FGV Annual Report 2016

ANNUAL INTEGRATED REPORT 2016 247 FINANCIAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2016 21 INTANGIBLE ASSETS (CONTINUED) (a) Impairment test for goodwill (continued) (ii) Palm upstream operations in Malaysia (continued) Financial year ended 31 December 2015 (i) CPO price RM2,000/MT to RM2,630/MT (ii) FFB price RM450/MT to RM550/MT (iii) Estate replanting fixed cost Matured – RM2,580 per hectare based on a 25 year cycle for oil palm Immature – RM6,436 (per hectare based on a 25 year cycle for oil palm (iv) FFB yield 13.6 MT/ha to 27.3 MT/ha (v) Discount rate 9.5% The Group's review includes an impact assessment of changes in key assumptions. Based on the sensitivity analysis performed, the Directors concluded that no reasonable change in any of the base case assumptions would cause the carrying amount of the CGU to exceed the recoverable amount. (iii) Others In the previous financial year, goodwill of RM12,770,000 arising from the acquisition of the production and selling of high grade carbon nanotubes and graphene business allocated to FGV Cambridge Nanosystems Limited ("FGV CNS") had been fully impaired. In the current financial year, the Board of Directors approved the proposed divestment of the Group's interest in FGV CNS. As at 31 December 2016, FGV CNS has been classified as asset held for sale in the statements of financial position as the criteria under FRS 5 "Non-current assets held for sale" has been met (Note 36). (b) Impairment test for intangible assets (other than goodwill) (i) Refining palm oil operation in China Difficult operating conditions during the financial year and continuing losses in a subsidiary, FGV China Oils Ltd, were identified as indicators for an impairment test to be performed for the non-financial assets in relation to the CGU for palm oil refining operations in China. As a result of the impairment assessment, RM11,818,000 of impairment loss had been recognised for intangible assets (other than goodwill) in respect of FGV China Oils Ltd. The other results, key assumptions and the sensitivity analysis for the impairment assessment are disclosed in Note 19 to the financial statements.