Square Enix 2007 Annual Report Download - page 42

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40
Derivative Transactions
• FY2005 (April 1, 2005 to March 31, 2006)
1. Terms of transaction
(1) Type of transaction and purpose
The Company does not engage in derivative transactions in
principal; however, the Company enters into forward for-
eign exchange contracts to reduce the effect of fluctuations
in foreign currencies.
(2) Transaction policy
The Company enters into forward foreign exchange con-
tracts to cover anticipated transactions denominated in
foreign currencies but does not enter into these contracts
for speculation.
(3) Risks
Forward foreign exchange contracts are subject to market
risk arising from fluctuations in foreign currencies, but the
Company deems the risk of nonperformance by the coun-
terparties to these contracts to be low as the Company only
enters into such contracts with financial institutions with
high credit ratings.
(4) Risk management
Contracts are approved by the representative director and
executive director in charge, and the Accounting and
Financing Division administers risk management.
2. Market value of transaction
Not applicable
• FY2006 (April 1, 2006 to March 31, 2007)
1. Terms of transaction
(1) Type of transaction and purpose
The Company does not engage in derivative transactions in
principal; however, the Company enters into forward for-
eign exchange contracts to reduce the effect of fluctuations
in foreign currencies.
(2) Transaction policy
The Company enters into forward foreign exchange con-
tracts to cover anticipated transactions denominated in
foreign currencies but does not enter into these contracts
for speculation.
(3) Risks
Forward foreign exchange contracts are subject to market
risk arising from fluctuations in foreign currencies, but the
Company deems the risk of nonperformance by the coun-
terparties to these contracts to be low as the Company only
enters into such contracts with financial institutions with
high credit ratings.
(4) Risk management
Contracts are approved by the representative director and
executive director in charge, and the Accounting and
Financing Division administers risk management.
2. Market value of transactions
Not applicable
Retirement Benefits
• FY2005 (April 1, 2005 to March 31, 2006)
1. Overview of retirement benefit plan
The Company and its domestic consolidated subsidiaries
have a lump-sum retirement payment plan with regard in
accordance with their internal bylaws.
The projected benefits are allocated to periods of service
on a straight-line basis. The Company’s domestic consoli-
dated subsidiaries apply a simplified method in the
calculation of the retirement benefit obligation. 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 ¥(11,249)
Fair value of plan assets 10,622
Net unfunded obligation (627)
Unrecognized prior service cost (1,895)
Unrecognized actuarial loss (479)
Allowance for retirement benefits ¥0(3,001)
3. Retirement benefit expenses:
Millions of yen
Service cost ¥(378
Interest cost 129
Expected return on plan assets (89)
Amortization of prior service cost (356)
Amortization of net actuarial gain (103)
Retirement benefit expenses ¥0(40)
15-52_07ｽｸｴﾆ欧文 07.8.31 14:29 ページ40