Asus 2012 Annual Report Download - page 211
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207
funds and listed and OTC stocks issued by companies with good credit ratings. The
Group manages credit risk exposure related to each financial institution and believes that
there is no significant concentration of credit risk of cash and equity securities. The
customers of the Group have good credit and profit records. The Group evaluates the
financial condition of these customers in order to reduce credit risk of accounts
receivable.
C. 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 liquidity risk would arise from lack of funding.
(B) The Group invests in funds and listed and OTC stocks, which are traded in active
markets and are expected to be readily convertible into certain amount of cash
approximate to their fair values in the markets. The Group has lower funding risk for
forward exchange contracts because sufficient working capital is maintained to fulfill
contract obligations, and lower cash flow risk due to the exchange rate of those contracts
was known.
(C) The Group is expected to have liquidity risk since there are no active market for
investment equity instruments carried at cost.
(D) The derivative financial instruments for hedging are intended mainly to hedge the
exchange rate risk from future cash flows. The forward exchange 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.
D. Cash flow risk due to changes in interest rates
The Group’s long-term loans are issued at floating interest rates. Accordingly, the future cash
flow will fluctuate with the yield rate of these debt instruments.
11. OPERATING SEGMENT INFORMATION
(1) General information
The businesses of the Group are mainly divided into two parts: 3C brand business, and others.
3C brand business focuses on the sales of 3C products, and others focus on strategic investments
in businesses other than 3C brand business.
(2) Measurement basis
The Group uses the operating profit as the measurement for operating segment profit and the basis
of performance assessment. The accounting policies of the operating segments and the accounting
policies described in Note 2 of the consolidated financial statements are the same.