Fujitsu 1998 Annual Report Download - page 41

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10. Income taxes
11. Shareholders’ equity
The changes in the number of issued shares of common stock during the years ended March 31, 1996, 1997 and 1998 were as follows:
Number of shares
1996 1997 199 8
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,816,848,438 1,841,272,768 1,841 ,435,783
Exercise of warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – 16,66 1,107
Conversion of bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,424,330 163,015 4 ,259,020
Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,841,272,768 1,841,435,783 1 ,862,355,910
The presentation of the following income tax information is pre-
pared in accordance with the regulations under the Securities and
Exchange Law of Japan.
The Group is subject to a number of income taxes. The relation-
ship between the aggregate statutory rate in Japan (approximately
50%) and the effective rates on income (loss) before income taxes
is normally distorted as tax benefits are not available for the
operating losses of certain consolidated subsidiaries, and also be-
cause of the effect of various tax credits, certain expenses of which
are not deductible for income tax purposes, and the different tax
rates applicable to the consolidated subsidiaries outside Japan.
Deferred income taxes at March 31, 1997 and 1998 were re-
flected in the accompanying consolidated balance sheets under the
following captions:
Yen U.S. dollars
(millions) (thousands)
1997 199 8 1 998
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 15,371 ¥ 1 7,266 $130,803
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,888 19,041 144 ,250
The issuance of shares upon conversion of convertible bonds and
the exercise of stock purchase warrants are accounted for by cred-
iting an amount equal to at least 50% of the amount of the issue to
the common stock account and the balance to the capital surplus
account in accordance with certain provisions of the Commercial
Code of Japan, which became effective October 1, 1982.
The liability reserve for the substitutional portion of the NWP
Plan of the Company and certain subsidiaries at March 31, 1996
and 19 97, the most recent valuation dates, amounted to ¥ 223 ,600
million and ¥ 2 17,740 million ($1 ,649 ,545 thousand), respectively.
The liability reserve for the remainder at March 31, 1996 and
1997 amounted to ¥ 199,784 million and ¥ 245,892 million
($1,862,818 thousand), respectively.
The aggregate fair value of the plan assets of the contributory
defined benefit plans, primarily marketable securities and loans, at
March 31 , 1 996 and 1 997 totaled ¥ 4 22 ,9 47 million and ¥ 4 63 ,7 82
million ($3,513,500 thousand), respectively.
The assumed rate for salary increases, the expected long-term
rate of return and the discount rate for the above contributory pen-
sion plans were from 2.2% to 5.3%, 5.5%, and 5.5%, respectively.
The balance of past service cost of ¥ 35,479 million ($2 68,780
thousand) as of March 31, 1997 is being amortized over 8 years.
Amortization of past service cost for the years ended March 31,
1995, 1996 and 1997 totaled ¥ 4,701 million, ¥ 5,132 million
and ¥ 5,578 million ($42,258 thousand), respectively.
Most subsidiaries outside Japan have defined benefit pension
plans and/ or defined contribution pension plans covering substan-
tially all employees. The major plan is the ICL Group Pension Plan,
which is a defined benefit plan. The pension cost of the plan is
calculated by the projected unit method. The plan is subject to formal
actuarial valuation and the fair value of the plan assets at April 5,
1997, the most recent valuation date, was sufficient to cover the
actuarial present value of future benefit obligations.