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NOTES TO
FINANCIAL STATEMENTS (CONT’D)
31 March 2015
29 FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT (cont’d)
Estimating the fair values (cont’d)
Non-derivative financial liabilities
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future
principal and interest cash flows, discounted at the market rate of interest at reporting date.
Other financial assets and liabilities
The carrying amounts of financial assets and liabilities with a maturity of less than one year (including trade
and other receivables, cash and cash equivalents, other payables and accruals, and short-term borrowings) are
assumed to approximate their fair values. The fair values of other classes of financial assets and liabilities are
disclosed in the respective notes to financial statements.
Interest rates used in determining fair values
The Group uses the government yield curve as of 31 March 2015 plus an adequate constant credit spread to
discount financial instruments. The interest rates used are as follows:
2015 2014
% p.a. % p.a.
Finance lease receivables 2.44 2.44
Receivables 6.50 6.50
Fair value hierarchy
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have
been defined as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
• Level 2:
inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices)
• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable
inputs)
84 NTU ANNUAL REPORT 2015