REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED) Key audit matters (continued) Key audit matters How our audit addressed the key audit matters Impairment assessment of property, plant and equipment, right-of-use assets and intangible assets other than goodwill The carrying values of property, plant and equipment, right-of-use assets and intangible assets other than goodwill of the Group as at 31 December 2021 is RM1,220.5 million, RM83.0 million and RM46.0 million respectively (“non-financial assets”). As at 31 December 2021, the Group’s market capitalisation of RM899.8 million was below the carrying value of its net assets of RM1,712.6 million which is an indication that the non-financial assets of the Group may be impaired. Consequently, management performed an impairment assessment on the Group’s non-financial assets. Management concluded that the non-financial assets were not impaired as at 31 December 2021. We focused on this area as the recoverable amount of the assets based on VIU calculations require management’s judgment on the assumptions used in the calculations, in particular selling price, raw sugar price, sales volume, refining costs, capital expenditure, realisability of the assets at terminal year, discount rate and exchange rate. Refer to Note 3(k) in the significant accounting policies, Note 5 in the critical accounting estimates and judgment and Note 17 to the financial statements. We performed the following procedures on the cash flow projections to support the impairment assessment of property, plant and equipment, right-of-use assets and intangible assets other than goodwill prepared by the management and approved by the Board of Directors of the Company: • We assessed the reasonableness of the key assumptions used by management in theVIU calculations, in particular selling price, raw sugar price, sales volume, refining costs, realisability of assets at terminal year, discount rate and exchange rate by comparing with business plans, historical results and market trends; • We assessed the reliability of management’s forecast through the review of past trends of actual financial performance against previous forecasted results; • We examined the sensitivity analysis prepared by the management on selling prices, raw sugar price, sales volume, refining costs, capital expenditure, discount rate and exchange rate to evaluate the impact on the impairment assessment; and • We assessed the adequacy of the disclosures in the financial statements. Based on our procedures, we noted no significant exceptions. There are no key audit matters to report for the Company. INDEPENDENT AUDITORS’ REPORT TOTHE MEMBERS OF MSM MALAYSIA HOLDINGS BERHAD (Incorporated in Malaysia) Registration No. 201101007583 (935722-K) SUSTAINABILITY JOURNEY HOWWE ARE GOVERNED FINANCIAL STATEMENTS ADDITIONAL INFORMATION 273
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