MKH Annual Report 2017

41. FAIR VALUE OF FINANCIAL INSTRUMENTS (continued) (iii)Derivative financial instruments Commodity forward contracts are valued based on published market prices or quoted prices from reputable financial institutions. The fair values of derivative financial instruments are the estimated amounts that the Company would expect to pay or receive on the termination of the outstanding positions as at the end of the financial year arising from such contracts. They are determined by reference to the difference between the contracted rate and the forward rate as at the end of the financial year applied to a contract of similar amount and maturity profile. (iv)Borrowings The carrying amounts of bank overdrafts, short-term revolving credits, bridging loan and short-term loans approximate fair values due to the relatively short-term maturity of these financial liabilities. The carrying amounts of long-term floating rate revolving credits and loans approximate their fair values as the loans will be re-priced to market interest rate on or near reporting date. The fair value of finance lease is estimated using discounted cash flow analysis, based on current lending rates for similar types of lending arrangements. The carrying amounts and fair value of financial instruments, other than the carrying amounts which are reasonable approximation of fair values, are as follows: The Group Carrying Fair amount value RM RM 2017 Financial assets Long-term other receivables 1,169,973 917,525 Loan receivables 21,032,679 18,002,070 Financial liabilities Finance lease liabilities 1,974,114 2,005,779 2016 Financial assets Long-term other receivables 1,171,687 580,811 Loan receivables 3,754,615 3,156,195 Financial liabilities Finance lease liabilities 2,754,206 2,965,687 Notes to the Financial Statements For the Financial Year ended 30 September 2017 199 MKH Berhad • Annual Report 2017