Serba Dinamik Annual Report 2019

269 8. INTANGIBLE ASSETS - GROUP (CONTINUED) Impairment testing for cash-generating units containing goodwill (continued) Goodwill arising from business combination has been allocated to three individual cash-generating units (“CGUs”) for impairment testing as follows: Group 2019 2018 Segment RM’000 RM’000 O&M 6,655 2,160 EPCC 2,882 2,882 Others 1,696 216 _______ _______ 11,233 5,258 ======== ======== The recoverable amount of a CGU is determined based on value in use calculations using cash flow projections based on financial budgets approved by management covering a five years period. The calculations of value in use for the CGUs are most sensitive to the following assumptions: (i) Gross margin The basis used to determine the value assigned to the gross margin is based on past experience, actual operating results and the 5-year business plan. (ii) Revenue growth The basis used to determine the revenue growth is based on past experience, actual operating results and the five year business plan. The anticipated annual revenue growth included in the cash flow projections is within the growth levels experienced by the CGU in the past. (iii) Long term growth rate The cash flows beyond the 5-year period are extrapolated using the long-term growth rates of 1%. (iv) Discount rate The discount rates used as follows are pre-tax and reflect specific risks relating to the relevant segments. Group Segment 2019 2018 O&M 9% 9% EPCC 9% 9% Others 9% 9% N O T E S T O T H E F I N A N C I A L S TAT E M E N T S