Asus 2015 Annual Report Download - page 220

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(2) Financial instruments
A. Fair value information of financial instruments
The carrying amounts of financial instruments measured at non fair value (including cash and
cash equivalents, notes/trade receivables, other receivables, refundable deposits, short-term
borrowings, notes and trade payables, other payables - accrued expenses, other current
liabilities and guarantee deposits received) are reasonably approximate to the fair values. Please
refer to Note 12(3) for the fair value information of financial instruments measured at fair
value.
B. Financial risk management policies
(A) The Group’s operating activities expose the Group to a variety of financial risks, including
market risk (including foreign exchange risk, interest rate risk and price risk), credit risk
and liquidity risk. The Group’s overall risk management programme focuses on the
unpredictability of financial markets and seeks to minimise potential adverse effects on the
Group’s financial position and financial performance. The Group uses variety of derivative
financial instruments to hedge certain risk exposures. Please refer to Notes 6(2) and 6(5).
(B) The Group’s key financial plans are all reviewed by the board of directors under the related
principles and internal control system. When executing the financial plans, the Group’s
treasury departments will follow the financial operating procedures in accordance with the
overall financial risk management and proper segregation of duties.
C. Nature and degree of significant financial risks
(A) Market risk
Foreign exchange risk
a. The Group operates internationally and is exposed to foreign exchange risk arising from
various currency exposures, primarily with respect to the USD, EUR and CNY. Foreign
exchange risk arises from future commercial transactions, recognized assets and
liabilities and net investments in foreign operations.
b. The management has set up a policy to require group companies to manage their foreign
exchange risk against their functional currency. To manage their foreign exchange risk
arising from future commercial transactions and recognized assets and liabilities, the
Group uses derivative financial instruments to hedge, like forward exchange contracts,
currency option contracts, etc. Foreign exchange risk arises when future commercial
transactions or recognized assets or liabilities are denominated in a currency that is not
the entity’s functional currency.
2015/12/31 2014/12/31
Total liabilities 164,176,927$ 186,898,450$
Total equity 169,427,946 165,523,063
Total assets 333,604,873$ 352,421,513$
Liability ratio 49.21% 53.03%