axiata group berhad | annual report 2015
195
19. DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)
Derivative designated as hedging instrument (continued)
(e) Net investment hedge – Cross currency interest rate swaps (continued)
The payment of the Group’s SGD notional amounts of USD300.0 million is designated as a hedge of net investment in the Group’s investment in
its associate. The hedge has been fully effective from inception and for the financial year.
The Group recognised a loss of RM125.3 million (2014: gain of RM21.6 million) in other comprehensive income after reclassification of an unrealised
foreign exchange loss of RM238.1 million (2014: loss of RM61.2 million) on the underlying Notes from the profit or loss to other comprehensive
income.
The fair value changes of the derivative are attributable to future exchange rates and interest rate movements.
(f) Cash flow hedge – Interest rate swap
The IRS is used to hedge cash flow risk arising from a floating rate borrowing of a subsidiary. The hedge is designed to hedge against interest rate
risks.
The information relating to the derivative as at 31 December 2015 is as follows:
Notional amount
USD’million
Period
Exchange
period
Floating
interest rate
paid
Floating
interest rate
received
Fair value liabilities
2015
2014
RM’000
RM’000
103.8
13 January 2014
- 29 July 2018
Quarterly
2.6075% p.a.
3 months’
LIBOR +1.45%
p.a.
1,102
1,734
The fair value changes of the derivative are attributable to interest rate movements.
20. DEFERRED INCOME
Group
2015
2014
RM’000
RM’000
At 1 January
254,304
271,585
Received during the financial year
-
30,741
Released to profit or loss
(37,150)
(49,563)
Currency translation differences
6,260
1,541
At 31 December
223,414
254,304
The deferred income relates to the government grants received by subsidiaries for the purchase of certain qualifying assets.
