Notes

Polsat

The value of the Polsat brand is recognized following the acquisition of Telewizja Polsat S.A. (currently Telewizja Polsat Sp. z o.o.) The carrying amount of the brand was allocated to ‘Broadcasting and television production’ cash-generating unit for the impairment testing purposes (see note 19).

The Polsat brand is not amortized as it is considered to have an indefinite useful life. Impairment test performed on Polsat brand balance as at 31 December 2013 did not indicate impairment (see note 19 for impairment test assumptions).

IPLA

In the consolidated financial statements, as a result of acquisition of entities comprising IPLA platform, the Group has recognized in 2012 among others goodwill and IPLA brand. Value of IPLA brand as at 31 December 2013 amounted to PLN 7,800. The carrying amount of the brand was allocated to ‘Retail’ cash-generating unit for the impairment testing purposes (see note 19).
The Management believes that IPLA brand has positive impact on acquisition of new customers as well as increase of ARPU among current customers of Cyfrowy Polsat. In addition, the Management believes that there is no foreseeable limit on the period over which an asset is expected to generate cash inflows for the entity as well as at the balance sheet date there are no plans to cease using or significantly modify IPLA brand. As a result, the Management concluded that the useful life of the IPLA brand was indefinite what means, that an asset is not being amortized and is tested for impairment once a year. The value assigned to the brand relate to the name “ipla” and the ipla logotype both of which are reserved trademarks. In case the Group decides about discontinuance of use or significant modification of the name or logotype the Management would review whether events and circumstances continue to support an indefinite useful life assessment of the ‘ipla’ brand and assess whether there are indicators of possible impairment or the need to discontinue recognition .

Impairment test performed on Ipla brand balance as at 31 December 2013 did not indicate impairment (see note 19 for impairment test assumptions).

TV4 i TV6

In the consolidated financial statements, as a result of acquisition of Polskie Media S.A., the Group has recognized in 2013 among others goodwill and TV4 and TV6 brands. Value of TV4 and TV6 brands as at 31 December 2013 amounted to PLN 43,000 thousand. The carrying amount of the brand was allocated to ‘Broadcasting and television production’ cash-generating unit for the impairment testing purposes (see note 19).

The fair value of the brands was estimated on the basis of relief from royalty method and profit split analysis. The relief from royalty method is based on the assumption that the benefits of owning a brand are equivalent to the hypothetical costs the owner of the brand would have to incur, should the brand be licensed from another entity based on market rates. The profit split analysis is based on the assumption that there is a possibility of determining or separating intangible assets from other assets controlled by a company and subsequently allocating a specific part of operating profit to such separated intangible assets.

The TV4 and TV6 brands were valued based on the forecasted revenues, forecasted operating profits and the royalty fee rate which was estimated based on the license agreements concluded by the companies with comparable business profile.
The discount rate which reflects the time value of money and the risks associated with anticipated future cash flows was established at 13.7%.

The Management believes that TV4 and TV6 brands have positive impact on the revenues from advertising and sponsorship. In addition, the Management believes that there is no foreseeable limit on the period over which an asset is expected to generate cash inflows for the entity as well as at the balance sheet date there are no plans to cease using or significantly modify TV4 and TV6 brands. As a result, the Management concluded that the useful life of the TV4 and TV6 brands was indefinite what means, that an asset is not being amortized and is tested for impairment once a year. The value assigned to the brand relate to the name “TV4″ and “TV6′ and the logotypes both of which are reserved trademarks. In case the Group decides about discontinuance of use or significant modification of the name or logotype the Management would review whether events and circumstances continue to support an indefinite useful life assessment of the TV4 and TV6 brands and assess whether there are indicators of possible impairment.