DESTINI AR 2017

9. Intangible Assets (Cont’d) (a) Description of the intangible assets (Cont’d) 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 sees a potential for such market and hence has spent two years to develop the new technology. As part of the purchase price allocation 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"). It has remaining amortisation period of 6 years (2016: 7 years). Development costs Development costs related to the boats production which consist of license fees, certification fees, review fee on design, interests and workshop costs have an average remaining amortisation period of 4 years (2016: 5 years). (b) Impairment testing for cash generating units (“CGU”) containing goodwill For impairment testing, goodwill is allocated to the Group’s subsidiaries which represent the lowest level of CGU level within the Group at which the goodwill is monitored for internal management proposes. The aggregate carrying amount of goodwill allocated to each subsidiary is as follows: Group 2017 2016 RM RM Technofibre International Sdn. Bhd. 2,411,262 2,411,262 Techno Fibre (S) Pte. Ltd. 12,377,619 12,682,017 Techno Fibre Middle East Marine Services FZE 16,731,999 17,143,482 Techno Fibre Australia Pty. Ltd. 281,205 288,121 Destini Oil Services Sdn. Bhd. 67,158,888 67,158,888 Destini Shipbuilding And Engineering Sdn. Bhd. 77,391,604 77,391,604 System Enhancement Resources & Technologies Sdn. Bhd. 2,199,962 2,199,962 Safeair Technical Sdn. Bhd. - 1,334,431 Destini Marine Safety Solutions Ltd. (formerly known as Imes Marine Safety Systems Ltd.) 1,752,992 1,796,103 Halaman Optima Sdn. Bhd. 6,623,255 - AMS Marine Pte. Ltd. 5,204,176 - 192,132,962 182,405,870 The recoverable amount of the Safeair Technical Sdn. Bhd. is determined based on a value-in-use, determined by discounted future cash flows. The recoverable amount is estimated at Nil and a full impairment loss of RM1,334,431 was recognised during the financial year. The recoverable amount of the Green Pluslink Sdn. Bhd. is determined based on a value-in-use, determined by discounted future cash flows. The recoverable amount is estimated at Nil and a full impairment loss of RM1,843,063 was recognised in the previous financial year. 137 DESTINI BERHAD Annual Report 2017