Yamaha 2003 Annual Report Download - page 38

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36 YAMAHA CORPORATION
A reconciliation between the statutory tax rate and the effective tax rate for the year ended March 31, 2003 is
as follows:
Year ended
March 31, 2003
Statutory tax rate.................................................................................................................................................................. 40.9%
Equity in earnings and loss of unconsolidated subsidiaries and affiliates
and non-temporary differences not deductible for tax purposes ......................................................................................... (11.7)
Inhabitants’ per capita taxes and other................................................................................................................................. 0.9
Effect of change in statutory tax rate .................................................................................................................................... 3.5
Change in valuation allowance............................................................................................................................................. (13.3)
Tax-rate variances of overseas subsidiaries and other.......................................................................................................... (2.5)
Effective tax rate.................................................................................................................................................................. 17.8%
11. LEGAL RESERVE AND ADDITIONAL PAID-IN CAPITAL
The Code provides that an amount equal to at least 10% of the amount to be disbursed as distributions of earnings
be appropriated to the legal reserve until such reserve and the amount of additional paid-in capital equals 25% of the
common stock account. The Code also provides that, to the extent that the sum of additional paid-in capital account
and the legal reserve exceeds 25% of the common stock account, the amount of any such excess is available for
appropriations by resolution of the shareholders.
12. RETIREMENT BENEFITS
The Company and its domestic consolidated subsidiaries have defined benefit plans, i.e., welfare pension fund plans,
tax-qualified pension plans and lump-sum payment plans, covering substantially all employees who are entitled to
lump-sum or annuity payments, the amounts of which are determined by reference to their basic rates of pay, lengths
of service and the conditions under which the termination occurs.
The following table sets forth the funded and accrued status of the plans, and the amounts recognized in the
consolidated balance sheets at March 31, 2003 and 2002 for the Company’s and consolidated subsidiaries’ defined
benefit plans:
Thousands of
Millions of Yen U.S. Dollars
2003 2002 2003
Retirement benefit obligation ......................................................................................... ¥(194,003) ¥(186,269) $(1,614,002)
Plan assets at fair value.................................................................................................. 91,778 89,012 763,544
Unfunded retirement benefit obligation.......................................................................... (102,225) (97,257) (850,458)
Unrecognized actuarial gain or loss ................................................................................ 47,055 39,717 391,473
Unrecognized past service cost (2) ................................................................................... 1,181 (1,534) 9,825
Net retirement obligation................................................................................................ ¥ (53,988) ¥ (59,074) $ (449,151)
Accrued retirement benefits ........................................................................................... ¥ (53,988) ¥ (59,074) $ (449,141)
Notes: (1) The government-sponsored portion of the benefits under the welfare pension fund plan has been included in the amounts shown in the
above table.
Notes: (2) Effective the year ended March 31, 2003, the Company and certain domestic subsidiaries amended the basis of calculation of their
employees’ retirement benefits from basing these on basic salary level and years of service, to adopting a system under which points
are awarded based on an assessment of each employee’s performance. As a result, additional past service cost was incurred and the
related liability increased.