Page 337 - Full Book_24.4.2021

NOTES TO THE
FINANCIAL STATEMENTS in retrospect

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for the financial year ended 31 december 2020 (continUed)
the Will to Suceed

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51 FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)
(a) Financial instruments carried at fair value (continued)
Valuation processes applied by the Group for Level 3 fair value achieving a leading repute
the Group has an established control framework in respect of the measurement of fair value of financial instruments.
this includes a valuation team that has overall responsibility for overseeing all significant fair value measurements, |
including level 3 fair values, and reports directly to the chief investment officer and chief financial officer. the valuation
team regularly reviews significant unobservable inputs and valuation adjustments.
Sensitivity analysis for Level 3
Impact on Impact on Impact on Paving the Way for a Sustainable future
Change in profit Impact on operating participants’
variables after tax equity* surplus fund
RM’000 RM’000 RM’000 RM’000
2020
discount rate +1% – (1,812) (15,018) (15,018)
discount rate -1% – 1,881 15,685 15,685 331

2019
adhering to the best Governance Practices
Discount rate +1% – (2,450) (10,789) (10,789)
Discount rate -1% – 2,564 11,270 11,270

* impact on equity reflects adjustments for tax, when applicable.

(b) Financial instruments not carried at fair value
the following methods and assumptions are used to estimate the fair values of the following classes of financial
instruments: |
(i) Other financial assets at amortised cost

the fair values of securities that are actively traded is determined by quoted mid prices. for non-actively traded
securities, the fair values are valued at cost less impairment or estimated using discounted cash flows analysis.
Where discounted cash flows technique is used, the estimated future cash flows are discounted using applicable Laying the Foundation for Financial Growth
prevailing market or indicative rates of similar instruments at the reporting date.
(ii) Financing, advances and others

the fair values of variable rate financing are estimated to approximate their carrying values. for fixed rate financing,
the fair values are estimated based on expected future cash flows of contractual instalment payments, discounted |
at applicable and prevailing rates at reporting date offered for similar facilities to new borrowers with similar credit
profiles. in respect of impaired financing, the fair values are deemed to approximate the carrying values which are
net of impairment allowances.
(iii) Subordinated Sukuk Murabahah and Recourse obligations on financing sold to Cagamas additional information & disclosure Summary
the fair values of subordinated obligations are estimated by discounting the expected future cash flows using the
applicable prevailing profit rates of borrowings with similar risk profiles.

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24 th aGm information