Chemical Company of Malaysia Berhad Annual Report 2019

6. Intangible assets (continued) 6.3 Impairment testing for cash-generating units containing goodwill For the purpose of impairment testing, goodwill is allocated to the Group’s operating divisions which represent the lowest level within the Group at which the goodwill is monitored for internal management purposes. The aggregate carrying amounts of goodwill allocated to each unit are as follows:    Group 2019 2018 Subsidiaries in Polymers division 94,107 94,107 The recoverable amounts of the cash-generating units containing goodwill were based on value in use of the investment in the subsidiaries and determined by discounting future cash flows based on financial budgets approved by management. For the purpose of impairment testing of Polymers division, the value in use was determined by discounting the future cash flows based on the following key assumptions: (a) Cash flows were projected based on past experience, actual operating results and 3 years (2018: 4 years) budget, adjusted with an estimated terminal value. Management believes that these forecast period was justified due to the long term nature of the businesses. (b) The anticipated growth rate for revenue was projected in accordance with the Group’s 3 years (2018: 4 years) budget. (c) The cash flows assume a long term growth rate of Nil (2018: Nil) and discounted using a pre-tax discount rate of 7.5% (2018: 7.5%). 7. Investments in subsidiaries    Company 2019 2018 At cost: Unquoted shares 305,167 305,167 Less: Accumulated impairment loss (82,624) (81,844) 222,543 223,323 BUSINESS OVERVIEW OTHER INFORMATION GOVERNANCE STRUCTURE 161 ANNUAL REPORT 2019 FINANCIAL STATEMENTS