Pentax 2008 Annual Report Download - page 71

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$20,661
20
$20,681
2008 2007 2008
Guarantees of borrowings and lease obligations for customers
Guarantees of borrowings for the Group’s employees
Total
¥2,070
2
¥2,072
¥2,772
3
¥2,775
Thousands of U.S. DollarsMillions of Yen
Notes: 1. Market value:
(1) Forward foreign exchange contract : Translated by forwward exchange rates
(2) Currency option contract : Calculation of market is based on the prices provided by the financial institutions the Company has business connection with.
2. Transactions which are translated at the contracted forward rates are excluded.
Forward foreign exchange contracts
Sell—USD
EURO
Buy—USD
EURO
Option
Buy-Call—USD
¥587
111
5
104
¥ 15
¥587
111
5
104
¥ 15
¥—
—
—
—
¥—
Millions of Yen
Contract over
one year
Contract value Market value
Unrealized gain
(loss)
No. 14 DERIVATIVES AND HEDGING ACTIVITIES
¥ 7,626
10,140
100
1,777
¥ 321
Derivatives and hedging activities as of March 31, 2008 and 2007 consisted of the following:
1. Conditions of transactions
The Group enters into derivative contracts, including foreign exchange forward contracts, currency option contracts, and interest rate swap contracts
to hedge foreign exchange risk and interest rate exposures. The Group does not enter into derivatives for trade or speculative purposes.
(1) Hedge accounting methods
Deferral hedging is applied. Appropriation is adopted for hedging exchange risks when the criteria for appropriation are met.
(2) Hedging methods and hedged items
Exchange risks are hedged based mainly on the Company’s ‘Internal Management Regulations’, and the Company adopted a policy of not
conducting any speculative derivative trading.
Hedging mehod: Forward exchange contracts
Item hedged: Foreign currency denominated debt
2. Fair value of transactions
No derivative transaction subject to hedge accounting was carried out for the year ended March 31, 2007. Therefore, the validity of hedging is not
evaluated.
Fair value of transations as of March 31, 2008 was as follows:
Currency-related transactions
Items
No. 13 CONTINGENT LIABILITIES
At March 31, 2008, the Group had the following contingent liabilities
HOYA ANNUAL REPORT 2008 69