39 Nipro Corporation Annual Report 2011
8. Financial instruments
Nipro Corporation Annual Report 2011 40
Remark 1 Methods used to calculate fair values of financial instruments and the details of securities
<Assets>
•Cashandcashequivalentsandtradenotesandaccountsreceivable
Cash and cash equivalents and trade notes and accounts receivable are stated at the relevant book value because the settlement periods are short and the fair values are almost the same as the book value.
•Investmentssecurities
Equity securities are stated at market value. See Note 6. “Investment securities” for the detailed information by classification.
<Liabilities>
•Tradenotesandaccountspayableandshort-termbankloansandcurrentportionoflong-termdebtandcommercialpaper
Because the settlement periods of the above items are short and their fair values are almost the same as their book values, the relevant book values are used.
•Othernotesandaccountpayable
Because the settlement periods of the above items are short and their fair values are almost the same as their book values, the relevant book values are used.
•Long-termdebt
The fair value of long-term debt is calculated by applying a discount rate to the total of principal and interest. The discount rate is based on the assumed interest rate if a similar new loan was entered into.
•Leaseobligation
The fair value of lease obligations is calculated by applying a discount rate to the total of principal and interest. The discount rate is based on the assumed interest rate if a current lease transaction was renewed.
Remark 2 Financial instruments for which the fair value is extremely difficult to determine
Millions of yen Thousands of U.S. dollars (Note 1)
2011 2010 2011
Unlisted equity securities ··· ¥ 18,068 ¥ 24,120 $ 217,294
Because these items have no market value and are difficult to estimate the future cash flow and it is extremely difficult to determine their fair values, they are not included in investment securities and investment in unconsolidated subsidiaries and an affiliate accounted for by the equity method above.
Remark 3 Planned redemption amounts after the balance sheet date for monetary receivables with maturity dates are as follows:
Millions of yen Thousands of U.S. dollars (Note 1)
2011 2010 2011
Within 1 year Within 1 year Within 1 year
Cash and cash equivalents, time deposits ··· ¥ 81,116 ¥ 59,267 $ 975,539
Trade notes and accounts receivable ··· 60,823 55,871 731,485
Remark 4 Planned repayment amounts after the balance sheet date for monetary payables with maturity dates are as follows:
Planned repayment amounts after the balance sheet date for monetary payables with maturity dates at March 31, 2011 are as follows:
Millions of yen 2011 Within 1 year Over 1 year but
within 2 years
Over 2 years but within 3 years
Over 3 years but within 4 years
Over 4 years but
within 5 years Over 5 years
Trade notes and accounts payable ··· ¥ 33,582 ¥ — ¥ — ¥ — ¥ — ¥ —
Short-term bank loans, current portion of
long-term debt, and commercial paper ··· 111,659 — — — — —
Other notes and account payable ··· 13,748 — — — — —
Long term debt ··· — 42,847 24,162 42,510 37,091 31,940
Lease obligations ··· 375 358 334 353 41 0
Total ··· ¥ 159,364 ¥ 43,205 ¥ 24,496 ¥ 42,863 ¥ 37,132 ¥ 31,940 Thousands of U.S. dollars (Note 1)
2011 Within 1 year Over 1 year but
within 2 years
Over 2 years but within 3 years
Over 3 years but within 4 years
Over 4 years but
within 5 years Over 5 years
Trade notes and accounts payables ··· $ 403,872 $ — $ — $ — $ — $ —
Short-term bank loans, current portion of
long-term debt, and commercial paper ··· 1,342,863 — — — — —
Other notes and account payable ··· 165,340 — — — — —
Long term debt ··· — 515,299 290,582 511,245 446,073 384,125
Lease obligations ··· 4,510 4,305 4,018 4,245 493 0
Total ··· $ 1,916,585 $ 519,604 $ 294,600 $ 515,490 $ 446,566 $ 384,125
41 Nipro Corporation Annual Report 2011
9. Short-Term Loans and Long-Term Debt
Short-term loans comprised overdrafts and promissory notes.
The weighted-average interest rate of short-term bank loans for the years ended March 31, 2011 and 2010 was 0.682% and 0.846%, respectively.
The weighted-average interest rate of commercial paper for the year ended March 31, 2011 and 2010 were 0.118% and 0.107% respectively.
Long-term debt comprised the following:
Millions of yen Thousands of U.S. dollars (Note 1)
2011 2010 2011
1.51% unsecured bonds due 2012 ··· ¥ 5,000 ¥ 5,000 $ 60,132 1.37% unsecured bonds due 2014 ··· 3,000 3,000 36,079 1.42% unsecured bonds due 2011 ··· — 10,000 — 1.37% unsecured bonds due 2013 ··· 10,000 10,000 120,265 2.04% unsecured bonds due 2018 ··· 10,000 10,000 120,265 0.877% unsecured bonds due 2016 ··· 20,000 — 240,529 Zero coupon convertible bonds due 2015 ··· 15,000 15,000 180,397
0.95% unsecured bonds due 2010 ··· — 100 —
0.79% unsecured bonds due 2010 ··· — 10 —
1.55% unsecured bonds due 2011 ··· — 50 — Long-term bank loans due through 2020, with weighted-average
interest rate of 1.217% for the year ended March 31, 2011, and of
1.434% for the year ended March 31, 2010. ··· 149,836 93,082 1,801,996 Less current portion of long-term debt ··· (34,286) (30,402) (412,339) Total ··· ¥ 178,550 ¥ 115,840 $ 2,147,324 In February 2009, the Company issued ¥5,000 million (US$60,132
thousand) of 1.51% privately-placed bonds due 2012.
