Square Enix 2005 Annual Report Download - page 36

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34 SQUARE ENIX CO., LTD.
Derivative Transactions
• FY2003 (April 1, 2003 to March 31, 2004)
The Group does not engage in derivative transactions.
• FY2004 (April 1, 2004 to March 31, 2005)
1. Condition of transaction
(1) Type of transaction and purpose
The Company does not engage in derivative transac-
tions in principal, however, the Company enters into
foreign exchange forward contracts to reduce the effect
of fluctuations in foreign currencies.
(2) Transaction policy
The Company enters into foreign exchange forward
contracts to cover anticipated transactions denomi-
nated in foreign currencies but does not enter into
these contracts for speculation.
(3) Risks
Foreign exchange forward contracts include the market
risk of fluctuations in foreign currencies but in our esti-
mation, the risk of nonperformance is considered to be
low as the contracts are entered into with prestigious
financial institutions.
(4) Risk Management
Contracts are approved by the representative director
and executive director in charge, and the Accounting
and Financing Division administer the risk management.
2. Market value of transaction
Not applicable
Retirement Benefits
• FY2003 (April 1, 2003 to March 31, 2004)
1. Overview of retirement benefit plan applied
The Company and its domestic consolidated subsid-
iaries applied a lump-sum retirement payment plan with
regard to its retirement benefit obligation.
The projected benefits are allocated to periods of ser-
vice on a straight-line basis. The Company’s domestic
consolidated subsidiaries apply the conventional method
in the calculation of retirement benefit obligations. In
addition, certain of the Company’s overseas subsidiaries
maintain defined contribution retirement pension plans.
2. Retirement benefit obligation
Millions of yen
Retirement benefit obligation ¥988
Unrecognized actuarial difference (10)
Allowance for retirement benefits ¥978
3. Retirement benefit expenses
Millions of yen
Service cost ¥602
Interest cost 12
Retirement benefit expenses ¥615
4. Assumption used in accounting for retirement benefit
obligation
Periodic allocation method for
projected benefits Straight-line basis
Discount rate 1.611％
Years over which net actuarial gains
and losses are amortized 1 year
• FY2004 (April 1, 2004 to March 31, 2005)
1. Overview of retirement benefit plan applied
The Company and its domestic consolidated subsid-
iaries applied a lump-sum retirement payment plan with
regard to its retirement benefit obligation.
The projected benefits are allocated to periods of ser-
vice on a straight-line basis. The Company’s domestic
consolidated subsidiaries apply the conventional method
in the calculation of retirement benefit obligations. In
addition, certain of the Company’s overseas subsidiaries
maintain defined contribution retirement pension plans.
2. Retirement benefit obligation
Millions of yen
Retirement benefit obligation ¥0,969
Unrecognized prior service cost 100
Unrecognized actuarial difference 103
Allowance for retirement benefits ¥1,173
3. Retirement benefit expenses
Millions of yen
Service cost ¥210
Interest cost 15
Amortization of net actuarial gains and losses 10
Retirement benefit expenses ¥235