Oki 2010 Annual Report Download - page 48
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18. DERIVATIVES AND HEDGING ACTIVITIES
The Group primarily utilizes comprehensive forward foreign exchange and currency swap contracts to hedge their exposure to foreign
exchange fluctuation relating to their receivables and payables. The Group also utilizes interest-rate swaps to manage the risks arising
from interest-rate fluctuation and to equalize their financial costs for each fiscal year with regard to short-term and long-term debt at vari-
able interest rates. As a matter of policy, the Group does not speculate in derivatives which are subject to significant market value
fluctuation. The Group does not anticipate any credit risk resulting from nonperformance by any of the counterparties to the derivative
transactions because all are financial institutions with high credit ratings. The Group has established internal rules for entering into and
monitoring derivative transactions which prescribe the managers’ duties and the management of these positions as well as a reporting
system. Derivatives are controlled on a daily basis by the Financial Section, which has established an internal control system to supervise
the procedures and transaction limits, and are checked by the Accounting Section.
19. LEASES
Lease payments relating to finance leases started before March 31, 2008, accounted for as operating leases in the accompanying consoli-
dated financial statements amounted to ¥1,515 million ($16,290 thousand), ¥4,019 million, and ¥6,303 million for the years ended March
31, 2010, 2009 and 2008, respectively.
The leases which were started on or before March 31, 2008 are principally accounted for as operating leases.
Leased assets held under finance leases accounted for as operating leases at March 31, 2010 and 2009 were as follows:
2011
2012 and thereafter
Total
Millions of yen
Thousands of
U.S. dollars
¥ 1,086
1,143
¥ 2,230
$ 11,677
12,290
$ 23,978
Year ending March 31,
Machinery and equipment
Other
Less: Accumulated depreciation
Total
2010 2009 2010
¥ 4,990
1,217
4,115
¥ 2,092
¥ 6,039
1,861
4,280
¥ 3,620
$ 53,655
13,086
44,247
$ 22,494
Millions of yen
Thousands of
U.S. dollars
Depreciation is computed by applying the straight-line method over the estimated useful lives of the related assets assuming that the
Company guarantees a nil residual value at the end of the term of each lease.
The following is a schedule of future minimum lease payments under finance leases accounted for as operating leases:
Minimum rental payments subsequent to March 31, 2010 required under operating leases with noncancelable lease terms in excess of
one year are summarized as follows:
2011
2012 and thereafter
Total
Millions of yen
Thousands of
U.S. dollars
¥ 2,563
11,423
¥ 13,986
$ 27,559
122,827
$ 150,387
Year ending March 31,