My EG Services Berhad Annual Report 2020

MY E.G. SERVICES BERHAD Regisration No. 200001003034 (505639-K) 182 NOTES TO THE FINANCIAL STATEMENTS For The Financial Year Ended 31 December 2020 (CONT’D) 11. OTHER INVESTMENTS (CONT’D) Investment in an entity engaged in providing debt collection system, telecommunication services, computer software, hardware and related accessories (Entity C) Unobservable Inputs Relationship of Unobservable Inputs to Fair Value Sensitivity Analysis (Assume All Other Variables Held Constant) (aa) Revenue growth rates of 17% (2019 - 15%) Based on management’s experience and knowledge of market conditions of the specific industries. The higher the revenue growth rate, the higher the fair value. A 1% change in revenue growth rate would result in an increase/decrease in the fair value by RM1,131,000. (bb) Pre-tax operating profit margins of 70% (2019 - 70%) Taking into account management’s experience and knowledge of market conditions of the specific industries. The higher the pre-tax operating margins, the higher the fair value. A 1% in pre-tax operating profit margin would result in an increase/decrease in the fair value by RM350,000. (cc) Discount rate of 9% (2019 - 14%) Reflects current market assessments of the uncertainty in the amount and timing of cash flows. The higher the discount rate, the lower the fair value. A 1% change in discount rate would result in a decrease/ increase in the fair value by RM714,000. 12. DEVELOPMENT COSTS The Group The Company 2020 2019 2020 2019 RM’000 RM’000 RM’000 RM’000 Cost:- At 1 January 2020/1 October 2018 20,624 20,624 10,267 10,267 Addition during the financial year 130,935 - 94,710 - At 31 December 2020/2019 151,559 20,624 104,977 10,267 Accumulated amortisation:- At 1 January 2020/1 October 2018 (19,770) (17,634) (9,698) (8,470) Amortisation during the financial year/period (5,056) (2,136) (2,438) (1,228) At 31 December 2020/2019 (24,826) (19,770) (12,136) (9,698) 126,733 854 92,841 569 Development costs were incurred for Electronic Government Services’ software/system development, immigration related integrated modules, MySafeTravel (“MST”) Portal, and other related services. Their amortisation charges are recognised in statements of profit or loss and other comprehensive income under the “Other Expenses” line item. Additional development costs with finite useful lives are amortised over a period of 2 to 3 years. Certain development costs are not amortised as these assets are not available for use and are still under development as at the financial year end.