Omron 2009 Annual Report Download - page 75

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As is customary in Japan, additional security must be
given if requested by a lending bank, and banks have the
right to offset cash deposited with them against any debt
or obligation that becomes due and, in case of default
and certain other specified events, against all debt payable
to the banks. The Companies have never received any
such requests.
As is also customary in Japan, the Company and
domestic subsidiaries maintain deposit balances with
banks with which they have short- or long-term debt. Such
deposit balances are not legally or contractually restricted
as to withdrawal.
Total interest cost incurred and charged to expense
for the years ended March 31, 2009, 2008 and 2007
amounted to ¥1,257million ($12,827 thousand), ¥1,537
million and ¥1,116 million, respectively.
The Companies do not have any material capital lease
agreements.
The Companies have operating lease agreements pri-
marily involving offices and equipment for varying peri-
ods. Leases that expire generally are expected to be
renewed or replaced by other leases. At March 31, 2009,
future minimum rental payments applicable to non-can-
celable leases having initial or remaining non-cancelable
lease terms in excess of one year were as follows:
9. Leases
The Company and its domestic subsidiaries sponsor ter-
mination and retirement benefit plans which cover sub-
stantially all domestic employees. Benefits were based
on the employee’s years of service, with some plans con-
sidering compensation and certain other factors. The
Company, effective from April 2004, and its domestic
subsidiaries, effective from April 2005, introduced an
amended plan to establish a new formula for determin-
ing pension benefits including a “point-based benefits
system,” under which benefits are calculated based on
accumulated points allocated to employees each year
according to their job classification and performance. If
the termination is involuntary, the employee is usually
entitled to greater payments than in the case of volun-
tary termination.
The Company and its domestic subsidiaries fund a
portion of the obligations under these plans. The general
funding policy is to contribute amounts computed in
accordance with actuarial methods acceptable under
Japanese tax law. The Company and substantially all
domestic subsidiaries had a contributory termination and
retirement plan which was interrelated with the
Japanese government social welfare program and
consisted of a substitutional portion requiring employee
and employer contributions plus an additional portion
established by the employers.
Periodic pension benefits required under the substi-
tutional portion were prescribed by the Japanese Ministry
of Health, Labour and Welfare, commence at age 65 and
continue until the death of the surviving spouse. Benefits
under the additional portion were usually paid in a lump
sum at the earlier of termination or retirement although
periodic payments were available under certain conditions.
On March 31, 2007, the Companies adopted the
recognition and disclosure provisions of SFAS No.158.
SFAS No.158 required the Companies to recognize the
funded status (i.e., the difference between the fair value
of plan assets and the projected benefit obligations) of
their pension plans in the consolidated balance sheet,
with a corresponding adjustment to accumulated other
comprehensive income (loss) as pension liability adjust-
ments. Before adoption of SFAS No.158, an additional
minimum pension liability was recognized based on a
plan’s accumulated benefit obligation (projected benefit
obligation, less future compensation increase), pursuant to
SFAS No.87.
10. Termination and Retirement Benefits
Years ending March 31
2010
2011
2012
2013
2014
Thereafter
Total
Millions of yen
Thousands of
U.S. dollars
¥ 2,724
2,343
1,963
1,725
1,474
7,746
¥ 17,975
$ 27,796
23,908
20,031
17,602
15,041
79,040
$ 183,418
Rental expense amounted to ¥13,787 million ($140,684 thousand), ¥13,292 million and ¥12,598 million for the years ended
March 31, 2009, 2008 and 2007, respectively.