199 ANNUAL REPORT 2025 MST GOLF GROUP BERHAD 4. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES (CONT’D) Right-of-use assets (cont’d) The motor vehicles of the Group with net carrying amount of RM249,000 (2024: RM364,000) were acquired under finance lease arrangements. The additional rights-of-use assets amounted to RM6,709,000 (2024: RM21,522,000) were derived after netting off lease incentive received of RMNil (2024: RM 534,000). During the financial year ended 31 December 2025, impairment charge of RM6,473,000 (2024: RMNil) was recorded in the consolidated statement of profit or loss, considering that the relevant subsidiaries have been incurring losses and that it was not probable that profits will be available in the foreseeable future. Impairment tests for right-of-use assets Management has carried out impairment test review for right-of-use assets based on the recoverable amount of each cashgenerating unit (“CGU”). The recoverable amount has been determined based on a value in use (“VIU”) calculation using cash flow projections from financial budgets approved by directors covering a 3-year period. The pre-tax discount applied to the cash flow projections are as follows:- Group 2025 2024 % % CGU Malaysia 10.54% - Singapore 9.42% - Key assumptions used in VIU calculation The calculation of VIU for the CGUs are most sensitive to the assumptions made for revenue, gross margins, operating expenses, growth rates and discount rates as disclosed in Note 3 to the financial statements. Sensitivity to change in assumptions With regard to the assessment of VIU of the respective CGU, management believes that no reasonably possible change in any of the above key assumptions would cause the carrying value, including property, plant and equipment, of the unit to materially exceed its recoverable amount.
RkJQdWJsaXNoZXIy NDgzMzc=