Trust Recovery Growth Vitalization - Marubeni

The weighted-average asset allocations of the Company’s pension plans at March 31, 2005 and 2004 were as follows:
Marubeni Corporation 2005 86 / 87
Asset category 2005 2004
Equity securities ....................................................................................................................................... 38.3% 29.9%
Debt securities ......................................................................................................................................... 45.0 42.6
Other ........................................................................................................................................................ 16.7 27.5
Total ......................................................................................................................................................... 100.0% 100.0%
Plan assets are generally invested 40%, 50% and 10% in equity
securities, debt securities and other. The allocation to foreign equity
and debt securities is approximately 30% of the total plan assets.
In making investment decisions, the main objective is to secure
the necessary return over the long term to cover pension and
retirement allowance liabilities. The primary investment policy is to
analyze the risk/return characteristics by asset class and to invest in a
diversified portfolio taking into consideration of the correlation
between asset classes. The Company sets a policy asset mix with
investments in equities, bonds, and alternative investments. Based
on this policy, the Company selects multiple investment managers
who execute the strategy. When selecting an investment manager,
the Company gives consideration to management philosophy and
content, investment management policy and investment style,
investment control systems including information collection
mechanism and decision-making process, compliance systems,
investment experience and track record of the investment manager
as well as their investment professional in charge of managing
pension money.
As a result of the introduction of the cash-balance plan, the
performance of certain plan assets is matched with the related
pension benefits.
The benefits expected to be paid in the next ten years are as follows:
Thousands of
Year ending March 31 Millions of yen U.S. dollars
2006 ..................................................................................................................................................... ¥ 9,186 $ 85,850
2007 ..................................................................................................................................................... 9,741 91,037
2008 ..................................................................................................................................................... 10,120 94,579
2009 ..................................................................................................................................................... 10,450 97,664
2010 ..................................................................................................................................................... 10,760 100,561
2011 – 2015 ......................................................................................................................................... 55,821 521,692
¥106,078 $991,383
The amount of contributions expected to be paid to the plan during the year ending March 31, 2006 is approximately ¥2,400 million
($22,430 thousand).
10 Income Taxes
The Company files a consolidated income tax return in Japan.
Total income taxes recognized for the years ended March 31, 2005, 2004 and 2003 were applicable to the following:
Millions of yen
Thousands of
U.S. dollars
2005 2004 2003 2005
Income before income taxes, minority interests and equity in
earnings of affiliated companies ...................................................... ¥33,837 ¥35,618 ¥16,274 $316,234
Equity in earnings of affiliated companies ......................................... 5,055 3,746 6,486 47,243
Other comprehensive income (loss) .................................................. 7,170 28,902 (6,403) 67,009
Total income taxes ............................................................................. ¥46,062 ¥68,266 ¥16,357 $430,486
Taxes on income applicable to the Company would normally
result in a statutory tax rates of approximately 41%, 44% (including
a temporary surtax of 2%) and 44% for the years ended March 31,
2005, 2004 and 2003, respectively. A reconciliation of the statutory
income tax rates to the effective income tax rates expressed as a
percentage of income before income taxes, minority interests and
equity in earnings of affiliated companies is as follows:
2005 2004 2003
Statutory income tax rates ............................................................................................ 41.0% 44.0% 44.0%
Tax effect of subsidiaries’ operations ........................................................................... 11.6 16.3 28.8
Tax effect of permanent differences ............................................................................ 4.8 2.6 6.5
Difference in tax rates of foreign subsidiaries .............................................................. (9.4) (9.8) (15.1)
Tax effect on undistributed earnings of subsidiaries and other .................................... 11.7 6.0 (23.5)
Effect of tax rate change ............................................................................................... – – 12.7
Other ............................................................................................................................. 0.9 1.4 (8.6)
Effective income tax rates ............................................................................................ 60.6% 60.5% 44.8%