Nikon 2007 Annual Report Download - page 40

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
38 NIKON ANNUAL REPORT 2007
The components of net periodic benefit costs for the fiscal years ended March 31, 2007 and 2006 were as follows:
Service cost
Interest cost
Expected return on plan assets
Recognized actuarial loss
Amortization of prior service cost
Net periodic retirement benefit costs
Thousands of
U.S. Dollars
2007
$ 27,800
23,644
(21,279)
10,372
(15,194)
$ 25,343
2006
¥ 3,207
2,747
(1,941)
2,995
(1,718)
¥ 5,290
2007
¥ 3,282
2,791
(2,512)
1,224
(1,793)
¥ 2,992
Millions of Yen
Assumptions used for the fiscal years ended March 31, 2007 and 2006 were principally set forth as follows:
Discount rate
Expected rate of return on plans assets
Recognition period of actuarial gain (loss)
Amortization period of prior service cost
2006
2.50%
2.00%
10 years
10 years
2007
2.50%
2.00%
10 years
10 years
8. EQUITY
On and after May 1, 2006, Japanese companies are subject to a new corporate law of Japan (the
“ Corporate Law”), which reformed and
replaced the Commercial Code of Japan (the “Code”) with various revisions that are, for the most part, applicable to events or transactions
which occur on or after May 1, 2006 and for the fiscal years ending on or after May 1, 2006. The significant changes in the Corporate Law
that affect financial and accounting matters are summarized below;
(a) Dividends
Under the Corporate Law, companies can pay dividends at any time during the fiscal year in addition to the year-end dividend upon resolution
at the shareholders meeting, if companies meet certain criteria such as; (1) having the Board of Directors, (2) having independent auditors, (3)
having the Board of Corporate Auditors, and (4) the term of service of the directors is prescribed as one year rather than two years of normal
term by its articles of incorporation. The Board of Directors of such company may declare dividends (except for dividends in kind) at any time
during the fiscal year if the company has prescribed so in its articles of incorporation. The Company meets all the above criteria.
The Corporate Law permits companies to distribute dividends-in-kind (non-cash assets) to shareholders subject to a certain limitation and
additional requirements.
Semiannual interim dividends may also be paid once a year upon resolution by the Board of Directors if the articles of incorporation of the
company so stipulate. The Corporate Law provides certain limitations on the amounts available for dividends or the purchase of treasury stock.
The limitation is defined as the amount available for distribution to the shareholders, but the amount of net assets after dividends must be
maintained at no less than ¥3 million.
(b) Increases/decreases and transfer of common stock, reserve and surplus
The Corporate Law requires that an amount equal to 10% of dividends must be appropriated as a legal reserve (a component of retained
earnings) or as additional paid-in capital (a component of capital surplus) depending on the equity account charged upon the payment of such
dividends until the total of aggregate amount of legal reserve and additional paid-in capital equals 25% of the common stock. Under the
Corporate Law, the total amount of additional paid-in capital and legal reserve may be reversed without limitation of such threshold. The
Corporate Law also provides that common stock, legal reserve, additional paid-in capital, other capital surplus and retained earnings can be
transferred among the accounts under certain conditions upon resolution of the shareholders.
(C) Treasury stock and treasury stock acquisition rights
The Corporate Law also provides for companies to purchase treasury stock and dispose of such treasury stock by resolution of the Board of
Directors. The amount of treasury stock purchased cannot exceed the amount available for distribution to the shareholders which is deter-
mined by specific formula.
Under the Corporate Law, stock acquisition rights, which were previously presented as a liability, are now presented as a separate compo-
nent of equity.
The Corporate Law also provides that companies can purchase both treasury stock acquisition rights and treasury stock. Such treasury
stock acquisition rights are presented as a separate component of equity or deducted directly from stock acquisition rights.
Stock acquisition rights of the convertible bonds were exercised for the fiscal year ended March 31, 2007.
As a result, Common stock was increased by ¥28,015 million ($237,315 thousand) and Capital surplus was increased by ¥27,985 million
($237,060 thousand).