NOTES TO THE FINANCIAL STATEMENTS
For The Financial Period From 1 January 2014 To 31 March 2015 (Cont’d)
86
Annual Report 2015
9.
GOODWILL
Group
31.3.2015
31.12.2013
RM’000
RM’000
At 1.1.2014/2013
–
–
Acquisition of new subsidiaries
4,153
–
At 31.3.2015/31.12.2013
4,153
–
The amount of goodwill relates to the manufacturing of cards cash-generating unit. The goodwill
arose from the investment in subsidiaries and is reviewed for impairment annually.
The Group has assessed the recoverable amount of goodwill, and determined that no impairment is
required. The recoverable amount of the manufacturing of cards cash-generating unit is computed
using the value-in-use approach, and this is derived from the present value of the future cash flows from
the generating segment based on the projections of financial budgets approved by management
covering a period of 3 years. The key assumptions used in the determination of the recoverable
amount are as follows:-
(i)
Budgeted profit margin Average profit margin achieved in the 3 years immediately
before the budgeted period increased for expected efficiency
improvements and cost saving measures.
(ii) Growth rate
Based on the expected projection of the smart card business.
(iii) Discount rate (pre-tax)
Reflects specific risks relating to the relevant operating segments.
10. DEVELOPMENT EXPENDITURES
Group
31.3.2015
31.12.2013
RM’000
RM’000
At cost:-
At 1.1.2014/2013
3,519
3,668
Additions
9,639
912
Cost of sales
(811)
(1,061)
At 31.3.2015/31.12.2013
12,347
3,519
Allowance for impairment losses
(1,222)
(1,222)
11,125
2,297
Allowance for impairment losses:-
At 1.1.2014/2013
(1,222)
–
Addition
–
(1,222)
At 31.3.2015/31.12.2013
(1,222)
(1,222)
The development expenditures consist of direct and related costs for overhead and software solutions
incurred in the process of development.
The development expenditures of the Group include staff costs amounting to RM1,659,000 (31.12.2013
- RM1,483,000).
