Eng - IOI Group

Notes To The Financial Statements cont’d45. FINANCIAL INSTRUMENTS cont’d45.6 Fair values cont’dGroupCompanyCarrying Fair Carrying Fairamount value amount valueRM’000 RM’000 RM’000 RM’0002006RecognisedQuoted other long term investments 28,706 40,614 8,965 6,306Quoted short term investments 2,027 4,170 - -1 st Exchangeable Bonds 439,163 398,199 - -Guaranteed Notes 1,825,548 1,708,687 - -Term loans 131,250 133,144 - -Amount due to subsidiaries - - 2,302,671 2,106,886UnrecognisedForward foreign exchange contractsSale contracts - (13,613) - -Purchase contracts - (4,754) - -Currency swap, option and future contracts - (13,230) - (13,230)Commodity future contractsSale contracts - (302) - -Purchase contracts - 2,552 - -Commodity swap contract - 2,660 - -Interest rate swap contracts - (24,205) - (16,439)The following methods and assumptions are used to estimate the fair values of financial instruments:i. The carrying amounts of financial assets and liabilities maturing within 12 months approximate fair values due to therelatively short term maturity of these financial instruments.ii.iii.iv.The fair values of quoted securities are their quoted market prices at the balance sheet date.The fair values of the Group’s borrowings are estimated using discounted cash flow analysis, based on currentincremental lending rates for similar types of lending and borrowing arrangements and of the same remainingmaturities.The fair values of derivative financial instruments are the estimated amounts that the Group would expect to pay orreceive on the termination of the outstanding positions arising from such contracts.v. It is not practical to estimate the fair value of the Group’s long term unquoted investments because of the lack of quotedmarket prices and the inability to estimate fair value without incurring excessive costs. However, the Group believesthat the carrying amount represents the recoverable value.235ANNUAL REPORT 2007IOI Corporation Berhad