Square Enix 2004 Annual Report Download - page 62

60 SQUARE ENIX 2004
10. INVESTMENT SECURITIES
As of March 31, 2004 and 2003, investment securities consist of:
Millions of Yen
2004
Cost Unrealized gain Unrealized loss Fair value
Marketable equity securities ¥548 ¥613 — ¥1,161
Other equity securities 355 — — 355
Treasury bond 2,000 — — 2,000
Total ¥2,903 ¥613 — ¥3,516
Thousands of U.S. Dollars
2004
Cost Unrealized gain Unrealized loss Fair value
Marketable equity securities $5,176 $5,799 — $10,975
Other equity securities 3,358 — — 3,358
Treasury bond 18,941 — — 18,941
Total $27,475 $5,799 — $33,274
Millions of Yen
2003
Cost Unrealized gain Unrealized loss Fair value
Marketable equity securities ¥50 ¥39 — ¥89
Other equity securities 1,583 — — 1,583
Treasury bond 2,002 — — 2,002
Total ¥3,635 ¥39 — ¥3,674
11. ACCRUED EXPENSES AND OTHER CURRENT
LIABILITIES
Accrued expenses and other current liabilities as of March 31st, 2004 and
2003 consist of:
Thousands of
Millions of Yen U.S. Dollars
2004 2003 2004
Consumption taxes payable ¥408 ¥111 $3,862
Unearned revenue 807 — 7,636
Deposit receipt 354 282 3,353
Accrued paid absence 257 90 2,436
Accrued expenses and other 1,571 775 14,832
Total ¥3,397 ¥1,258 $32,119
12. COMMITMENTS AND CONTINGENCIES
Certain subsidiaries lease office space under non-cancelable operating leas-
es that expire in 2005. Future minimum rental payments required under
non-cancelable terms of more than one year are as follows:
Thousands of U.S.
March 31, Millions of Yen Dollars
2005 ¥50 $475
2006 46 442
2007 15 144
Total minimum lease payments ¥111 $1,061
Rent expense is recognized on a straight-line basis over the lease periods.
Rent expense under these operating leases was approximately ¥79 million
for the year ended March 31, 2004.
The Company is involved in routine litigation in the ordinary course
of its business, which in management’s opinion, will not have a material
adverse effect on the Company’s financial condition, cash flows or results
of operations.
13. EMPLOYEE BENEFIT PLAN AND RETIREMENT
BENEFIT TO DIRECTORS AND STATUTORY AUDI-
TORS
Employee Benefit Plan
The Company has defined benefit plans covering their domestic employ-
ees, which are internally funded. The benefits are in the form of lump-sum
payment and are based on current basic rate pay applicable to former Enix
employees and the highest basic rate pay until present applicable to former
Square employees. For the new employees entering into the Company on
and after April 1st, 2003, the current basic rate pay is applicable to the basis
of benefit. The Company adopted SFAS No.87 "Employers’ Accounting
for Pensions" for its domestic defined benefit plans effective April 1st,
2002. A portion of the transitional obligation was allocated and charged
directly to equity on the adoption date.
Certain U.S. and U.K. subsidiaries have defined contribution plans for
their employees and the contributions are charged to earnings when
incurred. No pension plan is provided for the employees of the Chinese
subsidiary.
Net periodic pension cost of the Company and its domestic sub-
sidiaries for the year 2004 and 2003 consist of the following:
Millions of Yen Thousands of
Years ended March 31 U.S. Dollars
2004 2003 2004
Service cost ¥227 ¥21 $2,150
Interest cost 8 1 76
Amortization of SFAS No.87
transition obligation 2 2 25
Net periodic pension cost ¥237 ¥24 $2,251
Reconciliation of beginning and ending balances of benefit obligations are
as follows:
Thousands of
Millions of Yen U.S. Dollars
2004 2003 2004
Change in benefit obligation:
Benefit obligation at beginning of year ¥199 ¥162 $1,886
Service cost 227 21 2,150
Interest cost 8 1 76
Benefit obligation transferred from