Asia Media Annual Report 2017

ASIA MEDIA GROUP BERHAD Annual Report 2017 103 4. Property, Plant and Equipment (cont’d) Impairment losses (cont’d) The recoverable amount was determined by the management based on the value in use (“VIU”). The value in use was derived based on the projected cash flows which cover a period of ten (10) years. It reflects the management’s expectations of revenue growth, operating costs, and earnings before interest, taxes, depreciation and amortisation (“EBITDA”) margin for the CGUs by taking into account of the market growth, industry and future business performance. The key assumptions used in the VIU calculations are as follows: 2017 2016 Revenue growth rate 2% 0% EBITDA margin 22% 16% Pre-Tax discount rate 10% 9.70% The key assumptions represent management’s assessment of future trends in the broadcasting industry and are based on both external sources and internal sources. From the above assumptions, by their very nature are difficult to forecast, they 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 economics in which the Group and the Company operates. The Directors are confident to achieve the business plan as per the projection based on the current business trend of broadcasting industry in Malaysia. Sensitivity to change in assumption The effect of changes in the revenue growth on impairment loss is as follows: Group 2017 2016 RM RM Increase in impairment loss: - No growth in revenue - 1,434,800 - Revenue decrease by 50% 5,888,471 8,831,661 The above sensitivity analysis is based on a change in assumption while holding all other assumption constant. In practice, this is unlikely to occur, and changes in some of the assumption may be correlated. NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2017 (cont’d)