Wacom 2012 Annual Report Download - page 20

15. Provision for retirement benefits:
The Company has an unfunded retirement allowance
plan (the “Plan” ) covering substantially all of its em-
ployees who meet eligibility requirements under the
Plan. A portion of the overseas subsidiaries have
defined contribution pension plans.
The Company had historically been a member of the
Saitama prefectural industrial park multi employer
pension plan (the “Pension Plan” ). The Company
withdrew from the Pension Planfor the year ended
March 31 2012, and recognized the subsequent loss
of ¥253,775 thousand ($3,088 thousand) in the year
ended March 31 2012.
One of the overseas subsidiaries had a defined ben-
efit pension plan, but transferred it to a defined contri-
bution pension plan during the year ended March 31,
2012.
Overview of the multi-employer pension plan is as
follows, under which the required contributions to the
plan are charged to income.
The funded status of the pension plan as of March 31,
2011 and 2012 is as follows.
The ratio of the number of company’ s employees to
total employees in the multi-employer pension plan as
of March 31, 2011 was 18.8%.
The provision for retirement benefits for employees as
of March 31, 2011 and 2012 can be analyzed as
follows:
Thousands of yen
Foreign exchange forward contracts:
To sell Euros
To buy U.S. dollars
Total
¥1,606,427
¥165,640
-
(¥60,617)
297
(¥60,320)
(¥60,617)
297
(¥60,320)
March 31, 2011
Contract amount Fair value
Unrealized gain/
(loss)
Thousands of U.S. dollars
Foreign exchange forward contracts:
To sell Euros
To buy U.S. dollars
Total
$19,545
2,015
$ -
($738)
4
($734)
($738)
4
($734)
March 31, 2012
Contract amount Fair value
Unrealized gain/
(loss)
Thousands of yen Thousands of
U.S. dollars
The amount of pension assets
The amount of benefit
obligations under pension
funding programs
Net
¥6,570,527
(7,126,403)
(¥555,876)
¥ -
-
¥ -
¥ -
-
¥ -
March 31
2011
March 31
2012
March 31
2012
Thousands of yen Thousands of
U.S. dollars
(1)Projected benefit obligation
(2)Unrecognized actuarial loss
(3)Provision for retirement
benefits for employees (1)+(2)
(¥511,576)
32,459
(¥479,117)
(¥546,834)
35,573
(¥511,261)
($6,653)
433
($6,220)
2011 2012 2012
13. Investment securities:
Investment securities of ¥14,778 thousand on the con-
solidated balance sheets for the fiscal year ended
March 31, 2011 do not have market prices. As there is
no readily available information to calculate the cur-
rent market value, these securities have been omitted
from the fair market value presentation.
The loss on impairment of investment securities for
the fiscal year ended March 31, 2011 was ¥20,000
thousand. If net value at end of fiscal year declines to
50% or less of acquisition cost, the company recog-
nizes a loss on impairment of investment securities
after considering future recoverability.
Investment securities of ¥195,115 thousand ($2,374
thousand) on the consolidated balance sheets for the
fiscal year ended March 31, 2012 do not have readily
available market prices to calculate the current market
value, and thus these securities have been omitted
from the fair market value presentation.
14. Derivatives:
All derivative transactions are entered into to hedge
foreign currency exposures within the Company’ s
business. Accordingly, the market risk in these
derivatives is offset by opposite movements in the
value of hedged assets or liabilities. The Company
does not hold derivatives for trading or speculative
purposes. Because the counterparties to these
derivatives are limited to major international finance
institutions, the Company does not anticipate any
losses arising from credit risk.
Derivative transactions entered into by the Company
have been executed in accordance with internal poli-
cies, which regulate the authorization and credit limit
amount of transactions.
The amount of the derivative contracts does not nec-
essarily indicate the significance of the risk.
Certain information on outstanding derivative con-
tracts is shown below.
