IHH Healthcare Berhad
l
Annual Report 2014
150
Notes to the Financial Statements
6.
Goodwill on consolidation and intangible assets (continued)
Impairment testing for cash-generating units containing goodwill, brand names and hospital licences (continued)
(a) Hospital and healthcare services, and Education CGUs (continued)
Key assumptions used in determining the recoverable amount (continued)
(iii)
Terminal value was estimated using the perpetuity growth model:
• Hospital and healthcare services CGUs: 2% - 5% (2013: 2% - 7.5%) per annum; and
• Education CGU: 3% (2013: 3%) per annum
The terminal values were applied to steady-state estimated earnings at the end of the projected period.
(iv) Discount rates of approximately 7.5% - 13% (2013: 7.5% - 14.2%) which were based on the pre-tax cost of capital plus an
appropriate risk premium at the date of assessment of the respective CGUs.
(v)
There will be no other significant changes in the government policies and regulations which will directly affect the investees’
businesses. The inflation for the operating expenses is in line with the estimated gross domestic product growth rate for the country
based on the past trends.
The values assigned to the key assumptions represent the Group’s assessment of future trends in the healthcare and education market
and are based on both external sources and internal sources (historical data).
The Group believes that no reasonably foreseeable changes in the above key assumptions that would cause the carrying values of these
CGUs to materially exceed their recoverable amounts other than changes in the prevailing operating environment of which the impact is
not ascertainable.
(b) PLife REIT CGU
Recoverable amount of PLife REIT is based on fair value less cost to sell, using the open market price of this CGU as at reporting date.
7.
Investment in subsidiaries
Company
2014
RM’000
2013
RM’000
At cost:
Unquoted shares in Malaysia
15,652,137
15,652,137
Unquoted shares outside Malaysia
489,976
489,976
16,142,113
16,142,113
Allowance for impairment loss
(1,000)
-
16,141,113
16,142,113
