Page 26 - MCOM 2016 CASE STUDY 1

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MATTERS TO CONSIDER

1. In relation to the S$58 billion fine by the government of Nakolia, MCOM received a fine letter
from the NTRA but did not record it yet as it wants to challenge it in a Nakolian court of law.
The NTRA has confirmed it will wait for the outcome of the court ruling before it enforces the

payment of the fine.

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2. In the 2015 4 quarter meeting of the MCOM Board, a decision was taken to fast track the
transformation of its operating model and also monetise its passive infrastructure and non-
core assets by availing network towers for immediate sale in their present condition, as a
precaution in case the NTRA fine stands. Sidoms Limited, a world-wide company that provides

managed services, deployment and site ownership services in the telecoms sector has put in an
offer. On 31 December 2015, the carrying amount of the towers and the fair value was $20 billion.

3. MCOM having accepted the offer from Sidoms Limited, has instructed its legal advisers to draft
the sales contract to conclude the sale, for which a quote of S$5million has been received.

4. Towerdom, a subsidiary of Sidoms entered into an operating lease agreement with MCOM to
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lease out its tower equipment for a period of 10 years with effect from 1 of March 2016. MCOM
will be required to pay $200million a month in arrears.

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5. On the 31 of December 2015, Management tested goodwill for impairment and discovered that it
had been impaired by $4862m which had yet to be recorded.

6. Management considers 1.4% of group turnover as its benchmark for materiality.

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The CFO Business Case Study Competition 2016 Pack
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