2009 - TDM Berhad

118 TDM Berhad (6265-P)Notes to the Financial Statements33. GoodwillGroup2009 2008RM’000 RM’000CostAt 1 January 1,070 –Additional investment in subsidiaries (Note 14) – 1,070At 31 December 1,070 1,070Impairment test for goodwill(a) Allocation of goodwillGoodwill has been allocated to the Group’s CGU identifi ed according to business segment as follows:2009 2008RM’000 RM’000At 31 DecemberPlantation 79 79Healthcare 991 9911,070 1,070(b)Key assumptions used in value-in-use calculationsThe recoverable amount of a CGU is determined based on value-in-use calculations using cash fl ow projections based on fi nancialforecasts approved by management covering a fi ve-year period. Cash fl ows beyond the fi ve-year period are expected to be the samewith the fi fth year projection. The fi ve year cash fl ows are forecasted using the growth rates stated below. The key assumptions usedfor value-in-use calculations are:Plantation Healthcare% %At 31 December 2009Gross margin 40 50Growth rate (26) 36Discount rate 7 4The following describes each key assumptions on which management has based its cash fl ow projections to undertake impairmenttesting on goodwill:(i) Gross marginThe basis used to determine the value assigned to the key assumption is average gross margin achieved in the period immediatelybefore the budget period, increased for expected effi ciency improvement.(ii)Growth rateThe management believes that the average growth rates used are consistent with the medium-term average growth rate ofthe economy.(iii)Discount rateThe discount rates are pre-tax and refl ect specifi c risks relating to the relevant activities.