QL Resources Berhad (428915-X)
128
28. Financial instruments (Cont’d)
28.7 Hedging activities
28.7.1 Cash flow hedge
The Group and the Company have entered into forward exchange contracts to hedge the cash flow risk in
relation to the potential change in foreign exchange rates totalling RM54,058,000 (2015: RM79,180,000). The
forward exchange contracts have the same nominal value of RM54,058,000 (2015: RM79,180,000) and is to
be settled in full upon maturity. The Group and the Company have also entered into cross currency swap and
interest rate swap to hedge against cash flow risk in relation to loans in foreign currency and changes in interest
rates respectively.
The following table indicates the periods in which the cash flows associated with the derivatives that are expected
to occur and affect profit or loss:
Carrying Expected Under 1 – 2 2 – 5
amount cash flows 1 year years years
RM’000 RM’000 RM’000 RM’000 RM’000
Group
2016
Financial liabilities
Forward exchange contracts
Outflow - 63,635 63,635 - -
Inflow (86) (63,721) (63,721) - -
Cross currency swap (3,777) (3,777) (3,777) - -
Interest rate swap 227 282 118 110 54
2015
Financial liabilities
Forward exchange contracts
Outflow 3,141 80,895 80,895 - -
Inflow - (77,754) (77,754) - -
Cross currency swap (4,911) (4,911) (4,911) - -
Interest rate swap 229 229 229 - -
Company
2016
Financial liabilities
Cross currency swap (3,777) (3,777) (3,777) - -
Interest rate swap 227 282 118 110 54
2015
Financial liabilities
Cross currency swap (4,911) (4,911) (4,911) - -
Interest rate swap 229 229 229 - -
During the year, the Group and the Company had recognised net loss of RM3,053,000 and RM3,517,000 (2015:
net loss of RM972,000 and RM625,000) respectively in other comprehensive income.
Ineffectiveness loss amounting to RM56,000 (2015: RM17,000) was recognised by the Group in profit or loss
in respect of the hedge. There was no ineffectiveness gain or loss being recognised by the Company.
Notes to the Financial Statements
(Cont’d.)
