b'< NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2019The valuation as at 30 June 2019 was determined using budgeted gross margin based on past performance and its expectations for the future and are considered to be reasonably achievable. The valuation is based on a five-year cash flow forecast period. The weighted average growth rates used are consistent with forecasts included in industry reports. The valuation uses a negative growth rate of 1.9% in the first year and a growth rate of 3% in subsequent years, with a terminal year growth rate of 3%. The discount rate used of 18.93% reflects specific risks relating to the relevant segments and the countries in which they operate. The discount rate has been increased compared to the prior period as a result ofthe increase in the company-specific risk premium from 2.5% to 6%. The valuation was determined using a foreign exchange rate between Thai baht and US dollar of 30.68 THB:1 USD. DNA STAR VEGASCASINO LICENCE Capital expenditure of THB30 million (AUD1.4 million at the The casino licence relates to the licence to operate the DNAspot rate) was included in the valuation.Star Vegas casino acquired on 1 July 2015. The licence is statedBased on the valuation, the directors determined an impairment at cost less any impairment losses. This intangible asset isloss of AUD186,644,711 needed to be recognised as at 30 June 2019.tested for impairment annually or more frequently if events orApart from the impairment loss, the movement in the changes in circumstances indicate that the carrying value mayhistorical cost of the casino license is due to foreign exchange be impaired. translation as the licence is denominated in foreign currency.The recoverable amount of the cash-generating unit ofDNA Star Vegas has been determined based on its value in LAND RIGHTuse. Independent valuations of the 100% equity interest inIntangible asset of AUD30,127 (2018: AUD31,187) relates to DNA Star Vegas Co., Ltd were undertaken as at 31 Decembera 30-year land use right in the Socialist Republic of Vietnam. 2018 and as at 30 June 2019. As at 31 December 2018,Land use right is stated at cost less accumulated amortisation adjustments were made to determine the value in use ofand any impairment losses. The amortisation period is 30 years. the cash-generating unit which was reasonably determinedThis intangible asset is tested for impairment annually or more to be AUD331,232,365 (USD233,789,077 converted at thefrequently if events or changes in circumstances indicate that spot rate). Based on the valuation undertaken as at 30 Junethe carrying value may be impaired.2019, the value in use was determined to be AUD165,735,942 (USD116,232,514).DONACO INTERNATIONAL LIMITED 2019 ANNUAL REPORT 63'