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Home | Investors | Financial information | Annual Report 2006

Annual Report 2006

Notes to Consolidated Financial Statements

15. Derivative Transactions

The Company and certain subsidiaries have entered into derivative transactions in order to manage certain risks arising from adverse fluctuations in foreign currency exchange rates and interest rates.

The Company is exposed to credit risk in the event of nonperformance of the counterparties to its derivatives positions, but any such loss would not be material because the Company enters into such transactions only with financial institutions with high credit ratings.

Summarized below are the notional amounts and the estimated fair value of the derivative transactions outstanding at March 31, 2006 and 2005:

Currency-related transactions
Millions of yen				Thousands of U.S. dollars
As of March 31, 2006	Notional amount	Fair value	Unrealized gain (loss)	Notional amount	Fair value	Unrealized gain (loss)
Forward foreign exchange contracts
Buy:
US$	¥ 182	¥ 184	¥ 1	$ 1,556	$ 1,573	$ 9
STG£	18	18	(0)	154	154	(0)
EURO	-	-	-	-	-	-
YEN	1,589	1,576	(13)	13,581	13,470	(111)
Total	¥1,791	¥1,779	¥(11)	$15,308	$15,205	$(94)

As of March 31, 2005	Notional amount	Fair value	Unrealized gain (loss)
Millions of yen
Forward foreign exchange contracts
Buy:
US$	¥ 189	¥ 182	¥(7)
STG£	50	50	0
EURO	421	426	4
YEN	907	901	(5)
Total	¥1,569	¥1,561	¥(8)

The notional amounts of the forward foreign exchange contracts presented above exclude those entered into hedge receivables and payables denominated in foreign currencies, which have been translated and are reflected at their corresponding contracted rates in the accompanying consolidated balance sheets.

Interest-related transactions
At March 31, 2006 and 2005, the disclosure of fair value information for interest-related derivatives positions has been omitted since all derivatives have been accounted for as hedges.

16. Amounts Per Share

Year ended March 31,	2006	2005	2006
Yen			U.S. dollars
Net income:
Basic	¥47.28	¥41.35	$0.404
Diluted	47.26	40.78	0.404
Net assets	436.48	349.07	3.729
Cash dividends applicable to the year	12.00	11.00	0.103

Basic net income per share is computed based on the net income available for distribution to shareholders of common stock and the weighted average number of shares of common stock outstanding during each year. Diluted net income per share is computed based on the net income available for distribution to the shareholders and the weighted average number of shares of common stock outstanding during each year after giving effect to the dilutive potential of shares of common stock to be issued upon the conversion of convertible bonds and the exercise of stock options.

Amounts per share of net assets are computed based on net assets available for distribution to the shareholders and the number of shares of common stock outstanding at the year end.

Cash dividends per share represent the cash dividends resolved by the Board of Directors as applicable to that year together with the interim cash dividends paid.


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