30 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES  (continued) (d) Fair values  (continued) The fair value of the financial instruments as well as the methods used to estimate the fair value are summarised in the table below. 2014 2013 Valuation  technique-  market observable  inputs (Level 2)  $’000 Total  $’000 Valuation  technique-  market observable  inputs (Level 2)  $’000 Total  $’000 Financial assets: Derivatives 254 254 5,035 5,035 Total 254 254 5,035 5,035 Financial liabilities: Secured and unsecured borrowings 471,269 471,269 408,010 408,010 Derivatives 1,957 1,957 7,588 7,588 Total 473,226 473,226 415,598 415,598 The net fair values of the financial instruments are determined using valuation techniques that utilise data from observable and unobservable market data.  Assumptions are based on market conditions existing at each reporting date. The fair value is calculated as the present value of the estimated future cash  flows using an appropriate market based yield curve, which is independently derived. As a result, these derivatives have been classified based on the  observable market inputs as Level 2. The net fair values of the secured and unsecured borrowings are determined based on the weighted average market-based interest rates that are  applicable to the borrowings. As a result, these borrowings have been classified based on the observable market inputs as Level 2. (e) Derivative financial instruments 2014  $’000 2013  $’000 Current assets: Forward currency contracts – cash flow hedges 254 2,835 Interest rate caps and collars – held for trading – 2,147 254 4,982 Non-current assets: Forward currency contracts – cash flow hedges – 53 Current liabilities: Interest rate swap contracts – held for trading – 3,280 Interest rate swap contracts – cash flow hedges 902 645 Interest rate collars – held for trading – 2,128 Forward currency contracts – cash flow hedges 514 112 1,416 6,165 Non-current liabilities: Interest rate swap contracts – cash flow hedges 528 57 Interest rate collars – held for trading – 1,366 Forward currency contracts – cash flow hedges 13 – 541 1,423 Instruments used by the Group The Group uses derivative financial instruments such as forward currency contracts and interest rate swaps and collars (floors and caps) to hedge its  risks associated with interest rate and foreign currency fluctuations. Such derivative financial instruments are initially recognised at fair value on the date  on which a derivative contract is entered into and are subsequently remeasured to fair value. Refer Note 1(c)(ix). The Group enters into derivative transactions under International Swaps and Derivatives Association (“ISDA”) agreements, which allow for the netting of  relevant transactions which are to be settled at the same time, which does not occur regularly in practice. In certain situations, such as a default, all  outstanding transactions under the relevant ISDA are able to be terminated, and a net amount for settlement determined. The ISDA agreements do not  meet the criteria for offsetting in the statement of financial position, due to no default having occurred. CLOSE FILE X 71 ANNUAL REPORT 2014