Download Full Version - UMC

152 United Microelectronics Corporation Annual Report 2004
c. Transaction risk
a) Credit risk
There is no significant credit risk exposure with respect
to the above transactions because the counterparties
are reputable financial institutions with good global
standing.
b) Liquidity and cash flow risk
The cash flow requirements on the interest rate swap
agreements are limited to the net interest payables or
receivables arising from the differences in the swap
rates. The cash flow requirements on forward contracts
are limited to the net difference between the forward
and spot rates at the settlement date. Therefore, no
significant cash flow risk is anticipated since the working
capital is sufficient to meet the cash flow requirements.
c) Market risk
Interest rate swap agreements and forward contracts
are intended for hedging purposes. Gains or losses arising
from the fluctuations in interest rates and exchange
rates are likely to be offset against the gains or losses
from the hedged items. As a result, no significant exposure
to market risk is anticipated.
d) The presentation of derivative financial instruments on
financial statements
The net receivables or payables resulting from interest
rate swap and forward contracts were recorded under
current assets or current liabilities.
As of December 31, 2004 and 2003, the balances of
current assets arising from interest rate swap were NTD
36 million and NTD 129 million, respectively.
As of December 31, 2004, the balance of current
assets arising from forward contracts was NTD 39 million
and related exchange loss in NTD 310 million was
recorded under non-operating expenses for the year
ended December 31, 2004.
Note 11. Additional Disclosures
(1) The following are additional disclosures for the Company
and its affiliates pursuant to SFC requirements:
a. Financing provided to others for the year ended December
31, 2004: Please refer to Attachment-1.
b. Endorsement/Guarantee provided to others for the year
ended December 31, 2004: Please refer to Attachment-2.
c. Securities held as of December 31, 2004: Please refer to
Attachment-3.
d. Individual securities acquired or disposed of with accumulated
amount exceeding the lower of NTD 100 million or 20
percent of the capital stock for the year ended December
31, 2004: Please refer to Attachment-4.
e. Acquisition of individual real estate with amount exceeding
the lower of NTD 100 million or 20 percent of the capital
stock for the year ended December 31, 2004: Please
refer to Attachment-5.
f. Disposal of individual real estate with amount exceeding
the lower of NTD 100 million or 20 percent of the capital
stock for the year ended December 31, 2004: Please refer
to Attachment-6.
g. Related party transactions for purchases and sales
amounts exceeding the lower of NTD 100 million or 20 percent
of the capital stock for the year ended December 31,
2004: Please refer to Attachment-7.
h. Receivables from related parties with amounts exceeding
the lower of NTD 100 million or 20 percent of the capital
stock as of December 31, 2004: Please refer to Attachment-8.
The above significant intercompany transactions have
been eliminated. Please refer to Note 10 for intercompany
eliminations.
i. Names, locations and related information of investee companies
as of December 31, 2004: Please refer to Attachment-9.
j. Derivative financial instruments: Please refer to Note 10.
(2) Investment in Mainland China
None.
Note 10, 11