Atul Ltd 2020-21

210 Atul Ltd | Annual Report 2020-21 Note 29.7 Fair value measurements (continued) There were no transfers between any levels during the year. Level 1: This includes financial instruments measured using quoted prices. The fair value of all equity instruments that are traded on the stock exchanges is valued using the closing price as at the reporting period. Level 2: The fair value of financial instruments that are not traded in an active market (for example over-the-counter derivatives) is determined using valuation techniques, which maximise the use of observable market data and rely as little as possible on entity-specific estimates. The mutual fund units are valued using the closing net assets value. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. b) Valuation techniques used to determine fair value Specific valuation techniques used to value financial instruments include: i) the use of quoted market prices or dealer quotes for similar instruments, ii) the fair value of forward foreign exchange contracts are determined using forward exchange rates at the Consolidated Balance Sheet date, iii) the fair value of foreign currency option contracts is determined using the Black Scholes valuation model, iv) the fair value of the remaining financial instruments is determined using discounted cash flows analysis. All of the resulting fair value estimates are included in level 1, 2 and 3. c) Valuation processes The Finance department of the Group includes a team that performs the valuations of financial assets and liabilities with assistance from independent external experts when required, for financial reporting purposes, including level 3 fair values. d) Fair value of financial assets and liabilities measured at amortised cost ( ` cr) Particulars As at March 31, 2021 As at March 31, 2020 Carrying amount | Fair value Carrying amount | Fair value Non-current financial assets Investments: Government securities 0.01 0.01 Security deposits for utilities and premises 2.67 3.00 Finance lease receivables 3.58 1.20 Total non-current financial assets 6.26 4.21 Non-current financial liabilities Borrowings 126.67 108.47 Other liabilities 3.66 2.96 Lease liabilities 6.26 6.71 Total non-current financial liabilities 136.59 118.14 The carrying amounts of trade receivables, cash and cash equivalents, other bank balances, dividend receivables, other receivables, trade payables, capital creditors, other liabilities are considered to be the same as their fair values due to the current and short-term nature of such balances. The fair values of non-current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.