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Annual Report 2017

175

Notes to the

financial statements

31 march 2017

18. Goodwill on consolidation

Group

2017

2016

RM’000

RM’000

At 1 April 2016/2015 and 31 March

12,710

12,710

(a) Impairment tests for goodwill

Goodwill has been allocated to the Group’s cash generating units identified according to business segment as follows:

Bulking Plantation

Total

RM’000

RM’000

RM’000

As at 31 March 2017/2016

12,200

510

12,710

(b) Key assumptions used in value-in-use calculations

The following describes each key assumption on which management has based its cash flow projections to undertake

the impairment testing of goodwill:

2017

2016

%

%

Average discount rate

1

10.5

5.4

Terminal growth rate

2

2

5

Assumptions:

1.

Pre-tax discount rate applied to the cash flow projections.

2.

Weighted average growth rate used to extrapolate cash flows beyond the budget period.

(c) Sensitivity analysis

In assessing value-in-use and fair value, management believes that no reasonably possible change in any of the above

key assumptions would cause the carrying value of the goodwill to materially exceed its recoverable amount.