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GHL Systems Berhad
(293040-D)
Annual report 2015
Notes to the Financial Statements
31 December 2015 (continued)
9. GOODWILL (continued)
Group
Balance
as at
1.1.2014
Acquisition
of subsidiaries
(Note 10)
Balance
as at
31.12.2014
RM
RM
RM
Carrying amount
Goodwill
- 105,629,787 105,629,787
At 31.12.2014
Cost
Accumulated
impairment
Carrying
amount
RM
RM
RM
Goodwill
108,597,816 (2,968,029) 105,629,787
The carrying amount of goodwill allocated to the cash-generating units (“CGU”) of the Group is as follows:
Group
2015
2014
RM
RM
e-Pay group of companies
105,629,787 105,629,787
E-Pay group of companies represents all subsidiaries of e-Pay Asia Pty. Ltd., which were subsequently
transferred and directly held by the Company.
For the purpose of impairment testing, goodwill is allocated to the operating divisions of the Group which
represent the lowest level within the Group at which the goodwill is monitored for internal management
purposes.
The recoverable amounts of the CGUs have been determined based on value in use calculations using
cash flow projections from financial budgets approved by management covering a five-year period.
The calculations of value in use for the CGUs are most sensitive to the following assumptions:
(a) Growth rate
The anticipated annual revenue growth rates used in the cash flows are 3.0% (2014: 3.0%) for the
financial budget period.
(b) Pre-tax discount rate
Discount rates reflect the current market assessment of the risks specific to the Group. Discount rate
of 10.5% (2014: 10.5%) used for cash flows discounting purpose is the Group’s weighted average cost
of capital. This is the benchmark used by management to assess the operating performance of the
Group and to evaluate future investment proposals.