Frontken Berhad Annual Report 2018

98 Frontken Corporation Berhad (651020-T) ANNUAL REPORT 2018 13. GOODWILL ON CONSOLIDATION The Group 2018 2017 RM RM *] KNPRWWRWP NWM XO bNJ[ ! ! 0XXM`RUU JLZ^R[NM RW J K^\RWN\\ LXVKRWJ]RXW R\ JUUXLJ]NM J] JLZ^R\R]RXW ]X ]QN LJ\Q PNWN[J]RWP ^WR] ۷,0>۸ ]QJ] R\ NaYNL]NM ]X KNWN࠰] O[XV ]QJ] K^\RWN\\ LXVKRWJ]RXW =QN LJ[[bRWP JVX^W] XO ]QN PXXM`RUU QJM KNNW JUUXLJ]NM J\ OXUUX`\# The Group 2018 2017 RM RM /[XW]TNW .J\] 6JUJb\RJ <MW +QM ! ! ! ! *[N\ 0[NNW =NLQWXUXPb ,X[YX[J]RXW !! !! ==.< /[XW]TNW 2W]NP[J]NM <N[_RLN\ <MW +QM ! " ! " ! ! =QN 0[X^Y ]N\]\ PXXM`RUU JWW^JUUb OX[ RVYJR[VNW] X[ VX[N O[NZ^NW]Ub RO ]QN[N J[N RWMRLJ]RXW\ ]QJ] PXXM`RUU VRPQ] KN RVYJR[NM =QN [NLX_N[JKUN JVX^W] XO ]QN ,0> R\ MN]N[VRWNM O[XV _JU^N RW ^\N LJUL^UJ]RXW =QN TNb J\\^VY]RXW\ OX[ ]QN _JU^N RW ^\N LJUL^UJ]RXW J[N ]QX\N [NPJ[MRWP ]QN NaYNL]NM LQJWPN\ ]X Y[RLRWP JWM MR[NL] LX\]\ P[X`]Q [J]N\ JWM MR\LX^W] [J]N\ M^[RWP ]QN YN[RXM 2018 2017 % % +^MPN]NM P[X\\ VJ[PRW ! ]X ! " ]X Growth rates BNJ[ ]X ]X BNJ[ ]X ]X ]X 9[N ]Ja MR\LX^W] [J]N\ ]X " ]X ! =QN LJUL^UJ]RXW XO _JU^N RW ^\N OX[ ,0> J[N VX\] \NW\R]R_N ]X ]QN OXUUX`RWP J\\^VY]RXW\# (i) Budgeted gross margin Management determines budgeted gross margin based on past performance and its NaYNL]J]RXW\ XO VJ[TN] MN_NUXYVNW] (ii) Growth rates =QN P[X`]Q [J]N\ J[N KJ\NM XW RWM^\][b P[X`]Q OX[NLJ\]\ ,QJWPN\ RW \NUURWP Y[RLN\ JWM MR[NL] LX\]\ J[N KJ\NM XW YJ\] Y[JL]RLN\ JWM NaYNL]J]RXW\ XO O^]^[N LQJWPN\ RW ]QN VJ[TN] =QN\N LJUL^UJ]RXW\ ^\N Y[N ]Ja LJ\Q ࠱X` Y[XSNL]RXW\ KJ\NM XW ࠰WJWLRJU K^MPN]\ JYY[X_NM Kb VJWJPNVNW] JWM Na][JYXUJ]NM LJ\Q ࠱X`\ OX[ J ࠰_N bNJ[ YN[RXM based on growth rates consistent with the long-term average growth rate for the RWM^\][b (iii) Discount rates 6JWJPNVNW] N\]RVJ]N\ MR\LX^W] [J]N ^\RWP Y[N ]Ja [J]N ]QJ] [N࠱NL] L^[[NW] VJ[TN] J\\N\\VNW]\ XO ]QN ]RVN _JU^N XO VXWNb JWM ]QN [R\T \YNLR࠰L ]X ]QN ,0> =QN [J]N ^\NM ]X MR\LX^W] ]QN OX[NLJ\]NM LJ\Q ࠱X`\ [N࠱NL]\ \YNLR࠰L [R\T\ JWM NaYNL]NM [N]^[W\ [NUJ]RWP ]X ]QN RWM^\][b h (iv) Terminal value Terminal value is based on zero growth of projected present value of particular \^K\RMRJ[RN\ O[XV bNJ[ ^W]RU RW࠰WR]b The management believes that there is no reasonable change in the above key assumptions which would cause the LJ[[bRWP JVX^W] XO ]QN PXXM`RUU ]X NaLNNM R]\ [NLX_N[JKUN JVX^W]\ Notes To The Financial Statements (cont’d)