ANNUAL%20REPORT%202015%20eng

Notes to Consolidated Financial Statements
30 FINANCIAL RISK MANAGEMENT AND FAIR VALUE OF FINANCIAL
INSTRUMENTS (Continued)
(f)
Fair value measurement (Continued)
(i)
Financial assets and liabilities measured at fair value (Continued)
Fair value at
31 December
Fair value measurements
as at 31 December
2014 categorised into
2014 Level 1 Level 2 Level 3
USD’000 USD’000 USD’000 USD’000
Recurring fair
value measurement
Assets
– Redemption option
embedded in senior notes — — — —
During the year ended 31 December 2015 and 2014, there were no transfers between Level 1 and
Level 2, or transfers into or out of Level 3. The Group’s policy is to recognise transfers between
levels of fair value hierarchy as at the balance sheet date in which they occur.
Information about Level 3 fair value measurements
Significant
Valuation unobservable Expected
techniques inputs volatility
Redemption option
embedded in senior notes Binomial model Expected volatility 38%
The fair value of redemption option embedded in senior notes is determined using binomial model
and the significant unobservable input used in the fair value measurement is expected volatility.
The fair value measurement is positively correlated to the expected volatility. As at 31 December
2015, it is estimated that with all other variables held constant, an increase/decrease in the
expected volatility by 1% would have decreased/increased the Group’s loss by USD100,000.
Annual Report 2015
189