DESTINI Annual Report 2020

Key Audit Matters (Cont’d) Impairment assessment on intangible assets The Group has intangible assets amounting to RM71,850,620 as at 31 December 2020 representing approximately 14% of the Group’s total assets as at 31 December 2020. The Company carries out impairment test by comparing the recoverable amount of cash generating unit (“CGU”) based on value in use method and the carrying amounts. The impairment tests were significant to our audit due to the complexity of the assessment process involving significant judgements and estimation uncertainty in making key assumptions about future market and economic conditions, growth rates, profit margins, discount rate, etc. for value in use of CGU based on future discounted cash flows. How we addressed the key audit matters Our procedures in relation to management’s impairment assessment included, amongst others: • Examining management’s cash flows forecast that support the impairment assessment; • Assessing the reliability of management’s forecast through the review of past trends of actual financial performances against previous forecasted results; • Assessing the key assumptions on which the cash flows projections are based, by amongst others, comparing them against business plans, contracts with customers, historical results and market data; • Evaluating the reasonableness and consistency of key assumptions and inputs used in cash flow projection to available external industry sources of data; • Performing sensitivity analysis to stress test the key assumptions and inputs used in the impairment assessment; and • Assessing the adequacy and reasonableness of the disclosures in the financial statements. Information Other than the Financial Statements and Auditors’ Report Thereon The Directors of the Company are responsible for the other information. The other information comprises the annual report, but does not include the financial statements of the Group and of the Company and our auditors’ report thereon. Our opinion on the financial statements of the Group and of the Company does not cover the other information and we do not express any form of assurance conclusion thereon. In connectionwith our audit of the financial statements of the Group and of the Company, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the Group and of the Company, or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of Directors for the Financial Statements The Directors of the Company are responsible for the preparation of the financial statements of the Group and of the Company that give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 2016 in Malaysia. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of financial statements of the Group and of the Company that are free from material misstatement, whether due to fraud or error. In preparing the financial statements of the Group and of the Company, the Directors are responsible for assessing the Group’s and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the Company or to cease operations, or has no realistic alternative but to do so. Independent Auditors’ Report to theMembers of Destini Berhad ANNUAL REPORT 2020 DESTINI BERHAD 87