Integrated Report 2020

INTEGRATED REPORT 2020 CIM FINANCIAL SERVICES LTD Explanatory Notes 30 SEPTEMBER 2020 41. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONT’D) 30 September 2019 Carrying amounts Fair value Level 1 Level 2 Level 3 Total MUR m MUR m MUR m MUR m MUR m Financial assets not measured at fair value Net investment in leases and other credit agreements 8,769.1 - - 8,905.5 8,905.5 Loans and advances Credit facilities 2,952.2 - - 2,957.8 2,957.8 Corporate credit facilities 158.4 - - 164.1 164.1 11,879.7 - - 12,027.4 12,027.4 Financial liabilities not measured at fair value Other borrowed funds 9,094.8 - - 9,094.8 9,094.8 9,094.8 - - 9,094.8 9,094.8 Financial instruments for which the fair value approximates the carrying amount Financial assets Cash at bank balances 444.5 Deposits with banks 507.0 Loans and advances Factoring receivables 259.0 Card receivables 339.1 Investment in financial assets 8.9 Other assets 376.6 Financial liabilities Other liabilities 1,670.8 For financial assets and financial liabilities that have a short-term maturity, the carrying amounts, which are net of impairment, represent a reasonable approximation of their fair value. Such instruments include cash and bank balances, deposits with banks, factoring and card receivables and other liabilities. The fair value of the net investment in leases and other credit agreements, credit facilities, corporate credit facilities (included in loans and advances) and other borrowed funds are estimated using cash flow models discounted at the relevant discount rate taking into consideration credit risk, foreign exchange risk, of default and loss given default estimates. As a result, these balances fall under Level 3 of the fair value hierarchy. Market observable data is used when appropriate and when such data is not available, the Group uses historical experience. The discount rates used represent the market rates. Refer to Note 17 for further details regarding financial assets measured at fair value. The Group’s financial assets and liabilities approximates its fair value as at 30 September 2020. 151