Nikon 2001 Annual Report Download - page 32

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page 30
11. DERIVATIVES
The Group enters into derivative financial instruments (“derivatives”), including foreign exchange forward contracts, currency option contracts,
foreign currency swap contracts and interest rate swap contracts to hedge foreign exchange risk and interest rate exposures. The Group does
not hold or issue derivatives for trading purposes. Derivatives are subject to market risk and credit risk. Market risk is the exposure created by
potential fluctuations in market conditions, including interest or foreign exchange rates. Credit risk is the possibility that a loss may result from
a counterparty’s failure to perform according to the terms and conditions of the contract.
Because the counterparties to those derivatives are limited to major international financial institutions, the Group does not anticipate any
losses arising from credit risk.
Derivative transactions entered into by the Group have been made in accordance with internal policies which regulate the authorization and
credit limit amount.
Derivatives contracts outstanding at March 31, 2001 and 2000 were as follows:
Millions of Yen Thousands of U.S. Dollars
2001 2001
Contract or Net Contract or Net
Notional Unrealized Notional Unrealized
Amount Fair Value Gain (Loss) Amount Fair Value Gain (Loss)
Foreign Exchange Forward Contracts:
Selling JPY ¥ 2,001 ¥ 1,755 ¥ 246 $ 16,147 $ 14,163 $ 1,984
Selling USD 1,176 1,226 (50) 9,495 9,894 (399)
Selling EUR 6,247 6,816 (569) 50,422 55,013 (4,591)
Selling GBP 664 677 (13) 5,355 5,464 (109)
Buying JPY 21,793 18,125 (3,668) 175,893 146,291 (29,602)
Buying USD 156 162 6 1,261 1,305 44
Buying EUR 3,327 3,378 51 26,854 27,265 411
Buying DEM 1,926 1,914 (12) 15,547 15,450 (97)
Buying GBP 828 856 28 6,685 6,913 228
Total ¥ (3,981) $ (32,131)
Interest Rate Swaps:
(fixed rate receipt, floating rate payment) ¥ 30,000 ¥ 1,384 ¥ 1,384 $ 242,131 $ 11,174 $ 11,174
(fixed rate payment, floating rate receipt) 20,000 (876) (876) 161,421 (7,073) (7,073)
Total ¥ 50,000 ¥ 508 ¥ 508 $ 403,552 $ 4,101 $ 4,101