Page 154 - ar2011

152 TRANS FORMATION
NOTES TO THE FINANCIAL STATEMENTS
For the Financial Year Ended 31 December 2011
40 DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
The Group has the following derivative financial instruments accounted as:
At 31 December 2011:
(i) Cash flow hedges
(a) Foreign currency forward contracts designated as hedges against expected future sales in United States
Dollar (USD):
Average Exchange
Sell USD Range of Maturity Period Rate
(In million) RM/USD
47.1 From January 2012 to March 2012 3.1716
At 31 December 2011, net fair value loss of $435,000 with a deferred tax credit of $109,000 relating
to the cash flow hedges of the expected future sales that were assessed to be highly effective was
included in other comprehensive income. Certain forward contracts were assessed to be ineffective.
Accordingly, the fair value loss of $206,000 with a deferred tax credit of $52,000 was recognised in
the profit or loss.
(ii) Interest rate swap contract
(a) The interest rate swap contract to manage interest rate risk arising from floating rate borrowings in
United States Dollar (USD) is as follows:
Notional Amount Maturity Period Receive Floating Interest Rate Pay Fixed Interest Rate
(US$ million)
12.5 March 2014 3 month London 2.47%
Inter-bank Offer Rate
During the financial year, a fair value gain of $210,000 with a deferred tax expense of $53,000 relating
to the interest rate swap contract was recognised in the profit or loss.