Financial Risk Management
Due to the rapid changes in the global financial market, the fluctuations in exchange rates, interest rates, and even commodity prices, additional challenges were created for the Company's operations. If such risks are not adequately managed, they may erode the company’s profitability and impact the shareholders' interests. To manage such potential market uncertainties, our Finance Department created a Rules and Procedures of Derivative Transactions to specify the qualified hedging tools and authorization procedures, and mitigate the potential risks through timely applying the various types of financial instruments such as spot/forward, swaps, and options. In addition, as approximately 98% of Wistron’s sales derives from export businesses, which are mainly quoted in U.S. dollars, most of foreign currency positions can be automatically offset and neutrally hedged. Going forward, the company shall consistently and properly apply neutral hedge and derivatives to reduce the financial risks.