1999 Annual Report - Delta Electronics

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Forward contract receivable
Forward contract payable - foreign currency
(US$35,000 thousand dollars)
Interest receivable
Interest payable - foreign currency
(US$110 thousand dollars)
The Company did not enter into cross currency swap contracts with banks in 1998.
c. Term and characteristics of the derivative contracts:
a) Terms:
i) Foreign currency option contracts
The premiums of both options are to be offset and the net premium receivable of the Company and its
consolidated subsidiary, DNI, was US$20 thousand in 1999 and 1998, respectively, and the related exchange
gain from the matured option contracts was $9,776 and $20,062, respectively.
ii) Foreign currency deposit contracts
The Company received the premium amounting to US$39 thousand in 1999, and the related exchange loss
from the matured contracts was $1,017.
iii) Forward foreign currency contracts
The related exchange loss from the matured forward foreign currency contracts was $66 in 1999.
iv) Cross currency swap contracts
As of December 31, 1999, outstanding contracts were as follows: (in thousand)
Forward contract receivable
($221,340 each month)
Forward contract payable
- foreign currency (US$7,000 each month)
Rate of interest receivable
Rate of interest payable - foreign currency
Exercise rate (USD to NTD)
Exercise dates (the 13th of each month)
b) Credit risk:
The banks, which the Company and its consolidated subsidiary, DNI, deal with, are all in good credit standing
and, therefore, the possibility is low for the banks not to comply with the terms of the contracts. In the event
that the banks fail to comply with the contracts, these will not cause any major loss to the Company and its
consolidated subsidiary, DNI.
c) Market risk:
The Company and its consolidated subsidiary, DNI, entered into these contracts in order to hedge foreign
exchange losses. Due to the nature, there is no material market risk.
d) Future cash flow and period:
December 31, 1999
December 31, 1999
As of December 31, 1999, there are only cross currency swap contracts still outstanding.