VECTOR ANNUAL REPORT 2021 /
Notes to the Financial Statements
21. Derivatives and hedge accounting continued 21.3 Reconciliation of changes in hedge reserves
CASHFLOW HEDGE RESERVE $M
COST OF HEDGING $M
Hedge reserves 2021
TOTAL $M
Opening balance
76.3
5.4
81.7
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 prof it or loss – Interest rate swaps Transferred to prof it or loss – Cross currency swaps
(37.7)
–
(37.7)
2.7
2.7
5.4
2.4
– – –
2.4
(33.5)
(33.5)
0.7
0.7
Recognised as basis adjustment to non-f inancial assets Deferred tax on change in reserves
(2.3)
–
(2.3)
18.9 27.5
(0.8)
18.1 34.8
Closing balance
7.3
CASH FLOW HEDGE RESERVE $M
COST OF HEDGING $M
Hedge reserves 2020
TOTAL $M
Opening balance
56.4
4.7
61.1
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 prof it or loss – Interest rate swaps Transferred to prof it or loss – Cross currency swaps Recognised as basis adjustment to non-f inancial assets
57.4
–
57.4
7.3
1.0
8.3
(0.4)
– – –
(0.4)
(31.2)
(31.2)
(5.9)
–
0.4
–
0.4
Deferred tax on change in reserves
(7.7)
(0.3)
(8.0)
Closing balance
76.3
5.4
81.7
22. Financial risk management Risk management framework Vector has a comprehensive treasury policy, approved by the board, to manage f inancial 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.
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