Eng - IOI Group

Notes To The Financial Statements cont’d45. FINANCIAL INSTRUMENTS cont’d45.3 Price fluctuation risk cont’dThe Group’s plantation and downstream manufacturing segments are inversely exposed to price fluctuation risk on sales andpurchases of vegetable oil commodities. These two business segments enter into commodity future contracts with the objectiveof managing and hedging their respective exposures to price volatility in the commodity markets.As at the balance sheet date, the Group has entered into the following commodity future and swap contracts:i. Commodity futureNet unrecognisedgain/(loss)as atend of theTotal financial yearGroup RM’000 RM’0002007Sale contracts 184,383 (17,567)Purchase contracts 307,230 20,4692006Sale contracts 22,712 (302)Purchase contracts 92,023 2,552The above commodity future contracts have maturities of less than 1 year.ii.Commodity swapNet unrecognisedgain as atend of theEffectivefinancial yearContract Amount Period RM’000Group2007To pay fixed CPO price and to receive 1,000 MT per month April 2007 to March 2008 4,493floating CPO prices from counter party2006To pay fixed CPO price and to receive 2,084 MT per month May 2006 to March 2007 2,660floating CPO prices from counter partyIOI Corporation BerhadANNUAL REPORT 2007 232