MSM Malaysia Holdings Berhad Annual Report 2019

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 19 INTANGIBLE ASSETS (CONTINUED) Group Company Goodwill Brand Software Total Software RM’000 RM’000 RM’000 RM’000 RM’000 2019 Cost 576,240 86,033 14,493 676,766 8,080 Accumulated amortisation - (34,752) (11,076) (45,828) (4,419) Accumulated impairment - - (179) (179) - Net book value 576,240 51,281 3,238 630,759 3,661 2018 Cost 576,240 86,033 15,635 677,908 8,589 Accumulated amortisation - (30,090) (7,658) (37,748) (2,641) Net book value 576,240 55,943 7,977 640,160 5,948 * See Note 17 to the financial statements for details of impairment assessment. Goodwill The goodwill relates to the acquisition of the sugar business and is allocated to the sugar segment. This represents the lowest level at which goodwill is monitored for internal management purposes. The recoverable amount of the Cash Generating Unit ("CGU”) is determined based on value-in-use (‘VIU”) calculations using cash flows projections based on financial budgets approved by the Directors covering a three-year period and applying a terminal value multiple using a long term sustainable growth rate. The recoverable amount calculated based on VIU exceeded the carrying value by RM144 million (2018 : RM306 million). The key assumptions used for the CGU’s value in use calculation are: Key assumptions 2019 2018 Selling price, RM/MT 1,607 - 2,600 1,746 - 2,630 Raw sugar price, US cents/lbs 13.5 - 14.0 14.0 Sales volume, MT’000 1,156 - 1,268 1,238 - 1,561 Terminal value growth rate % 2% 2% Discount rate % 9.0% - 11.4% 10.5% - 12.5% Exchange rate (RM – USD) RM4.20/USD RM4.15/USD MSM Malaysia Holdings Berhad | Annual Report 2019 180