Eng - IOI Group

Notes To The Financial Statements cont’d45. FINANCIAL INSTRUMENTS cont’d45.3 Price fluctuation risk cont’dThe net unrecognised gain on the commodity future and swap contracts have been deferred until the related future transactionsoccur, at which time they will be included in the measurement of the transactions.The Group is also exposed to price fluctuation risk arising from changes in the market prices of its quoted investments. TheGroup does not use derivative instruments to manage this risk as these quoted investments are mainly held as long terminvestments.45.4 Credit riskCredit risk or risk of financial loss from the failure of customers or counter parties to discharge their financial and contractualobligations, is managed through the application of credit approvals, credit limits, insurance programme and monitoringprocedures on an ongoing basis. If necessary, the Group may obtain collaterals from counter parties as a means of mitigatinglosses in the event of default.The Group does not have any significant exposure to any individual customer or counter party nor does it have any majorconcentration of credit risk related to any financial instruments.The maximum exposure to credit risk for the Group and for the Company were represented by the carrying amount to eachfinancial asset; and in addition, in respect of derivatives, the notional amount as disclosed in the respective notes to financialstatements.45.5 Liquidity riskThe Group actively manages its debt maturity profile, operating cash flows and the availability of funding so as to ensureall operating, investing and financing needs are met. To mitigate liquidity risk, management measures and forecasts itscash commitments, monitors and maintains a level of cash and cash equivalents deemed adequate to finance the Group’soperation and investment activities. In addition, the Group strives to maintain available banking facilities at a reasonablelevel against its overall debt position.233ANNUAL REPORT 2007IOI Corporation Berhad