AUDITED FINANCIAL STATEMENTS 2022 101 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 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 RM1,191 million (2021: RM646 million). The key assumptions used for the CGU’s VIU calculation are: 2022 2021 Selling price, RM per metric tonne (“MT”) * 2,303 – 3,635 2,010 - 3,012 Raw sugar price, RM/lb 0.65 - 0.79 0.64 - 0.86 Sales volume, MT’000 1,002 - 1,220 1,088 - 1,502 Freight charges, RM/MT 152.3 - 173.9 127.5 - 148.8 Landed cost, RM/MT 15.0 - 18.3 3.0 - 15.3 Natural gas price, RM/MMBtu 33.0 - 54.8 30.0 - 33.1 Terminal value growth rate 2% 2% Discount rate 11.6% - 12.0% 11.6% - 12.0% * Excluding products subject to price control The sensitivity on the goodwill arising from the sugar business operations in Malaysia recoverable amount to key assumptions are as follows: 2022 Key assumptions Sensitivity VIU Higher/ (Lower) by RM’000 Raw sugar price Increase NY11 in 2024 & 2025 by USD0.61 cents/lb and USD0.30 cents/lb (29,500) Selling price Decrease of selling price by RM116/mt in 2023 (681,863) Natural gas price Increase in natural gas price by 22% to RM67/MMBtu in 2023 (39,637) All changes taken in isolation, a reduction in selling price by 17.2%, increase in raw sugar price by USD2.2 cents/ lb, increase in terminal value growth rate by 6.9%, increase in discount rate by 3.6%, decrease in sales volume by 17.1%, increase in freight charges by RM23/MT, increase in landed cost by RM96/MT and increase in natural gas prices by 15.7% would result in the recoverable amount being equal to the carrying amount.
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