NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 FINANCIAL PERFORMANCE 202 5. INTANGIBLE ASSETS (CONT’D) Goodwill Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating unit that is expected to benefit from that business combination. The Group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired. The recoverable amount of the cash generating unit is determined based on the value in use. The value in use calculations is based on the discounted net cash projections based on financial budgets approved by management covering a period 3 years (2024: 3 years) with an estimated growth rate range between 5% to 9% (2024: 0% to 8%) and a weighted average cost of capital of 10.53% (2024: 9.32%). Cash flows projections during the budget period are based on the same expected gross margins and raw materials price inflation throughout the budget period. The Directors believe that any reasonably possible change in the key assumptions on which recoverable amount is based would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the cash generating unit. 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 and right-of-use assets, of the unit to materially exceed its recoverable amount. 6. INVESTMENT IN SUBSIDIARIES Company 2025 2024 RM’000 RM’000 Unquoted shares, at cost - Within Malaysia 39,717 39,717 - Outside Malaysia 71,003 49,098 110,720 88,815 Less: Accumulated impairment loss (7,376) - 103,344 88,815
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