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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
150
35.
Financial instruments – Fair values and risk management
continued
35.3 Financial risk management
continued
v. Currency risk
The group is exposed to currency risk to the extent that there is a mismatch between the currencies in which revenue, operating costs and
borrowings are denominated and the respective functional currencies of group companies. The primary functional currencies used by the
group are the Rand, US Dollar and Euro. The group’s investments in sub-Saharan Africa (excluding SA) exposes the group to US Dollar currency
risk, while the group’s investments in South-Eastern Europe exposes the group to Euro currency risk. Income earned from foreign operations
is currently not hedged.
Currency exposure
The summary quantitative data about the group’s exposure to currency risk as reported to the management of the group is as follows:
June 2016
June 2015
USD
EUR
ZAR000
equivalent
Total
USD*
ZAR000
equivalent
Total
Loans receivable
220 564 705
897 756
3 273 289
183 926 879
2 258 125
Trade and other receivables
3 594 675
1 948 643
85 073
2 948
36
Cash and cash equivalents
365 694
5 403
754
9
Borrowings
(316 428 001)
(5 076 480)
(178 628 099)
(2 193 071)
Trade and other payables
(6 300 844)
(93 087)
(775 009)
(9 515)
Net exposure
(98 203 771)
2 846 399
1 805 802
4 527 473
55 584
Forward exchange contracts
(5 673 957)
(83 825)
(1 501 278)
(18 432)
Net exposure
(103 877 728)
#
2 846 399
(1 889 627)
#
3 026 195
37 152
# Excludes the fair value of Ikeja City Mall, Lagos Nigeria, which is consolidated with investment property. Refer to note 2 – Investment Property.
Exchange rates
The following significant exchange rates have been applied:
June 2016
June 2015
Average
rate
Year-end
spot
Average
rate
Year-end
spot
USD1
14,50
14,77
11,45
12,28
EUR1
16,97
16,40
*
*
Currency risk sensitivity analysis
A strengthening/(weakening) of the Euro and US Dollar against the Rand at 30 June would have affected the measurement of financial
instruments denominated in a foreign currency and affected profit or loss by the amounts shown below. This analysis assumes that all other
variables, in particular interest rates, remain constant.
June 2016
June 2015
June 2016
June 2015
Profit or loss
Profit or loss
Change vs ZAR
Change vs ZAR
Strengthening Weakening
Strengthening
Weakening
USD1
10%
1%
(103 308)
103 308
372
(372)
EUR1
12%
5 419
(5 419)
*
*
June 2016
June 2016
Change vs ZAR
June 2015
Change vs ZAR
Other comprehensive income
Strengthening Weakening
USD1
10%
1%
(146)
146
EUR1
12%
**
**
*
No comparative is shown for EUR as there was no EUR exposure in the prior year
*
*
No movement is shown due to the deferral of recognition of Hystead