BIMB Integrated Annual Report 2017

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 47. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED) The following table presents the changes in Level 3 instruments for the financial year ended 31 December 2017 for the Group: 2017 2016 RM’000 RM’000 Financial assets available-for-sale At 1 January 160,112 152,641 Purchases 101,539 48,545 Maturity (21,539) (48,545) Gains 10,939 7,471 At 31 December 251,051 160,112 The following table shows the valuation techniques used in the determination of fair values within Level 3, as well as the key unobservable inputs used in the valuation models. (a) Financial instruments carried at fair value TYPE VALUATION TECHNIQUE SIGNIFICANT UNOBSERVABLE INPUTS INTER-RELATIONSHIP BETWEEN SIGNIFICANT UNOBSERVABLE INPUTS AND FAIR VALUE MEASUREMENT Financial assets available-for-sale Valued at cost less impairment Not applicable Not applicable Institutional trust account Discounted cash flows using market profit rate for a similar instrument at the measurement date 4.58% (2016: 4.58%) The estimated fair value would increase (decrease) if the discount rate were (lower) higher Valuation processes applied by the Group for Level 3 fair value 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/Chief Financial Officer/General Manager, Finance. The valuation team regularly reviews significant unobservable inputs and valuation adjustments. 290 BIMB HOLDINGS BERHAD Integrated Annual Report 2017