tak Chue
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14 CORPORATE GOVERNANCE REPORT The
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18 CORPORATE GOVERNANCE REPORT Upon
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24 CORPORATE GOVERNANCE REPORT Corp
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28 REPORT OF THE DIRECTORS Director
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30 REPORT OF THE DIRECTORS (e) (f)
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32 REPORT OF THE DIRECTORS Director
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34 REPORT OF THE DIRECTORS Interest
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36 REPORT OF THE DIRECTORS Li Ka-Sh
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Page 42 and 43: 40 REPORT OF THE DIRECTORS During t
Page 44 and 45: 42 INDEPENDENT AUDITOR’S REPORT I
Page 46 and 47: 44 CONSOLIDATED INCOME STATEMENT Fo
Page 48 and 49: 46 CONSOLIDATED STATEMENT OF FINANC
Page 50 and 51: 48 STATEMENT OF FINANCIAL POSITION
Page 52 and 53: 50 CONSOLIDATED STATEMENT OF CHANGE
Page 54 and 55: 52 NOTES TO THE CONSOLIDATED FINANC
Page 102 and 103: 100 NOTES TO THE CONSOLIDATED FINAN
Page 126 and 127: 124 PRINCIPAL SUBSIDIARIES, JOINTLY
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2011 Annual Report - TOM Group

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