Maxis Berhad
Annual Report 2015
page
132
Notes to the Financial Statements
31 December 2015
22 DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)
(i) derivative designated in hedging relationship (continued)
For the financial year ended 31 December 2014, RM219,673,000 was reclassified to the statements of profit or loss to offset the foreign
exchange losses of RM218,431,000 which arose from the weakening RM against USD and SGD, and the interest expense of RM1,242,000
as the underlying interest rates were higher than the hedged interest rates on the borrowings. This reduced the credit balance of the cash
flow hedging reserve of the Group and the Company as at 31 December 2014 by RM18,691,000.
For derivatives designated as cash flow hedge on borrowings, the gains or losses recognised in the cash flow hedging reserve in equity will
be continuously released to the statements of profit or loss within finance costs until the underlying borrowings are repaid. As the Group and
the Company intend to hold the borrowings and associated derivative financial instruments to maturity, any changes to the fair values of the
derivative financial instruments will not impact the statements of profit or loss and will be taken to the cash flow hedging reserve in equity.
For derivatives designated as cash flow hedge on forecast transactions, the gains or losses on changes to the fair value of derivative
financial instruments are recognised in the cash flow hedging reserve in equity until such time that the hedged items affect profit or loss,
then the gains or losses are transferred to statements of profit or loss.
(ii) derivative not designated in hedging relationship
The increase in the Group’s fair value gains of RM157,000 which is due to changes in foreign currency exchange spot and forward rates
respectively has been charged to the statements of profit or loss within other expenses.
As the derivative financial instrument is used to hedge the fair value movement attributable to the foreign exchange rate fluctuation
associated to certain payable balances denominated in USD as at reporting date, any changes to the fair values of the derivative financial
instruments will impact the statements of profit or loss within other expenses until the maturity of the derivative financial instruments.
The method and assumption applied in determining the fair value of derivatives are disclosed in Note 3(i) to the financial statements.
23 DEFERRED TAXATION
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities
and when the deferred taxes relate to the same tax authority. The following amounts, determined after appropriate offsetting, are shown in the
statements of financial position:
Group
2015
RM’000
2014
RM’000
Deferred tax assets
55,386
102,045
Deferred tax liabilities
(493,532)
(482,352)
(438,146)
(380,307)
