Fujitsu 1998 Annual Report Download - page 40

Fujitsu annual report 1998
38
Financial Section
Notes to Consolidated Financial Statements
Assets pledged as collateral for bank loans and long-term debt at March 31, 1997 and 1998 were summarized as follows:
Yen U.S. dollars
(millions) (thousands)
1997 199 8 1 998
Investments-noncurrent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 352 ¥ 330 $ 2,50 0
Property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,467 27,18 1 205,91 7
¥30,819 ¥ 2 7 ,511 $208,417
As is customary in Japan, substantially all loans from banks
(including short-term loans) are made under general agreements
which provide that, at the request of the banks, the borrower is
required to provide collateral or guarantors (or additional collat-
eral or guarantors, as appropriate) with respect to such loans, and
that all assets pledged as collateral under such agreements will be
applicable to all present and future indebtedness to the banks con-
cerned. These general agreements further provide that the banks
have the right, as the indebtedness matures or becomes due pre-
maturely by default, to offset any deposits at the banks against the
indebtedness.
The current conversion prices of the 3%, 1.3%, 1.4%, 1.9%,
1.95% and 2.0% convertble bonds issued by the Company are
¥ 1,093.90, ¥ 1,751.50, ¥ 1 ,75 1.50, ¥ 998.00 , ¥ 998.00 and
¥ 9 98.00 per share, respectively, and the current exercise prices of
the warrants issued with the 3.0% notes and the 3 1/8% and 4.1%
bonds are ¥ 1,144.90 , ¥ 1,220.00 and ¥ 1,144.90 per share, re-
spectively. The conversion and exercise prices referred to above
are subject to adjustment in certain circumstances including stock
splits or free share distributions of common stock. At March 31,
1998, approximately 231 million shares of common stock were
reserved for the conversion or exercise of all outstanding convert-
ible bonds and warrants. Conversion options of convertible bonds
and warrants are recorded under liabilities in accordance with
accounting principles generally accepted in Japan.
Certain outstanding convertible bonds and notes can be repur-
chased at any time and may be redeemed at the option of the
Company, in whole or in part, at prices ranging from 106% to
100% of their principal amounts.
The aggregate annual maturities of long-term debt subsequent to March 31, 1998 are summarized as follows:
Year ending Yen U.S. dollars
March 31 (millions) (thousands)
1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 165,460 $1,253,485
2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109,522 829,712
2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111,419 844,083
2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177,682 1,346,07 6
2003 and thereafter . . . . . . . . . . . . . . . . . . . . . . 664,902 5,037,137
9. Retirement and severance benefits
Accrued severance benefits in the consolidated balance sheets
comprise the principal pension plans which are unfunded defined
benefit plans. Under the plans, employees are entitled to lump-
sum payments based on current basic rates of pay and length of
service. Accrued severance benefits in the consolidated balance
sheets are stated at the present value of the vested benefit obliga-
tion which would be required if all employees voluntarily terminated
their employment at the balance sheet dates. Provisions for em-
ployees’ severance benefits charged to income for the years ended
March 31, 1996, 1997 and 1998 amounted to ¥ 23,140 million,
¥ 26,697 million and ¥ 25,352 ($192,06 1) million, respectively.
In addition to the plans described above, substantially all
employees of the Company and most subsidiaries in Japan are
covered by contributory defined benefit plans which include a
substitutional portion of the benefits under the National Welfare
Pension Plan of Japan (“the NWP Plan”). The plans require that the
liability reserve and annual contributions be actuarially calculated
by the open aggregate cost method for the substitutional portion
under the NWP Plan, and by the entry-age normal cost method for
the remainder.