2019 UEM Edgenta Annual Report

202 Notes to the Financial Statements For the year ended 31 December 2019 16. INTANGIBLE ASSETS (CONT’D.) (a) Goodwill (cont’d.) 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 period Years Discount rate Terminal growth rate 2019 % 2018 % 2019 % 2018 % Asset consultancy: Opus Group Berhad 5 13.0 13.0 1.0 1.0 Healthcare support: EMS 10 12.0 12.0 * * Edgenta UEMS Group: - Malaysia 5 11.0 11.0 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: EGT Group 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. The calculation of the value-in-use for the CGUs are most sensitive to the following assumptions: (i) Budgeted gross margin The 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 The 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 Terminal growth rates used to extrapolate cash flows beyond the budget period is based on published industry research for each business.