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FRONTKEN CORPORATION BERHAD
(651020-T)
ANNUAL REPORT
2015
12.
INVESTMENTS IN ASSOCIATES (CONT’D)
The non-trade balance is unsecured, interest-free and repayable on demand. The amount owing is to be settled in cash.
Transactions undertaken with associate during the financial year are as follows:
The Group
2015
2014
RM
RM
Frontken (Thailand) Co., Ltd.
Purchases
27,554
142,888
13.
GOODWILL ON CONSOLIDATION
The Group
2015
2014
RM
RM
At beginning of year
33,760,856
25,394,265
Arising from acquisition of a subsidiary (Note 11)
-
8,366,591
At end of year
33,760,856
33,760,856
Goodwill acquired in a business combination is allocated, at acquisition, to the cash-generating unit (“CGU”) that is
expected to benefit from that business combination. The carrying amount of the goodwill had been allocated as follows:
The Group
2015
2014
RM
RM
Frontken (East Malaysia) Sdn. Bhd.
805,812
805,812
Ares Green Technology Corporation
24,588,453
24,588,453
TTES Frontken Integrated Services Sdn. Bhd.
8,366,591
8,366,591
33,760,856
33,760,856
The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be
impaired.
The recoverable amount of the CGU is determined from value in use calculation. The key assumptions for the value in
use calculation are those regarding the expected changes to pricing and direct costs, growth rates and discount rates
during the period.
2015
2014
%
%
Budgeted gross margin
20 to 36
26 to 37
Growth rates
2.0 to 5.0
0.0 to 5.0
Pre-tax discount rate
9.83 to 12.71
10.20
NOTES TO THE FINANCIAL STATEMENTS
(cont’d)