Olympus 2003 Annual Report Download - page 38

 OLYMPUS 2003
Future minimum lease receipts under these finance lease arrangements as of March ,  are as follows:
T H O U S A N D S O F
M I L L I O N S O F Y E N U S D O L L A R S
2003 ................................................................................................................................................ ¥1,390 $11,583
2004 and thereafter ........................................................................................................................... 2,268 18,900
Total future minimum lease receipts .................................................................................................. ¥3,658 $30,483
15. D E R I VAT I VE F I N A N C I A L I N S T R U M E N T S
The Company and its consolidated subsidiaries use derivative financial instruments in the normal course of their business to manage
the exposure to fluctuations in foreign exchange rates and interest rates. The primary classes of derivative used by the Company and
its consolidated subsidiaries are foreign exchange forward contracts, currency options, and interest rate swaps. Almost all-derivative
transactions are used to hedge interest rates and foreign currency positions in connection with their business. Accordingly, market risk
in these derivatives is largely offset by opposite movements in the underlying positions. Management assesses derivative transactions
and market risks surrounding these transactions according to the Company’s policy regarding derivative transactions. Contracts of
derivative financial instruments are executed by the finance department of the Company or foreign subsidiaries in accordance with the
internal rules approved by the Company’s board of directors or with the approval and under the directions of a responsible director of
foreign subsidiaries.
The counter-parties to the derivative financial instruments of the Company and its consolidated subsidiaries are substantial and
creditworthy multinational commercial banks or other financial institutions that are recognized market makers. Neither the risks of
counter-party non-performance nor the economic consequences of counter-party non-performance associated with these contacts are
considered by the Company to be material.
The following table summarized the underlying notional transaction amounts, book values and fair values for outstanding deriva-
tive financial instruments by risk category and instrument type as of M arch ,  and :
A S O F M A R C H M I L L I O N S O F YE N T H O U S A N D S O F U S D O L L A R S
N O T I O N A L A M O U N T B O O K VA L U E F A I R VA L U E N O T I O N A L A M O U N T B O O K VA L U E F A I R VA L U E
Foreign exchange forward contracts:
To buy U.S. dollars ................................. ¥ 111 ¥— ¥ 131 $ 925 $— $ 1,092
To sell British pounds............................. 3,072 — 2,997 25,600 — 24,975
To sell other currency.............................. 3,023 — 2,980 25,192 — 24,833
A S O F M A R C H M I L L I O N S O F YE N
N O T I O N A L A M O U N T B O O K VA L U E F A I R VA L U E
Foreign exchange forward contracts:
To buy U.S. dollars ......................................................................................................... ¥ 58 ¥— ¥ 58
To buy British pounds..................................................................................................... 577 — 583
The forward contracts on the foreign currency receivable and payables translated into Japanese yen at the forward exchange rate in
the accompanying consolidated financial statements are not included in the above amounts.
The fair value of currency option agreements are estimated by obtaining quotes from financial institutions. The fair value of for-
eign exchange forward contracts are estimated based on market prices for contracts with similar terms.
16. S U BS E Q U E N T E VE N T S
(a) At the general meeting of shareholders held on June , , the shareholders approved a cash dividend totaling ¥, million
($, thousand) or ¥. ($.) per share and payment of bonuses to directors totaling ¥ million ($ thousand). In accor-
dance with the Code of Japan, the declaration of this dividend and the payment of these bonuses have not been reflected in the
accompanying consolidated financial statements as of March , .
(b) In April , the Company reorganized “Medical Systems Group” to complete the life science business (the genome medical
business etc.) and established “Life Science Group” as a separate business segment from fiscal . The Group also changed the
category of “M edical New Business” from “Medical Systems Group” to “Others” by the reorganization in Research and
Development Center.
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