MISC BERHAD - Annual Report 2014 p 294 35. Financial risk management objectives and policies (cont’d.) (c) Liquidity risk (cont’d.) Group Hedging activities The Group had in prior years entered into an interest rate swap (“IRS”) arrangement to hedge its cash flow risk on a floating interest rate term loan. Following early settlement of the floating rate term loan in July 2014, the corresponding IRS was also terminated on the loan repayment date. As a result, the cumulative loss on the IRS of RM4,208,000 has been reclassified from equity into the income statement. The Group’s hedging activities on the IRS were tested to be effective and the Group recognised a gain of RM22,199,000 on the IRS of its subsidiaries in other comprehensive income in the prior year. The following table indicates the periods in which the cash flows are expected to occur for cash flow hedges as at 31 December 2013: More More More More than than than than 1 year 2 years 3 years 4 years and and and and Carrying Contractual Within within within within within amount cash flows 1 year 2 years 3 years 4 years 5 years RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 At 31 December 2013 Net cash outflows 4,230 (4,648) (2,462) (1,567) (619) – – The Group’s share of its joint ventures’ unrealised gain on IRS during the year was RM23,112,000 (2013: RM27,925,000). NOTESTOTHE FINANCIAL STATEMENTS - 31 December 2014
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