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CHAIRMAN’S DELIVERING MSM MANAGEMENT DISCUSSION GROUP FINANCIAL
STATEMENT VALUE OVERVIEW & ANALYSIS REPORT

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020

4 FINANCIAL RISK MANAGEMENT (CONTINUED)

(c) Fair value estimation (continued)
Carrying
amount Level 1 Level 2 Level 3
RM’000 RM’000 RM’000 RM’000

Company - Liabilities
As at 31 December 2020
Derivatives used for hedging:
174 - Islamic profit rate swap (10,163) - (10,163) -

As at 31 December 2019
MSM MALAYSIA HOLDINGS BERHAD Annual Report 2020
Derivatives used for hedging:
- Islamic profit rate swap (4,968) - (4,968) -

There were no transfers between levels 1 and 2 during the financial year.
(i) Financial instruments in Level 1
The fair value of financial instruments traded in active markets is based on quoted market prices at the statement
of financial position date. The quoted market price used for financial assets held by the Group is the current bid
price. These instruments are included in Level 1. Instruments included in Level 1 comprise of commodity derivatives
quoted on foreign commodity exchanges.
(ii) Financial instruments in Level 2
The fair value of financial instruments that are not traded in an active market is determined by using valuation
techniques. These valuation techniques maximise the use of observable market data where it is available and rely
as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are
observable, the instrument is included in Level 2. Instruments included in Level 2 comprise Islamic profit rate swap
and foreign exchange forward contract.
There are no offsetting financial assets and financial liabilities during the financial year.