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BLUE LABEL
INTEGRATED ANNUAL REPORT 2017
Notes
to the Group annual financial statements
continued
For the year ended 31 May 2017
3.
Financial instruments and financial risks
continued
3.2 Financial liabilities continued
3.2.1 Trade and other payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of
business from suppliers. Trade payables are classified as current liabilities if payment is due within the normal
operating cycle of the business. If not, they are presented as non-current liabilities.
2017
R’000
2016
R’000
Trade payables
3 167 171
2 235 245
Accruals
138 428
116 240
Employee benefits
71 458
70 142
Sundry creditors
88 189
103 194
Deferred revenue
2 786
2 044
Contingent consideration
32 974
83 563
VAT
19 332
9 048
Payables to related parties (refer to note 8)
3 609
23 144
3 523 947
2 642 620
Less:
Amounts included in current portion of trade and other payables
(3 517 673)
(2 601 807)
6 274
40 813
Trade payables are discounted at a discount rate of 10.5% per annum (2016: 10.5% per annum) based on average
creditors’ days outstanding. The effect of discounting of the trade payables balance amounts to R21.0 million
(2016: R13.6 million).
Fair value estimation
Fair value measurement hierarchy:
t
Level 1: fair value based on quoted prices (unadjusted) in active markets for identical assets or liabilities;
t
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
t
Level 3: fair value based on inputs for the asset or liability that are not based on observable market data (that is,
observable inputs).
Contingent consideration
Changes in level 3 instruments are as follows:
2017
R’000
2016
R’000
Opening balance
83 563
123 902
Acquisition of Reware Proprietary Limited
1 150
—
Acquisition of Utilities World Proprietary Limited
4 516
—
Settlements
(50 666)
(1 931)
Gains or losses recognised in profit or loss
(5 589)
(38 408)
Closing balance
32 974
83 563
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
(10 210)
(48 120)
Interest paid
4 621
9 712
Unrealised gains or losses recognised in profit or loss for liabilities held at
the end of the reporting period
5 304
9 127
The closing balance includes R5.6 million relating to SupaPesa Africa Limited, R18.3 million relating to Viamedia
Proprietary Limited, R4 million to Utilities World Proprietary Limited and R5 million to other contingent considerations.