NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2014
Financial Statements
139
Annual Report 2014
34.
Financial risk management
(continued)
(e)
Fair value measurements
The following table presents assets and liabilities measured at fair value and classified by level of the
following fair value measurement hierarchy:
(i)
quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);
(ii)
inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly (as prices) or indirectly (derived from prices) (Level 2); and
(iii)
inputs for the asset or liability that are not based on observable market data (unobservable
inputs) (Level 3).
Level 1
Level 2
Level 3
Total
$’000
$’000
$’000
$’000
The Group
2014
Assets
Available-for-sale financial assets
- Quoted equity shares
795
–
–
795
Total assets
795
–
–
795
2013
Assets
Available-for-sale financial assets
- Quoted equity shares
438
–
–
438
Forward currency contracts
–
770
–
770
Total assets
438
770
–
1,208
There were no transfers between levels 1 and 2 during the year.
The fair value of financial instruments traded in active markets (such as trading and available-for-sale
securities) is based on quoted market prices at the balance sheet 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.
The fair value of financial instruments that are not traded in an active market (for example, over-
the-counter derivatives) is determined by using valuation techniques. The Group uses a variety of
methods and makes assumptions that are based on market conditions existing at each balance
sheet date. The fair value of forward foreign exchange contracts is determined using quoted
forward currency rates at the balance sheet date. These investments are classified as Level 2. In
infrequent circumstances, where a valuation technique for these instruments is based on significant
unobservable inputs, such instruments are classified as Level 3.
The carrying amount less impairment provision of trade receivables and payables are assumed to
approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated
based on quoted market prices or dealer quotes for similar instruments by discounting the future
contractual cash flows at the current market interest rate that is available to the Group for similar
financial instruments. The carrying amount of current borrowings approximates their fair value.
