99 AUDITED FINANCIAL STATEMENTS 2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 23 INTANGIBLE ASSETS (CONTINUED) (a) Impairment test for goodwill (continued) (i) Sugar business operations in Malaysia (continued) Other than as disclosed below, there is no reasonably possible change in any of the above key assumptions, which would cause the carrying value of the CGU to exceed its recoverable amount. (continued) 2020 Assumptions Sensitivity VIU Higher/(Lower) by RM’000 Exchange rate Reduce by RM0.13/USD 202,700 Raw sugar price ** 154,800 Domestic and industry sales volume Domestic reduce by 28MT – 88MT; 71,200 and discount rate industry reduce by 33MT –131MT; Discount rate reduce by 1% Capital expenditure Increase by RM79m (87,100) Selling Premium Reduce in Selling premium by USD50/MT (11,000) ** Increasing raw sugar price by RM0.50/USD in 2021, reducing by RM0.75/USD in 2022, reducing by RM2.90/USD in 2023 and constantly reducing by RM0.30/USD in FY2024 to FY2028. All changes taken in isolation, a reduction reduction in domestic selling price of RM36/MT and increase in raw sugar price by 0.2 cents per pound, reduce in terminal value growth rate by 0.6%, increase in discount rate by 0.4%, decrease in domestic sales volume by 3.8% and increase in exchange rate by RM0.06 per USD would result in the recoverable amount being equal to the carrying amount. The above sensitivity analysis is based on the movement of individual key assumptions while holding all other assumptions constant. (ii) Palm upstream operations in Malaysia Goodwill of RM226,795,000 (2020: RM226,795,000) for palm upstream operations in Malaysia comprise of RM127,238,000 (2020: RM127,238,000) for PUP and RM99,557,000 (2020: RM99,557,000) for Yapidmas. The Group’s estates in Malaysia are combined for the purposes of goodwill impairment testing as they represent the lowest level within the Group at which goodwill is monitored for internal management purpose. The recoverable amount of the palm upstream operations CGU is determined using a fair value less cost to sell calculation (Level 3 fair value computation) using cash flow projections covering a 25 year period. The key assumptions are as follows: Financial year ended 31 December 2021 (i) CPO price RM2,450/MT to RM4,200/MT (ii) PK price RM1,500/MT to RM2,645/MT (iii) Average FFB yield 16.9 MT/ha to 21.8 MT/ha (iv) Estate cost Mature estate costs – RM3,304 per hectare to RM4,365 per hectare based on a 25 year cycle for oil palm Immature estate costs – RM4,575 per hectare to RM5,402 per hectare based on a 25 year cycle for oil palm (v) Discount rate 9.5%
RkJQdWJsaXNoZXIy NDgzMzc=