Asus 2008 Annual Report Download - page 134
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130
ASUSTEK COMPUTER INC.
Notes to Non-Consolidated Financial Statements
(In thousands of New Taiwan dollars unless otherwise stated)
VIII SIGNIFICANT DISASTER LOSS
None.
IX. SUBSEQUENT EVENTS
On February 18, 2009, the board of the Company resolved to buy back its 60,000 thousand
shares. The buyback period would be from February 19 to April 18, 2009.
X. OTHER SIGNIFICANT MATTERS
1. RISKS MANAGEMENT OBJECTIVE AND POLICIES
Derivative financial instruments held by the Company are forward exchange contracts and
foreign currency options. The Company’s principal financial instruments, other than
derivatives, comprise of cash and cash equivalents, financial assets at fair value through profit
or loss, available-for-sale financial asset-current and available-for-sale financial
asset-noncurrent. The main purpose of these financial instruments is to manage the
financing for the Company’s operations. The Company also holds various other financial
assets and liabilities such as accounts receivable and accounts payable, which arose 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 risk from fluctuations in interest
rate.
(1) Foreign currency risk
The Company exposes to foreign currency risks arising from purchases or sales
denominated in foreign currencies. The Company uses the principle of natural hedge to
mitigate the risk and utilizes spot or forward contracts to hedge foreign currency risk.
The notional amounts of the foreign currency contracts are the same as the amounts of
the hedged items. In principle, the Company does not enter into any forward contracts
for commitments of uncertain nature. The Company enters into forward currency
contracts to hedge the exchange rate risk of assets, liabilities and commitments
denominated in foreign currencies. The Company’s hedging strategy is to avoid most
market price risks. The Company uses the derivatives that have highest negative
correlation with the hedged items as hedging instruments and evaluate the hedge
effectiveness periodically.
(2) Commodity price risk
The Company's exposure to price risk is minimal.