HERALD INVESTMENT TRUST plc ANNUAL REPORT ...

NOTES TO THE FINANCIAL STATEMENTS continued
21. Financial instruments (continued)
C. Liquidity Risk (continued)
Liquidity Risk Exposure
Contractual maturities of the financial liabilities at the year end, based on the earliest date on which payment
can be required are as follows:
2010 2009
In more In more In more In more
than one than two than one than two
year but years but year but years but
One not more not more Five One not more not more Five
year than two than five years year than two than five years
or less years years or more Total or less years years or more Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Bank loans 25,594 544 25,453 – 51,591 737 26,184 26,853 – 53,774
Derivative financial
instruments 2,037 1,719 2,643 6,536 12,935 2,042 1,243 1,017 6,335 10,637
Other creditors 2,201 – – – 2,201 2,888 – – – 2,888
29,832 2,263 28,096 6,536 66,727 5,667 27,427 27,870 6,335 67,299
Fair Value of Financial Instruments
Fair values are measured using the following fair value hierarchy:
Level 1: reflects financial instruments quoted in an active market.
Level 2: reflects financial instruments whose fair value is evidenced by comparison with other observable current
market transactions in the same instrument or based on a valuation technique whose variables includes
only data from observable markets.
Level 3: reflects financial instruments whose fair value is determined in whole or in part using a valuation technique
based on assumptions that are not supported by prices from observable market transactions in the same
instrument and not based on available observable market data.
The valuation techniques used by the Company are explained in the accounting policies on page 40.
The tables below set out the fair value measurements using the fair value hierarchy.
At 31 December 2010
Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000
Financial assets
Equity investments 471,350 – 3,900 475,250
Government debt securities 14,669 – – 14,669
Other debt securities 5,482 – – 5,482
Current assets 40,813 – – 40,813
Total assets 532,314 – 3,900 536,214
Financial liabilities
Bank loans 50,000 – – 50,000
Derivatives – 8,937 – 8,937
Current liabilities (excluding bank loans) 2,715 – – 2,715
Total liabilities 52,715 8,937 – 61,652
Total net assets 479,599 (8,937) 3,900 474,562
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