127
127
2015/2016 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended 31 March 2016
26. FINANCIAL INSTRUMENTS (CONTINUED)
(h) Measurement of fair values
Valuation techniques
The following shows the valuation techniques:
Type
Valuation technique
Derivative financial assets
and liabilities
The fair value of interest rate swaps is based on broker’s quotes. These
quotes are tested for reasonableness by discounting estimated future
cash flows based on the terms and maturity of each contact and using
market interest rates for a similar instrument at the measurement date.
Financial assets held for
trading
The fair value of quoted equity securities is determined by reference to
their quoted bid prices at the reporting date without any deduction for
transaction costs
The carrying amounts of financial assets and liabilities with a maturity of less than one year (including
trade and other receivables, amount due from subsidiaries (current), cash and cash equivalents, trade
and other payables, and amount due to subsidiaries) are assumed to approximate their fair values
because of the short period to maturity.
The fair values of the bank borrowings approximate their carrying values as they are repriced every
one to three months.
