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Effective April 1, 2000, the Group adopted a new accounting standard for derivative financial instruments and a revised accounting standard for foreign currency transactions. These stan- dards require that: a) all derivatives be recognized as either assets or liabilities and measured at fair value and gains or losses on derivative transactions be recognized in the statement of income and b) for derivatives used for hedging purposes, if such derivatives qualify for hedge accounting because of high correlation and effectiveness between the hedging instruments and the hedged items, gains or losses are deferred until maturity of the hedged transactions. 

The interest rate swaps which qualify for hedge accounting and meet specific matching criteria are not remeasured at market value, but the differential paid or received under the swap agree- ments is recognized and included in interest expense or income. 

As a result of adopting the new accounting standards for derivative financial instruments, income before income taxes and minority interests for the year ended March 31, 2001 decreased by ¥61 million. 

## Appropriations of Retained Earnings 

Appropriations of retained earnings at each year-end are reflected in the financial statements for the following year upon shareholders’ approval. 

## Per Share of Common Stock 

The computation of net income per common share is based on the weighted average number of shares outstanding, less treasury stock. The average number of common shares used in the computation for the years ended March 31, 2001 and 2000 was 263,748 thousand and 263,813 thousand, respectively. 

Diluted net income per share is not disclosed because potentially dilutive securities are not issued. 

Cash dividends per share presented in the accompanying consolidated statements of income are dividends applicable to the respective years including dividends to be paid after the end of the year. 

Inventories at March 31, 2001 and 2000 consisted of the following: 3. Inventories 

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The carrying amounts and aggregate fair values of investment securities at March 31, 2001 were as follows: 4. Investment Securities 

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