Osim FR 050407.indd

Notes to the Financial Statements - 31 December 2006 (cont’d)10. Fixed assets (cont’d)Assets held under fi nance leasesAs at 31 December 2006, the carrying amount of fi xed assets held under fi nance leases are as follows:Group2006 2005$’000 $’000Motor vehicles 398 176Offi ce equipment – 116Plant and machinery 21 28Computers 163 180Shop renovations 2,195 857Furniture and fi ttings – 3,5502,777 4,907Assets pledged as securityIn addition to assets held under fi nance leases, the Group’s freehold and leasehold land and buildings with carrying amounts of$7,980,000 (2005: $8,543,000) are mortgaged to secure the Group’s bank loans (Notes 25 and 26).Impairment of assetsImpairment loss on fi xed assets was recognised in the following line item of the profi t and loss account as follows:Group2006 2005$’000 $’000Other operating expenses (Note 32) 90 1 100 21The impairment loss recognised by the Group represents the write down of certain fi xed assets of a subsidiary company to theirrecoverable amount as certain retail outlets were loss-making or were intended to be closed down. The recoverable amount wasdetermined on the basis of value-in-use calculation at the cash-generating unit.2The impairment loss recognised by the Group represents the write down of leasehold building to its recoverable amount. Therecoverable amount of the leasehold building was determined by reference to open market value on an existing use basis. TheDirectors of a subsidiary have engaged Dovebid Valuation Services, Inc., an independent professional valuer, to determine thefair market value of its leasehold building. The date of the valuation was 9 December 2005.Notes to the Financial Statements 114Annual Report 2006