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194 EXIM BANK MALAYSIA
Annual Report 2020

NOTES TO THE FINANCIAL STATEMENTS

42. FINANCIAL RISK MANAGEMENT POLICIES (CONT’D.)
Fair values

(i) Fair value hierarchy
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been
defined as follows:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Valuation method for which all significant inputs are, or are based on, observable market data.

Level 3 - Valuation method for which significant inputs are not based on observable data.
For financial instruments classified as Level 1, the valuations are determined by reference to unadjusted quoted prices
for identical assets or liabilities in active markets where the quoted prices are readily available, and the prices represent
actual and regularly occurring market transactions at arm’s length basis. An active market is one in which transactions
occur with sufficient volume and frequency to provide pricing information on an ongoing basis.

For financial instruments classified as Level 2, their values are based on quoted prices in inactive markets, or whose
values are based on models whereby the inputs to those models are observable either directly or indirectly for substantially
the full term of the asset or liability. These would include certain bonds, corporate debt securities and issued notes.

The following table represents financial assets and liabilities measured at fair value and classified by level with the
following fair value measurement hierarchy:

Carrying Fair value Fair value
Group and Bank value Level 2 Level 3
RM’000 RM’000 RM’000

2020
Financial assets
Assets measured at fair value
Financial investments at FVOCI
- Unquoted debt securities 678,185 678,185 -
Derivative financial instruments 141,749 141,749 -
Total financial assets carried at fair value 819,934 819,934 -

Assets not measured at fair value
Investment properties 832 - 1,140
Investment securities at amortised cost
- Unquoted debt securities 487,366 540,348 -
Loans, advances and financing 3,679,083 - 3,678,630

Financial liabilities
Liabilities not measured at fair value
Borrowings 6,591,282 6,595,733 -