CAHYA MATA SARAWAK ANNUAL REPORT 2016

127 Cahya Mata Sarawak Berhad A N N U A L R E P O R T 2 0 1 6 Section 07 Financial StatementS NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 December 2016 3. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES (CONT'D.) 3.2 Key sources of estimation uncertainty (cont'd.) (f) Impairment of investments in subsidiaries and interests in associates (cont'd.) Judgements made by management in the process of applying the Group’s accounting policies in respect of investments in subsidiaries and interests in associates are as follows: (i) The Group determines whether its investments are impaired following certain indications of impairment such as, amongst others, prolonged shortfall between market value and carrying amount, significant changes with adverse effects on the investment and deteriorating financial performance of the investment due to observed changes and fundamentals. (ii) 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 flow, realisable net asset value and sector average price-earning ratio methods. 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 a 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. Management believes that no reasonably expected possible change in the key assumptions described above would cause the carrying amounts of the investments to materially exceed their recoverable amount. 4. REVENUE Group Company 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000 Sale of goods 878,010 1,016,987 - - Sale of land 10,399 - - - Sale of properties 29,005 51,207 - - Construction and road maintenance 182,281 233,832 - - Rendering of services 435,538 462,223 - - Interest income 5,677 1,484 15,277 11,726 Dividend income from investments 9,599 21,473 9,599 21,472 Rental income: - Investment properties (Note 16) 528 528 - 600 - Land and buildings 282 274 - - Dividend income from subsidiaries - - 82,110 50,249 Dividend income from associates - - 2,067 2,368 1,551,319 1,788,008 109,053 86,415