| CIM FINANCE. INTEGRATED REPORT 2022 210 For financial assets and financial liabilities that have a short-termmaturity, 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 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. Fair value hierarchy IFRS 13 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources; unobservable inputs reflect the Bank’s market assumptions. These two types of inputs have created the following fair value hierarchy: Level 1 – Quoted prices in active markets for identical assets or liabilities. This level includes listed equity securities and debt instruments on exchanges. Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). This level includes the majority of the OTC derivative contracts, traded loans and issued structured debt. Level 3 – Inputs for the asset or liability that are not based on observable market data (unobservable inputs). This level includes equity investments and debt instruments with significant unobservable components. This hierarchy requires the use of observable market data when available. The Bank considers relevant and observable market prices in its valuations where possible. 44. FAIR VALUE OF FINANCIAL INSTRUMENTS 30 September 2022 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 8,909.9 - - 8,779.2 8,779.2 Loans and advances Credit facilities 6,561.8 - - 6,909.4 6,909.4 Corporate credit facilities 146.3 - - 133.7 133.7 Investment securities 119.6 - 117.8 - 117.8 15,737.6 - 117.8 15,822.3 15,940.1 Financial liabilities not measured at fair value Other borrowed funds 11,735.1 - - 11,735.1 11,735.1 11,735.1 - - 11,735.1 11,735.1 Financial instruments for which the fair value approximates the carrying amount Financial assets Cash at bank balances 681.8 Deposits with banks 482.9 Loans and advances Factoring receivables 87.9 Card receivables 283.8 Investments securities 0.8 Other assets 374.7 1,911.9 Financial liabilities Other liabilities 1,402.9 Except for financial assets and liabilities at fair value through profit or loss, the Group does not measure its financial assets and financial liabilities at fair value. The table below shows, by class of financial instruments, the comparison of their carrying amounts with their fair values. These fair values are calculated for disclosure purposes only. EXPLANATORY NOTES 30 SEPTEMBER 2022
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