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AEMULUS HOLDINGS BERHAD
TA R G E T I N G T H E B U L L’ S E Y E
6. INTANGIBLE ASSETS (Cont’d)
The goodwill arising from the business acquisition and other intangible assets have been allocated to the Group’s
electronic tester segment as the cash-generating unit (“CGU”).
For annual impairment testing purposes, the recoverable amount of the CGU are determined based on their value-in-
use, which apply a discounted cash flow model using cash flow projections based on approved financial budget and
projections covering a five-year period.
Key assumptions used in value-in-use calculations
The key assumptions on which the management has based on for the computation of value-in-use are as follows:
(i)
Cash flow projections and growth rate
The five (5) years cash flow projections are prepared based on management’s past experience. The revenue for
the first year of the five (5) years cash flow projections is prepared based on the most recent approved financial
budget by the Board of directors. Thereafter, a
10%
(30.9.15: 10%) annual growth rate is applied to the remaining
years of the cash flow projections. A terminal value is assigned at the end of the five (5) year cash flow projections
based on an assumed growth rate of
1%
(30.9.15: 1%) in perpetuity. The growth rate of
1%
(2015: 1%) is in line
with information obtained from external sources.
(ii)
Discount rate
A pre-tax discount rate of
5.90%
(30.9.15: 6.31%) was applied in determining the recoverable amount of the CGU.
The discount rate was estimated based on the Group’s weighted average cost of capital (“WACC”), which takes
into consideration both the cost of debt and cost of equity.
Sensitivity to changes in key assumptions
The implications of the key assumptions for the recoverable amount are discussed below:
(i)
Cash flow projections and growth rate
Management recognises that the speed of technologies changes, possibility of new entrants as well as uncertainty
in the demand of its products could yield a reasonably possible alternative estimate on its projected revenue over
the five (5) years period. A 20% decrease in budgeted revenue will result in impairment of the CGU to which the
goodwill is allocated to.
(ii)
Discount rate
A rise in pre-tax discount rate to 10.90% would result in impairment of the CGU to which the goodwill is allocated
to.
7. TRADE RECEIVABLES
30.9.16
30.9.15
Note
RM
RM
Finance lease arrangement
7.2
788,746
–
Outright sale
7.3
10,818,755
9,311,260
11,607,501
9,311,260
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)
– 30 SEPTEMBER 2016