Page 43 - Annual Report 2017

December 31, 2017
(expressed in United States Dollars)

3 Financial risk management ... continued

Fairvalue estimation
F air value amounts represent estimates of the consideration that would currently be agreed upon between knowledgeable, willing
parties who are under no compulsion to actand is best evidenced by a quoted market value, if one exists.

Financial assets and financialliabilities in the statement of financÎal position are grouped into three levels of a fair value hierarchy.
The three Levels are defined based on the observability of significant inputs to the measurement, as follows:
• Level1: quoted priees (unadjusted) in active markets for identical assets or liabilities
• levef 2: inputs other than quoted priees included within Levell that are observable for the asset or liability, either directly
or indirectly
• Level3: unobservable inputs for the asset or liability.

Capital risk management
The Company's capital management objective is to ensure the Company's ability to continue as a going concern by pricing services
commensurately with the level of risk.

Management assesses the Company's reserves in order to maintain an efficient overall financing structure while avoiding excessive
leverage. The Company manages the reserve structure and makes adjustments to it in the light of changes in economic conditions and
the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the
amount of disbursements to members, increase membership contributions, or sell assets to reduce debt.

4 Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the circumstances.
The Company makes estima tes and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom
equal the related actual results. Management does not consider that there are estimates and assumptions that will have a significant
risk, causing a material adjustment to the carrying amounts of assets and liability within the next financial year.

Judgements
ln the process of applying the Company's accounting policies, management has made judgements, apart from those involving
estimations, which have the most significant effect on the amounts recognised in the financial statements.

(a) Financial assets and financialliabilities
IFRS requires that certain fi nancial assets and liabilities be carried at fair value, which requires the use of accounting judgement
and estimates. While significant components of fair value measurement are determined using verifiable objective evidence
(i.e., foreign exchange rates, interest rates, and volatility rates), timing and amount of change in fair value would differ with the
valuation methodology used. Any change in the fair value of these financial assets and liabilities would directly affect profit or
loss and equity.
(b) Investment securities: loans and receivables
The Company follows the guidance of lAS 39 on classifying non-derivative financial assets with fixed or determinable payments
and fixed maturity and without quoted price in an active market as loans and receivables. This classification requires significant
judgement. In making this judgement, the Company evaluates its intention and ability to ho Id such investments to maturity,
and the availability of a quoted price in an active market. Due to absence of a quoted price in an active market, the investment
is therefore classified as loans and receivables and measured at amortised cost.