66 FGV HOLDINGS BERHAD NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 4 FINANCIAL RISK MANAGEMENT (CONTINUED) (c) Fair value estimation (continued) The Company has no financial assets and liabilities that are measured at fair value at 31 December 2021 and 31 December 2020. There were no transfers between Levels 1 and 2 during the financial year. (i) Financial instruments in Level 1 The fair value of financial instruments traded in active markets is based on quoted market prices at the statement of financial position date. The quoted market price used for financial assets held by the Group is the current bid price. These instruments are included in Level 1. Instruments included in Level 1 comprise primarily equity investments listed in Bursa Malaysia Securities Berhad or foreign stock exchanges classified as trading securities or financial assets at fair value through other comprehensive income and commodity derivatives quoted on Malaysia Derivatives Exchange (“MDEX”) for palm oil, sugar commodity futures contracts, brent crude oil option contracts and other foreign commodity exchanges. (ii) Financial instruments in Level 2 The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2. Instruments included in Level 2 comprise foreign currency forward contracts and Islamic profit rate swap. If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3. (iii) Financial instruments in Level 3 The following table present the changes in recurring Level 3 financial instruments during the financial year: Group 2021 2020 RM’000 RM’000 LLA liability At 1 January 4,213,824 4,316,146 Fair value changes charged to profit or loss 3,984 158,490 Repayment during the financial year (413,018) (260,812) At 31 December 3,804,790 4,213,824 Financial assets at fair value through other comprehensive income At 1 January 140,685 103,686 Additions 3,541 3,521 Disposal – (14,007) Fair value changes 54,499 47,588 Currency translation differences (131) (103) At 31 December 198,594 140,685 (d) Offsetting financial assets and financial liabilities There are no offsetting of financial assets and financial liabilities during the financial year for the Group and Company.
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