KENANGA ANNUAL REPORT 2017

48. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES (CONT’D.) 2017 2016 Carrying amount RM’000 Fair value RM’000 Carrying amount RM’000 Fair value RM’000 Bank Financial assets Cash and bank balances 1,092,544 1,092,544 949,421 949,421 Financial assets at fair value through profit or loss 549,735 549,735 381,588 381,588 Financial investments available-for-sale 1,010,167 1,010,167 937,704 937,704 Financial investments held-to-maturity 38,001 38,214 40,000 40,026 Derivative financial assets 67,393 67,393 39,117 39,117 Loans, advances and financing 2,180,080 2,179,330 2,065,887 2,065,272 Balances due from clients and brokers 494,883 494,883 445,005 445,005 Other assets 49,147 49,147 54,537 54,537 Statutory deposit with Bank Negara Malaysia 116,186 116,186 99,504 99,504 Financial liabilities Deposits from customers 4,278,148 4,278,148 3,355,577 3,355,577 Deposits and placements of banks and other financial institutions 210,762 210,762 550,954 550,954 Balances due to clients and brokers 416,960 416,960 474,231 474,231 Other liabilities 184,997 184,997 142,993 142,993 Obligations on securities sold under repurchase agreements 74,993 74,993 27,253 27,253 Borrowings 69,000 69,380 115,200 118,334 Derivatives financial liabilities 36,174 36,174 47,406 47,406 Note: The fair values of the other assets and other liabilities, which are considered short term in nature, are estimated to approximate their carrying values. The methods and assumptions used in estimating the fair values of financial instruments are as follows: (i) Financial assets/liabilities for which fair value approximates carrying value The carrying amounts of financial assets and financial liabilities that have a short-term maturity and deposits/accounts without a specific maturity, approximate fair values. (ii) Deposits and placements with banks and other financial institutions The fair values of these financial instruments with remaining maturity of less than one year approximate their carrying amounts due to the relatively short maturity of the financial instruments. For those financial instruments with maturity of more than one year, the fair values are estimated based on discounted cash flows using applicable prevailing market rates for placements of similar credit risk and similar remaining maturity as at the reporting date. (iii) Financial assets at fair value through profit or loss, financial investments available-for-sale and held-to-maturity The fair values are estimated based on quoted or observable market prices at the reporting date. Where such quoted or observable market prices are not available, the fair values are estimated using pricing models or discounted cash flow techniques. Where discounted cash flow technique is used, the expected future cash flows are discounted using prevailing market rates for a similar instrument at the reporting date. Kenanga Investment Bank Berhad 31 December 2017 172 notes to the financial statements