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FRONTKEN CORPORATION BERHAD
(651020-T)
ANNUAL REPORT
2015
13.
GOODWILL ON CONSOLIDATION (CONT’D)
The calculation of value-in-use for CGU are most sensitive to the following assumptions:
(i)
Budgeted gross
margin
Management determines budgeted gross margin based on past performance and its
expectations of market development.
(ii) Growth rates
The growth rates are based on industry growth forecasts. Changes in selling prices and
direct costs are based on past practices and expectations of future changes in the market.
These calculations use pre-tax cash flow projections based on financial budgets approved
by management and extrapolated cash flows for a three-year period based on growth rates
consistent with the long-term average growth rate for the industry.
(iii) Discount rate
Management estimates discount rate using pre-tax rate that reflect current market
assessments of the time value of money and the risk specific to the CGU. The rate used to
discount the forecasted cash flows reflects specific risks and expected returns relating to
the industry.
The management believes that there is no reasonable change in the above key assumptions would cause the carrying
amount of the goodwill to exceed its recoverable amounts.
14.
DEFERRED TAX ASSETS/LIABILITIES
The Group
2015
2014
RM
RM
Deferred tax assets
At beginning of year
1,062,816
665,109
Transfer from profit or loss (Note 8)
37,141
289,118
Transfer to other comprehensive expenses
105,318
95,117
Foreign currency translation differences
200,569
13,472
At end of year
1,405,844
1,062,816
Deferred tax liabilities
At beginning of year
2,571,891
3,653,351
Transfer from/(to) profit or loss (Note 8)
486,043
(1,164,261)
Arising from acquisition of a subsidiary
-
48,932
Foreign currency translation differences
388,230
33,869
At end of year
3,446,164
2,571,891
The net deferred tax liabilities and assets are in respect of the tax effects of the following:
The Group
Deferred Tax
(Assets)/Liabilities
2015
2014
RM
RM
Temporary differences arising from
property, plant and equipment
2,091,901
2,272,694
Others
(51,581)
(763,619)
2,040,320
1,509,075
NOTES TO THE FINANCIAL STATEMENTS
(cont’d)