Integrated Annual Report 2024 SECTION 6 • FINANCIAL STATEMENTS 263 Notes to the Financial Statements 6. INTANGIBLE ASSETS (CONT’D) 6.1 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 2024 RM’000 2023 RM’000 Press Metal International Limited 9,219 9,219 Press Metal Aluminium Rods Sdn. Bhd. 28,628 28,628 Japan Alumina Associates (Australia) Pty. Ltd. 7,493 7,991 45,340 45,838 Multiple units without significant goodwill 21,141 21,141 66,481 66,979 The recoverable amount of each unit was based on its value in use. Value in use was determined by discounting the future cash flows expected to be generated from the continuing use of the units and was based on the following key assumptions: • Cash flows were projected based on past experience, actual operating results and a 5-year business plan. A terminal growth rate of 2% (2023: 2%) was then applied. Management believes that this terminal growth rate was justified due to the long-term nature of the aluminium business. • The anticipated annual revenue growth included in the cash flow projections was between 1% to 3% (2023: 1% to 3%), which is lower than the average growth rate experienced in the past 3 years. • The aluminium price was assumed to be similar to the average prices for the current financial year. • Cost growth, based on past experience, was estimated to be between 1% to 3% (2023: 1% to 3%), which is in line with revenue growth. • Pre-tax discount rates of 8% - 10% (2023: 8% - 10%) were applied in determining the recoverable amount of the units. The discount rates were estimated based on an industry weighted average cost of capital. The values assigned to the key assumptions represent management’s assessment of future trends in the aluminium industry and are based on both external sources and internal sources (historical data). The above estimates are not particularly sensitive in any areas. 6.2 Material accounting policy information (a) Recognition and measurement Intangible assets, other than goodwill, that are acquired by the Group, which have finite useful lives, are measured at cost less any accumulated amortisation and any accumulated impairment losses. (b) Amortisation Amortisation is recognised in profit or loss as other expenses on a straight-line basis over the estimated useful lives of intangible assets. The estimated useful life for the current and comparative periods for other intangible assets is 7 years.
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