Group |
Company |
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21. Other financial assets and liabilities |
2015 Rm |
2014 Rm |
2015 Rm |
2014 Rm |
|||||||||
| Non-current other financial assets consist of: | 28 | 74 | 28 | 74 | |||||||||
| Total other financial assets | 1 275 | 261 | 1 275 | 261 | |||||||||
| > Repurchase agreements | 1 101 | – | 1 101 | – | |||||||||
| > Derivative instruments | 174 | 261 | 174 | 261 | |||||||||
| Forward exchange contracts | 70 | 139 | 70 | 139 | |||||||||
| Firm commitments | 5 | 4 | 5 | 4 | |||||||||
| Cross currency swaps | 99 | 118 | 99 | 118 | |||||||||
| Less: Current portion of other financial assets | 1 247 | 187 | 1 247 | 187 | |||||||||
| > Repurchase agreements | 1 101 | – | 1 101 | – | |||||||||
| > Derivative instruments | 146 | 187 | 146 | 187 | |||||||||
| Forward exchange contracts | 70 | 139 | 70 | 139 | |||||||||
| Firm commitments | 5 | 4 | 5 | 4 | |||||||||
| Cross currency swaps | 71 | 44 | 71 | 44 | |||||||||
Repurchase agreements
The group manages a portfolio of repurchase agreements, with a view to generate additional investment income on the favourable interest rates and security provided on these instruments. They are short-term, usually seven days and are held to maturity.
Group |
Company |
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| 2015 Rm |
2014 Rm |
2015 Rm |
2014 Rm |
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| Non-current other financial liabilities consist of: | |||||||||||||
| At fair value through profit or loss | – | – | – | – | |||||||||
| Total other financial liabilities | (185) | (98) | (185) | (98) | |||||||||
| > Derivative instruments | (185) | (98) | (185) | (98) | |||||||||
| Forward exchange contracts | (14) | (61) | (14) | (61) | |||||||||
| Firm commitments | (170) | (37) | (170) | (37) | |||||||||
| Interest rate swaps | (1) | – | (1) | – | |||||||||
| Less: Current portion of other financial liabilities | (185) | (98) | (185) | (98) | |||||||||
| > Derivative instruments | (185) | (98) | (185) | (98) | |||||||||
| Forward exchange contracts | (14) | (61) | (14) | (61) | |||||||||
| Firm commitments | (170) | (37) | (170) | (37) | |||||||||
| Interest rate swaps | (1) | – | (1) | – | |||||||||
Hedging activities and derivatives
Derivatives not designated as hedging instruments
The group only uses forward exchange contracts to economically and fair value hedge its transaction exposures. Derivative instruments are measured at fair value through profit or loss.
Fair value hedge
The foreign exchange forward contracts designated as fair value hedges are being used to hedge the exposure to changes attributable to movement in the spot exchange rate of its firm commitments.
An increase in fair value of the forward exchange contracts designated as fair value hedges of R172 million (2014: R90 million) has been recognised in finance charges and fair value movements and offset with a similar loss on the hedged items (property, plant and equipment and inventory). The ineffectiveness recognised in the current financial year was immaterial.