Omron 2004 Annual Report Download - page 55

53
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Life insurance company general accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14.4%
25.0
43.5
10.8
6.3
100.0%
—%
60.6
27.1
11.9
0.4
100.0%
2004 2003
Asset Category
The Company investment policies are designed to ensure adequate plan assets are available to provide future payments of pension
benefits to eligible participants. Taking into account the expected long-term rate of return on plan assets, the Company formulates a
model portfolio comprised of the optimal combination of equity and debt securities in order to produce a total return that will match the
expected return on a mid-term to long-term basis.
The Company evaluates the gap between expected return and actual return of invested plan assets on an annual basis to determine
if such differences necessitate a revision in the model portfolio. The Company revises the model portfolio when and to the extent con-
sidered necessary to achieve the expected long-term rate of return on plan assets.
Equity securities include common stock of the Company in the amounts of ¥53 million ($500 thousand)(0.04% of total domestic plan
assets) and ¥111 million (0.11% of total domestic plan assets) at December 31,2003 and 2002, respectively.
Cash Flows
The Company expects to contribute ¥5,712 million ($53,887 thousand) to its domestic termination and retirement benefit plans in the
year ending March 31, 2005.
Certain employees of European subsidiaries are covered by a defined benefit pension plan. The projected benefit obligation for the
plan and related fair value of plan assets were ¥1,285 million ($12,123 thousand) and ¥1,125 million ($10,613 thousand), respectively,
at March 31, 2004 and ¥1,315 million and ¥887 million, respectively, at March 31, 2003.
The Companies also have unfunded noncontributory termination plans administered by the Companies. These plans provide lump-
sum termination benefits and are paid at the earlier of the employee’s termination or mandatory retirement age, except for payments to
directors and corporate auditors which require approval by the shareholders before payment. The Companies record provisions for ter-
mination benefits sufficient to state the liability equal to the plans’ vested benefits, which exceed the plans’ accumulated benefit obliga-
tions.
The aggregate liability for the termination plans excluding the funded contributory termination and retirement plan in Japan, as of
March 31, 2004 and 2003 was ¥3,954 million ($37,302 thousand) and ¥3,348 million, respectively. The aggregate net periodic benefit
cost for such plans for the years ended March 31, 2004, 2003 and 2002 was ¥1,688 million ($15,925 thousand), ¥890 million and
¥2,385 million, respectively.
9. SHAREHOLDERS’ EQUITY
Japanese companies are subject to the Japanese Commercial Code (the "Code") to which various amendments have become effective
since October 1, 2001.
The Code was revised whereby common stock par value was eliminated resulting in all shares being recorded with no par value and
at least 50% of the issue price of new shares is required to be recorded as common stock and the remaining net proceeds as addition-
al paid-in capital, which is included in capital surplus. The Code permits Japanese companies, upon approval of the Board of Directors,
to issue shares to existing shareholders without consideration as a stock split. Such issuance of shares generally does not give rise to
changes within the shareholders’ accounts.
The revised Code also provides that an amount at least equal to 10% of the aggregate amount of cash dividends and certain other
appropriations of retained earnings associated with cash outlays applicable to each period shall be appropriated as a legal reserve (a
Plan assets
The Company’s pension plan weighted-average asset allocation by asset category is as follows: