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Hyprop Investments Limited
Group annual financial statements 2016
35.
Financial instruments – Fair values and risk management
continued
35.3 Financial risk management
continued
iv. Liquidity risk
Liquidity risk is the risk that the group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled
by delivering cash or another financial asset. The group’s approach to managing liquidity is to ensure, as far as possible, that it will have
sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses
or risking damage to the group’s reputation.
This risk is minimised by holding cash balances and a floating loan facility. In addition, the company regularly monitors forecast cash flows and
considers the matching of maturity profiles of financial assets and liabilities.
Exposure to liquidity risk
The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted,
and include contractual interest payments and exclude the impact of netting agreements:
Contractual cash flows
Carrying
amount
R000
Total
contractual
in-/(out)
flows
R000
One year
or less
R000
One to five
years
R000
More
than
five years
R000
Non-derivative financial liabilities
Long-term portion of interest-bearing borrowings
(8 632 036)
(9 237 368)
(9 237 368)
Short-term portion of interest-bearing borrowings
(1 294 052)
(1 617 798)
(1 617 798)
Payables
(434 060)
(434 060)
(434 060)
(10 360 148)
(11 289 226)
(2 051 858)
(9 237 368)
Derivative financial liabilities*
Interest rate swaps used for hedging
(101 198)
(244 985)
(49 328)
(195 657)
Total
(10 461 346)
(11 534 211)
(2 101 186)
(9 433 025)
* The inflows/(outflows) disclosed in the above table represent the contractual undiscounted cash flows relating to derivative financial liabilities held
for risk management purposes. These derivative financial instruments are not usually closed out before contractual maturity. The disclosure shows
net cash flow amounts for derivatives as they are net cash settled