Fujitsu 2014 Annual Report Download - page 115

The unrecognized obligation for retirement benefits for plans in
Japan improved by ¥96.1 billion from ¥308.7 billion at the end of
fiscal 2012 to ¥212.6 billion ($2,064 million) at the end of fiscal
2013, mainly as a result of improvements in pension asset manage-
ment. Following a revision in the accounting standard for retirement
benefits, with regard to the ending balance of unrecognized obliga-
tion for retirement benefits of ¥212.6 billion, a post-tax amount of
¥146.7 billion has been deducted from remeasurements of defined
benefit plans, net of taxes.
Meanwhile, the unrecognized obligation for retirement benefits
relating to plans outside of Japan increased by ¥24.8 billion from
¥149.7 billion at the end of fiscal 2012 to ¥174.6 billion ($1,695
million), mainly because of the depreciation of the yen against the
British pound. In accordance with a revision in “Employee Benefits”
(IAS 19) applied at overseas consolidated subsidiaries, the amounts
of unrecognized obligations for retirement benefits at the end of
each fiscal year have been retrospectively revised, with deductions
made from remeasurements of defined benefit plans, net of taxes in
the amounts of ¥149.7 billion at the end of fiscal 2012 and ¥174.8
billion at the end of fiscal 2013.
Moreover, among operating lease transactions at the end of
fiscal 2013, the minimum lease payment required under non-cancel-
able operating leases amounted to ¥94.4 billion ($917 million). In
addition, commitments outstanding at March 31, 2014 for purchases
of property, plant and equipment and intangible assets were ¥6.6
billion ($64 million), and contingent liabilities for guarantee con-
tracts amounted to ¥1.2 billion ($11 million).
*3 “Actuarial gains and losses” refer to disparities that occur chiefly as the
result of differences between expected and actual returns from pension
plan assets, differences between the estimates used for the actuarial
calculation of retirement benefit obligations and actual obligations, and
changes in estimates. Of these differences, those that have not yet been
expensed are referred to as “unrecognized actuarial gains and losses.” The
Group expenses actuarial gains and losses over the average remaining
service period of its employees.
Under the Japanese Companies Act, the entire amount paid for
new shares is required to be designated as common stock in principal.
However, a company may designate a maximum 50% of the amount
of the new shares as capital reserve, which is included in capital
surplus. The Companies Act also requires that an amount equal to 10%
of dividends must be appropriated as a legal reserve, which is included
in retained earnings, or as a capital reserve, which is included in
capital surplus, until the aggregated amount of legal reserve and
capital reserve equals 25% of common stock. The Companies Act also
requires that legal reserve, capital reserve, other capital surplus and
other retained earnings can be transferred among the accounts
under certain conditions upon resolution of the shareholders.
Capital surplus in the consolidated financial statements includes
capital reserve and other capital surplus of non-consolidated financial
statements, and retained earnings in the consolidated financial state-
ments includes legal reserve and other retained earnings of non-
consolidated financial statements. The maximum amount that a
company can distribute as dividends is calculated based on the Com-
panies Act and its non-consolidated financial statements in accor-
dance with the Generally Accepted Accounting Principles in Japan.
Non-consolidated net assets of the Company were ¥604.2 bil-
lion ($5,866 million), up ¥193.8 billion from the end of the previous
fiscal year. Shareholders’ equity in the non-consolidated financial
statements as of March 31, 2014 was ¥570.7 billion ($5,541 mil-
lion) and consisted of common stock of ¥324.6 billion ($3,152
million), capital reserve of ¥166.2 billion ($1,615 million), legal
reserve of ¥10.1 billion ($98 million) and other retained earnings of
¥70.1 billion ($681 million). Other retained earnings returned to a
positive result at the end of fiscal 2013, after turning negative at the
end of the previous fiscal year due to recording large impairment
losses on subsidiaries’ stock relating to LSI device business and
business outside Japan.
In fiscal 2012, the Company posted negative other retained
earnings. Accordingly, the Company did not pay a year-end dividend
for fiscal 2012 or an interim dividend in fiscal 2013. However,
because of the implementation of a variety of measures, for fiscal
2013, the Company’s financial condition on a non-consolidated basis
has recovered to a level at which dividend payments can be resumed.
In consideration of the future sustainability of dividend payments,
the Company has decided to pay a year-end dividend of ¥8.2 billion
($80 million), or ¥4 ($0.04) per share. The Company did not pay
dividends from surplus during fiscal 2013.
Adding the Company’s non-consolidated other retained earnings
and other capital surplus together, the funds allocable for distribution
amounted to ¥236.0 billion ($2,291 million), an increase of ¥183.7
billion from the end of the previous fiscal year. The unrecognized
obligation for retirement benefits, in accordance with a revision in the
accounting standard for retirement benefits, is not applied to balance
sheet reporting for non-consolidated financial results. As of the end of
fiscal 2013, the balance of the unrecognized obligation for retirement
benefits for the non-consolidated financial statements was ¥147.2
billion ($1,429 million), with a reduction of ¥47.6 billion compared to
the end of fiscal 2012, because of an improvement in the investment
return on plan assets stemming from the increase in stock prices.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF OPERATIONS
113
FUJITSU LIMITED ANNUAL REPORT 2014
MANAGEMENT FACTS & FIGURESRESPONSIBILITYPERFORMANCE