22 INTANGIBLE ASSETS (CONTINUED) (a) Impairment test for goodwill (continued) (i) Sugar business operations in Malaysia (continued) The recoverable amount calculated based on VIU exceeded the carrying value by RM404 million (2023: RM868 million). The key assumptions used for the CGU’s VIU calculation are: 2024 2023 Selling price, RM per metric tonne (“MT”)* 2,685 – 4,470 2,967 – 4,654 Selling price of products subject to price control, (RM/MT)** 3,690 3,690 – 4,190 Selling price of Premium Grain Sugar, (RM/MT) 3,550 – 4,470 4,200 – 4,564 Raw sugar price, RM/lb 0.84 – 0.91 0.96 – 1.04 Sales volume, MT’000 1,066 – 1,210 922 – 1,162 Sales voume of Premium Grain Sugar, MT’000 23 – 45 21 – 45 Freight charges, RM/MT 206 – 217 157.5 – 188.5 Natural gas price, RM/MMBtu 44.5 – 46.4 44.5 – 48.8 Terminal value growth rate 2% 2% Discount rate, pre-tax 11.4% – 12.4% 11.4% – 12.4% * E xcluding products subject to price control ** I n deriving the key assumption of selling price of products subject to price control, the Directors of the MSM Group have applied three probability weighted scenario for the prior year on the assumptions surrounding the selling prices based on the management’s ongoing discussion with relevant authorities. In 2024, the Directors of MSM Group have applied a single scenario assessment to the selling price assumption for products subject to price control, which is fixed at RM3,690/MT. This is based on the Directors’ assessment of the latest development in the pricing mechanism of the products subject to price control. Included in the key assumptions is the lease term related to a sugar refinery in Prai, which was determined to be 30 years. This is consistent with MSM Group Director’s assessment on the Group’s legal and contractual rights of the lease agreement set out in Note 20. The sensitivity on the goodwill arising from the sugar business operations in Malaysia recoverable amount to key assumptions are as follows: Key assumptions Sensitivity VIU lower by RM‘000 2024 Selling price of products subject to price control Selling price remain at RM2,690/MT* (1,900,430) * Represents existing ceiling price for products subject to price control. All changes taken in isolation, a reduction in selling price of products subject to price control by RM137/MT, decrease in raw sugar price by USD0.39 cents/lb, increase in discount rate by 1.32%, decrease in domestic sales volume by 20,000MT, increase in freight charges by USD6.74/MT, or increase in natural gas prices by RM8.00/MMBtu would result in the recoverable amount being equal to the carrying amount. FGV Holdings Berhad | Audited Financial Statements 2024 Notes to the Financial Statements For the financial year ended 31 December 2024 106
RkJQdWJsaXNoZXIy NDgzMzc=