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FINANCIAL STATEMENTS
Axiata Group Berhad | Annual Report 2016
201
19. DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)
(g) Cash flow hedge – Cross currency interest rate swaps
The underlying debt instrument for the CCIRS is the Group’s Notes as disclosed in Note 16(c) to the financial statements. The hedge is
designed to hedge against foreign currency and interest rate risks.
Notional
amount
USD’ million
Notional
amount
RM’ million
Period
Exchange
period
Fixed interest
rate paid on RM
Notional
Fixed interest
rate received on
USD Notional
Fair value
assets 2016
RM’000
255.0
1,025.3
30 Sep 2016 -
19 Nov 2020
Semi-annually
5.440%
3.466%
99,789
30.0
122.5
8 Sep 2016 -
19 Nov 2020
Semi-annually
5.350%
3.466%
10,090
130.0
545.1
20 Dec 2016 -
24 Mar 2026
Semi-annually
6.656%
4.357%
2,027
20.0
83.2
28 Oct 2016 -
24 Mar 2026
Semi-annually
6.730%
4.357%
799
154.0
640.7
27 Dec 2016 -
24 Mac 2026
Semi-annually
6.641%
4.357%
12,638
The borrowing is designated as cash flow hedge to hedge the currency risk of the borrowings denominated in USD. The hedge has been fully
effective from inception and during the financial year.
The Group recognised a gain of RM1.9 million in other comprehensive income after reclassification of an unrealised foreign exchange loss of
RM113.8 million on the underlying Multi-Currency Sukuk Programme 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.
(h) 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 2016 is as follows:
Notional
amount
USD’ million
Period
Exchange
period
Floating
interest
rate paid
Floating
interest
rate received
Fair value liabilities
2016
RM’000
2015
RM’000
70.0
13 Jan 2014
- 29 July 2018
Quarterly
2.6075% p.a.
3 months’
LIBOR +1.45%
p.a.
902
1,102
The fair value changes of the derivative are attributable to interest rate movements.