Oki 2002 Annual Report Download - page 28

Oki Electric Industry Co., Ltd. Annual Report 200226
Assumptions used in the actuarial calculation:
Year ended March 31
2002 2001
Actuarial cost method: Projected unit credit method
Discount rate: 2.8% 3.5%
Expected rate of return: 4.0% 4.0%
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 cost was incurred)
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 was incurred)
15 years, except for certain consolidated
subsidiaries which charged or credited to
income when incurred
8. Income taxes
Deferred tax assets (liabilities) at March 31, 2002 and 2001, consisted
of the following:
Thousands of
Millions of yen U.S. dollars
.................................................... 2002 2001 2002
Deferred tax assets:
Loss carryforwards ............... ¥(47,185 ¥(22,742 $(354,777
Nondeductible accrued
bonuses ............................... 3,293 3,730 24,764
Nondeductible severance
indemnities ......................... 7,171 5,627 53,917
Nondeductible write-downs
of inventories ...................... 3,091 —23,245
Other ..................................... 752 3,662 5,657
Gross deferred tax assets ........... 61,494 35,762 462,361
Less: Valuation allowance ......... (16,677) (15,988) (125,391)
Total deferred tax assets ............ 44,817 19,774 336,970
Deferred tax liabilities:
Tax purpose reserve
(special reserve) .................. (7,269) (7,426) (54,656)
Net unrealized holding gains on
other securities ......................... (1,638) (3,112) (12,316)
Other .......................................... (121) (114) (917)
Gross deferred tax liabilities ...... (9,029) (10,652) (67,890)
Net deferred tax assets ............... ¥(35,787 ¥(09,121 $(269,079
Net deferred tax assets are included in the consolidated balance
sheets as follows:
Thousands of
Millions of yen U.S. dollars
.................................................... 2002 2001 2002
Other current assets ................... ¥08,866 ¥(9,787 $066,668
Other assets ................................ 26,925 3,753 202,445
Other current liabilities .............. (4) (12) (34)
Other long-term liabilities ......... —(4,407) —
Net deferred tax assets ............... ¥35,787 ¥(9,121 $269,079
The following is a summary of the plans.
Retirement benefit obligation at March 31, 2002:
Thousands of
Millions of yen U.S. dollars
.................................................... 2002 2001 2002
Projected benefit obligation ....... ¥(312,663) ¥(283,168) $(2,350,853)
Fair value of plan assets ............ 140,646 142,712 1,057,489
Funded status ............................. (172,017) (140,455) (1,293,364)
Transition differences arising
from initial adoption of a new
accounting standard for
retirement benefits ................... 82,705 89,100 621,845
Unrecognized actuarial loss ....... 74,180 27,720 557,747
Unrecognized prior service
cost ........................................... (8,745) —(65,758)
Obligation recognized in the
consolidated balance sheets ..... (23,876) (23,634) (179,523)
Prepaid pension cost .................. —53 —
Allowance for retirement
benefits .................................... ¥0(23,786) ¥0(23,687) $0,(179,523)
(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) Effective the year ended March 31, 2002, in accordance with a revision to the Pension
Insurance Law in March 2000, the mandatory age of employees eligible to receive annu-
ity pension benefits from a certain portion of the Fund (which has been entrusted by the
government to the Company to administer) has been extended. As a result, the related
unrecognized prior service cost decreased by ¥8,745 million ($65,758 thousand) at
March 31, 2002.
(3) Certain consolidated subsidiaries have adopted a simplified method, as permitted, to
calculate their projected benefit obligations.
Components of net periodic pension cost for the years ended March 31,
2002 and 2001:
Thousands of
Millions of yen U.S. dollars
.................................................... 2002 2001 2002
Service cost during the year ...... ¥09,021 ¥08,953 $067,830
Interest cost on projected
benefit obligation ..................... 9,829 9,265 73,905
Expected return on plan assets .. (5,700) (6,047) (42,859)
Amortization of obligation
at transition .............................. 6,395 9,567 48,084
Amortization of actuarial
difference ................................. 1,991 —14,974
Amortization of prior
service cost .............................. (676) —(5,088)
Net periodic pension cost .......... ¥20,860 ¥21,739 $156,846
(1) Retirement payments of ¥6,012 million ($45,203 thousand) and ¥1,705 million were
paid in addition to the net periodic pension cost in the above table for the years ended
March 31, 2002 and 2001, respectively.
(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.
Amortization period for
prior service cost:
Amortization period for
actuarial difference:
Amortization period for
transition obligations arising
from the initial adoption of
a new accounting method: