ANNUAL REPORT 2021 201 FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS ʹˢ˥ ˧˛˘ Ѓˡ˔ˡ˖˜˔˟ ˬ˘˔˥ ˘ˡ˗˘˗ ʦʤ ʷ˘˖˘ˠ˕˘˥ ʥʣʥʤ (CONT’D) 11. OTHER INVESTMENTS (CONT’D) The details of significant unobservable inputs of material investments under level 3 fair value measurement relating to Entity A, B, C, H, I and K are as follows:- Investment in an entity engaged in computer and mobile software application and provision of information technology related services activities (Entity A) Unobservable Inputs Relationship of Unobservable Inputs to Fair Value Sensitivity Analysis (Assume All Other Variables Held Constant) (aa) Revenue growth rates of 33% (2020 - 22%) Based on management’s experience and knowledge of market conditions of the specific industries. The higher the revenue growth rate, the higher the fair value. A 1% change in revenue growth rate would result in an increase/decrease in the fair value by RM1,540,000. (bb) Pre-tax operating profit margins of 39% (2020 - 40%) Taking into account management’s experience and knowledge of market conditions of the specific industries. The higher the pre-tax operating margins, the higher the fair value. A 1% change in pre-tax operating profit margin would result in an increase/decrease in the fair value by RM462,000. (cc) Discount rate of 17% (2020 - 15%) Determined using a Capital Asset Pricing Model. The higher the discount rate, the lower the fair value. A 1% change in discount rate would result in a decrease/ increase in the fair value by RM576,000. Investment in an entity engaged in online fashion boutique business (Entity B) Unobservable Inputs Relationship of Unobservable Inputs to Fair Value Sensitivity Analysis (Assume All Other Variables Held Constant) (aa) Revenue growth rates of 18% (2020 - 30%) Based on management’s experience and knowledge of market conditions of the specific industries. The higher the revenue growth rate, the higher the fair value. A 1% change in revenue growth rate would result in an increase/decrease in the fair value by RM4,711,000. (bb) Pre-tax operating profit margins of 49% (2020 - 50%) Taking into account management’s experience and knowledge of market conditions of the specific industries. The higher the pre-tax operating margins, the higher the fair value. A 1% change in pre-tax operating profit margin would result in an increase/ decrease in the fair value by RM1,847,000. (cc) Discount rate of 18% (2020 - 14%) Determined using a Capital Asset Pricing Model. The higher the discount rate, the lower the fair value. A 1% change in discount rate would result in a decrease/ increase in the fair value by RM377,000.
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