Square Enix 2005 Annual Report Download - page 56

54 SQUARE ENIX CO., LTD.
Thousands of U.S. dollars
2005
Unrealized Unrealized
Cost gain loss Fair value
Marketable equity
securities $3,070 $6,901 $(168) $9,803
Other equity securities 2,259 — — 2,259
Total $5,329 $6,901 $(168) $12,062
Millions of yen
2004
Unrealized Unrealized
Cost gain loss Fair value
Marketable equity
securities ¥0,548 ¥613 ¥— ¥1,161
Other equity securities 355 — — 355
Treasury bond 2,000 — — 2,000
Total ¥2,903 ¥613 ¥— ¥3,516
11. Accrued Expenses and Other
Current Liabilities
Accrued expenses and other current liabilities as of March
31, 2005 and 2004 consist of:
Thousands of
Millions of yen U.S. dollars
2005 2004 2005
Consumption taxes payable ¥1,022 ¥0,408 $09,525
Unearned revenue 1,057 807 9,844
Deposit receipt 385 354 3,591
Accrued paid absence 329 257 3,070
Accrued expenses and other 1,666 1,571 15,487
Total ¥4,459 ¥3,397 $41,517
12. Commitments and Contingencies
Certain subsidiaries lease office space under non-cancelable
operating leases that expire in 2006. Future minimum rental
payments required under non-cancelable terms of more
than one year are as follows:
Thousands of
Years ending March 31 Millions of yen U.S. dollars
2006 ¥084 $0,782
2007 28 260
2008 30 278
2009 31 294
2010 33 311
2011 and thereafter 9 82
Total minimum lease payments ¥215 $2,007
Rent expense is recognized on a straight-line basis over
the lease periods. Rent expense under these operating
leases was approximately ¥1,033 million for the year ended
March 31, 2005.
The Company is involved in routine litigation in the ordi-
nary 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 Auditors
Employee Benefit Plan
The Company has defined benefit plans covering their
domestic employees, which are internally funded. The ben-
efits are in the form of lump-sum payment and are based
on current basic rate pay applicable to former ENIX employ-
ees and the highest basic rate pay until present applicable
to former SQUARE employees. For the new employees
hired by the Company on and after April 1, 2003, the
current basic rate pay is applicable to the basis of benefit.
Effective April 1, 2005, the Company changed its plan pol-
icy, in which the benefit is defined as the accumulation of
the product of base-pay and certain point earned in each
year of service until termination.
The Company adopted SFAS No. 87 “ Employers’
Accounting for Pensions
” for its domestic defined benefit
plans effective April 1, 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 contri-
bution 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 subsidiaries for the years ended March 31, 2005,
2004 and 2003 consist of the following:
Thousands of
Millions of yen U.S. dollars
2005 2004 2003 2005
(Unaudited)
Service cost ¥214 ¥227 ¥21 $1,992
Interest cost 16 81147
Amortization of SFAS No. 87
transition obligation 222 24
Net periodic pension cost ¥232 ¥237 ¥24 $2,163