Fujitsu 2005 Annual Report Download - page 63

Download and view the complete annual report

Please find page 63 of the 2005 Fujitsu annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 73

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73

61
Annual Report 2005
12. Shareholders’ Equity
The changes in the number of issued shares of common stock for the years ended March 31, 2003, 2004 and 2005 were as follows:
Number of shares
Years ended March 31 2003 2004 2005
Balance at beginning of year 2,001,962,672 2,001,962,672 2,001,962,672
Conversion of convertible bonds — — 1,141
Increase as a result of stock exchange — — 68,054,400
Balance at end of year 2,001,962,672 2,001,962,672 2,070,018,213
An increase as a result of stock exchange for the year ended March 31, 2005 reflected the issuance of shares in October
2004 by which the Company turned Fujitsu Support and Service Inc. into a wholly owned subsidiary.
13. Commitments and Contingent Liabilities
Commitments outstanding at March 31, 2005 for purchases of property, plant and equipment were approximately ¥18,180
million ($169,907 thousand).
Contingent liabilities for guarantee contracts amounted to ¥50,167 million ($468,850 thousand) at March 31, 2005.
Of the total contingent liabilities, guarantees given mainly for loans taken by Spansion LLC group were ¥17,087 million
($159,692 thousand) and for employees’ housing loans were ¥10,071 million ($94,121 thousand).
14. Derivative Financial Instruments
Purpose of Derivative Trading
The Group enters into derivative transactions related to foreign currency exchange rates and interest rates in order to
reduce risk exposure arising from fluctuations in these rates, to reduce the cost of the funds financed, and to improve
return on invested funds.
Basic Policies for Derivative Trading
The Group basically enters into derivative transactions only to cover actual requirements for the effective management of
receivables/liabilities, and not for speculative or dealing purposes.
The Group, in principle, has no intention to use derivative financial instruments that would increase market risks.
Furthermore, the counterparties to the derivative transactions are thoroughly assessed in terms of their credit risks. There-
fore, the Group believes that its derivative financial instruments entail minimal market and credit risks.
Control of Derivative Trading
The Group enters into derivative transactions based on regulations established by the Company, and controls the risk of
the transaction by assessing the efficiency of its hedging.