- 12 - INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF DESTINI BERHAD (CONT’D) Registration No: 200301030845 (633265-K) (Incorporated in Malaysia) Key Audit Matters (Cont’d) Key Audit Matters How we addressed the key audit matters Impairment of goodwill The Group has goodwill amounting to RM67,158,888 as at 31 December 2022 representing approximately 24% of the Group’s total assets as at 31 December 2022. The Company has appointed an independent professional valuer to determine and reassess the recoverable amount of the CGU in accordance with MFRS 136. 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, terminal growth rates, discount rate, etc. for value in use of CGU based on future discounted cash flows. Our procedures to address this are of focus include, amongst others, the following: • Evaluated the independent valuers’ competency, capabilities, and objectivity by taking into consideration of their qualifications and experiences; • Reviewed the valuation methodologies and key assumptions adopted by the independent valuer, and assessed whether such methodologies are consistent with those used in the industry; • Interviewed the valuers, discussed and challenged the variables, discount rate and key assumptions of the basis applied based on our knowledge of the industry; • Tested the accuracy of the underlying model to assess whether the processes are applied to the correct input data and the outputs are mapped accurately; • Tested management’s sensitivity analysis in relation to the key inputs to the goodwill impairment test model, as well as performing our own sensitivity analysis which include changes to key assumptions; and • Assessed the adequacy of the disclosure in the financial statements. Independent Auditors' Report to the Members 90 DESTINI BERHAD ANNUAL REPORT 2022
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