Oki 2001 Annual Report Download - page 27

Oki Electric Industry Co., Ltd. Annual Report 2001 25
termination of their employment with the Group, may receive certain
additional payments under the plans.
The following is a summary of the plans.
Retirement benefit obligation at March 31, 2001:
Thousands of
Millions of yen U.S. dollars
Projected benefit obligation ........................... ¥(283,168) $(2,283,616)
Fair value of plan assets ................................ 142,712 1,150,907
Funded status ................................................. (140,455) (1,132,709)
Transition differences arising from initial
adoption of a new accounting standard for
retirement benefits ....................................... 89,100 718,554
Unrecognized actuarial loss ........................... 27,720 223,554
Obligation recognized in the consolidated
balance sheet ................................................ (23,634) (190,599)
Prepaid pension cost ...................................... 53 432
Allowance for retirement benefits ................. ¥0(23,687) $0(191,031)
(1) The information in the above table includes the portion substituted by the Fund for the
noncontributory pension plans under the governmental welfare pension program.
(2) Certain consolidated subsidiaries have adopted a simplified method, as permitted, to
calculate their projected benefit obligations.
Components of net periodic pension cost for the year ended March 31,
2001:
Thousands of
Millions of yen U.S. dollars
Service cost during the year .......................... ¥08,953 $(72,204
Interest cost on projected benefit
obligation ..................................................... 9,265 74,720
Expected return on assets .............................. (6,047) (48,770)
Amortization of obligation at transition ........ 9,567 77,161
Amortization of actuarial difference ............. ——
Net periodic pension cost .............................. ¥21,739 $175,316
(1) Additional retirement payments of ¥1,705 million ($13,757 thousand) were paid in
addition to the net periodic pension cost in the above table.
(2) Employees’ contributions to the Fund were excluded from the net periodic pension cost
in the above table.
(3) The allowance for retirement benefits was determined by the simplified method by
certain consolidated subsidiaries and their net periodic pension cost has been included in
service cost of benefits earned during the year.
Assumptions used in the actuarial calculation:
Actuarial cost method: Projected unit credit method
Discount rate: 3.5% per annum
Expected rate of return: 4.0% per annum
Amortization period for
actuarial difference: 14 years (amortized by the straight-line
method as a certain period within the
employees’ average remaining service
years, effective the year subsequent to the
period when such difference incurred)
Amortization period for
transition obligations
arising from the initial
adoption of a new
accounting method: 15 years, except for certain consolidated
subsidiaries who charged or credited to
income when incurred
8. Income taxes
Deferred tax assets (liabilities) at March 31, 2001 and 2000 consisted of
the following:
Thousands of
Millions of yen U.S. dollars
.................................................... 2001 2000 2001
Deferred tax assets:
Loss carryforwards ............... ¥(22,742 ¥(30,281 $(183,409
Nondeductible accrued
bonuses ............................... 3,730 2,320 30,082
Nondeductible severance
indemnities ......................... 5,627 1,940 45,379
Elimination of intercompany
profit ................................... 1,401 1,654 11,299
Other ..................................... 2,260 2,407 18,233
Gross deferred tax assets ........... 35,762 38,604 288,405
Less: Valuation allowance ......... (15,988) (11,594) (128,936)
Total deferred tax assets ............ 19,774 27,009 159,468
Deferred tax liabilities
Tax purpose reserve
(special reserve) .................. (7,426) (7,539) (59,887)
Net unrealized holding gains on
other securities ......................... (3,112) —(25,102)
Other .......................................... (114) (515) (919)
Gross deferred tax liabilities ...... (10,652) (8,055) (85,909)
Net deferred tax assets ............... ¥(09,121 $(18,954 $(073,558
Net deferred tax assets are included in the consolidated balance
sheets as follows:
Thousands of
Millions of yen U.S. dollars
.................................................... 2001 2000 2001
Other current assets ................... ¥(9,787 ¥09,845 ¥(78,933
Other assets ................................ 3,753 9,115 30,271
Other current liabilities .............. (12) (1) (101)
Other long-term liabilities ......... (4,407) (6) (35,544)
Net deferred tax assets ............... ¥(9,121 ¥18,954 ¥(73,558
Total income tax benefits for the years ended March 31, 2001 and 2000
resulted in effective tax benefit rates of 55.3% and 78.3%, respectively. The
differences between the aggregate statutory rate in Japan (42.0%) and the
effective rates on pretax income are summarized as follows:
............................................................................ 2001 2000
Statutory rate ................................................... 42.0.%42.0.%
Addition (deduction) in income taxes
resulting from:
Increase in valuation allowance
recognized on loss of subsidiaries ............ 12.6.17.8.
Intercompany profit in excess of
taxable income .......................................... —.14.2.
Permanent differences nondeductible
such as entertainment expense ................. 3.5.10.3.
Permanent differences unrecognized for
tax purpose such as dividends received .... (3.4.)(8.1.)
Other, net .................................................... 0.6.2.1.
Effective tax rate.............................................. 55.3.%78.3.%