22. Derivatives and hedge accounting continued 22.3 Reconciliation of changes in hedge reserves
CASHFLOW HEDGE RESERVE $M
COST OF HEDGING $M
Hedge reserves 2023
TOTAL $M
Opening balance
(60.0)
1.3
(58.7)
Hedging gains or losses recognised in OCI – Interest rate swaps Hedging gains or losses recognised in OCI – Cross currency swaps Hedging gains or losses recognised in OCI – Forward exchange contracts Transferred to profit or loss – Interest rate swaps Transferred to profit or loss – Cross currency swaps Recognised as basis adjustment to non-financial assets
(24.2)
–
(24.2)
27.4
4.1
27.4
(1.0)
– – –
(1.0)
18.2
18.2
(25.9)
(25.9)
5.5
–
5.5
–
(1.1)
(1.1)
Deferred tax on change in reserves
Closing balance
(60.0)
4.3
(55.7)
CASH FLOW HEDGE RESERVE $M
COST OF HEDGING $M
Hedge reserves 2022
TOTAL $M
Opening balance
27.5
7.3
34.8
Hedging gains or losses recognised in OCI – Interest rate swaps Hedging gains or losses recognised in OCI – Cross currency swaps Hedging gains or losses recognised in OCI – Forward exchange contracts Transferred to profit or loss – Interest rate swaps Transferred to profit or loss – Cross currency swaps Recognised as basis adjustment to non-financial assets
(93.0)
–
(93.0)
(5.5)
(8.3)
(13.8)
(6.0)
– – –
(6.0)
(18.0)
(18.0)
(1.1)
(1.1)
2.0
–
2.0
Deferred tax on change in reserves
34.1
2.3 1.3
36.4
Closing balance
(60.0)
(58.7)
23. Financial risk management Risk management framework Vector has a comprehensive treasury policy, approved by the board, to manage financial risks arising from business activity. The policy outlines the objectives and approach that the group
applies to manage: — Interest rate risk; — Credit risk; — Liquidity risk; — Foreign exchange risk; and — Funding risk. For each risk type, any position outside the policy limits requires the prior approval of the board. Each risk is monitored on a regular basis and reported to the board.
96
Vector Annual Report 2023
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