Asus 2010 Annual Report Download - page 185
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181
(3) Liquidity risk
A. The Group adjusts its funding mainly through corporate bonds, cash and bank
deposits. The Group maintains funding sufficient to fulfill all contract obligations,
and thereby expects no significant liquidity risk would arise from lack of funding.
B. The Group invests in funds and listed stocks, which are traded in active markets and
are expected to be able to be readily converted into certain amount of cash
approximate to their fair values in the market. The Group has lower funding risk
for forward exchange contracts and currency option contracts because sufficient
working capital is maintained to fulfill contract obligations, and lower cash flow risk
as the exchange rate of those contracts was known.
C. The Group is expected to have liquidity risk since investments in equity instruments
carried at cost have no active market.
D. The derivative financial instruments for hedging are intended mainly to hedge the
exchange rate risk from future cash flows. The contracts’ duration corresponds to
the Group’s foreign currency future cash flows. The Group will settle the foreign
currency liabilities at expiration of the contracts. Thus, management believes that the
cash flow risk is not significant.
(4) Cash flow risk arising from variation in interest rates
The Group’s long-term loans bear floating interest rates. Changes in the prevailing market
rate will affect the effective interest rate on long-term loans and cause future cash flows
to fluctuate.
5) Others
(1) To maximize the efficiency of the own-brand business and to dedicate the OEM business,
the Company resolved to decrease its authorized capital and transfer its OEM business
(the Company’s long-term equity investment in PEGATRON) to the Company’s another
investee, Pegatron Investment, on June 1, 2010.
The consolidated subsidiaries had been changed due to the aforementioned capital
reduction and transfer. The consolidated assets and liabilities of PEGATRON on
December 31, 2009 are as follows:
2009
/
12
/3
1
Assets:
Current assets
$ 155,806,945
Funds and long
-
term investments
4,851,535
Property, plant and equipment and
58,415,276
intangible assets
Other non
-
current assets
5,481,076
$ 224,554,832