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200 | S P SETIA BERHAD GROUP | Annual Report 2014

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 October 2014

V. FINANCIAL STATEMENTS

45. FAIRVALUE OF FINANCIAL INSTRUMENTS

(a) Classification of financial instruments

The Group’s and the Company’s financial assets are categorised as loans and receivables except for other investments which are

categorised as available-for-sale and gross amount due from customers, accrued billings and prepayments which are categorised as

other current assets.

The Group’s and the Company’s financial liabilities are categorised as financial liabilities measured at amortised cost except for gross

amount due to customers and progress billings which are categorised as other current liabilities.

(b) Determination of fair value

The fair value of a financial instrument is the amount at which the instrument could be exchanged or settled between knowledgeable

and willing parties in an arm’s length transaction, other than in forced or liquidation sale.

Fair value hierarchy

The table below analyses financial instruments carried at fair value, by revaluation method. The fair value hierarchy has the following

levels:-

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as

prices) or indirectly (i.e. derived from prices); and

Level 3: Inputs for the asset or liability that is not based on observable market data (unobservable inputs).

The carrying amounts and fair values of the long term financial assets and liabilities of the Group and of the Company at the reporting

date are as follows:

Group

Company

Carrying

Carrying

amount

Fair value

amount

Fair value

RM‘000

RM‘000

RM‘000

RM‘000

2014

Level 2

Level 2

Financial assets:

Amounts owing by subsidiary companies

-

-

2,437,922

#

Amount owing by a former joint venture partner

14,398

#

-

-

Financial liabilities:

Redeemable cumulative preference shares

55,768

#

-

-

Fixed rate long term borrowings

500,000

#

500,000

#

Floating rate long term borrowings

2,887,935

*

-

-