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Notes to the Financial Statements (cont’d)
For the financial year ended 31 December 2011
34. Derivative financial instruments (cont’d)
148
At 31 December 2011 (cont’d)
(ii) Interest rate swap contract
The Group has an interest rate swap contract to manage its interest rate risk arising from floating rate borrowings in
United States dollar (USD):
Notional amount Maturity period Receive floating Pay fixed
(USD million) interest rate interest rate
12.5 March 2014 3 month London Inter-bank Offer Rate 2.47%
As at 31 December 2011, a fair value loss of RM865,000 with a deferred tax income of RM216,000 relating to the
interest rate swap contract was recognised in profit or loss.
At 31 December 2010
(i) Cash flow hedges
(a) Foreign currency forward contracts designated as hedges against expected future sales in United States Dollar
(USD):
Sell USD Range of maturity period Average exchange rate
(in million) RM/USD
22.0 From January 2011 to February 2011 3.1423
The fair value gain of RM950,000 with a deferred tax expense of RM238,000 on such contracts that relate to
effective hedges was included in the hedging reserve (Note 31) in respect of the contracts. The cash flow hedges
of certain future forward contracts were assessed to be ineffective. Accordingly, the fair value gain of RM212,000
with a deferred tax expense of RM53,000 was recognised in profit or loss.
(b) Foreign currency forward contract designated as hedges against expected future purchase in Singapore Dollar
(SGD):
Buy SGD Maturity Average exchange rate
SGD’000 RM/SGD
73 January 2011 2.388
The cash flow hedge on this forward contract was assessed to be ineffective. Accordingly, the fair value loss of
RM1,000 was recognised in profit or loss.
(ii) Interest rate swap contract
The Group has an interest rate swap contract to manage its interest rate risk arising from floating rate borrowings in
United States dollar (USD):
Notional amount Maturity period Receive floating Pay fixed
(USD million) interest rate interest rate
16.5 March 2014 3 month London Inter-bank Offer Rate 2.47%
As at 31 December 2010, a fair value loss of RM1,375,000 with a deferred tax income of RM344,000 relating to the
interest rate swap contract was recognised in profit or loss.
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