Toshiba 2008 Annual Report Download - page 101

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33
32
Weighted-average assumptions used to determine benefit obligations as of March 31, 2008 and 2007 and net periodic pen-
sion and severance cost for the years then ended are as follows:
March 31 2008 2007
Discount rate 2.8% 2.5%
Rate of compensation increase 3.0% 3.0%
Year ended March 31 2008 2007
Discount rate 2.5% 2.5%
Expected long-term rate of return on plan assets 3.9% 4.0%
Rate of compensation increase 3.0% 3.0%
The Company determines the expected long-term rate of return in consideration of the target allocation of the plan assets,
the current expectation of long-term returns on the assets and actual returns on plan assets.
The Company’s pension and severance plan asset allocations at March 31, 2008 and 2007, by asset category are as follows:
March 31 2008 2007
Asset category :
Equity securities 50% 55%
Debt securities 31% 27%
Life insurance company general accounts 2% 2%
Other 17% 16%
Total 100% 100%
The other category includes hedge funds and real estate.
The Company’s investment policies and strategies are to assure adequate plan assets to provide for future payments of
pension and severance benefits to participants, with reasonable risks. The Company designs the basic target allocation of the
plan assets to mirror the best portfolio based on estimation of mid-term and long-term return on the investments. The
Company periodically reviews the actual return on the investments and adjusts the portfolio to achieve the assumed long-
term rate of return on the investments. The Company targets its investments in equity securities at 40 percent or more of
total investments, and investments in equity and debt securities at 75 percent or more of total investments.
Certain of the Company’s subsidiaries provide certain health care and life insurance benefits to retired employees. Such
benefits have no material impact on the consolidated financial statements of the Company.
12. RESEARCH AND DEVELOPMENT COSTS
Research and development costs are expensed as incurred and amounted to ¥393,293 million ($3,932,930 thousand) and
¥393,987 million for the years ended March 31, 2008 and 2007, respectively.
13. ADVERTISING COSTS
Advertising costs are expensed as incurred. Advertising costs amounted to ¥53,201 million ($532,010 thousand) and ¥49,230
million for the years ended March 31, 2008 and 2007, respectively.
14. OTHER INCOMES AND OTHER EXPENSE
FOREIGN EXCHANGE GAINS AND LOSSES
For the years ended March 31, 2008 and 2007, the net foreign exchange impacts were ¥16,861 million ($168,610 thousand)
loss and ¥14,639 million gain, respectively.
GAINS ON SALES OF SECURITIES
The gains on sales of securities for the years ended March 31, 2008 and 2007 were ¥33,953 million ($339,530 thousand) and
¥63,074 million, respectively. For the year ended March 31, 2008, the gains on sales of securities were related mainly to
Toshiba-EMI Limited and Toshiba Machine Co., Ltd.. For the year ended March 31, 2007, the gains on sales of securities
were related mainly to GE Toshiba Silicones Co., Ltd. and Toshiba Ceramics Co., Ltd..