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Financial instruments at fair value

12 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

Financial instruments at fair value

9	Financial instruments at fair value

The Company complies with ASC 820, “Fair Value Measurements” (“ASC 820”). ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data.

Level 3-Inputs are unobservable inputs which reflect the reporting entity's own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

The Company entered into forward contracts with a bank, and the bank will pay the Company if the Chinese Yuan appreciates against the USD. If the Chinese Yuan depreciates against the USD, the Company will need to pay the bank, but will be able to buy more Chinese Yuan as a result.

During the fiscal year ended March 31, 2016, based on our valuation of the existing forward contracts, we recorded a gain of approximately $36,000 (2015: $132,000) for the change in valuation, resulting in a liability of approximately $160,000 (2015: $196,000).

During the fiscal year ended March 31, 2015, the Company purchased an investment product for approximately $390,000 through Ping An Bank, and the fair value at March 31, 2015 was approximately $391,000. Such investment product has been redeemed during the fiscal year ended March 31, 2016.

During the fiscal year ended March 31, 2016, the Company purchased listed shares in Hong Kong for approximately $134,000. A revaluation gain of approximately $10,000 was recorded.

At the end of the accounting period, the fair value of the following assets / (liabilities) were as follows:

		March 31, 2015																March 31, 2016
$ in thousands
		Level 1				Level 2				Level 3				Total				Level 1				Level 2				Level 3				Total
Forward contracts (1)			-				(196	)			-				(196	)			-				(160	)			-				(160	)
Investment product (2)			-				-				391				391				-				-				-				-
Equity investment (3)			-				-				-				-				144				-				-				144

(1)

The fair value of forward contracts was determined based on the present value of expected future cash flows considering the risks involved, and using discount rates appropriate for the respective maturities. Observable level 2 inputs are used to determine the present value of expected future cash flows.

(2)

Observable inputs for the fair value of financial instruments were not assessable. The fair value is determined based on valuation and projection provided by Ping An Bank. On July 8, 2015, the investment product has been redeemed for approximately $397,000 for a net gain of approximately $6,000.

(3)

The fair value of equity investment is determined based on quoted price in active markets.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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