289 / 396
8. Finance income/(costs), foreign exchange gain/(losses) and fair value (losses)/gains on derivatives (cont’d.)
(b) Finance costs
Group
Company
2017
RM’000
2016
RM’000
(Restated)
2017
RM’000
2016
RM’000
(Restated)
Interest expense
– bank borrowings
(487,649)
(558,634)
(380,206)
(495,701)
Amortisation of premiums for interest rate caps
(17,353)
(9,420)
(9,617)
(9,420)
Impact of discounting effect on financial instruments
(47,806)
(20,040)
–
(17,463)
Bank facilities and other charges
(24,940)
(4,967)
(24,047)
(3,760)
(577,748)
(593,061)
(413,870)
(526,344)
(c) Foreign exchange gains/(losses)
Group
Company
2017
RM’000
2016
RM’000
(Restated)
2017
RM’000
2016
RM’000
(Restated)
Borrowings:
– foreign exchange gains/(losses)
564,631
(216,115)
576,579
(216,115)
– fair value movement recycled from cash flow hedge reserve
(148,901)
(77,298)
(148,901)
(77,298)
Operations
(9,804)
108,559
(51,535)
105,979
Amounts due from associates and joint ventures
(218,867)
245,993
(218,867)
245,993
187,059
61,139 157,276
58,559
(d) Fair value (losses)/gains on derivatives
Group
Company
2017
RM’000
2016
RM’000
(Restated)
2017
RM’000
2016
RM’000
(Restated)
(Losses)/gains from fuel hedging contracts
(13,287)
45,733
881
45,733
Gains/(losses) from foreign currency hedging contracts
36,577
(4,838)
36,577
(4,838)
(Losses)/gains from interest rate hedging contracts
(163,892)
29,591
(163,892)
29,591
(140,602)
70,486 (126,434)
70,486
Since the previous financial year, the Company has hedged the foreign currency spot translation on the lease income for the
aircraft that are sub-leased on operating lease basis to its associates companies against the foreign currency spot translation
on the aircraft borrowing repayment. This is to hedge the foreign currency risk arising from operating lease income that the
Company is exposed to. Gains and losses recognised in the hedging reserve in equity as of end of reporting date will be
continuously released to the income statements within foreign exchange gains/(losses).
Fair value change of derivatives consists of fair value changes due to movement in mark-to-market (“MTM”) position on
outstanding hedging contracts that did not qualify for hedge accounting.
[ ]
275
AirAsia Berhad
REPORTS AND FINANCIAL STATEMENTS