Nikon 2002 Annual Report Download - page 29

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7. RETIREMENT AND PENSION PLANS
The Company and major domestic subsidiaries have non-contributory funded pension plans covering substantially all of its employees. Certain for-
eign subsidiaries also have contributory pension plans. Under the pension plan, employees terminating their employment are, in most circum-
stances, entitled to pension benefits determined by reference to basic rates of pay at the time of termination, length of service and certain other
factors.
Effective April 1, 2000, the Group adopted a new accounting standard for employees’ retirement benefits.
The liability for employees’ retirement benefits at March 31, 2002 and 2001 consisted of the following:
Thousands of
Millions of Yen U.S. Dollars
2002 2001 2002
Projected benefit obligation ¥115,380 ¥95,988 $865,894
Fair value of plans assets (66,437) (63,942) (498,592)
Unrecognized actuarial loss (31,589) (12,279) (237,067)
Unrecognized transitional obligation (9,743)
Net Liability 17,354 10,024 130,235
Prepayment of service cost 65 493
Net Liability ¥17,419 ¥10,024 $ 130,728
The components of net periodic benefit costs for the fiscal years ended March 31, 2002 and 2001 were as follows:
Thousands of
Millions of Yen U.S. Dollars
2002 2001 2002
Service cost ¥4,039 ¥3,861 $30,312
Interest cost 3,080 3,190 23,118
Expected return on plans assets (2,739) (2,477) (20,557)
Amortization of transitional obligation 9,755 16,459 73,206
Amortization of service cost resulting from actuarial assumptions 1,133 8,500
Net periodic benefit costs ¥15,268 ¥21,033 $114,579
Assumptions used for the fiscal years ended March 31, 2002 and 2001 were principally set forth as follows:
2002 2001
Discount rate 2.5% 3.0%
Expected rate of return on plans assets 4.0% 4.0%
Recognition period of actuarial gain (loss) 10 years 10 years
Amortization period of transitional obligation 2 years 2 years
8. SHAREHOLDERS’ EQUITY
The Company is subject to the Japanese Commercial Code (the “Code”) to which certain amendments became effective as from October 1, 2001.
Prior to October 1, 2001, the Code required at least 50 per cent. of the issue price of new shares, with a minimum of the par value thereof, to be
designated as stated capital as determined by resolution of the Board of Directors. Proceeds in excess of amounts designated as stated capital
were credited to additional paid-in capital. Effective October 1, 2001, the Code was revised and common stock par values were eliminated result-
ing in all shares being recorded with no par value.
Prior to October 1, 2001, the Code also provided that an amount at least equal to 10 per cent. of the aggregate amount of cash dividends and
certain other cash payments which are made as an appropriation of retained earnings applicable to each fiscal period shall be appropriated and
set aside as a legal reserve until such reserve equals 25 per cent. of stated capital. Effective October 1, 2001, the revised Code allows for such
appropriations to be determined based on total additional paid-in capital and legal reserves. The amount of total additional paid-in capital and legal
reserve which exceeds 25 per cent. of stated capital can be transferred to retained earnings by resolution of the shareholders, which may be avail-
able for dividends. The Company’s legal reserve amount, which is included in retained earnings, totals ¥5,565 million ($41,766 thousand) and