UEM EDGENTA BERHAD Integrated Annual Report 2025 322 NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2025 17. INTANGIBLE ASSETS (CONTD.) (a) Goodwill (contd.) Impairment testing of goodwill (contd.) (iv) UEMS SG CGU The recoverable amount of the UEMS SG CGU was determined based on a VIU calculation using cash flow projections derived from financial budgets approved by the Board of Directors covering a five-year period. Based on the assessment, the recoverable amount of the UEMS SG CGU was RM220.3 million. The projected cash flows reflect expected margin compressions arising from regulatory cost increases and competitive pricing pressures impacting contract renewals. As a result, the goodwill allocated to UEMS SG CGU was partially impaired and an impairment loss of RM58.7 million was recognised for the financial year ended 31 December 2025. Key assumptions used in VIU 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 Pre-tax discount rate Terminal growth rate 2025 % 2024 % 2025 % 2024 % Asset consultancy: Opus Group 5 13.5 13.5 1.0 1.0 Healthcare solutions EMS 10 11.4 12.6 * * Edgenta UEMS Group: - Malaysia 5 13.4 10.7 1.0 1.0 - Singapore 5 10.2 10.3 1.0 1.0 - Taiwan 5 12.1 12.2 1.0 1.0 Property and Facility Solutions: EGT Group 5 8.7 8.7 1.0 1.0 MEEM for Facilities Management Company 5 8.8 7.8 1.0 1.0 Kaizen Group 5 11.1 11.1 1.0 1.0 Infrastructure services: Edgenta PROPEL Berhad 5 12.7 10.0 1.0 1.0 * For EMS, the VIU is determined by discounting cash flows for a period of 10 years (2024: 11 years) with no terminal value. The Board of Directors has applied a 10-year period for computing EMS’s DCF, considering the historical relationship with the customer and the likelihood of contract renewal, despite the shorter contract duration.
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