ANNUAL REPORT 2017/18 49
NOTES TO THE FINANCIAL STATEMENTS
31 March 2018
25. FINANCIAL RISKMANAGMENT
(continued)
(d) Capital risk
The University is limited by guarantee with no share
capital and is funded mainly by grants received from the
Ministry of Education.
The University is in compliance with all externally
imposed capital requirements for the financial years
ended 31 March 2018 and 2017.
(e) Fair value measurement
The University classifies fair value measurements using
a fair value hierarchy that reflects the significance of the
inputs used in making the measurements. The fair value
hierarchy has the following levels:
(i) quoted prices (unadjusted) from active markets for
identical assets (Level 1);
(ii) inputs other than quoted prices in active markets
included within Level 1 that are observable for the asset,
either directly (i.e. as prices) or indirectly (i.e. derived from
prices) (Level 2); and
(iii) inputs for the asset that are not based on observable
market data (unobservable inputs) (Level 3).
The following table shows an analysis of financial
instruments measured and carried at fair value and
classified by level of fair value measurement hierarchy:
The fair value of financial instruments traded in active
markets is based on quoted market prices at the balance
sheet date. The quoted market price used for financial
assets held by the University is the current bid price.
These instruments are included in Level 1.
The fair value of financial instruments that are not
traded in an active market (unlisted unit trusts and other
investments) is based on price quotes by the brokers.
The fair value of currency forwards is determined
using quoted forward currency forward rates at the
balance sheet date. These instruments are classified as
Level 2. In infrequent circumstances, where a valuation
technique for these instruments is based on significant
unobservable inputs, such instruments are classified as
Level 3.
There were no significant transfers between Level 1 and
Level 2 of the fair value hierarchy in the period.
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
At 31 March 2018
Assets
Financial assets
at fair value
through income
and expenditure
- Quoted debt
securities
196,041
-
- 196,041
- Quoted unit
trusts
89,662 431,414
521,076
- Quoted equity
securities
33,096
-
- 33,096
- Other
investments
- 164,649 65,298 229,947
Total assets 318,799 596,063 65,298 980,160
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
At 31March2017
Assets
Financial assets
at fair value
through
income and
expenditure
- Quoted debt
securities
218,206
-
- 218,206
- Quoted unit
trusts
82,886 382,215
- 465,101
- Quoted
equity
securities
29,985
-
- 29,985
- Other
investments
- 38,804 64,169 102,973
Derivative
financial
instruments
-Currency
forwards
- 5,034
-
5,034
Total assets 331,077 426,053 64,169 821,299
Liabilities
Derivative
financial
instruments
-Currency
forwards
- (1,845)
- (1,845)
