PTT Global Chemical Public Company Limited and its Subsidiaries For the year ended 31 December 2023 PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the financial statements For the year ended 31 December 2023 69 Impairment testing for CGUs containing goodwill For the purposes of impairment testing, goodwill has been allocated to the Group’s CGU which is substantially represented by Allnex Holding GmbH and its subsidiaries. The recoverable amount was based on value in use, estimated using discounted cash flows. The fair value measurement was categorised as a Level 3 fair value. The recoverable amount of CGU relating to goodwill arising from the cash flow projections included specific estimates for ten years and a terminal growth rate thereafter to aligned with long-term business plan of the Group. The terminal growth rate was determined based on management’s estimate of the long-term annual EBITDA growth rate, consistent with the assumptions that a market participant would make. The key assumptions used in the estimation of the recoverable amount The discount rate was based on the weighted average cost of capital, derived using a risk free rate referencing a 10-year government bond, market risk premium and average company beta at a discount rate of 8%. The forecasted growth in EBITDA was derived based on the expectations of industry, regional and global macroeconomic information. With references to historical data, internal and external sources of information, applicable adjustments have been reflected to the increases in revenue and corresponding expenditures ranging from raw material and utilities prices, logistic costs to research, innovations and development to enhance product and services standards in satisfying diverse customer requirements and demands at a growth rate of 10% to 12%. From the impairment assessment, the recoverable amount of CGU was higher than its carrying amount, therefore, no impairment loss was recognised in the consolidated financial statements. Management is aware that if there were to be changes to two key assumptions, either an increase in discount rate of 17% of company weighted average cost of capital or a decrease in the forecasted EBITDA growth rate in excess of 20%, the calculated recoverable amount will approximately be equal to the carrying amount. 313 PTT GLOBAL CHEMICAL PUBLIC COMPANY LIMITED Form 56-1 One Report 2023
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