14 INTANGIBLE ASSETS
(a) Customer relationships
Group
2015
2014
HK$’000
HK$’000
Net book value
At beginning of the year
7,172,802
7,507,008
Amortisation
(334,206)
(334,206)
At end of the year
6,838,596
7,172,802
Cost
8,440,000
8,440,000
Accumulated amortisation
(1,601,404)
(1,267,198)
At end of the year
6,838,596
7,172,802
(b) Goodwill
Goodwill is allocated to the Group’s cash-generating unit (“CGU”) identified according to geographical locations as the
Group has one business segment only. The goodwill is allocated as follows:
Group
2015
2014
HK$’000
HK$’000
Hong Kong
1,666,002
1,666,002
Mainland China
20,963,042
20,963,042
22,629,044
22,629,044
Group
2015
2014
HK$’000
HK$’000
At beginning of the year
22,629,044
42,500,443
Disposal of subsidiary companies
-
(871,399)
Impairment of goodwill (accumulated: HK$19.0 billion)
-
(19,000,000)
At end of the year
22,629,044
22,629,044
Management performed an impairment assessment as at 31 December 2015 based on value-in-use calculations and considered
that no further impairment of goodwill is required. As in prior years, the impairment methodology assumed terminal values and
discount rates of 2% - 3% and 8% - 10% per annum, respectively. Terminal values are determined by considering both internal and
external factors relating to the port operation and discount rates reflect specific risks relating to the relevant business.
The assumptions regarding the growth rates in revenue and cost of services rendered used in the current year’s assessment
of the Hong Kong CGU were comparable to last year. For illustration purposes, a hypothetical 0.5% decrease in the revenue
growth rate, a 0.5% increase in costs of services rendered and a 0.5% increase in the discount rate, with all other variables
and assumptions held constant, would decrease the recoverable amount of the Hong Kong CGU, by HK$3.2 billion, HK$1.9
billion and HK$1.7 billion, respectively.
Actual results in the future may di
er materially from the sensitivity analysis due to developments in the global markets and changes
in economic conditions which may cause fluctuations in growth and market interest rates to vary and therefore it is important to
note that the hypothetical amounts so generated do not represent a projection of likely future events and profits or losses.
Notes to the
Financial Statements
OPTIMISING FOR THE FUTURE
092
