Annual Report 2004 [PDF/1.1MB]

11. DERIVATIVE FINANCIAL INSTRUMENTS
The Companies trade in derivatives based on currencies and commodities, primarily as a way of hedging the risk of future
fluctuation in exchange rates, interest rates and commodity prices.
The Companies have taken various steps, including the establishment of internal management rules, to ensure that all transactions
are implemented, reported and monitored appropriately, and that each related risk is managed. The Companies do
not hold or issue derivative financial instruments for speculative trading purposes.
At March 31, 2004 and 2003, the outstanding derivatives positions were as follows:
(1) Currencies
Millions of yen
2004
2003
Notional
amount
Fair
value
Unrealized
gain (loss)
Notional
amount
Fair
value
Unrealized
gain (loss)
Forward foreign exchange
contracts to sell:
U.S. dollars
¥ 9,132
¥ 8,862
¥ 270
¥ 5,827
¥ 5,813
¥ 14
Other
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38
1
Forward foreign exchange
contracts to buy:
U.S. dollars
¥ 6,177
¥ 6,119
¥ (58)
¥ 4,442
¥ 4,520
¥ 78
Other
663
657
(6)
147
150
3
Currency call options to buy:
Euro
¥ 195
¥ 0
¥ (1)
¥ 255
¥ 0
¥ (0)
Total
¥ 206
¥ 95
Forward foreign exchange
contracts to sell:
U.S. dollars
Other
Forward foreign exchange
contracts to buy:
U.S. dollars
Other
Currency call options to buy:
Euro
Total
Notional
amount
$ 86,404
369
$ 58,445
6,273
$ 1,845
Thousands of U.S. dollars
2004
Fair
value
$ 83,849
360
$ 57,896
6,216
$ 0
Unrealized
gain (loss)
$ 2,555
9
$ (549)
(57)
$ (9)
$ 1,949
Notes:
1. The fair value of forward foreign exchange contracts is based on the quoted forward foreign exchange rates.
2. The fair value of currency option contracts is based on the prices offered by the counterparty financial institutions.
3. The above figures exclude outstanding derivatives positions to which hedge accounting has been applied.
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