DESTINI Annual Report 2019

NOTES TO THE FINANCIAL STATEMENTS 10. Intangible Assets (Cont’d) (a) Description of the intangible assets (Cont’d) 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 2 years (2018: 3 years). One of the development cost 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. (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 goodwill allocated to each CGU is impaired during the financial year when the recoverable amount from value in use is higher than the carrying amount. The aggregate carrying amount of goodwill allocated to each subsidiary is as follows: Group 2019 2018 RM RM Technofibre International Sdn. Bhd. ("TFISB") - 2,411,262 Techno Fibre (S) Pte. Ltd. ("TFSPL") - 12,388,228 Techno Fibre Middle East Marine Services FZE (“TFMEMS”) - 16,746,340 Techno Fibre Australia Pty. Ltd. ("TFAPL") - 281,446 Destini Oil Services Sdn. Bhd. ("DOSSB") 67,158,888 67,158,888 Destini Shipbuilding And Engineering Sdn. Bhd. (“DSESB”) 38,255,132 77,391,604 System Enhancement Resources & Technologies Sdn. Bhd. (“SERTSB”) - 2,199,962 Destini Marine Safety Solutions Ltd. ("DMSSL") - 1,754,494 Halaman Optima Sdn. Bhd. ("HOSB") - 6,623,255 AMS Marine Pte. Ltd. (“AMS”) - 5,208,636 105,414,020 192,164,115 The recoverable amount of the goodwill allocated to each CGU is determined based on a value-in-use, determined by discounted future cash flows. The impairment of goodwill is recognised when the recoverable amount is estimated at lower than the cost of investment. During the financial year, the full impairment loss on goodwill allocated to subsidiaries namely TFISB, TFSPL, TFMEMS, TFAPL, SERTSB, DMSSL, HOSB and AMS amounted to an aggregate of RM47,613,623 and partial impairment loss on goodwill allocated to DSESB of RM39,136,472 were recognised in the profit of loss. FINANCIAL STATEMENTS 06 ANNUAL REPORT 2019 153