110 GHL SYSTEMS BERHAD 199401007361 (293040-D) ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2022 CONT’D 15. GOODWILL (Cont’d) (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: 2022 2021 % % Growth rates e-pay group of companies 5 5 Paysys group of companies 5 6 - 10 (ii) Pre-tax discount rate Discount rates reflect the current market assessment of the risks specific to the Group. Discount rate of 11.3% (2021: 11.3%) 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. (iii) Terminal value 2022 2021 % % Terminal growth rates e-pay group of companies 5 5 Paysys group of companies 5 5 Based on the annual impairment testing undertaken by the Group, no impairment loss is required for the carrying amount of the remaining goodwill assessed as at 31 December 2022 as its recoverable amount is in excess of its carrying amount. Sensitivity to changes in assumptions Management is not aware of any reasonably possible changes in the assumptions above that could cause further impairment loss on goodwill.
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