Asus 2007 Annual Report Download - page 126

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122
ASUSTEK COMPUTER INC.
Notes to Non-Consolidated Financial Statements (Unaudited)
(In New Taiwan thousand dollars unless otherwise stated)
38
4. On April 24, 2008, the board of the Company resolved to invest US$7,350 thousand in
Power Technology (Hang Zhou) Limited (tentative name) indirectly, but the resolution has
not yet been approved by Investment Commission, MOEA.
5. On April 24, 2008, the board of the Company resolved to increase capital for 494,065,172
shares with $10 per share, amounted to $4,940,652 thousand, by transferring from retained
earnings and employees’bonus, but the resolution has not yet been approved by the
stockholders meeting.
6. On April 24, 2008, the board of the Company resolved to swap all of its holding of Unihan
Holding Ltd. with Pegatron Holding Ltd. for its 279,628,141 newly issued shares.
X. OTHER SIGNIFICANT MATTERS
1. RISKS MANAGEMENT OBJECTIVE AND POLICIES
The Company’s derivative financial instruments are forward exchange contracts. The
Company’s principal financial instruments, other than derivatives, comprise of cash and cash
equivalents, financial assets at fair value through profit or loss and available-for-sale
financial asset-noncurrent. The main purpose of these financial instruments is to manage
financing for the Company’s operations. The Company also holds various other financial
assets and liabilities such as accounts receivable and accounts payable, which derived
directly from its operations.
The main risks arising from the Company’s financial instruments are foreign currency risk,
commodity price risk, credit risk, liquidity risk and cash flow interest rate risk.
(1) Foreign currency risk
The Company exposes to foreign currency risks arising from purchases or sales. The
Company adopts spot or forward contracts to avoid foreign currency risk. The
Company has to buy or sell the same amount of foreign currency with hedging items for
forward contracts. In principle, the Company does not carry out any forward hedge
for commitments of uncertain nature. The Company enters into the forward currency
contracts to hedge the exchange rate risk of foreign currency assets, liabilities and
commitments. The Company’s strategy on risk is to avoid most price risks. The
Company uses the derivatives that have highest negative trend toward the hedged items
as the hedging device and evaluate such periodically.