Pentax 2006 Annual Report Download - page 64

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
The Group enters into foreign currency forward contracts to
hedge foreign currency exchange risk associated with certain
assets and liabilities denominated in foreign currencies.
All derivative transactions are entered into to hedge foreign
currency exposures incorporated within its business. Accordingly,
market risk in these derivatives is basically offset by opposite
movements in the value of hedged assets or liabilities.
Because the counterparties to these derivatives are limited
to major international financial 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 which regulate the
authorization and credit limit amount.
Foreign currency forward contracts which qualify for hedge
accounting for the years ended March 31, 2006 and 2005 and
such amounts which are assigned to the associated assets or
liabilities and are recorded on the balance sheets at March 31,
2006 and 2005, are not subject to disclosure of market
value information.
No. 15 DERIVATIVES
Reconciliation of the differences between basic and diluted net income per share (“EPS”) for the years ended March 31, 2006, 2005 and
2004 was follows:
Thousands of
Millions of Yen Shares Yen U.S. Dollars
Weighted-Average
Net Income Shares EPS EPS
Year ended March 31, 2006:
Basic EPS—Net income available to common shareholders ¥75,555 440,008 ¥171.71 $1.46
Effect of dilutive securities—Stock options —1,625
Diluted EPS—Net income for computation ¥75,555 441,633 ¥171.08 $1.46
Year ended March 31, 2005:
Basic EPS—Net income available to common shareholders ¥64,072 110,690 ¥578.84
Effect of dilutive securities—Stock options — 253
Diluted EPS—Net income for computation ¥64,072 110,943 ¥577.52
Year ended March 31, 2004:
Basic EPS—Net income available to common shareholders ¥39,500 112,545 ¥350.96
Effect of dilutive securities—Stock options — 129
Diluted EPS—Net income for computation ¥39,500 112,674 ¥350.56
No. 16 NET INCOME PER SHARE
On November 15, 2005, the Company effected four-for-one
stock split of its shares of common stock pursuant to a resolution
approved at a meeting of the Board of Directors held on July 20,
2005. As a result, the number of shares of the Company’s common
stock in issue has increased to 449,396,020 shares. If the stock
split had gone into effect at the beginning of the year ended
March 31, 2005 and 2004, net income per share would have been
¥144.71 ($1.23) in 2005 and ¥87.74 ($0.75) in 2004.