2016 Annual Report For Web 7.3MB

[B] FAIR VALUE
Set out below is a comparison by class of the carrying amounts and fair value of the Company’s financial instruments that are carried in the
consolidated financial statements:
CARRYING AMOUNT
$
2016 2015
FAIR VALUE
$
CARRYING AMOUNT
$
FAIR VALUE
$
FINANCIAL ASSETS
Loans and receivables
Cash and cash equivalents 2,774 2,774 58,234 58,234
Cash held in trust 5,093 5,093 250 250
Accounts receivable 81,033 81,033 73,524 73,524
Due from vendor 342 342 — —
Derivative instruments 9,289 9,289 — —
Available-for-sale investment 900 900 900 900
Note receivable 807 807 — —
FINANCIAL LIABILITIES
Other financial liabilities
Interest-bearing loans and borrowings 208,581 208,916 148,317 148,531
Trade payables and provisions 71,056 71,056 54,271 54,271
Dividends payable 2,956 2,956 2,883 2,883
Due to vendor 16,415 16,415 1,114 1,114
Acquisition, transaction and financing costs payable 262 262 732 732
Contingent consideration 20,224 20,224 4,663 4,663
Other financial liabilities — — 9,017 9,017
Derivative instruments 1,577 1,577 23,768 23,768
Convertible unsecured subordinated debentures 201,210 198,150 197,585 185,414
The fair value of the financial assets and liabilities are included at
the amount at which the instrument could be exchanged in a current
transaction between willing parties, other than in a forced or liquidation
sale.
The following methods and assumptions were used to estimate the fair
values:
• Cash and cash equivalents, cash held in trust, restricted cash,
accounts receivable, dividends payable, acquisition, transaction and
financing costs payable, accounts payable and accrued liabilities,
due to vendor, contingent consideration and other liabilities
approximate their carrying amounts largely due to the short-term
maturities of these instruments.
• The fair value of unquoted instruments and loans from banks is
estimated by discounting future cash flows using rates currently
available for debt on similar terms, credit risk and remaining
maturities.
• The Company enters into derivative financial instruments with
financial institutions with investment grade credit ratings.
Derivatives valued using valuation techniques with market
observable inputs are mainly foreign exchange forward contracts.
The most frequently applied valuation techniques include forward
pricing, using present value calculations. The models incorporate
various inputs including the credit quality of counterparties and
foreign exchange spot and forward rates.
• AGI includes its available-for-sale investment, which is in a
private company, in Level 3 of the fair value hierarchy as it trades
infrequently and has little price transparency. AGI reviews the fair
value of this investment at each reporting period and when recent
arm’s length market transactions are not available, management’s
estimate of fair value is determined using a market approach based
on external information and observable conditions where possible,
supplemented by internal analysis as required.
[C] FAIR VALUE [“FV”] HIERARCHY
AGI uses the following hierarchy for determining and disclosing the fair
value of financial instruments by valuation technique:
145 CONSOLIDATED FINANCIAL STATEMENTS
FIELD TO CONSUMER
2016 ANNUAL REPORT
CONSOLIDATED FINANCIAL STATEMENTS 146