Kyowa Hakko Kogyo Co., Ltd., is an R&D-based company with special strengths in biotechnology. The company is dedicated to the creation of new value in the life sciences, especially in its two core business segments of pharmaceuticals and biochemicals, and strives to contribute to the health and well-being of people around the world. The company provided the following disclosures related to its retirement benefits in its 2007 annual report.
Kyowa Hakko Kogyo Co., Ltd.
Basis of Presenting Consolidated Financial Statements (partial)
Kyowa Hakko Kogyo Co., Ltd. (the "Company") and its consolidated subsidiaries maintain their accounts and records in accordance with the provisions set forth in the Securities and Exchange Law and in conformity with generally accepted accounting principles and practices prevailing in Japan.The Company's fiscal year is from April 1 to March 31. Therefore, "fiscal 2007" begins on April 1, 2006 and ends on March 31, 2007.
Reserve for Retirement Benefits to Employees
A reserve for retirement benefits to employees is provided at an amount equal to the present value of the projected benefit obligation less fair value of the plan assets at the year-end. Unrecognized prior service costs are amortized on a straight-line basis over five years from the year they occur. Unrecognized actuarial differences are amortized on a straight-line basis over ten years from the year after they occur.
Note 9. Reserve for Retirement Benefits to Employees
The Company and its domestic consolidated subsidiaries operate various defined benefit plans, including a corporate pension plan (the so-called cash-balanced plan), a group contributory plan, a tax-qualified pension plan and a severance payment plan.
(a) The reserve for retirement benefits as of March 31, 2007, is analyzed as follows.
- Millions of Yen 2007 Thousands of U.S. Dollars 2007
- Projected benefit obligations ¥(62,221) $(526,895)
- Plan assets 42,888 363,181
- Unfunded benefit obligations (19,333) (163,714)
- Unrecognized actuarial differences 1,660 14,057
- Unrecognized prior service costs (Note 2) (2,350) (19,900)
- Prepaid pension cost (1,359) (11,678)