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NOTES TO THE FINANCIAL STATEMENTS
continued
for the year ended 30 June 2016
Hyprop Investments Limited
Group annual financial statements 2016
122
6.
Investment in joint ventures
continued
6.3 60% – Joint venture (JV) – Hystead Limited (Hystead)
Hyprop has a 60% interest in Hystead, a UK-based property investment company. The effective date of the investment is 3 December 2015.
The shareholders’ agreement between Hyprop and the remaining 40% shareholder (the JV partner) includes reserve matters and voting rights
such that Hyprop has effective joint control of Hystead.
The purpose of Hystead is to invest (directly or indirectly) in shopping centres in South-Eastern Europe.
The fair value of Hyprop’s investment in Hystead has been determined as R1,5 billion (EUR89,8 million) at the date of acquisition. The day-one
gain of R1,5 billion (EUR89,8 million) was deferred (in accordance with IFRS), since the valuation method includes assumptions which are
derived from unobservable inputs.
Hyprop provided a financial guarantee to fund the acquisition of Hystead’s investments in the Delta City shopping malls in Serbia and
Montenegro. (
Refer to note 35 – Financial instruments – Fair values and risk management
.) The value of the guarantee provided by Hyprop
was determined to be negligible. The JV partner has also provided an indemnity and security equivalent to 10% of the acquisition cost.
Since credit enhancement was provided by Hyprop the JV partner will reimburse Hyprop in the form of an increased right by Hyprop to
dividends from Hystead (ie disproportionate to shareholding), while the guarantee is in place. Hyprop has accounted for its economic interest
in Hystead in determining the fair value of its investment.
June 2016
R000
June 2015
R000
Percentage ownership interest
60%
Percentage entitlement to dividends (economic interest)
78%
Dividends received by Hyprop
31 944
Summary of audited statement of financial position
(all figures below reflect 100% of Hystead unless otherwise indicated):
Non-current assets
3 385 254
Current assets
124 313
Total assets
3 509 567
Non-current liabilities
2 523 323
Current liabilities
921 153
Capital and reserves
65 091
Total equity and liabilities
3 509 567
Group’s share of net assets (60%)
39 055
Summary of audited statement of profit or loss and other comprehensive income
Revenue
182 354
Expenses
(60 426)
Taxation
(7 812)
Profit for the year
114 116
The following table shows a reconciliation from the opening balances to the closing balances for
the Hystead investment:
Balance at 1 July
Acquisition of 60% equity investment in Hystead at cost
#
Net change in fair value of right to receive dividends
1 472 754
Deferral of unrealised fair value change, calculated with reference to unobservable inputs
(1 472 754)
Balance at 30 June
#
Values less than R1 000
6.4 Reconciliation of share of net assets to statement of financial position
AttAfrica
Manda Hill Mauritius
57 057
80 996
Hystead
57 057
80 996