NOTES TO THE FINANCIAL STATEMENTS
31 December 2014
(cont’d)
E X C E L F O R C E M S C B E R H A D • A N N U A L R E P O R T 2 0 1 4
73
9.
GOODWILL ON CONSOLIDATION (cont’d)
(a) For the purpose of impairment testing of goodwill on consolidation, the recoverable amount in the
Cash Generating Unit (‘CGU’) is determined based on its value in use. The value in use is determined
by discounting the future cash flows to be generated from the continuing use of the CGU based on
financial budgets prepared by management covering a five (5) year period.
The key assumptions used in the value in use calculations are as follows:
(i) The anticipated average annual revenue growth rates used in the cash flow budgets and plans
of the CGU ranged from 8% to 64% per annum for years 2015 to 2019.
(ii) Profit margins are projected based on the historical profit margin achieved or predetermined
profit margin for the products.
(iii) A pre-tax discount rate of 9.70% per annum has been applied in determining the recoverable
amount of the CGU.
Based on these assumptions, the Directors are of the view that no impairment loss is required as the
recoverable amount determined is higher than the carrying amount of the CGU.
(b) Sensitivity to changes in assumptions
The management believes that a reasonable possible change in the key assumptions on which
management has based its determination of the CGU’s recoverable amount would not cause the
CGU’s carrying amount to exceed its recoverable amount.
10. INTANGIBLE ASSETS
Group and Company
2014
2013
RM
RM
Cost
1,010,000
1,010,000
Accumulated amortisation
At beginning of financial year
(1,010,000)
(959,500)
Charge for the financial year
-
(50,500)
At end of financial year
(1,010,000)
(1,010,000)
Carrying amount
-
-
Intangible assets consist of trademarks and copyrights which had been fully amortised in the previous
financial year.
11. INVESTMENTS IN SUBSIDIARIES
Company
2014
2013
RM
RM
Unquoted shares - At cost
556,000
250,000
Less: Accumulated impairment losses
(120,000)
(120,000)
436,000
130,000
