115 GHL SYSTEMS BERHAD 199401007361 (293040-D) ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2021 CONT’D 15. GOODWILL (Cont’d) (b) Allocation of goodwill The carrying amount of goodwill allocated to the cash-generating units (“CGU”) of the Group is as follows: Group 2021 2020 RM RM e-pay group of companies # 105,629,787 105,629,787 Paysys group of companies ^ 63,009,198 63,009,198 168,638,985 168,638,985 # e-pay group of companies represents e-pay (M) Sdn. Bhd. and its subsidiaries, Mobiepay Sdn. Bhd. and its subsidiaries, S Capital Sdn. Bhd. and Sentripay Sdn. Bhd.. ^ Paysys group of companies represents all subsidiaries of Paysys (M) Sdn. Bhd.. For the purpose of impairment testing, goodwill is allocated to the operating divisions of the Group which represent the lowest level within the Group at which the goodwill is monitored for internal management purposes. (c) Key assumptions used in value in use calculations The recoverable amount of an asset or CGU is the higher of its fair value less cost to sell and its value in use. The calculations of value in use for the CGUs are most sensitive to the following assumptions: (i) Growth rate The anticipated annual revenue growth rates used in the cash flows for the financial budget period are following: 2021 2020 % % Growth rates e-pay group of companies 5 2 Paysys group of companies 6 - 10 3 (ii) Pre-tax discount rate Discount rates reflect the current market assessment of the risks specific to the Group. Discount rate of 11.3% (2020: 10.3%) used for cash flows discounting purpose is the Group’s weighted average cost of capital. This is the benchmark used by management to assess the operating performance of the Group and to evaluate future investment proposals.
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