37
Thousands of yen
Foreign exchange forward contracts:
To sell U.S. dollars
To sell Euros
To buy U.S. dollars
Total
¥186,497
812,356
116,980
-
(¥3,958)
(25,575)
(2,580)
(¥32,113)
(¥3,958)
(25,575)
(2,580)
(¥32,113)
March 31, 2011
Contract amount Fair value
Unrealized gain/
(loss)
Notes to Consolidated Financial Statements
The components of the net periodic pension expense
for the years ended March 31, 2011 and 2012 are as
follows:
The assumptions used as of March 31, 2011 and 2012
are as follows:
16. Stock options:
Information regarding stock options for the year
ended March 31, 2012 is as follows:
(1)Account name and amount regarding share-based
compensation expenses
(2)Contents, scale and changes of stock options
(a)Contents of stock options
November 8, 2002
June 24, 2010
June 23, 2011
Employees
Subsidiaries’ executive officers
Subsidiaries’ employees
Directors
Executive officers
Employees
Subsidiaries’ directors
Subsidiaries’ employees
Employees
Subsidiaries’ employees
19,160
2,985
1,160
23,305
113
6
33
6
3
70
3
63
55
50
Person granted
Number of
options granted
(shares)
Date of ordinary
shareholders’
meeting
(b)Scale and changes in stock options
i)Number of stock options
ii) Unit price information
(3) Method for estimating fair market price related to
stock options
(a) The Black-Scholes Model is used for estimating the
fair market price of stock options
(b) Key assumptions in valuation model:
Notes:
i)Stock price volatility is determined based on stock
market performance from February 2008 to August
2011.
ii)Since there is no accumulation of enough data and it’s
difficult to make reasonable estimate of average life, it’s
estimated by way of exercising at the middle of the
exercise period.
iii)Expected dividend is based on cash dividend for the
year ended March 2011.
iv)Risk-free interest rate is the yield of government
bonds for expected life.
Regarding the method for estimating the number of
effective rights of stock options, the number of expired
options is estimated based upon the past attrition rate.
Outstanding at
March 31, 2011
Granted
Exercised
Expired
Outstanding at
March 31, 2012
Exercise periods
940
-
800
140
-
2,930
-
-
215
2,715
-
1,160
-
40
1,120
November 8,
2002
June 24,
2010
June 23,
2011
Date of ordinary
shareholders’
meeting
(Unit: shares)
From November 9,
2004 to October
31, 2011
From August 12,
2012 to August
11, 2015
From August 12,
2013 to August
11, 2016
November 8, 2002
June 24, 2010
June 23, 2011
¥17,659
103,730
83,743
¥96,310
-
-
¥ -
35,420
25,674
Exercise price
per share
(exact yen)
Average price per
share at exercise
(exact yen)
Fair market price per
share at grant
(exact yen)
Date of ordinary
shareholders’
meeting
Stock price volatility
Expected average life
Expected dividend
Risk-free interest rate
56.091%
3.5 years
¥3,000 per share
0.254%
38
Yen U.S. dollars
Cost of sales
Selling, general and
administrative expenses
¥3,301
28,616
¥6,660
52,018
$81
633
March 31
2011
March 31
2012
March 31
2012
Thousands of yen Thousands of
U.S. dollars
(1)Service cost
(2)Interest cost
(3)Recognized actuarial loss
(4)Contribution
(5)Extra retirement payments
(6) Net periodic pension expense
¥53,300
7,513
6,775
89,070
7,217
¥163,875
¥68,046
6,055
8,303
50,942
5,522
¥138,868
$828
74
101
620
67
$1,690
2011 2012 2012
(1)Discount rate
(2)
Method of attributing the projected
benefits to periods of service
(3)Amortization of unrecognized
actuarial differences
Mainly 1.24%
Straight-line
basis
Mainly
straight-line
over 5 years
Mainly 0.99%
Straight-line
basis
Mainly
straight-line
over 5 years
2011 2012