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Nikon Annual Report 2009 45
14. DERIVATIVES
The Group enters into derivative contracts, 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 deriva-
tives 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 changes in 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 the Group’s derivative contracts 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 that regulate the authorization and
credit limit amount.
Derivatives contracts outstanding at March 31, 2009 and 2008 were as follows:
Millions of Yen Thousands of U.S. Dollars
2009 2009
Contract or
Notional
Amount Fair Value
Net
Unrealized
Gain (Loss)
Contract
or Notional
Amount Fair Value
Net
Unrealized
Gain (Loss)
Forward Exchange Contracts:
Selling USD ¥34,772 ¥35,135 ¥(363) $353,990 $357,683 $(3,693)
Selling EUR 24,062 24,510 (448) 244,952 249,513 (4,561)
Selling Other 3,739 3,677 62 38,064 37,438 626
Buying JPY 2,217 2,071 (146) 22,574 21,085 (1,489)
Buying USD 3,132 3,138 6 31,886 31,950 64
Buying Other 314 304 (10) 3,192 3,093 (99)
Total ¥(899) $(9,152)
Millions of Yen
2008
Contract or
Notional
Amount Fair Value
Net
Unrealized
Gain (Loss)
Forward Exchange Contracts:
Selling USD ¥43,403 ¥41,067 ¥2,336
Selling EUR 20,610 20,480 130
Buying JPY 4,275 4,285 10
Buying USD 5,889 5,855 (34)
Total ¥2,442
Derivatives which qualified for hedge accounting and the related amounts are included with the associated assets and liabilities, and
were excluded from disclosure of market value information in the preceding table.
15. CONTINGENT LIABILITIES
Contingent liabilities at March 31, 2009 were as follows:
Millions of Yen
Thousands of
U.S. Dollars
2009 2009
As the guarantor of bank loans and indebtedness, principally of employees,
unconsolidated subsidiaries and associated companies ¥2,486 $25,305
Total ¥2,486 $25,305