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For the year ended 31 May 2016
BLUE LABEL INTEGRATED ANNUAL REPORT 2016
160
2.
Financial risks
continued
Market risk
Market risk is the risk that changes in market prices (interest rate and currency risk) will affect the Company’s income
or the value of its holding of financial instruments. The objective of market risk management is to manage and
control market risk exposures within acceptable parameters, while optimising the return.
The Company is exposed to risks from movements in foreign exchange rates and interest rates that affect its assets,
liabilities and anticipated future transactions.
Fair value measurement hierarchy:
•
Level 1: fair value based on quoted prices (unadjusted) in active markets for identical assets or liabilities;
•
Level 2: fair value based on inputs other than quoted prices included within level 1 that are observable for the asset
or liability, either directly (that is, as prices) or indirectly (that is, derived from prices); or
•
Level 3: fair value based on inputs for the asset or liability that are not based on observable market data (that is,
unobservable inputs).
Contingent consideration, included in trade and other payables, are level 3 financial liabilities.
Changes in level 3 instruments are as follows:
2016
R’000
2015
R’000
Contingent consideration
Opening balance
93 280
7 256
Acquisition of Viamedia Proprietary Limited
—
84 783
Settlements
(1 931)
(4 113)
Gains and losses recognised in profit or loss
(23 117)
5 354
Closing balance
68 232
93 280
Total gains or losses for the period included in profit or loss for
liabilities held at the end of the reporting period, under:
Other income
(30 924)
(923)
Interest paid
(7 807)
6 277
Change in unrealised gains or losses for the period included in profit or loss
for liabilities held at the end of the reporting period
7 222
1 382
Refer to note 3.2.1 of the Group financial statements.
NOTES TO THE COMPANY ANNUAL FINANCIAL STATEMENTS
continued