DESTINI Annual Report 2020

10. Intangible Assets (Cont’d) (a) Description of the intangible assets Brand Brand relates to the Techno Fibre Companies brand name of which the fair value of the acquired brand name was established using a form of income approach known as Relief-From-Royalty (“RFR”) method of which an independent valuation specialist had been engaged by the Group to value the brand name as part of the purchase price allocation exercise on the acquisition of the Techno Fibre Companies. The brand was fully impaired in the financial year ended 2019 when the recoverable amount arising from value in use determined by discount future cash flows was lower than the carrying amount. Product technology Product technology relates to the Group’s new technology on the production of hyperbaric lifeboat. Due to the increased industry regulation and demand for hyperbaric lifeboats, the acquired subsidiary saw a potential for suchmarket and hencehad spent twoyears todevelop thenewtechnology. As part of thepurchasepriceallocation exercise on the acquired subsidiary, the Group engaged an independent valuation specialist to value the product technology by using the cash flows projections i.e. multi-period excess earnings method (“MEEM”). The product technology was fully impaired in the financial year ended 2019 when the recoverable amount arising from value in use determined by discount future cash flows was lower than the carrying amount. In current financial year 2020, the impairment loss on one of the product technologies amounting to RM3,503,636 was reversed and recognised as gain on reversal of impairment loss in profit or loss when the recoverable amount arising from value in use determined by discount future cash flows exceeded the carrying amount due to a new contract entered by a subsidiary company and a contract customer. Brand Goodwill Product technology Development costs Total RM RM RM RM RM Group 2019 At cost At 1 January 1,617,000 193,498,546 6,746,994 10,739,283 212,601,823 Additions - - - 784,557 784,557 Written off - - - (5,900,678) (5,900,678) Exchange differences - - - (145,240) (145,240) At 31 December 1,617,000 193,498,546 6,746,994 5,477,922 207,340,462 Accumulated amortisation At 1 January 431,200 - 1,927,712 4,186,014 6,544,926 Recognised in profit or loss 108,007 - 965,706 1,051,000 2,124,713 Written off - - - (1,227,968) (1,227,968) Exchange differences - - - (161,132) (161,132) At 31 December 539,207 - 2,893,418 3,847,914 7,280,539 Accumulated impairment losses At 1 January - 1,334,431 - - 1,334,431 Recognised in profit or loss 1,077,793 86,750,095 3,853,576 - 91,681,464 At 31 December 1,077,793 88,084,526 3,853,576 - 93,015,895 Carrying amount At 31 December - 105,414,020 - 1,630,008 107,044,028 ANNUAL REPORT 2020 DESTINI BERHAD Notes to Financial Statements 146