2018 UEM Edgenta Annual Report

16. INTANGIBLE ASSETS (CONT’D.) (a) Goodwill Impairment testing of goodwill Goodwill is allocated and monitored by management across the following cash generating units (“CGU”): 2018 2017 RM’000 RM’000 Consultancy Opus Group Berhad 38,636 38,636 Healthcare services Edgenta Mediserve Sdn. Bhd. (“EMS”) 26,982 26,982 Edgenta UEMS Group: - Malaysia 63,528 63,449 - Singapore 268,258 267,923 - Taiwan 10,699 10,686 Property and Facility Solutions KFM Holdings Sdn. Bhd. (“KFM”) 49,600 49,600 Infrastructure services Edgenta PROPEL Berhad 76,372 76,372 534,075 533,648 Goodwill is tested for impairment on an annual basis by comparing the carrying amount of the CGU with their respective recoverable amounts, which is based on value-in-use. The value-in-use is determined by discounting future cash flows over a period of five years including a terminal value. The future cash flows are based on management’s future business plan, which is the best estimate of immediate future performance. For EMS, the value-in-use is determined by discounting cash flows over the remaining concession period. Key assumptions used in value-in-use calculation The 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: Projection Discount rate Terminal growth rate period 2018 2017 2018 2017 Years % % % % Consultancy Opus Group Berhad 5 13.0 13.0 1.0 1.0 Healthcare services EMS 10 12.0 12.0 * * Edgenta UEMS Group: - Malaysia 5 11.0 10.0 2.0 2.0 - Singapore 5 8.0 8.0 1.0 1.0 - Taiwan 5 8.0 8.0 1.0 1.0 Property and Facility Solutions KFM 5 12.0 12.0 1.0 1.0 Infrastructure services Edgenta PROPEL Berhad 5 12.0 12.0 1.0 1.0 * Future cash flows for the integrated facilities management unit are estimated covering the concession period of ten years with no terminal value. Financial Review Stakeholder Information AGM Information 201 Governance Review of Sustainability Activities