5. GOODWILL Group 30.6.2022 RM’000 30.6.2021 RM’000 Cost 1 January/1 July/30 June 63,820 63,820 Accumulated impairment loss 1 July/1 January 63,820 3,600 Impairment loss – 60,220 30 June 63,820 63,820 Carrying amounts 1 July/1 January – 60,220 30 June – – In the previous financial period, impairment losses were recognised on OGPC Sdn. Bhd. and OGPC O&G Sdn. Bhd. (“OGPC Group”) of approximately RM44,504,000 and Genaxis Group Sdn. Bhd. and Innovation Associates Consulting Sdn. Bhd. (“Genaxis Group”) of approximately RM15,716,000 in “other operating expenses” line item of the statements of profit or loss and other comprehensive income after determining their recoverable amounts were lower than their carrying amounts. The recoverable amounts of the cash-generating units were determined using the value in use approach, and this was derived from the present value of the future cash flows from each cash-generating unit computed based on the projections of financial budgets approved by management covering a period of 5 years. The key assumptions used in the determination of the recoverable amounts were as follows: OGPC Group 30.6.2021 Genaxis Group 30.6.2021 Average Gross Margin 25.00% 15.00% Average Growth Rate 10.00% 6.90% Discount Rate 17.51% 10.00% Terminal Growth Rate 0% 0% The key assumptions represented management’s assessment based on past operating results and management’s expectations of market conditions and assessment of future trends derived from both external and internal sources. Management had determined the average gross profit margin and weighted average growth rate based on past performance and its expectation of market development. The discount rate used was computed based on the weighted average cost of capital of the industries that the Group operated in. NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) DAGANG NeXCHANGE BERHAD 238
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