MISC Annual Report 2017

NOTES TO THE FINANCIAL STATEMENTS MISC BERHAD | Annual Report 2017 292 37. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT'D.) (c) Liquidity risk (cont'd.) Group Hedging activities The Group entered into interest rate swaps to hedge the cash flow risk of floating interest rate on the term loans. The notional amount swapped as at 31 December 2017 was RM2,145,433,000 (2016: RM1,804,840,000). The swaps are settled quarterly, consistent with the interest payment schedule of the loan. The following table indicates the periods in which the cash flows are expected to occur for cash flow hedges as at 31 December 2017 and 31 December 2016:  Carrying   amount   RM'000   Contractual   cash flows   RM'000  Within    1 year   RM'000   More than   1 - 2 years    RM'000  More than   2 - 3 years    RM'000  More than  3 - 4 years    RM'000   More than  4 - 5 years    RM'000   More than   5 years   RM'000  At 31 December 2017 Net cash outflows 3,328   (47,061) (2,608) (5,415) (5,430) (5,415) (4,390) (23,803) At 31 December 2016 Net cash outflows 781   (27,659) (8,010)  (6,820)   (3,753)   (3,763)  (3,707)  (1,606) The Group's hedging activities on the interest rate swaps are tested to be effective. During the year, the Group recognised in other comprehensive income a gain of RM7,697,000 (2016: loss of RM221,000) on the interest rate swaps of its subsidiaries. The Group's share of its joint ventures' unrealised gain on interest rate swap during the year was RM444,000 (2016: RM1,001,000).