103
102
STARHILL
GLOBAL
REIT
Annual
Report
FY 2014/15
Notes to the
Financial Statements
Key unobservable inputs correspond to:
•
Capitalisation rates derived from specialised publications from the related markets and comparable transactions.
•
Discount rate, based on the risk-free rate for 10-year bonds issued by the government in the relevant market, adjusted for a
risk premium to reflect both the increased risk of investing in the asset class.
5. PLANT AND EQUIPMENT
Group
$’000
Trust
$’000
Cost:
At 1 January 2013
2,351
–
Additions
20
–
Disposal/write off
(105)
–
Translation differences
149
–
At 31 December 2013
2,415
–
Additions
798
790
Disposal/write-off
(2)
–
Translation differences
91
–
At 30 June 2015
3,302
790
Accumulated depreciation:
At 1 January 2013
(735)
–
Depreciation charge
(489)
–
Disposal/write off
99
–
Translation differences
(56)
–
At 31 December 2013
(1,181)
–
Depreciation charge
(1,006)
(367)
Disposal/write-off
2
–
Translation differences
(67)
–
At 30 June 2015
(2,252)
(367)
Carrying amount:
At 31 December 2013
1,234
–
At 30 June 2015
1,050
423
6. INTERESTS IN SUBSIDIARIES
Trust
30 June 2015
$’000
31 December 2013
$’000
Equity investments at cost
573,181
441,027
Advances to subsidiaries
197,036
199,721
770,217
640,748
Less: allowance for impairment loss
(67,000)
(67,000)
703,217
573,748
Advances to subsidiaries are unsecured and stated at cost less impairment loss. The advances form part of the Trust’s interests
in subsidiaries as settlement of these amounts is neither planned nor likely to occur in the foreseeable future.
The Manager has reassessed for impairment by comparing the recoverable amount of the Trust's interests in subsidiaries
against the Group’s investment in subsidiaries. The recoverable amount of the cash generating unit was estimated based on
its value in use, and using the discounted cash flow method. This involves the estimation and projection of an income stream
over a period at a rental growth rate indicative of market, and discounting the income stream with an internal rate of return.
The recoverable amount was estimated to approximate the net carrying amount of the Group’s interest in these subsidiaries,
and no impairment loss was recognised for the 18 months ended 30 June 2015 and 12 months ended 31 December 2013.
The movement in the allowance for impairment loss in respect of interests in subsidiaries during the period/year was as follows:
Trust
30 June 2015
$’000
31 December 2013
$’000
At beginning and end of period/year
(67,000)
(67,000)
Details of the subsidiaries are as follows:
Effective interest
Name of subsidiary
Country of
incorporation
30 June 2015
31 December 2013
%
%
Starhill Global REIT Japan SPC One Pte Ltd
(1)
Singapore
100
100
Starhill Global REIT Japan SPC Two Pte Ltd
(1)
Singapore
100
100
Starhill Global REIT MTN Pte Ltd
(1)
Singapore
100
100
SG REIT (M) Pte Ltd
(1)
Singapore
100
100
SG REIT (WA) Pte Ltd
(1)
Singapore
100
100
Starhill Global REIT One TMK
(2)
Japan
100
100
Starhill Global ML K.K.
(3)
Japan
100
100
Top Sure Investment Limited
(4)
Hong Kong
100
100
Renhe Spring Department Store Co., Ltd
(2)
China
100
100
SG REIT (WA) Trust
(2)
Australia
100
100
SG REIT (WA) Sub-Trust1
(2)
Australia
100
100
SG REIT (SA) Sub-Trust2
(2)
Australia
100
–
Ara Bintang Berhad
(2)
Malaysia
100
100
(1)
Audited by KPMG LLP
(2)
Audited by other member firms of KPMG International
(3)
Not required to be audited by the laws of the country of incorporation
(4)
Audited by other auditors
7.
INTANGIBLE ASSET
The intangible asset represents goodwill on acquisition of Top Sure Investment Limited (“Top Sure”) in August 2007. Top Sure
owns, through its wholly owned subsidiary, Renhe Spring Zongbei Property in China.
For the purpose of impairment testing, goodwill is allocated to the Group’s operations in China which represent the lowest
level within the Group at which the goodwill is monitored for internal management purposes. The recoverable amount of the
China cash-generating unit was based on its value in use. This involves the estimation and projection of an income stream over
a period at a rental growth rate indicative of market, and discounting the income stream with an internal rate of return. The
recoverable amount was estimated to approximate the net carrying amount of Top Sure’s interest in its subsidiary, and no
impairment loss was recognised for the 18 months ended 30 June 2015 and 12 months ended 31 December 2013. The movement
during the period was due to the retranslation of goodwill at the exchange rate at the reporting date.
