annual report - Pumpkin Patch investor relations

PUMPKIN PATCH LIMITED & SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS 31 JULY 2010
PUMPKIN PATCH LIMITED & SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS 31 JULY 2010
25 FINANCIAL RISK MANAGEMENT continued
The Group enters into forward exchange contracts to manage the risks associated with
foreign currency denominated sales and also manage the purchase of foreign currency
denominated products.
The table below analyses the GroupÕs derivative financial instruments that will be settled on
a gross or net basis into relevant maturity groupings based on the remaining period at the
balance sheet to the contractual maturity date. The amounts disclosed in the table are the
contractual undiscounted cash flows. They are expected to occur and affect profit or loss
at various dates between balance date and the following five years.
Less than
1 year
Between 1
& 2 years
Between 2
& 5 years
Over
5 years
Consolidated $Õ000 $Õ000 $Õ000 $Õ000
At 31 July 2010
Forward foreign exchange contracts -
cash flow hedges
inflow 137,567 88,329 63,426 -
outflow (108,732) (71,041) (30,061) -
At 31 July 2009
Forward foreign exchange contracts -
cash flow hedges
inflow 86,805 75,157 43,828 -
outflow (66,782) (66,683) (41,238) -
Net settled derivatives -
interest rate swaps
net outflow (476) - - -
(D) FAIR VALUE ESTIMATION
Effective for annual periods beginning on or after 1 January 2009, the group adopted the
amendment to NZ IFRS 7 for financial instruments that are measured in the balance sheet
at fair value, this requires disclosure of fair value measurements by level of the following fair
value measurement hierarchy:
Level 1
Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2
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) (level 2).
Level 3
Inputs for the asset or liability that are not based on observable market data (that is,
unobservable inputs) (level 3).
The following table presents the groupÕs assets and liabilities that are measured at fair
value. The parent company did not have any assets or liabilities measured at fair value
(2009: nil)
Level 1 Level 2 Level 3 Total balance
Consolidated $Õ000 $Õ000 $Õ000 $Õ000
At 31 July 2010
Assets
Derivatives used for hedging - 7,485 - 7,485
- 7,485 - 7,485
Liabilities
Derivatives used for hedging - 25,550 - 25,550
- 25,550 - 25,550
At 31 July 2009
Assets
Derivatives used for hedging - 6,785 - 6,785
- 6,785 - 6,785
Liabilities
Derivatives used for hedging - 23,722 - 23,722
- 23,722 - 23,722
Level 2
The fair value of financial instruments that are not traded in an active market (for example,
over-the-counter derivatives) is determined by using valuation techniques. These valuation
techniques maximise the use of observable market data where it is available and rely as
little as possible on entity specific estimates. If all significant inputs required to fair value an
instrument are observable, the instrument is included in level 2.
20
years
young
93