114 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023 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 RM868 million (2022: RM1,191 million). The key assumptions used for the CGU’s VIU calculation are: 2023 2022 Selling price, RM per metric tonne (“MT”) * 2,967 - 4,654 2,303 - 3,635 Selling price of products subject to price control,(RM/MT) # 3,690 - 4,190 2,690 Raw sugar price, RM/lb 0.96 - 1.04 0.65 - 0.79 Sales volume, MT’000 922 -1,162 1,002 - 1,220 Freight charges, RM/MT 157.5 - 188.5 152.3 - 173.9 Natural gas price, RM/MMBtu 44.5 - 48.8 33.0 - 54.8 Terminal value growth rate 2% 2% Discount rate 11.0% - 12.0% 11.6% - 12.0% * Excluding products subject to price control # In deriving the key assumption of selling price of products subject to price control, the Group has applied three probability weighted scenario on the assumptions surrounding the selling prices based on the Group’s ongoing discussion with the relevant authorities. The sensitivity on the goodwill arising from the sugar business operations in Malaysia recoverable amount to key assumptions are as follows: 2023 Key assumptions Sensitivity VIU lower by RM ‘000 Selling price of products subject to price control Selling price remain at RM2,690/MT* (2,311,900) * 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 RM291/MT, increase in raw sugar price by USD0.24 cents/lb, decrease in terminal value growth rate by 3.6%, increase in discount rate by 2.6%, decrease in domestic sales volume by 30,000MT, increase in freight charges by USD15.68/MT, or increase in natural gas prices by RM17.45/ MMBtu would result in the recoverable amount being equal to the carrying amount.
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