My EG Services Berhad Annual Report 2020

ANNUAL REPORT 2020 229 FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS For The Financial Year Ended 31 December 2020 (CONT’D) 47. FINANCIAL INSTRUMENTS (CONT’D) 47.5 FAIR VALUE INFORMATION (CONT’D) (a) Fair Value of Financial Instruments Carried at Fair Value (aa) The level 2 fair value of other investments have been determined based on transacted values during the financial year and the market comparison technique using market multiples derived from quoted prices of companies comparable to the investee, adjusted for the effect of the non- marketability of the unquoted shares. (bb) The level 3 fair value of other investments have been determined using discounted cash flow income approach based on pre-tax cash flow projections performed by management based on the significant unobservable inputs as disclosed in Note 11 to the financial statements. (cc) The fair value of the short-term investments is determined by reference to statements provided by the respective financial institutions, with which the investments were entered into. (b) Fair Value of Financial Instruments not Carried at Fair Value The fair values, which are for disclosure purposes, have been determined using the following basis:- (i) The fair value of the Group’s term loans and revolving credits that carry floating interest rates approximated their carrying amounts as they are repriced to market interest rates on or near the reporting date. (ii) The fair values of financing receivables, hire purchase and finance lease receivables and block discounting that carry fixed interest rates are determined by discounting the relevant cash flows using current market interest rates for similar instruments at the end of the reporting period. The effective interest/profit rates used to discount the estimated cash flows are as follows:- The Group The Company 2020 2019 2020 2019 % % % % Hire purchase and finance lease receivables 2.60 - 10.00 2.65 - 8.10 - - Ijarah financing receivables 3.69 - 10.00 - - - Loan receivables 7.40 - 7.65 7.65 - - Block discounting 3.86 - 6.76 3.86 - 6.74 - - 48. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (a) On 11 March 2020, the World Health Organisation declared the COVID-19 outbreak as global pandemic. Following the declaration, the Government of Malaysia has on 18 March 2020 imposed the Movement Control Order (“MCO”) and subsequently entered into various phases of the MCO until 31 December 2020 to curb the spread of the COVID-19 pandemic in Malaysia. The management has assessed the impact on the Company and of the opinion that there were no material financial impacts arising from the pandemic. Nevertheless, the Company has taken and will continue to take necessary steps to safeguard and preserve its financial condition, emphasising on liquidity management to meet its continuing financial commitments and liquidity needs. Given the dynamic nature of the COVID-19 pandemic, it is not practicable to provide a reasonable estimate of its impacts on the Company’s financial position, operating results and cash flows at the date on which these financial statements are authorised for issue.