JVC 2003 Annual Report Download - page 50

Victor Company of Japan, Limited
48 Annual Report 2003
The 1.5% unsecured convertible bonds are redeemable prior
to their stated maturity, in whole or in part, at the option of the
Company at prices ranging from 107% to 100% of the princi-
pal amount. The price at which shares of common stock shall
be issued upon conversion is ¥2,867 ($23.89) per share, sub-
ject to adjustment under certain circumstances. The 0.55%
unsecured convertible bonds are redeemable prior to their stated
maturity, in whole or in part, at the option of the Company at
prices ranging from 103% to 100% of the principal amount.
The price at which shares of common stock shall be issued upon
conversion is ¥1,487 ($12.39) per share, subject to adjustment
under certain circumstances.
The aggregate annual maturities of long-term debt at March
31, 2003 were as follows:
Thousands of
Year ending March 31 Millions of yen U.S. dollars
2004 ¥ 12,727 $106,058
2005 17,498 145,817
2006 57,337 477,808
2007 20,134 167,783
2008 10,136 84,467
Thereafter 363 3,025
¥118,195 $984,958
9. PLEDGED ASSETS
The following assets were pledged as collateral for long-term
debt, including current portion, at March 31, 2003:
Thousands of
Millions of yen U.S. dollars
Buildings 467 3,892
Land 180 1,500
¥647 $5,392
10. EMPLOYEES’ SEVERANCE AND RETIREMENT BENEFITS
As explained in Note 2, Significant Accounting Policies, effec-
tive April 1, 2000, the Companies adopted the new accounting
standard (“Opinion on Setting Accounting Standard for Employ-
ees’ Severance and Retirement Benefits”).
(Return of substitutional portion of Employees’ Pension
Insurance)
Employees of Japanese companies are compulsorily included
in the Welfare Pension Insurance Scheme operated by the gov-
ernment. Employers are legally required to deduct employees’
welfare pension insurance contributions from their payroll and
to pay them to the government together with employers’ own
contributions. For companies that have established their own
Employees’ Pension Fund which meets certain legal requirements,
it is possible to transfer a part of their welfare pension insurance
contributions (referred to as the substitutional portion of the
government’s scheme) to their own Employees’ Pension Fund
under the government’s permission and supervision.
Based on the newly enacted Defined Benefit Corporate Pen-
sion Law, the Company and its domestic consolidated subsid-
iaries decided to restructure their Employees’ Pension Fund and
were permitted by the Minister of Health, Labor and Welfare on
July 1, 2002 to be released from their future obligation for pay-
ments for the substitutional portion of the Welfare Pension In-
surance Scheme. Pension assets for the substitutional portion
maintained by the Employees’ Pension Fund are to be trans-
ferred back to the government.
The Company and its domestic consolidated subsidiaries
applied the transitional provisions as prescribed in paragraph
47-2 of the JICPA Accounting Committee Report No. 13, “Prac-
tical Guideline for Accounting of Retirement Benefits (Interim
Report)”, and the effect of transferring the substitutional portion
was recognized on the date permission was received from the
Ministry of Health, Labor and Welfare. As a result, in the year
ended March 31, 2003, the Company and its consolidated do-
mestic subsidiaries recorded gains on the release from the sub-
stitutional portion of the government’s Welfare Pension Insurance
Scheme amounting to ¥3,456 million ($28,800 thousand),
which was calculated based on the amounts of the substitu-
tional portion of the projected benefit obligations, the related
pension assets, and the related unrecognized items.
The amount of pension plan assets expected to be transferred
back to the government approximated ¥65,305 million
($544,208 thousand) as at March 31, 2003.
Liability for employees’ retirement benefits included in liabilities in the consolidated balance sheets for 2003 and 2002 and the
related expenses for 2003, 2002 and 2001, which were determined based on the amounts obtained by actuarial calculations, were
as follows:
Thousands of
Millions of yen U.S. dollars
2003 2002 2003
Projected benefit obligation:
Projected benefit obligation ¥(164,185) ¥(252,417) $(1,368,208)
Unamortized prior service costs —(8,009) —
Unamortized actuarial differences 55,865 42,321 465,542
Less fair value of pension assets 75,037 159,425 625,308
Less unrecognized net transition obligation 19,225 36,129 160,208
Liability for severance and retirement benefits (14,058) (22,551) (117,150)