Nikon 2011 Annual Report Download - page 46

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The components of net periodic benefit costs for the fiscal years ended March 31, 2010 and 2011 were as follows:
Millions of Yen
Thousands of
U.S. Dollars
2010 2011 2011
Service cost ¥3,663 ¥3,428 $41,223
Interest cost 2,889 2,775 33,375
Expected return on plan assets (1,786) (2,000) (24,058)
Recognized actuarial loss 4,993 3,953 47,544
Amortization of prior service cost (1,768) (1,899) (22,836)
Net periodic retirement benefit costs ¥7,991 ¥6,257 $75,248
In addition to the above, the Company and certain of its overseas subsidiaries charged ¥2,151 million and ¥1,794 million ($21,570
thousand) for defined contribution pension plans to income for the fiscal years ended March 31, 2010 and 2011, respectively.
Assumptions used for the fiscal years ended March 31, 2010 and 2011 were principally as set forth below:
2010 2011
Discount rate 2.50% 2.50%
Expected rate of return on plan assets 2.00% 2.00%
Recognition period of actuarial gain (loss) 10 years 10 years
Amortization period of prior service cost 10 years 10 years
8. Equity
Japanese companies are subject to the Companies Act of
Japan (the “Companies Act”). The significant provisions in the
Companies Act that affect financial and accounting matters
are summarized below:
(a) Dividends
Under the Companies Act, companies can pay dividends at any
time during the fiscal year in addition to the year-end dividend
upon resolution at the shareholders meeting. For companies
that meet certain criteria such as; (1) having the Board of
Directors, (2) having independent auditors, (3) having the
Board of Corporate Auditors, and (4) the term of service of
the directors is prescribed as one year rather than two years
of normal term by its articles of incorporation, the Board of
Directors of such company may declare dividends (except
for dividends in kind) at any time during the fiscal year if the
company has prescribed so in its articles of incorporation.
The Company meets all the above criteria.
The Companies Act permits companies to distribute
dividends-in-kind (non-cash assets) to shareholders subject
to a certain limitation and additional requirements.
Semiannual interim dividends may also be paid once a year
upon resolution by the Board of Directors if the articles of
incorporation of the company so stipulate. The Companies
Act provides certain limitations on the amounts available for
dividends or the purchase of treasury stock. The limitation is
defined as the amount available for distribution to the share-
holders, but the amount of net assets after dividends must be
maintained at no less than ¥3 million.
(b) Increases/ Decreases and Transfer of Common Stock,
Reserve and Surplus
The Companies Act requires that an amount equal to 10% of
dividends must be appropriated as a legal reserve (a compo-
nent of retained earnings) or as additional paid-in capital
(a component of capital surplus) depending on the equity
account charged upon the payment of such dividends until
the total of aggregate amount of legal reserve and additional
paid-in capital equals 25% of the common stock. Under the
Companies Act, the total amount of additional paid-in capital
and legal reserve may be reversed without limitation. The
Companies Act also provides that common stock, legal
reserve, additional paid-in capital, other capital surplus and
retained earnings can be transferred among the accounts
under certain conditions upon resolution by the shareholders.