2020 UEM Edgenta Annual Report

15. INTANGIBLE ASSETS (CONTD.) a. Goodwill (contd.) Key assumptions used in value-in-use calculation T he discount rates applied to the cash flow projections and the forecasted growth rates used to extrapolate cash flows beyond the projection period are as follows: Discount Rate Terminal growth rate Projection period Years 2020 % 2019 % 2020 % 2019 % Asset consultancy: Opus Group Berhad 5 13.0 13.0 1.0 1.0 Healthcare support: EMS 14 12.0 12.0 * * Edgenta UEMS Group: - Malaysia 5 11.0 11.0 1.0 2.0 - Singapore 5 8.5 8.0 1.0 1.0 - Taiwan 5 8.5 8.0 1.0 1.0 Property and Facility Solutions: EGT Group 5 11.5 12.0 1.0 1.0 Infrastructure services: Edgenta PROPEL Berhad 5 11.0 12.0 1.0 1.0 * For EMS, the value-in-use is determined by discounting cash flows for a period of 14 years (2019: 10 years) with no terminal value. T he calculation of the value-in-use for the CGUs are most sensitive to the following assumptions: i. Budgeted gross margin T he basis used to determine the value assigned to the budgeted gross margins is the average gross margins and average growth rate achieved in the years before the budgeted year, adjusted for market and economic conditions and internal resource efficiency. ii. Discount rate T he discount rates reflect the current market assessment of the risks specific to each CGU. This reflected the management’s best estimate of return on capital employed required in the Group. iii. Terminal growth rate T erminal growth rates used to extrapolate cash flows beyond the budget period is based on published industry research for each business. UEM EDGENTA BERHAD 244 Financial Statements NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2020