17 PROPERTY, PLANT AND EQUIPMENT (CONTINUED) (b) Impairment assessment (continued) Financial year ended 31 December 2021 (continued) (a) MSM Sugar Refinery (Johor) Sdn Bhd (“MSM Johor”) (continued) The sensitivity on the MSM Johor’s assets recoverable amount to key assumptions are as follows: Key assumptions Sensitivity VIU Higher/(Lower) by RM’000 Sales volume 30% reduction in FY22 and FY23 (43,000) Freight charges Increase to USD60/MT in FY22 (USD 30/MT FY23 onwards) (32,400) Natural gas price Increase to RM40/MMBtu in FY22 (21,100) Fine syrup sales volume Reduce by 12KMT - 16KMT (8,800) The above sensitivity analysis is based on the movement of individual key assumptions while holding all other assumptions constant. (b) Reversal of impairment loss In the current financial year, the Group carried out an assessment on the recoverable amount of certain plant and machinery assets previously impaired during the financial year ended 31 December 2019. Following the assessment, the Group has reversed a total impairment of RM5,127,000 as a result of increase in service potential through the commencement of utilisation of these assets. In addition, in December 2021, the Company received an offer in respect of certain plant and machinery from a scrap metal purchaser. These plant and machinery are part of assets impaired in financial year ended 31 December 2019 following cessation of refinery operations in MSM Perlis. Following this offer, a reversal of impairment loss of RM11,300,000 had been recognised based on the recoverable amount of the assets which is equivalent to the offer price. As the assets were planned for disposal to the scrap metal purchaser, the assets have been reclassified to Assets Held for Sale (Note 29) from Property, Plant and Equipment. Sale of these assets was completed on 17 February 2022. (c) MSM Perlis Sdn Bhd (“MSM Perlis”) During the financial year ended 31 December 2019, the recoverable amount of plantation assets which included leasehold land and bearer plant assets was determined based on the offer received from a potential buyer. During the financial year ended 31 December 2020, following the rescission of sale and purchase agreement of the assets’ disposal, the plantation assets were transferred to Property, Plant and Equipment and Right-Of-Use Assets, as indicated in Note 18 to the financial statements, from Assets Held for Sale. NOTESTOTHE FINANCIAL STATEMENTS FORTHE FINANCIALYEAR ENDED 31 DECEMBER 2021 SUSTAINABILITY JOURNEY HOWWE ARE GOVERNED FINANCIAL STATEMENTS ADDITIONAL INFORMATION 331
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