MKH Berhad 155 12. INTANGIBLE ASSETS (CONT’D) 12.1 Goodwill (Cont’d) Impairment test of goodwill (Cont’d) K ey assumptions used in the value-in-use calculations based on a 9 years (2020: 10 years) cash flows projection in respect of impairment test for goodwill on the plantation segment are: (i) discount rate of 7.3% (2020: 6.4%) which is pre-tax and reflected specific risks of the plantation segment in Indonesia; (ii) oil palm trees with an average life of 25 (2020: 25) years with the first three years as immature and remaining years as mature which is the average life cycle of the trees; (iii) crude palm oil (“CPO”) average selling price of RM2,675 (2020: RM2,000) per metric tonne based on the management’s estimate; (iv) average CPO extraction rate of 21% (2020: 22%) based on the industry trend and past performance; and (v) average annual oil palm yield per hectare of 30 to 33 (2020: 30 to 33) metric tonnes based on management’s estimate and historical yield. I n assessing the value-in-use, management does not foresee any possible changes in the above key assumptions that would cause the carrying amounts of the goodwill plus the CGU to materially exceed their recoverable amounts. 12.2 Other intangible asset The Group 2021 2020 RM RM Capitalised development At beginning of year 45,735,470 25,234,391 Additions 9,158,204 20,501,079 At end of year 54,893,674 45,735,470 O ther intangible asset represents expenditure incurred to construct a commuter station for Perbadanan Aset Keretapi (“PAK”) in consideration for the right to lease a plot of land from PAK for a period of 60 years as disclosed in Note 11. The total estimated construction costs of the commuter station is approximately RM59,629,206 (2020: RM59,042,876). The status of the construction is as disclosed in Note 36 (a). Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2021
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