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NOTES TO THE FINANCIAL STATEMENTS
31 March 2010
TEXWINCA HOLDINGS LIMITED ANNUAL REPORT 2010
38. FAIR VALUE HIERARCHY
The Group uses the following hierarchy for determining and
disclosing the fair value of financial instruments:
Level 1: fair values measured based on quoted prices
(unadjusted) in active markets for identical assets
or liabilities;
Level 2: fair values measured based on valuation
techniques for which all inputs which have a
significant effect on the recorded fair value are
observable, either directly or indirectly;
Level 3: fair values measured based on valuation
techniques for which all inputs which have a
significant effect on the recorded fair value are not
based on observable market data (unobservable
inputs).
As at 31 March 2010, the financial instruments measured
at fair value held by the Group comprised of equity
investments at fair value through profit or loss and was
classified as Level 1.
During the year ended 31 March 2010, there were no
transfers of fair value measurements between Level 1 and
Level 2 and no transfers into or out of Level 3.
39. FINANCIAL RISK MANAGEMENT OBJECTIVES
AND POLICIES
The Group’s principal financial instruments, other than
derivatives, comprise bank loans and overdrafts, and
cash and short term deposits. The main purpose of
these financial instruments is to raise finance for the
Group’s operations. The Group has various other financial
assets and liabilities such as trade receivables and trade
payables, which arise directly from its operations.
The Group also enters into derivative transactions,
including principally forward currency contracts. The
purpose is to manage currency risks arising from the
Group’s operations and its sources of finance.
The main risks arising from the Group’s financial
instruments are interest rate risk, foreign currency risk,
credit risk and liquidity risk. The Board reviews and agrees
policies for managing each of these risks and they are
summarised below. The Group’s accounting policies
in relation to derivatives are set out in note 2.4 to the
financial statements.
38.
39.
2.4
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