Pioneer 2011 Annual Report Download - page 44

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Pioneer Corporation Annual Report 2011
42
12. Research and Development Costs
Research and development costs charged to income were ¥ 33,040 million ($398,072 thousand) and ¥35,977
million for the years ended March 31, 2011 and 2010, respectively.
13. Leases
The Group leases certain land, machinery and equipment, office space, warehouses, computer equipment
and employees’ residential facilities.
The minimum rental commitments under noncancellable operating leases at March 31, 2011 were as
follows:
Thousands of
Millions of Yen U.S. Dollars
2011 2011
Operating leases:
Within one year ¥ 1,526 $ 18,386
Over one year 4,116 49,590
Total ¥ 5,642 $ 67,976
Millions of Yen
2010
Special termination benefits ¥17,337
Loss on settlement of retirement benefit obligations 739
Facilities removal-related expenses with regard to consolidations of offices 1,191
Others 2,608
Total ¥21,875
14. Restructuring Costs
A breakdown of restructuring costs for the year ended March 31, 2010 was as follows:
15. Financial Instruments and Related Disclosures
In March 2008, the ASBJ revised ASBJ Statement
No. 10 “Accounting Standard for Financial Instru-
ments” and issued ASBJ Guidance No. 19 “Guid-
ance on Accounting Standard for Financial Instru-
ments and Related Disclosures.” This accounting
standard and the guidance are applicable to finan-
cial instruments and related disclosures at the end
of the fiscal years ending on or after March 31,
2010 with early adoption permitted from the begin-
ning of the fiscal years ending before March 31,
2010. The Group applied the revised accounting
standard and the new guidance effective March 31,
2010.
(1) Group Policy for financial instruments
The Group has a policy to invest cash surplus, if any,
only in short-term deposit or other financial instru-
ments which have similar nature. The Group raises
funds by bank loans and/or from capital markets
through bonds. Derivatives are used, not for specu-
lative purposes, to manage exposure to financial
risks as described in (2) below.
(2) Nature and extent of risks arising from financial
instruments
Receivables such as trade receivables are exposed
to customer credit risk. Although receivables in for-
eign currencies are exposed to the market risk of
fluctuation in foreign currency exchange rates, the
position, net of payables in foreign currencies, is
hedged by using forward foreign currency con-
tracts. Investment securities, mainly equity instru-
ments in the companies with which the Company
has business and capital alliance, are exposed to
the risk of market price fluctuations.
Payment terms of payables, such as trade pay-
ables, are less than one year. Payables in foreign
currencies arising from imports of raw materials and
finished products are exposed to the market risk of
fluctuation in foreign currency exchange rates.
Long-term loans bear floating interest rates, and
are exposed to variable interest rate risk based on
the short-term prime rate.
Derivatives include forward foreign currency
contracts which are used to manage exposure to
market risks from changes in foreign currency
exchange rates of receivables and payables and
currency swaps which are used to manage expo-
sure to market risks from changes in foreign cur-
rency exchange rates of bank loans. Please see
Note 16 for more detail about derivatives.