234 / 280
NOTES TO THE COMPANY ANNUAL FINANCIAL STATEMENTS
CONTINUED
For the year ended 31 May 2014
232
BLUE LABEL INTEGRATED ANNUAL REPORT 2014
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:
2014
R’000
2013
R’000
Contingent consideration
Opening balance
3 030
—
Acquisition of Panacea Proprietary Limited
6 155
2 334
Acquisition of Blue Label Engage Proprietary Limited
—
335
Settlements
(1 800)
—
Gains and losses recognised in profit or loss
(129)
361
Closing balance
7 256
3 030
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
(827)
—
Interest paid
698
361
Change in unrealised gains or losses for the period included in profit
or loss for liabilities held at the end of the reporting period
698
361