NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December 2023 29. CAPITAL AND FINANCIAL RISK MANAGEMENT (continued) 2022 During the period – 2022 Notional amount Carrying amount – assets Carrying amount – liabilities Changes in the value of the hedging instrument recognised in Unitholders’ funds Amount reclassified from hedging reserve to the statement of total return Amount reclassified from costs of hedging reserve to the statement of total return Line item in the statement of total return affected by the reclassification Group and Trust $’000 $’000 $’000 $’000 $’000 $’000 Interest rate risk Interest rate swaps 1,019,000 42,694 (825) 35,711 3,865 – Finance costs The following table provides a reconciliation by risk category of components of equity and analysis of items recognised in Unitholders’ funds, net of tax, resulting from cash flow hedge accounting. Group and Trust Hedging reserve Cost of hedging reserve $’000 $’000 Balance at 1 January 2022 2,321 – Cash flow hedges Change in fair value: Interest rate risk 35,711 – Amount reclassified to statement of total return: Interest rate risk 3,865 – Balance at 31 December 2022 41,897 – Balance at 1 January 2023 41,897 – Cash flow hedges Change in fair value: Interest rate risk (49,388) – Amount reclassified to statement of total return: Interest rate risk 22,562 – Balance at 31 December 2023 15,071 – Hedge of net investment in foreign operations The Group has foreign currency exposures from the net investment in its foreign subsidiaries in China that has RMB functional currency. As at 31 December 2023, the Group’s net investment in its foreign subsidiaries is hedged by the RMB FTZ fixed rate bonds and cross currency interest rate swap of $161.6 million, which mitigates the foreign currency risk arising from the foreign subsidiaries’ net assets. The net change in fair value of the net investment hedge comprised the effective portion of approximately $47,000 which was recognised in the foreign currency translation reserve as at 31 December 2023. 218 CAPITALAND CHINA TRUST
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