DESTINI Annual Report 2018

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 5 years (2017: 6 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 (2017: 4 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: 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 in previous financial year. Group 2018 2017 RM RM Technofibre International Sdn. Bhd. 2,411,262 2,411,262 Techno Fibre (S) Pte. Ltd. 12,388,228 12,377,619 Techno Fibre Middle East Marine Services FZE 16,746,340 16,731,999 Techno Fibre Australia Pty. Ltd. 281,446 281,205 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 Destini Marine Safety Solutions Ltd. 1,754,494 1,752,992 Halaman Optima Sdn. Bhd. 6,623,255 6,623,255 AMS Marine Pte. Ltd. 5,208,636 5,204,176 192,164,115 192,132,962 DESTINI BERHAD ANNUAL REPORT 2018 157