140 / 148
Notes to the consolidated
financial statements
continued
for the year ended 30 June 2017
138
Hyprop Investments Limited
Integrated annual report and consolidated financial statements
2017
34.
Financial instruments – Fair values and risk management
continued
C – 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) expose the group to “in-country” local currency and US Dollar currency
risk, while the group’s investments in South-Eastern Europe expose the group to “in-country” local currency (in instances where the local currency is
not the Euro or pegged to the Euro) and Euro currency risk. Dividends earned from foreign operations are currently hedged six months in advance of
receipt.
The summary quantitative data about the group’s exposure to currency risk as reported to management of the group is as follows.
30 June 2017
30 June 2016
USD
EUR
ZAR000
equivalent
Total
USD
EUR
ZAR000
equivalent
Total
Loans receivable
229 650 903
1 186 531
3 013 407
220 564 705
897 756
3 273 289
Trade and other receivables
4 306 806
5 379 826
136 343
3 594 675
1 948 643
85 073
Cash and cash equivalents
4 720 772
61 581
365 694
5 403
Borrowings
(354 185 562)
(4 620 244)
(316 428 001)
(5 076 480)
Trade and other payables
(6 175 603)
(80 559)
(6 300 844)
(93 087)
Net exposure
(121 682 684)
6 566 357
(1 489 472)
(98 203 771)
2 846 399
(1 805 802)
Financial guarantee
(294 943 604)
(4 394 778)
Forward exchange contracts
(502 722)
(6 558)
(5 673 957)
(83 825)
Net exposure
(122 185 406)
(288 377 247)
(5 890 808)
(103 877 728)
2 846 399
(1 889 627)
The following significant exchange rates have been applied.
30 June 2017
30 June 2016
Average
rate
Year-end
spot
Average
rate
Year-end
spot
USD1
13,63
13,04
USD1
14,87
14,77
EUR1
14,53
14,90
EUR1
16,40
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.
30 June 2017
30 June 2016
R000
R000
Profit or loss
Profit or loss
Change vs ZAR Strengthening
Weakening
Change vs ZAR Strengthening
Weakening
USD1
5%
73 671
(73 671)
10%
103 308
(103 308)
EUR1
2%
(1 549)
1 549
12%
(5 419)
5 419
30 June 2017
30 June 2016
Other comprehensive income
Other comprehensive income
Change vs ZAR Strengthening
Weakening
Change vs ZAR Strengthening
Weakening
USD1
5%
(16 655)
16 655
10%
(146)
146
EUR1
2% None as Hystead is not consolidated
12% None as Hystead is not consolidated