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) (a) Financial instruments carried at fair value (continued) Sensitivity analysis for Level 3 IMPACT ON IMPACT ON IMPACT ON CHANGE IN PROFIT IMPACT ON OPERATING PARTICIPANTS’ VARIABLES BEFORE TAX EQUITY SURPLUS FUND RM’000 RM’000 RM’000 RM’000 2017 Market price +1% – (556) – (3,601) Market price -1% – 1,533 – 9,789 2016 Market price +1% – (699) – (5,819) Market price -1% – 839 – 2,881 (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) Financial investments held-to-maturity (“HTM”) The fair values of securities that are actively traded is determined by quoted bid 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 prevailing market or indicative rates of similar instruments at the reporting date. (ii) Financing and advances 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 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. 48. CAPITAL COMMITMENTS GROUP 2017 2016 RM’000 RM’000 Property and equipment Contracted but not provided for in the financial statements 108,639 98,127 291 Overview Value Creation Accountability Financial Statements Sustainability Performance Data Shareholders Information 21 st AGM Information Management Discussion & Analysis t