NOTE 38

NOTES TO THE FINANCIAL STATEMENTS – NOTE 38

38.

Fair value hierarchy and financial instruments by category

Accounting policies have been applied to financial instruments as indicated below.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the group takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.

In addition, for financial reporting purposes, fair value measurements are categorised into level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety. The three levels are explained as follows:

Level 1 –	inputs are quoted prices in active markets for identical assets or liabilities that the company can access at the measurement date. These quoted prices are unadjusted.
Level 2 –	inputs are inputs, other than quoted prices included in level 1, that are observable for the asset or liability, either directly or indirectly.
Level 3 –	inputs are unobservable inputs for the asset or liability.

The table below categorises financial instruments and analyses those measured at fair value by the level into which the fair value measurement is categorised.

Group			Recurring fair value measurements
Assets	Loans and receivables at amortised cost R000	Assets designated at fair value through profit and loss R000	Level 1 R000	Level 2 R000	Level 3 R000
30 June 2015
Derivative instruments⁽¹⁾		53 132		53 132
Loans receivable	2 311 882
Receivables	87 152
Cash and cash equivalents	83 841
30 June 2014
Derivative instruments⁽¹⁾		32 978		32 978
Loans receivable	859 945
Receivables	103 686
Cash and cash equivalents	77 353

(1) Refer to note 19 for revaluation techniques and key inputs

			Recurring fair value measurements
	Loans and receivables at amortised cost R000	Assets designated at fair value through profit and loss R000	Level 1 R000	Level 2 R000	Level 3 R000
Liabilities
30 June 2015
Loans – non-current	5 919 909
– current	772 000
Derivative instruments⁽¹⁾		42 752	42 752
Payables	377 917			53 132
30 June 2014
Debentures and debenture premium	5 719 119
Loans – non-current	5 185 822
– current	2 013 031
Derivative instruments⁽¹⁾		41 829	41 829	32 978
Payables	367 686

(1) Refer to note 19 for revaluation techniques and key inputs

Company			Recurring fair value measurements
	Loans and receivables at amortised cost R000	Assets designated at fair value through profit and loss R000	Level 1 R000	Level 2 R000	Level 3 R000
Assets
30 June 2015
Derivative instruments⁽¹⁾		53 132		53 132
Loans receivable	67 450
Receivables	78 311
Cash and cash equivalents	62 970
30 June 2014
Derivative instruments⁽¹⁾		32 978		32 978
Loans receivable	47 674
Receivables	102 629
Cash and cash equivalents	61 257

(1) Refer to note 19 for revaluation techniques and key inputs

			Recurring fair value measurements
Liabilities	Loans and receivables at amortised cost R000	Liabilities designated at fair value through profit and loss R000	Level 1 R000	Level 2 R000	Level 3 R000
30 June 2015
Loans – non-current	3 726 838
– current	1 533 128
Derivative instruments⁽¹⁾		24 320		24 320
Payables	359 831
30 June 2014
Debentures and debenture premium	5 730 187
Loans – non-current	3 792 566
– current	2 013 031
Derivative instruments⁽¹⁾		39 811		39 811
Payables	335 626

(1) Refer to note 19 for revaluation techniques and key inputs

The directors consider that the carrying amounts of financial assets and liabilities recognised at amortised cost in the consolidated financial statements approximate their fair values. There have been no changes in valuation methodologies during the year.

There have been no significant transfers between level 1, level 2 and level 3 during the year.

The fair value gain (in respect of investment property and all other financial assets) included in profit and loss is R2,4 billion (2014: R1,5 billion) for the group and R2,4 billion (2014: R1,5 billion) for the company.