In September 2009, the Company issued ¥3,000 million (US$36,079 thousand) of 1.37% privately-placed bonds due 2014.
In March 2006, the Company issued ¥10,000 million (US$120,265 thousand) of 1.42% unsecured bonds due 2011.
In March 2008, the Company issued ¥10,000 million (US$120,265 thousand) of 1.37% unsecured bonds due 2013.
In March 2008, the Company issued ¥10,000 million (US$120,265 thousand) of 2.04% unsecured bonds due 2018.
In March 2011, the Company issued ¥20,000 million (US$240,529 thousand) of 0.877% unsecured bonds due 2016.
In March 2010, the Company issued ¥15,000 million (US$180,397 thousand) of zero coupon convertible bonds due 2015.
In August 2005, Zensei Pharmaceutical Industries Co., Ltd. issued
¥100 million (US$1,203 thousand) of 0.95% privately-placed bonds due 2010.
In August 2005, Zensei Pharmaceutical Industries Co., Ltd. issued
¥100 million (US$1,203 thousand) of 0.79% privately-placed bonds to be serially redeemed by 2010.
In March 2006, Zensei Pharmaceutical Industries Co., Ltd. issued
¥50 million (US$601 thousand) of 1.55% privately-placed bonds due 2011.
The aggregate annual maturities of long-term debt outstanding at March 31, 2011 are as follows:
Millions of yen Thousands of U.S. dollars (Note 1)
2011 2011
2011··· ¥ 34,286 $ 412,339 2012··· 42,847 515,298 2013··· 24,162 290,583 2014 and thereafter ··· 111,541 1,341,443 Total ··· ¥ 212,836 $ 2,559,663 As is customary in Japan, long-term and short-term bank loans
are made under general agreements which provide that additional securities and guarantees for present and future indebtedness will be given under certain circumstances at the request of the bank.
In addition, the agreements provide that the bank has the right to offset cash deposits against any long-term and short-term bank loan that becomes due, and in case of default and certain other specified events, against all other loans payable to the bank.
Nipro Corporation Annual Report 2011 42
10. Accrued Pension and Severance Liabilities
The Company and certain consolidated subsidiaries have defined benefit pension plans and unfunded retirement benefit plans, and defined contribution pension plan for employees. The following table sets forth the changes in projected benefit obligation, plan assets and funded status of the Company and its consolidated subsidiaries at March 31, 2011 and 2010.
Millions of yen Thousands of U.S. dollars (Note 1)
2011 2010 2011
1) Projected benefit obligation ··· ¥ (8,799) ¥ (10,084) $ (105,821) 2) Fair value of plan assets ··· 6,182 7,122 74,348 3) Projected benefit obligation in excess of plan assets 1)+2) ··· (2,617) (2,962) (31,473) 4) Unrecognized actuarial (gain) loss ··· 1,039 1,039 12,495 5) Unrecognized past service obligation ··· (12) (15) (144) 6) Total 3)+4)+5) ··· (1,590) (1,938) (19,122) 7) Prepaid pension cost ··· 26 35 313 8) Accrued pension and severance liabilities 6)-7) ··· ¥ (1,616) ¥ (1,973) $ (19,435) The breakdown of net pension and severance costs for the years ended March 31, 2011 and 2010 were as follows:
Millions of yen Thousands of U.S. dollars (Note 1)
2011 2010 2011
Service cost ··· ¥ 698 ¥ 640 $ 8,394 Interest cost ··· 178 223 2,141 Expected return on plan assets ··· (117) (103) (1,407) Amortization of actuarial gain ··· 97 83 1,167 Amortization of past service obligation ··· (3) (3) (36) Other ··· 114 30 1,371 Net pension and severance costs ··· ¥ 967 ¥ 870 $ 11,630 The assumptions used in the accounting for the above benefit plans were as follows:
2011 2010
Discount rate ··· Primarily 1.8% Primarily 1.8%
Expected rate of return on plan assets··· Primarily 1.5% Primarily 1.5%
Amortization period of past service obligation ··· Primarily 5 years Primarily 5 years Amortization period of actuarial differences ··· Primarily 5 years Primarily 5 years
11. Commitments and Contingent Liabilities
The Company and Consolidated Subsidiaries had the following commitments and contingent liabilities:
Millions of yen Thousands of U.S. dollars (Note 1)
2011 2010 2011
Export drafts discounted ··· ¥ 78 ¥ 3 $ 938 Trade notes receivable discounted ··· 30 32 361 Total ··· ¥ 108 ¥ 35 $ 1,299
43 Nipro Corporation Annual Report 2011