116 / 148
Notes to the consolidated
financial statements
continued
for the year ended 30 June 2017
114
Hyprop Investments Limited
Integrated annual report and consolidated financial statements
2017
6.
Investment in joint ventures
continued
6.3
60% – Joint venture – Hystead Limited (Hystead)
Hyprop has a 60% interest in Hystead, a UK-based property investment company. The effective date of the investment was 3 December 2015.
The shareholders’ agreement between Hyprop and the remaining 40% shareholder (the JV partner) includes reserved 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.
June 2017
R000
June 2016
R000
Percentage ownership Interest
60%
60%
Dividends received by Hyprop
146 350
Summary of audited statement of financial position
(all figures below reflect 100% of Hystead unless otherwise indicated):
Non-current assets
4 088 180
3 385 254
Current assets
114 692
124 313
Total assets
4 202 872
3 509 567
Non-current liabilities
766 045
2 523 323
Current liabilities
3 296 310
921 153
Capital and reserves
140 517
65 091
Total equity and liabilities
4 202 872
3 509 567
Group’s share of net assets (60%)
84 310
39 055
Summary of audited statement of profit or loss and other comprehensive income
Revenue
233 857
182 354
Expenses
(102 380)
(60 426)
Taxation
(7 812)
Profit for the year
131 477
114 116
The fair value of Hyprop’s investment in Hystead was determined as R1,5 billion (EUR89,8 million) at the date of acquisition. The day-one gain of
R1,5 billion was deferred (in accordance with IFRS), since the valuation method includes assumptions which were derived from unobservable inputs.
Subsequently all acquisitions have been treated in the same manner with day-one gains deferred and subsequent fair value movements recognised,
resulting in a total deferred value of R2 billion (EUR135,7 million) at year-end.
As credit enhancement was provided by Hyprop, the JV partner reimburses Hyprop in the form of an increased right by Hyprop to dividends from
Hystead (ie disproportionate to shareholding), while the guarantee is in place (refer to
note 7 – Financial guarantees
). Hyprop has accounted for its
economic interest in Hystead in determining the fair value of its investment.
The following table shows a reconciliation from the opening balances to the closing balances for the Hystead investment:
June 2017
R000
June 2016
R000
Balance at 1 July
Acquisition of 60% equity investment in Hystead at cost
(1)
Net change in fair value
1 472 754
Deferral of unrealised fair value change calculated with reference to unobservable inputs
(1 472 754)
Unrealised foreign exchange loss
(112 340)
Net change in fair value of new assets (acquisition of Skopje City Mall, Skopje, Macedonia)
661 868
1 472 754
Deferral of unrealised fair value change calculated with reference to unobservable inputs (day-one gains)
(549 528)
(1 472 754)
Balance at 30 June
(1)
Value less than R1 000
6.4 Reconciliation of share of net assets to statement of financial position
AttAfrica
Manda Hill Mauritius
10 103
57 057
Hystead
10 103
57 057