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72 NIKON REPORT 2016
16. Derivatives
The Group enters into derivative contracts, including foreign exchange
forward contracts, currency option contracts, foreign currency swap
contracts and interest rate swap contracts to hedge foreign exchange
risk and interest rate exposures. The Group does not hold or issue
derivatives for trading purposes. Derivatives are subject to market risk
and credit risk. Market risk is the exposure created by potential uctu-
ations in market conditions, including changes in interest or foreign
exchange rates. Credit risk is the possibility that a loss may result from
a counterparty’s failure to perform according to the terms and conditions
of the contract.
Because the counterparties to the Group’s derivative contracts are
limited to major international nancial institutions, the Group does not
anticipate any losses arising from credit risk.
Derivative transactions entered into by the Group have been made in
accordance with internal policies that regulate the authorization and
credit limit amount.
(a) Derivative transactions to which hedge accounting is not applied at March 31, 2015 and 2016 were as follows:
Millions of Yen
March 31, 2015
Contract
Amount
Contract
Amount Due
after One Year Fair Value
Unrealized
(Loss) Gain
Forward exchange contracts:
Selling USD ¥ 17,458 ¥ 10 ¥ 10
Selling EUR 11,674 530 530
Selling Other 12,239 (215) (215)
Buying JPY 38
Buying USD 16,567 57 57
Buying Other 608 4 4
Total ¥ 386
Currency swap contracts:
Y en receipt,
Brazil Real payment ¥ 665 ¥ 113 ¥ 113
Y en receipt,
Thai Baht payment 7,533 ¥4,679 (2,867) (2,867)
Total ¥(2,754)
Millions of Yen Thousands of U.S. Dollars
March 31, 2016
Contract
Amount
Contract
Amount Due
after One Year Fair Value
Unrealized
(Loss) Gain Contract Amount
Contract
Amount Due
after One Year Fair Value
Unrealized
(Loss) Gain
Forward exchange contracts:
Selling USD ¥42,704 ¥1,126 ¥1,126 $378,988 $ 9,990 $ 9,990
Selling EUR 10,452 134 134 92,760 1,193 1,193
Selling Other 8,100 (145) (145) 71,888 (1,284) (1,284)
Buying USD 8,612 (396) (396) 76,432 (3,512) (3,512)
Total ¥ 719 $ 6,387
Currency swap contracts:
Yen receipt,
Thai Baht payment ¥ 4,679 ¥1,825 ¥ (842) ¥ (842) $ 41,522 $16,194 $(7,470) $(7,470)
Total ¥ (842) $(7,470)
Notes: Methods used to calculate fair values
(1) Forward exchange contracts:
Forward exchange rates are used to determine fair values of forward exchange contracts.
(2) Currency swap contracts:
The fair values of derivative transactions are measured at the quoted prices provided by nancial institutions.
The currency swap amounts are notional amounts, which are shown in the above table, and do not represent the amounts exchanged by the parties and do not measure the Group’s
exposure to credit or market risk.
Millions of Yen Thousands of U.S. Dollars
March 31, 2016 Due in One Year or Less
Due after One Year
through Five Years Due in One Year or Less
Due after One Year
through Five Years
Cash and cash equivalents ¥251,210 ¥ $2,229,414 $
Notes and accounts receivable 98,990 878,509
Total ¥350,200 ¥ $3,107,923 $