ANNUAL REPORT 2024 FOR THE FINANCIAL YEAR ENDED 31 MARCH 2024 FINANCIAL STATEMENTS NOTES TO THE 159 11. DEVELOPMENT EXPENDITURE Group 2024 2023 RM’000 RM’000 At cost:- At 31 March 2024/2023 51,807 51,807 Accumulated amortisation:- At 1 April 2023/2022 (46,733) (35,226) Amortisation during the financial year (Note 39) (3,852) (11,507) At 31 March 2024/2023 (50,585) (46,733) Accumulated impairment losses:- At 31 March 2024/2023 (1,222) (1,222) - 3,852 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 under Cost of Sales line item. In the previous financial year, the Group had assessed the recoverable amount of the development expenditure and determined that no further impairment is required. The recoverable amount is 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. The key assumptions used in the determination of the recoverable amount are as follows:- (i) Budgeted gross margin Gross margin is the forecasted margin as a percentage of revenue over the five-year projection periods which were determined based on the expectations of market development and, adjusted for market and economic conditions, internal resource efficiency, where applicable. (ii) Growth rate Based on the expected projection of the customised software and hardware systems business. (iii) Discount rate (pre-tax) Reflects specific risks relating to the relevant cash-generating unit. 12. PROJECTS-IN-PROGRESS Group 2024 2023 RM’000 RM’000 At costs:- Technical services 1,098 1,589 Others 84 8 1,182 1,597
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