A N N U A L R E P O R T 2 0 1 6
122
NOTES TO THE
FINANCIAL STATEMENTS
For the Financial Year Ended 31 March 2016
32.
Fair value of assets and liabilities (cont’d)
(c)
Level 3 fair value measurements (cont’d)
(ii)
Valuation policies and procedures (cont’d)
For valuations performed by external valuation experts, the Finance Department reviews the appropriateness of the valuation
methodologies and assumptions adopted. The Finance Department also evaluates the appropriateness and reliability of the
inputs (including those developed internally by the Group) used in the valuations.
In selecting the appropriate valuation models and inputs to be adopted for each valuation that uses significant non-observable
inputs, external valuation experts are requested to calibrate the valuation models and inputs to actual market transactions
(which may include transactions entered into by the Group with third parties as appropriate) that are relevant to the valuation if
such information are reasonably available. For valuations that are sensitive to the unobservable inputs used, external valuation
experts are required, to the extent practicable to use a minimum of two valuation approaches to allow for cross-checks.
Significant changes in fair value measurements from period to period are evaluated by the Finance Department for
reasonableness. Key drivers of the changes are identified and assessed for reasonableness against relevant information from
independent sources, or internal sources if necessary and appropriate.
The Finance Department documents and reports its analysis and results of the external valuations to the Audit Committee as
and when necessary. The Audit Committee performs a high-level independent review of the valuation process and results and
recommends if any revisions need to be made before presenting the results to the Board of Directors for approval.
(d)
Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are reasonable
approximation of fair value
Cash and bank balances (Note 21), Current trade and other receivables and payables (Notes 19 and 22), Current deposits (Note 17),
Other liabilities (Note 23), and Current bank loans and Non-current bank loans at floating rates (Note 25)
The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, either due to their short-term
nature or that they are floating rate instruments that are re-priced to market interest rates on or near the end of reporting period.
