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28 Brother Annual Report 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Brother Industries, Ltd. and Consolidated Subsidiaries
For the Years ended March 31, 2008 and 2007
7. Retirement and Pension Plans
The liability for retirement benefits in the accompanying consolidated balance sheets consisted of retirement
allowances for directors and corporate auditors of ¥192 million ($1,920 thousand) and ¥243 million at March 31, 2008
and 2007, respectively, and employees’ retirement benefits of ¥6,546 million ($65,460 thousand) and ¥6,299 million at
March 31, 2008 and 2007, respectively.
Retirement Allowances for Directors and Corporate Auditors
Retirement allowances for directors and corporate auditors are paid subject to approval of the shareholders in accor-
dance with the Japanese Corporate Law.
Certain domestic consolidated subsidiaries recorded a liability for their unfunded retirement allowance plan cover-
ing all of their directors and corporate auditors.
Employees’ Retirement Benefits
Under the pension plan, employees terminating their employment are, in most circumstances, entitled to pension pay-
ments based on their average pay during their employment, length of service and certain other factors.
The Company and certain domestic subsidiaries have two types pension plans for employees: a non-contributory
and a contributory funded defined benefit pension plan. The contributory funded defined benefit pension plan applied
by the Company and established under the Japanese Welfare Pension Insurance Law, covers a substitutional portion of
the government and a corporate portion established at the discretion of the Company.
The Company and certain domestic subsidiaries implemented a defined contribution pension plan in fiscal 2005 by
which a part of the former contributory and non-contributory defined benefit pension plan was terminated. The
Company and certain domestic subsidiaries applied accounting treatments specified in the guidance issued by the
Accounting Standard Board of Japan.
In fiscal 2006, one domestic consolidated subsidiary, Xing Inc, which had been applying the simplified method
above mentioned Note 2 (14), changed to measure its retirement benefits from the simplified method to an actuarial
calculation due to the increase in employee headcount. The effect of this change was to decrease income before
income taxes and minority interests by ¥213 million and was recorded as other expense in the consolidated statement
of income for the year ended March 31, 2007.