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Asia Media Group Berhad
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Annual Report 2015
Notes to the Financial Statements
(continued)
pg.
96
5.
Property, plant and equipment (cont’d)
b) Capital work in progress, broadcasting centre, network and SMS gateway (“Broadcasting
Infrastructure”) & other intangible assets (“Broadcasting Licences”) (cont’d)
The recoverable amount was determined based on the value-in-use (“VIU”), was determined
by the management. Cash flows are derived based on financial forecast covering a period
of five (5) years which reflect management’s expectations of revenue growth, operating
costs, ability for successful launching of live broadcasting in year 2017 and EBITDAmargin
for the CGUs based on expectation of market growth, industry growth and future business
performance.
The key assumptions used in the value in use calculations are as follows:
Growth rate
5%
EBITDA margin
57%
Pre-tax discount rate
8.52%
The key assumptions represent management’s assessment of future trends in the live
broadcasting industry and are based on both external sources and internal sources.
The balance carrying amount of RM23,840,736 of Broadcasting Infrastructure and
Broadcasting Licences remain unimpaired. From the above assumptions, by their very
nature are difficult to forecast and are regarded as significant areas of uncertainty which
remain a risk that the ability to achieve management’s business plan will be adversely
affected due to unforeseen changes in the business plan and the respective economies
in which the Group and the Company operates.
The Directors are confident to achieve the business plan as per the projection as the
management believe that the country will move towards live broadcasting in near future.
Sensitivity to changes in assumption
Based on the sensitivity analysis performed as follows:
(i) Delay in launching of live broadcasting by 1 year would result a RM8,542,552 increase
in the impairment charges.
(ii) No growth in revenue would result a RM1,300,280 increase in the impairment charges.
(iii) Revenue decrease by 50% would result a RM11,920,368 increase in the impairment
charges.