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48
A reconciliation between the normal effective statutory tax rates, and the actual effective tax rates reflected in the consolidated
statements of operations for the fiscal years ended March 31, 2010 and 2011 is as follows:
2010 2011
Normal statutory tax rate 40.6% 40.6%
Tax credit for research and development costs (1.6)
Tax difference of consolidated subsidiaries 13.1 (10.3)
Amortization of goodwill (1.8)
Deferred tax assets for unrealizable profits (12.3) 6.3
Increase in valuation allowance 1.6
Tax effect on retained earnings for foreign subsidiaries (5.4) 3.7
One-time depreciation of work in progress of development costs (6.7)
Other—net 1.1 1.0
Actual effective tax rate 28.6% 41.3%
12. Research and Development Cost
Research and development costs charged to income were ¥60,261 million and ¥60,767 million ($730,817 thousand) for the
fiscal years ended March 31, 2010 and 2011, respectively.
13. Leases
The Group primarity leases certain machinery and equipment for manufacturing.
The minimum rental commitments under noncancellable operating leases at March 31, 2010 and 2011 were as follows:
Millions of Yen
Thousands of
U.S. Dollars
2010 2011 2011
Due within one year ¥2,292 ¥2,221 $26,709
Due after one year 5,014 3,905 46,961
Total ¥7,306 ¥6,126 $73,670
14. Financial Instruments and Related Disclosures
On March 10, 2008, the ASBJ revised ASBJ Statement No. 10,
“Accounting Standard for Financial Instruments” and issued
ASBJ Guidance No. 19, “Guidance on Accounting Standard for
Financial Instruments and Related Disclosures.” This account-
ing standard and the guidance were applicable to financial
instruments and related disclosures at the end of the fiscal
years ending on or after March 31, 2010. The Group applied
the revised accounting standard and the guidance effective
March 31, 2010.
(1) Group Policy for Financial Instruments
The Group restricts fund management to short-term
deposits, and funding is mainly treated by bank loans and
bond issuance. Derivatives are used not for speculative
purposes, but to hedge foreign exchange risk and interest
rate exposures.
(2) Nature and Extent of Risks Arising from Financial Instru-
ments and Risk Management for Financial Instruments
Receivables such as trade notes and trade accounts are
exposed to customer credit risk. The Group manages its
credit risk from receivables on the basis of internal guide-
lines, which include monitoring of payment terms and bal-
ances of major customers by each business administration
department to identify the default risk of customers in the
early stages. Although receivables in foreign currencies due
to global operations are exposed to the market risk of fluctua-
tion in foreign currency exchange rates, the position, net of
payables in foreign currencies, is hedged by using forward
foreign currency contracts.
Investment securities are exposed to the risk of market
price fluctuations, but are managed by monitoring market the
values and the financial position of issuers on a regular basis.
In addition securities other than held-to-maturity securities
are continually reviewed as to the situation, taking into account
the relationship between the Group and trading partners.