65
TEHO INTERNATIONAL INC LTD.
Annual Report 2016
NOTES
TO THE FINANCIAL STATEMENTS
Year ended 30 June 2016
5 INTANGIBLEASSETS (CONT’D)
Impairment test (cont’d)
(iv) ECG Property Services Pte. Ltd. and its subsidiaries (cont’d)
“The Bay” project is faced with unfavourable macro-economic outlook in the
condominium sector in Phnom Penh. Management believes there is heightened
risk of oversupply of condominiums as condominium supply is expected to
increase significantly through to 2018. In the best interests of the Group’s “The
Bay” project, and having considered the market conditions in Phnom Penh
and other factors, the Group and its joint venture partner have decided to put
on hold the residential development phase of the project. As management is
working together with its joint venture partner in assessing the market changes
and considering alternative plans for repositioning the development project,
the estimated recoverable amount of ECG Property Services is estimated to be
nil. Accordingly, an impairment loss on the goodwill of $12,475,753 (2015: Nil) was
recognised. The impairment loss was included in other operating expenses.
6 INVESTMENT PROPERTY
Group
$
Cost
:
At 1 July 2014 and 30 June 2015
–
Reclassification from property, plant and equipment
4 1,637,368
At 30 June 2016
1,637,368
Accumulated depreciation and impairment loss:
At 1 July 2014 and 30 June 2015
–
Impairment loss
(1,637,368)
At 30 June 2016
(1,637,368)
6 INVESTMENT PROPERTY (CONT’D)
Group
$
Net book value:
At 1 July 2014
–
At 30 June 2015
–
At 30 June 2016
–
Investment property comprises a number of show flats which were intended to be used
tomarket “The Bay” project in Cambodia. During the year, therewas a change in business
plan as the Group intends to hold the property to earn rental income. Accordingly,
the property is treated as an investment property at 30 June 2016.
The Group recognised an impairment loss of $1,637,368 on its investment property as
the property has not been generating rental income. The impairment loss is charged to
profit or loss and recognised in other operating expenses.
7 INVESTMENTS IN SUBSIDIARIES
Company
2016
2015
$
$
Equity investments at cost
34,222,459 34,222,459
Impairment loss
(8,906,645) (3,059,283)
Cost at the end of the year
25,315,814 31,163,176
During the year, the Company assessed the carrying amount of its investments in
subsidiaries for indications of impairment. Based on this assessment, the Company
recognised an impairment loss of $5,847,362 (2015: $3,059,283) on its investments in
subsidiaries. The recoverable amount of the investments has been determined based on
value in use (see Note 5). The impairment loss is charged to profit or loss and recognised
in other operating expenses.
