Annual Report 2012 - IOI Group

22. DERIVATIVE FINANCIAL INSTRUMENTS (Continued)CompanyContract/Notional Fair valueamount Financial FinancialNet long Assets LiabilitiesRM’000 RM’000 RM’0002012Cross currency swap contracts 318,184 14,597 –Interest rate swap contracts 1,917,000 – 74,884Total derivative financial instruments 2,235,184 14,597 74,884Less: Current portion – –Non-current portion 14,597 74,8842011Commodity swap contracts 18,000 2,640 2,640Cross currency swap contracts 652,940 – 69,406Interest rate swap contracts 1,816,200 3,695 –Total derivative financial instruments 2,487,140 6,335 72,046Less: Current portion (2,640) (52,140)Non-current portion 3,695 19,906i. Forward foreign exchange contractsForward foreign exchange contracts were entered into as hedges for sales and purchases denominated in foreign currenciesand to limit the exposure to potential changes in foreign exchange rates with respect to the Group’s foreign currenciesdenominated financial assets and financial liabilities.ii.Commodity forward contracts, swap contracts and futuresThe commodities forward contracts, swap contracts and futures were entered into with the objective of managing andhedging the respective exposure of the Group’s plantation segment and resource-based manufacturing segment to adverseprice movements in vegetable oil commodities. The fair values of these components have been determined based onpublished market prices or quoted prices from reputable financial institutions.iii.Cross currency swap contractsCurrency swap contracts are used to hedge foreign currency exposures of borrowings.iv.Interest rate swap contractsInterest rate swap contracts are used to hedge the Group’s exposures to movements in interest rates.Annual Report 2012IOI CORPORATION BERHAD 179