b'NOTES TO THE FINANCIAL STATEMENTS >for the year ended 30 June 2019NOTE 14. NON-CURRENT ASSETSINTANGIBLESCONTINUEDRECONCILIATIONSReconciliations of the written down values at the beginning and end of the current and previous financial year are shown below.GOODWILL LAND RIGHT CASINO LICENSE TOTALConsolidated $ $ $ $Balance at 1 July 20172,426,187 32,353 386,681,694 389,140,234 Impairment of assets(143,860,973)(143,860,973)Exchange differences 932 8,786,226 8,787,158 Amortisation expense (2,098) (2,098)Balance at 30 June 20182,426,187 31,187 251,606,947 254,064,321 Impairment of assets(186,644,711)(186,644,711)Exchange differences 1,181 10,154,186 10,155,367 Amortisation expense (2,241) (2,241)Balance at 30 June 20192,426,187 30,127 75,116,422 77,572,736 IMPAIRMENT TESTING OF GOODWILLGoodwill is monitored by the CODM at the cash-generating unit level. CODM reviews the business performance based on geography and type of business. It has identified two reportable cash-generating units: Lao Cai and DNA Star Vegas. A business-level summary of the goodwill allocation is shown below: CONSOLIDATED20192018 $$Lao Cai International Hotel JVC2,426,187 2,426,187 Total goodwill2,426,187 2,426,187 LAO CAIGOODWILL projections for future years are based on past performance The recoverable amount of the cash-generating unit of and managements expectations for future performance in Lao Cai has been determined based on the value in useeach segment.calculation. To calculate this, cash flow projections are Management determined budgeted gross margin based on based on financial budgets approved by senior management past performance and its expectations for the future and are covering a five-year period. considered to bereasonably achievable. The weighted average The group determines whether goodwill is impaired at least growth rates used are consistent with forecasts included in on an annual basis. To do so, the group employs a value in industry reports. The discount rates used reflect specific risks use calculation using cash flow projections from financialrelating to the relevant segments and the countries in which budgets approved by senior management. Management hasthey operate.forecast a strong growth rate in budgeted gross margin forThe recoverable amount calculation for goodwill is most FY20 based on the growth in revenue from Aristos mainsensitive to changes in growth rate and EBIT margin on sales. gaming floor, VIP gaming and the increase in the numberBased on sensitivity analysis performed, no reasonable change of slot machines. The new hotel room, entertainment,in these assumptions would give rise to an impairment.restaurant and bar revenue lines, with associated marketingNo impairment has been recognised for the year ended 30 June programs, will increase visitation to the new hotel, which2019 (2018: nil).will also contribute to overall revenue growth. Gross margin 62 DONACO INTERNATIONAL LIMITED 2019 ANNUAL REPORT'