Datasonic Group Berhad 136 Notes to the Financial Statements for the Financial Year Ended 31 March 2022 (Cont’d) 10. GOODWILL Group 2022 2021 RM’000 RM’000 Goodwill 4,162 4,162 The amount of goodwill relates to the manufacturing of cards cash-generating unit. The goodwill arose from the investment in subsidiaries and is reviewed for impairment annually. The Group has assessed the recoverable amount of goodwill, and determined that no impairment is required. The recoverable amount of the manufacturing of cards cash-generating unit is computed using the value in use approach, and this is derived from the present value of the future cash flows from the cash-generating unit based on the projections of financial budgets approved by management covering a period of 5 years. The key assumptions used in the determination of the recoverable amount are as follows:- (i) Budgeted gross margin Average gross margin achieved in the 5 years immediately before the budgeted period increased for expected efficiency improvements and cost saving measures. (ii) Growth rate Based on the expected projection of the smart card business. (iii) Discount rate (pre-tax) Reflects specific risks relating to the relevant cash-generating unit. The values assigned to the key assumptions represent management’s assessment of future projections in the cashgenerating unit and are based on both external sources and internal historical data. 11. DEVELOPMENT EXPENDITURE Group 2022 2021 RM’000 RM’000 At cost:- At 31 March 2022/2021 51,807 51,807 Accumulated amortisation:- At 1 April 2021/2020 (30,244) (26,971) Amortisation during the financial year (Note 37) (4,982) (3,273) At 31 March 2022/2021 (35,226) (30,244) Accumulated impairment losses:- At 31 March 2022/2021 (1,222) (1,222) 15,359 20,341 The development expenditure consist of direct and related costs for overhead and software solutions incurred in the process of development, and attributable to the Group’s customised smart card solutions (“CSCS”) reportable segment. Their amortisation charges are recognised in profit or loss as Cost of Sales line item. The Group has assessed the recoverable amounts of the development expenditure and determined that no impairment is required. Their recoverable amounts are determined using the value in use approach, and this is derived from the present value of the future cash flows from the customised software and hardware systems business computed based on the projections of financial budgets covering a period of 5 years (2021 - 3 to 5 years). The key assumptions used in the determination of the recoverable amounts are as follows:-
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