Excel Force MSC Berhad Annual Report 2015

NOTES TO THE FINANCIAL STATEMENTS 31 December 2015 (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 5 76 9. GOODWILL ON CONSOLIDATION (continued) (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 5% to 47% (2014: 8% to 64%) per annum for years 2016 to 2020. (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 8.40% (2014: 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 2015 2014 RM RM Cost 1,010,000 1,010,000 Accumulated amortisation At beginning of financial year (1,010,000) (1,010,000) Charge for the financial year - - 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 financial year ended 2013.