NOTES TO THE FINANCIAL STATEMENTS — NOTE 18

18. Derivative instruments
 

Derivative instruments comprise interest rate swaps and zero cost collars. The interest rate swaps are used to fix the interest rates on long-term debt facilities and corporate bonds, while the zero cost collars are used to fix the exchange rate in advance of the receipt of dividends from Hyprop Mauritius and Hystead.

         June 2017 
R000 
   June 2016 
R000 
  
Opening balance as at 1 July        (51 889)    10 380    
Foreign exchange movement        10 748     (6 722)   
Additions        (938)         
Acquisition of business combination              (2 365)   
Fair value adjustment        (5 074)    (53 182)   
Balance at end of year        (47 153)    (51 889)   
Standard Bank of South Africa Limited                   
Assets                   
   Non-current  Interest rate swap           7 260    
Liabilities                   
   Non-current  Interest rate swap     (18 086)    (5 236)   
   Current  Zero cost collar     (80)         
Rand Merchant Bank (RMB)                  
Assets                   
   Non-current  Interest rate swap           13 797    
   Current  Interest rate swap     9 530          
Liabilities                   
   Non-current  Interest rate swap     (13 194)    (84 371)   
   Current  Interest rate swap     (858)         
Nedbank Limited                   
Assets                   
   Non-current  Interest rate swap     785     28 252    
Liabilities                   
   Non-current  Interest rate swap     (25 250)    (11 592)   
   Current  Interest rate swap                
         (47 153)    (51 889)   
Reconciliation to the statements of financial position                   
Non-current assets        785     49 309    
Current assets        9 530          
Non-current liabilities        (56 530)    (101 198)   
Current liabilities        (938)         
         (47 153)    (51 889)   

The valuation of the derivative instruments was determined by discounting the future cash flows using the JIBAR or LIBOR swap curve.

Financial institution Nominal amount Fixed rate payable Expiry date Variable rate receivable  
Standard Bank R100 million 8,02% 13/8/2018 3-month JIBAR  
Standard Bank R100 million 8,04% 11/11/2019 3-month JIBAR  
Standard Bank R100 million 8,50% 3/2/2020 3-month JIBAR  
Standard Bank R450 million 7,85% 30/10/2020 3-month JIBAR  
Standard Bank R300 million 7,82% 31/10/2023 3-month JIBAR  
Standard Bank R100 million 7,85% 27/5/2024 3-month JIBAR  
RMB R300 million 5,83% 13/9/2017 3-month JIBAR  
RMB R450 million 5,87% 18/4/2018 3-month JIBAR  
RMB R200 million 7,73% 18/9/2019 3-month JIBAR  
Nedbank R250 million 8,54% 2/1/2020 3-month JIBAR  
Nedbank R250 million 8,29% 2/1/2020 3-month JIBAR  
Nedbank R500 million 7,43% 4/1/2021 3-month JIBAR  
Nedbank R250 million 7,21% 1/2/2021 3-month JIBAR  
Nedbank R500 million 7,61% 1/9/2021 3-month JIBAR  
Nedbank R500 million 7,55% 1/10/2021 3-month JIBAR  
RMB USD7,68 million 4,26% 6/5/2018 3-month LIBOR + 3,2%  
RMB USD1,64 million 1,27% 17/5/2018 3-month LIBOR  
RMB USD1,78 million 1,67% 17/5/2018 3-month LIBOR  
RMB USD4,50 million 4,47% 17/5/2018 3-month LIBOR + 3,2%  
RMB USD4,98 million 2,10% 18/5/2020 3-month LIBOR  

Further disclosure on the designation of the interest rate swaps and their risk mitigation role is provided in note 34 – Financial instruments – Fair values and risk management.


NOTES TO THE FINANCIAL STATEMENTS — NOTE 18