Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Fair Value Measurement

v3.19.2
Fair Value Measurement
12 Months Ended
Jan. 31, 2019
Fair Value Measurement  
Fair Value Measurement

32 Fair Value Measurement

 

The Group measures the following assets and liabilities at fair value on a recurring basis:

 

  Financial assets - derivative financial instruments
  Financial liabilities - derivative financial instruments

 

Fair value hierarchy

 

AASB 13 Fair Value Measurement requires all assets and liabilities measured at fair value to be assigned to a level in the fair value hierarchy as follows:

 

  Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date.
  Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
  Level 3 Unobservable inputs for the asset or liability.

 

The table below shows the assigned level for each asset and liability held at fair value by the Group:

 

    Level 1
NZ$000’s
    Level 2
NZ$000’s
    Level 3
NZ$000’s
    Total
NZ$000’s
 
31 January 2019                        
Recurring fair value measurements                                
Financial assets                                
Foreign exchange contracts     -       -       -       -  
Financial liabilities                                
Foreign exchange contracts     -       1,484       -       1,484  
Derivative on Convertible Notes     -       -       -       -  

 

    Level 1
NZ$000’s
    Level 2
NZ$000’s
    Level 3
NZ$000’s
    Total
NZ$000’s
 
31 January 2018                        
Recurring fair value measurements                                
Financial assets                                
Foreign exchange contracts     -       -       -       -  
Financial liabilities                                
Foreign exchange contracts     -       2,087       -       2,087  
Derivative on Convertible Notes     -       -       1,110       1,110  

 

    Level 1
NZ$000’s
    Level 2
NZ$000’s
    Level 3
NZ$000’s
    Total
NZ$000’s
 
31 January 2017                        
Recurring fair value measurements                                
Financial assets                                
Foreign exchange contracts     -       -       -       -  
Financial liabilities                                
Foreign exchange contracts     -       4,188       -       4,188  
Derivative on Convertible Notes     -       -       4,112       4,112  

 

There were no transfers between levels during the financial periods.

 

The carrying amount of trade and other receivables and trade and other payables are assumed to approximate their fair values due to their short-term nature. Bank loans approximate fair value of the carrying amount on the basis of the variable nature of the interest rates associated with the loans.

 

Valuation techniques for fair value measurements categorised within level 2

 

The fair value of derivative financial instruments is determined using valuation techniques which maximise the use of observable market data where it is available and relies as little as possible on entity specific estimates.

 

Valuation techniques for fair value measurements categorised within level 3

 

The fair value of the derivative on convertible notes has been determined using a Black-Scholes model. Measurement inputs include share price on measurement date, expected term of the instrument, risk free rate, expected volatility and expected dividend rate. The Group used valuations specialists to perform these valuations.

 

Fair value measurements using significant unobservable movements (level 3)

 

The following table presents the changes in level 3 instruments for the year ended 31 January 2019.

 

    Convertible note liability
NZ$000’s
 
Balance at 31 January 2018     1,110  
Conversion     (1,110 )
Balance at 31 January 2019     -