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SUSTAINABILITY JOURNEY HOW WE ARE GOVERNED FINANCIAL STATEMENTS ADDITIONAL INFORMATION 317

NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021

4 FINANCIAL RISK MANAGEMENT (CONTINUED)
(c) Fair value estimation (continued)

There were no transfers between levels 1 and 2 during the financial year.
(i) Financial instruments in Level 1
The fair value of financial instruments traded in active markets is based on quoted market prices at the statement
of financial position date. The quoted market price used for financial assets held by the Group is the current bid
price. These instruments are included in Level 1. Instruments included in Level 1 comprise of sugar commodity
futures contracts and brent crude oil option contracts.

(ii) Financial instruments in Level 2
The fair value of financial instruments that are not traded in an active market is determined by using valuation
techniques. These valuation techniques maximise the use of observable market data where it is available and
rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument
are observable, the instrument is included in Level 2. Instruments included in Level 2 comprise Islamic profit rate
swap and foreign exchange forward contract.
There are no offsetting financial assets and financial liabilities during the financial year.

5 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgements are continually evaluated by Directors and management and are based on historical experience
and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The estimates and assumption that have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year are discussed below:
Goodwill
The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the recoverable
amount of the cash generating units (‘CGU’) to which the goodwill is allocated. Estimating the recoverable amount requires
management to make an estimate of the expected future cash flows from the CGU and also to choose a suitable discount
rate in order to calculate the present value of those cash flows.

The recoverable amounts of CGUs were determined based on the higher of fair value less cost to sell and value-in-use
(“VIU”) calculations. The VIU is the net present value of the projected future cash flows derived from the CGU discounted at
an appropriate discount rate. Projected future cash flows are estimates made based on historical, industry trends, general
market and economic condition and other available information. Projected future cash flows are based on Group’s judgement
in terms of assessing future uncertain parameters such as selling price, raw sugar price, sales volume and terminal value
growth rate. These judgements are based on the historical track record and expectations of future events that are believed to
be reasonable under current circumstances.
As a result of these impairment assessments, the Group did not recognise any impairment. A forecast period of 8 years
together with a terminal value growth rate was used to derive the recoverable amount. An extended forecast period of
8 years is used to show the full impact following the rationalisation plan within the Group.
The key assumptions and sensitivity analysis are as disclosed in Note 19 to the financial statements.