Notes

Note 14 - Financial instruments and fair values through profit or loss

Determination of fair value         
The following describes the methodologies and assumptions used to determine fair values.    
                 
Financial instruments at fair value through profit or loss            
The fair value of financial assets classified as financial instruments at fair value through profit or loss and the fair value of bonds included is determined by reference to published price quotations in an active market. For unquoted financial assets the fair value has been estimated using a valuation technique based on assumptions that are supported by observable market prices. 
                 
Assets for which fair value approximates carrying value            
For financial assets and liabilities that have a short-term maturity, it is assumed that the carrying amounts approximate to their fair value. This assumption is also applied to demand deposits and savings accounts without a specific maturity. 
                 
Fair value hierarchy                
The Gard group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique.
                 
Financial instruments in Level 1         
The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis. The quoted market price used for financial assets held by the Company is the last trade price. These instruments are included in Level 1. Instruments included in Level 1 comprise primarily listed equity common stocks, futures, US, UK and Germany listed government bonds.
                 
Financial instruments in Level 2         
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value of an instrument are observable, the instrument is included in Level 2.
 
If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.  
                 
Specific valuation techniques used to value financial instruments include:       
* Quoted market prices or dealer quotes for similar instruments;       
* The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield curves;  
* The fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date, with the resulting value discounted back to present value;
* Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial instruments.
                 
Note that all of the resulting fair value estimates are included in Level 2 except for financial investments explained below. 
                 
Financial instruments in Level 3         
Level 3 includes securitised debt instruments and investments in less liquid fund structures.   
                 
     Parent company    Parent company
        As at 20.02.17       As at 20.02.16
Amounts in USD 000's Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
                 
Financial investments                 
Equities and investment funds 198,617 47,620 4,649 250,887 198,771 34,384 15,267 248,422
Bonds  168,724 136,068 12,606 317,398 183,221 134,059 14,653 331,933
Financial derivative assets 0 3,674 0 3,674 0 7,596 0 7,596
Cash incl. in other financial investments 112,897 0 0 112,897 22,562 0 0 22,562
Other financial investments 68,753 278 0 69,031 55,366 428 0 55,793
Total financial investments 548,991 187,641 17,254 753,887 459,919 176,467 29,921 666,306
                 
                 
Financial liabilities                
Financial derivative liabilities 0 3,186 0 3,186 0 4,679 0 4,679
Financial liabilities incl. in other payables 125,949 0 0 125,949 43,447 796 0 44,243
Total financial liabilities 125,949 3,187 0 129,135 43,447 5,475 0 48,922
                 
     Consolidated accounts    Consolidated accounts
        As at 20.02.17       As at 20.02.16
Amounts in USD 000's Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
                 
Financial investments                 
Equities and investment funds 503,473 382,021 50,232 935,726 481,262 368,018 43,527 892,807
Bonds  570,937 444,225 38,713 1,053,875 651,606 406,180 43,885 1,101,671
Financial derivative assets 0 9,420 0 9,420 0 15,839 0 15,839
Cash incl. in other financial investments 177,946 0 0 177,946 57,826 0 0 57,826
Other financial investments 131,286 373 0 131,659 102,956 429 0 103,385
Total financial investments 1,383,642 836,039 88,944 2,308,626 1,293,650 790,466 87,412 2,171,528
                 
Financial liabilities                
Financial derivative liabilities 0 8,799 0 8,799 0 19,297 0 19,297
Financial liabilities incl. in other payables 236,888 0 0 236,888 117,387 2,212 0 119,599
Total financial liabilities 236,888 8,799 0 245,687 117,387 21,510 0 138,896