Square Enix 2008 Annual Report Download - page 40

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3. Other investment securities with market value:
Millions of yen
Acquisition Book
Type cost value Difference
Securities with book
value exceeding (1) Stocks ¥217 ¥266 ¥ 48
acquisition cost Subtotal 217 266 48
Securities with
acquisition cost (1) Stocks 263 198 (65)
exceeding book value Subtotal 263 198 (65)
Total ¥481 ¥465 ¥(16)
Note: For the year ended March 31, 2008, the impairment loss associated with the
fair market value determination of other investment securities with market
value was ¥31 million. Impairment loss on securities is charged to income
when the market price at the end of the fiscal year falls less than 50% of the
acquisition cost. In addition, impairment loss on securities is charged to
income when the market price at the end of the fiscal year falls between
30% and 50% of the acquisition cost after considering factors such as the
significance of amount and the likelihood of recovery.
4. Securities sold during the fiscal year:
(April 1, 2007 to March 31, 2008)
Millions of yen
Amount of sale Gain on sale Loss on sale
¥155 ¥64 ¥—
5. Investment securities whose fair values are not readily
determinable:
Millions of yen
Book value
(1) Other investment securities
Unlisted securities (excluding OTC securities) ¥191
Unlisted overseas bonds 0
6. Redemption schedule of other securities with maturities and
Held-to-maturity securities
Not applicable
Derivative Transactions
• FY2006 (April 1, 2006 to March 31, 2007)
1. Terms of transactions
(1) Types and purposes of transactions
In principle, the Company does not engage in derivative trans-
actions. However, from time to time, the Company enters into
forward foreign exchange contracts for the purpose of reducing
the risk of exposure to foreign exchange rate fluctuations.
(2) Transaction policy
The Company enters into forward foreign exchange contracts to
cover anticipated transactions denominated in foreign currencies
but does not enter into such contracts for speculative purposes.
(3) Risks
Forward foreign exchange contracts are subject to market
risk arising from fluctuations in foreign exchange rates. The
Company deems the risk of nonperformance by the counterpar-
ties to forward foreign exchange contracts to be low because
the Company only enters into such contracts with financial
institutions that have high credit ratings.
(4) Risk management
Contracts are approved by a representative director and the
director with responsibility for this area. The Accounting and
Finance Division administers risk management.
2. Market valuation of transactions
Not applicable
• FY2007 (April 1, 2007 to March 31, 2008)
1. Terms of transactions
(1) Types and purposes of transactions
In principle, the Company does not engage in derivative trans-
actions. However, from time to time, the Company enters into
forward foreign exchange contracts for the purpose of reducing
the risk of exposure to foreign exchange rate fluctuations.
(2) Transaction policy
The Company enters into forward foreign exchange contracts to
cover anticipated transactions denominated in foreign currencies
but does not enter into such contracts for speculative purposes.
(3) Risks
Forward foreign exchange contracts are subject to market
risk arising from fluctuations in foreign exchange rates. The
Company deems the risk of nonperformance by the counterpar-
ties to forward foreign exchange contracts to be low because
the Company only enters into such contracts with financial
institutions that have high credit ratings.
(4) Risk management
Contracts are approved by a representative director and the
director with responsibility for this area. The Accounting and
Finance Division administers risk management.
2. Market valuation of transactions
Not applicable
38