<table><tr><td rowspan="2"></td><td>Patents and
trademarks</td><td> Software</td><td>Non-
competition
agreement</td><td>Customer
relationships</td><td> Total</td></tr><tr><td>RMB’000</td><td>R MB’000</td><td> RMB’000</td><td> RMB’000</td><td> RMB’000</td></tr><tr><td>Accumulated amortisation:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>At 1 January 2017 </td><td>(168)</td><td>(1,324)</td><td> –</td><td> –</td><td>(1,492)</td></tr><tr><td>Charge for the year </td><td>(58)</td><td>(492)</td><td> –</td><td> –</td><td>(550)</td></tr><tr><td>At 31 December 2017</td><td>(226)</td><td>(1,816)</td><td> –</td><td> –</td><td>(2,042)</td></tr><tr><td>Charge for the year </td><td>(60)</td><td>(793)</td><td> –</td><td> –</td><td>(853)</td></tr><tr><td>At 31 December 2018</td><td>(286)</td><td>(2,609)</td><td> –</td><td> –</td><td>(2,895)</td></tr><tr><td>Charge for the year </td><td>(56)</td><td>(1,586)</td><td>(378)</td><td>(355)</td><td>(2,375)</td></tr><tr><td>Exchange adjustments </td><td>–</td><td>–</td><td>3</td><td>3</td><td>6</td></tr><tr><td>At 31 December 2019</td><td>(342)</td><td>(4,195)</td><td>(375)</td><td>(352)</td><td>(5,264)</td></tr><tr><td>Charge for the period </td><td>(38)</td><td>(1,868)</td><td>(3,295)</td><td>(3,094)</td><td>(8,295)</td></tr><tr><td>Exchange adjustments </td><td>–</td><td> –</td><td>9</td><td>8</td><td>17</td></tr><tr><td>At 30 September 2020 </td><td>(380)</td><td>(6,063)</td><td>(3,661)</td><td>(3,438)</td><td>(13,542)</td></tr><tr><td>Net book value:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>At 31 December 2017</td><td>383</td><td>3,455</td><td> –</td><td> –</td><td>3,838</td></tr><tr><td>At 31 December 2018</td><td>323</td><td>9,662</td><td> –</td><td> –</td><td>9,985</td></tr><tr><td>At 31 December 2019</td><td>267</td><td>14,013</td><td>13,126</td><td>41,910</td><td>69,316</td></tr><tr><td>At 30 September 2020 </td><td>229</td><td>16,182</td><td>9,519</td><td>37,818</td><td>63,748</td></tr></table>

The amortisation of intangible assets is included in cost of services and general and administrative expenses in the consolidated statement of profit or loss and other comprehensive income.

The useful lives of patents and trademarks of 10 years are determined based on terms of expiry of related legal rights.

The useful lives of software are around 5-10 years which are determined based on technological obsolescence.

Non-competition agreement is amortised over the shorter of the unexpired term of the agreement and its estimated useful lives, which is 3 years.

The useful life of the customer relationship recognised in acquisition of Biomere is 10 years, which is determined based on the factor of the attrition rate.

# 14 GOODWILL

<table><tr><td></td><td>RMB’000</td></tr><tr><td>Cost</td><td></td></tr><tr><td>At 1 January 2017, 31 December 2017 and 31 December 2018 </td><td>–</td></tr><tr><td>Acquisition of Biomere (Note 34) </td><td>135,187</td></tr><tr><td>Exchange adjustments </td><td>(1,225)</td></tr><tr><td>At 31 December 2019 </td><td>133,962</td></tr><tr><td>Exchange adjustments </td><td>(3,190)</td></tr><tr><td>At 30 September 2020 </td><td>130,772</td></tr></table>

# Impairment tests for cash-generating units containing goodwill

The goodwill arose from the acquisition of Biomere in 2019 (Note 34).

The recoverable amounts of the cash-generating unit was determined based on value-in-use calculations. These calculations use cash flow projections based on financial budgets approved by management covering a 5-year period. Cash flows beyond the 5-year period are extrapolated using estimated nil growth rate at 31 December 2019 and 30 September 2020.

<table><tr><td></td><td>As at
31 December
2019</td><td>As at
30 September
2020</td></tr><tr><td>Annual growth rate of revenue during the 5-year forecast
period</td><td>3.0%-10.0%</td><td>0.2%-9.8%</td></tr><tr><td>Pre-tax discount rate </td><td>12.6%</td><td>13.9%</td></tr></table>

The headroom calculated based on the recoverable amounts deducting the carrying amount of the cash-generating unit as at 31 December 2019 and 30 September 2020 is RMB10,038,000 and RMB5,901,000 respectively.

Management have undertaken sensitivity analysis on the impairment test of goodwill. The following table sets out the hypothetical changes to annual growth rate and pre-tax discount rate that would, in isolation, have removed the remaining headroom respectively as at 31 December 2019 and 30 September 2020:

<table><tr><td></td><td>As at
31 December
2019</td><td>As at
30 September
2020</td></tr><tr><td>Decrease in annual growth rate </td><td>0.2%</td><td>0.1%</td></tr><tr><td>Increase in pre-tax discount rate </td><td>3.5%</td><td>2.2%</td></tr></table>

As a result of the above impairment tests, the directors of the Company are of the view that there was no impairment of goodwill as at 31 December 2019 and 30 September 2020.