axiata group berhad | annual report 2015
203
24. INTANGIBLE ASSETS (CONTINUED)
Key assumptions used in the VIU (continued)
Cash flows beyond third (3
rd
) year for the mobile business in Malaysia, fifth (5
th
) year for the mobile business in Cambodia and Indonesia, meanwhile
tenth (10
th
) for fixed telecommunication business and television business in Sri Lanka are extrapolated in perpetuity using estimated terminal growth
rate which takes into consideration the current Gross Domestic Product, inflation and average growth rate for the telecommunication industry. These
rates have been determined with regards to projected growth rates for the market in which the CGUs participates and are not expected to exceed the
long term average growth rates for this market.
Pre-tax adjusted discount rate applied to the cash flow forecasts are derived from the CGU pre-tax plus a reasonable risk premium at the date of the
assessment of the respective CGU to reflect the risk of the CGU.
The following assumptions have been applied in the VIU calculations:
Cambodia
Malaysia
Sri Lanka
Indonesia
2015
2014
2015
2014
2015
2014
2015
2014
Pre-tax adjusted
discount rate
19.0%
16.7%
12.5%
10.9%
15.2%
14.6%
13.1%
12.8%
Terminal growth rate
2.0%
2.0%
0%
0%
3.0%
3.0%
3.0%
2.1%
Revenue growth rate
5.2% to
6.7%
over
5 years
6.0% to
10.6%
over
5 years
3.0% to
4.6%
over
3 years
3.0% to
5.0%
over
3 years
4.5% to
11.0%
over
10 years
1.9% to
10.7%
over
10 years
6.8% to
7.4%
over
5 years
10.0% to
14.2%
over
3 years
Based on the above test, the Malaysia, Indonesia, Sri Lanka and Cambodia CGUs’ goodwill are not impaired as the recoverable amounts exceeds the
carrying amounts included in the financial statements.
The Group’s review includes an impact assessment of changes in key assumptions. Based on the sensitivity analysis performed, the Directors concluded
that no reasonable change in the base case assumptions would cause the carrying amounts of the CGUs to exceed its recoverable amounts.
