NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2023 270 WE ARE KENANGA LEADERSHIP MESSAGE VALUE CREATION MODEL KENANGA INVESTMENT BANK BERHAD ANNUAL REPORT 2023 49. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES (CONT’D.) The methods and assumptions used in estimating the fair values of financial instruments are as follows (cont’d.): (vi) Deposits and placements of banks and other financial institutions The carrying 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 deposits and placements with maturities of one year and above, the estimated fair value is based on discounted cash flows using prevailing money market interest rates at which similar deposits and placements would be made with financial institutions of similar credit risk and remaining period to maturity. (vii) Borrowings The fair values of borrowings are estimated based on expected future cash flows discounted at applicable variable rates offered for borrowings. 50. SEGMENTAL REPORTING The business segment results are prepared based on the Group’s internal management reporting, which reflect the organisation’s management reporting structure. The Group is organised into six major operating divisions. The division form the basis of which the Group reports its segment information. (i) Investment banking - Investment banking business, treasury and related financial services; (ii) Stockbroking - Dealings in securities and investment related services; (iii) Listed derivatives - Futures broking; (iv) Money lending and financing - Money lending, Islamic factoring and leasing; (v) Investment and wealth management - Management of funds and unit trusts; and (vi) Corporate and others - Support services comprising all middle and back office functions costs that are not allocated out to business segments and include business operations conducted by the Group’s associates in the Kingdom of Saudi Arabia and Sri Lanka and joint ventures, Rakuten Trade Sdn Bhd and Rakuten Trade Singapore Pte Ltd. Except as indicated above, no operating segments have been aggregated to form the above reportable operating segments. Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which, in certain respects as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements. Group income taxes are managed on group basis and are not allocated to operating segments. Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties.
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