DESTINI Annual Report 2019

NOTES TO THE FINANCIAL STATEMENTS 10. Intangible Assets (Cont’d) Brand Goodwill Product technology Development costs Total RM RM RM RM RM Group 2018 At cost At 1 January 1,617,000 193,467,393 6,746,994 9,678,260 211,509,647 Additions - - - 1,099,348 1,099,348 Written off - - - (32,235) (32,235) Exchange differences - 31,153 - (6,090) 25,063 At 31 December 1,617,000 193,498,546 6,746,994 10,739,283 212,601,823 Accumulated amortisation At 1 January 323,400 - 963,856 3,056,782 4,344,038 Recognised in profit or loss 107,800 - 963,856 1,077,878 2,149,534 Written off - - - (32,235) (32,235) Exchange differences - - - 83,589 83,589 At 31 December 431,200 - 1,927,712 4,186,014 6,544,926 Accumulated impairment losses At 1 January / 31 December - 1,334,431 - - 1,334,431 Carrying amount At 31 December 1,185,800 192,164,115 4,819,282 6,553,269 204,722,466 (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. It has remaining amortisation period of 10 years (2018: 11 years). The brand is fully impaired during the financial year when the recoverable amount arising from value in use determined by discount future cash flows is 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 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 4 years (2018: 5 years). The product technology is fully impaired during the financial year when the recoverable amount arising from value in use determined by discount future cash flows is lower than the carrying amount. 06 FINANCIAL STATEMENTS DESTINI BERHAD 152