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Pioneer Corporation Annual Report 2011 39
2011 2010
Discount rate 4.9%–5.6% 3.7%–7.4%
Expected rate of return on plan assets 0.0%–7.5% 4.0%–8.0%
Amortization period of prior service gain or cost Average remaining service Average remaining service
period of employees period of employees
Recognition period of actuarial gain or loss Average remaining service Average remaining service
period of employees period of employees
9. Equity
Since May 1, 2006, Japanese companies have been
subject to the Company Law of Japan (the “Com-
pany Law”). The significant provisions in the Com-
pany Law that affect financial and accounting mat-
ters are summarized below:
a. Dividends
Under the Company Law, companies can pay divi-
dends at any time during the fiscal year in addition
to the year-end dividend upon resolution of the
shareholders meeting. For companies that meet
certain criteria such as; (1) having a board of direc-
tors, (2) having independent auditors, (3) having a
board of corporate auditors, and (4) the term of
service of directors is prescribed as one year rather
than two years by its articles of incorporation, the
board of directors 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.
Semiannual interim dividends may also be paid
once a year upon resolution by the board of direc-
tors if the articles of incorporation of the company
so stipulate. The Company Law 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 shareholders, 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 Company Law requires that an amount equal
to 10% of dividends must be appropriated as an
additional paid-in capital (a component of capital
surplus) or as a legal reserve (a component of
retained earnings) depending on the equity
account charged upon the payment of such divi-
dends until the aggregate amount of additional
paid-in capital and legal reserve equals 25% of the
common stock. Under the Company Law, the total
amount of additional paid-in capital and legal
reserve may be reversed without limitation. The
Company Law also provides that common stock,
legal reserve, additional paid-in capital, other capi-
tal surplus and retained earnings can be transferred
among the accounts under certain conditions upon
resolution of the shareholders.
c. Treasury Stock and Treasury Stock Acquisition
Rights
The Company Law also provides for companies to
purchase treasury stock and dispose of such trea-
sury stock by resolution of the board of directors.
The amount of treasury stock purchased cannot
exceed the amount available for distribution to the
shareholders which is determined by a specified
formula. Under the Company Law, stock acquisi-
tion rights are presented as a separate component
of equity. The Company Law also provides that
companies can purchase both treasury stock acqui-
sition rights and treasury stock. Such treasury stock
acquisition rights are presented as a separate com-
ponent of equity or deducted directly from stock
acquisition rights.
Assumptions used for the years ended March 31, 2011 and 2010 were as follows:
Notes to Consolidated Financial Statements