
	Goodwill		Customer relationship s		Total
	S$’000		S$’000		S$’000
Cost:
At 1 January 2022		—		—		—
Recognition on acquisition of subsidiary		1,057		1,867		2,924

At 31 December 2022		1,057		1,867		2,924

Carrying amount:
At 1 January 2022		—		—		—
At 31 December 2022		1,057		1,867		2,924

Goodwill of S$1,057,000 arose when TDCX (HK) Limited was acquired by the Group in October 2022.

The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired.

The goodwill was allocated to TDCX HK as a cash-generating unit (“CGU”). The recoverable amount of TDCX HK as a cash-generating unit was determined based on a value in use calculation which used a five-year cash flow projection. Management estimated discount rates that reflect current market assessments of the time value of money and the risks specific to the CGU. The pre-tax discount rate used to discount the forecast cash flows was

12.3

The key assumptions used by management in preparing the cash flow projection for the initial five-year period were as follows:

Forecast sales growth rates

Forecast sales growth rates between 7.0% and 9.5% applied are based on past experience adjusted for sales/market trends and the strategic decisions for TDCX HK.

Operating profits

Operating profits are forecast based on historical experience of operating margins, adjusted for the impact of changes in operating expenses. Operating margins between 2.5% and 6.3% were applied.

Cash flows beyond that five-year period have been extrapolated using a steady 5 per cent per annum growth rate. This growth rate does not exceed

the long-term average growth rate for the industry.

The steady growth rate of 5 per cent was estimated based on past performance of the cash-generating unit and expectations of the industry.

Sensitivity analysis

The Group has conducted an analysis of the sensitivity of the impairment test to changes in the key assumptions used to determine the recoverable amount for each of the group of CGUs to which goodwill is allocated. The management believe that any reasonably possible change in the key assumptions on which the recoverable amount of the TDCX HK CGU is based would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the related CGU.