Notes to the Financial Statements - Cahaya Mata Sarawak Bhd

158
Notes to the Financial Statements
For the fi nancial year ended 31 December 2011
42. Fair value of fi nancial instruments (contd.)
(b) Fair value hierarchy
The Group classifi es fair value measurement using a fair value hierarchy that refl ects the signifi cance of
the inputs used in making the measurements. The fair value hierarchy has the following levels:
Level 1 - Quoted prices in active markets for identical assets or liabilities;
Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly or indirectly; and
Level 3 - Inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
The following table shows an analysis of fi nancial instruments carried at fair values by level of fair value
hierarchy:
Group/Company Level 1 Level 2 Level 3 Total
2011 RM’000 RM’000 RM’000 RM’000
Financial assets
Fixed income debt securities - 52,838 - 52,838
Equity instruments 8,314 - - 8,314
Unit trust funds 27,557 - - 27,557
35,871 52,838 - 88,709
Comparative fi gures have not been presented for 31 December 2010 by virtue of paragraph 44G of
FRS 7.
There have been no transfers between Level 1 and Level 2 during the fi nancial year.
43. Financial risk management objectives and policies
The Group and the Company are exposed to fi nancial risks arising from their operations and the use of
fi nancial instruments. The Group’s overall risk management strategy seeks to minimise potential adverse
effects on the fi nancial performance of the Group. The key fi nancial risks include credit risk, liquidity risk,
interest rate risk, foreign currency risk and market price risk.
Financial risk management policies are reviewed and approved by the Board of Directors and executed
by the management of the respective operating units. The Group Risk Committee provides independent
oversight on the effectiveness of the risk management process.
It is, and has been throughout the current and previous fi nancial year, the Group’s policy that no derivatives
shall be undertaken except for the use as hedging instruments where appropriate and cost-effi cient. The
Group and the Company do not apply hedge accounting and do not hold or issue derivative fi nancial
instruments for trading purposes.
The following sections provide details regarding the Group’s and Company’s exposure to the above-mentioned
fi nancial risks and the objectives, policies and processes for the management of these risks.
Cahya Mata Sarawak Berhad