KENANGA ANNUAL REPORT 2020

172 5 1 2 3 4 6 7 FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS 31 December 2020 4. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (CONT’D.) (vi) The Group and the Bank assess whether there is any indication that investments in subsidiaries and investments in associates may be impaired at each reporting date. If indicators are present, these assets are subject to impairment review. The impairment review comprises comparison of the carrying amount of the investment and the investment’s estimated recoverable amount. Judgements made by management in the process of applying the Group’s and the Bank’s accounting policies in respect of investments in subsidiaries and investments in an associate are as follows: - The Bank determines whether its investments are impaired following certain indications of impairment such as, amongst others, significant changes with adverse effects on the investments and deteriorating financial performance of the investments due to observed changes and fundamentals. - Depending on their nature and the industries in which the investments relate to, judgements are made by management to select suitable methods of valuation such as, amongst others, discounted cash flows and realisable net asset value. Once a suitable method of valuation is selected, management makes certain assumptions concerning the future to estimate the recoverable amount of the investment. These assumptions and other key sources of estimation uncertainty at the reporting date may have a significant risk of causing material adjustment to the carrying amounts of the investments within the next financial year. Depending on the specific individual investment, assumptions made by management may include, amongst others, assumptions on expected future cash flows, revenue growth, discount rate used for purposes of discounting future cash flows which incorporates the relevant risks, and expected future outcome of certain past events. Investments in subsidiaries and associates of the Group are disclosed in Notes 13 and 14 respectively. 5. CASH AND BANK BALANCES Group Bank 2020 RM’000 2019 RM’000 2020 RM’000 2019 RM’000 Cash and balances with banks and other financial institutions 535,551 408,089 370,909 291,599 Money at call and deposit placements 1,108,983 1,654,968 1,007,737 1,585,551 1,644,534 2,063,057 1,378,646 1,877,150 Included in cash and bank balances are: Cash and cash equivalents 1,284,397 1,838,760 1,256,124 1,816,949 Monies held in trust on behalf of dealer’s representatives and segregated funds for customers 360,137 224,297 122,522 60,201 1,644,534 2,063,057 1,378,646 1,877,150 Monies held in trust on behalf of clients of RM1,257,682,000 (2019: RM623,581,000) in respect of the stockbroking business are excluded from the cash and bank balances of the Group and the Bank in accordance with Financial Reporting Standards Implementation Committee (“FRSIC”) Consensus 18.