February 26, 2002
Notice of Revision of Earnings
Forecast due to Abolishment of Retirement Allowance System
(Severance Allowances and Retirement
Pensions)
Information Services International-Dentsu, Ltd. (ISID, head office: Nakano-ku, Tokyo, Representative: Jutaro Takinami, President & CEO) has decided to abolish the current retirement allowance system (severance allowances and retirement pensions) during a Board of Directors' meeting held on February 26, 2002. The company's existing severance allowance will be abolished and retirement pension system will be converted to a defined-contribution pension system. In consideration of the impacts of this change, the company has revised as shown below its earnings forecast for FY2001 (April 1, 2001 through March 31, 2002), which had been announced on October 31, 2001.
1. Abolishment of Retirement Allowance System
(1) Abolishment of lump-sum severance allowance system
- Liquidation at time of abolishment, with lump-sum payments to covered
employees
- After abolishment, amounts equivalent to current retirement contributions
will be added to bonus payments.
(2) For the retirement pension system, the qualified retirement pension
system will be abolished and converted to a defined-contribution pension
system.
2. Effective Date:
March 31, 2002
(Defined-contribution pension system to be implemented on April 1, 2002)
3. Reasons for Abolishment
(1) Strengthening of the financial structure through elimination of severance
allowance payment obligations
(2) Conformity and consistency with a personnel system based on employee
performance results
• Transition to a system linked to added values of jobs and performance
results, rather than tenure of service
(3) Conversion to the defined-contribution pension system for ensuring portability
of pensions along with the expected mobility of human resources
4. Revision of Business Results Forecast
(1) There will be no revision to the forecast for consolidated business
results for FY2001 (full year ending March 31, 2002).
(2) Revision to the forecast for non-consolidated business results for FY2001
(full year from April 1, 2001 through March 31, 2002):
| Previously announced forecast (A) | 58,700 |
5,000 |
2,500 |
| Current revised forecast (B) | 58,700 |
5,000 |
1,500 |
| Increase/decrease (B-A) | 0 |
0 |
△1,000 |
| Rate of increase/decrease (%) | 0 |
0 |
△ 40 |
Reference Period FY2000 (term ended March 2001) |
52,185 |
4,353 |
2,170 |
5. Reasons for the Revision
(1) Consolidated business results
The company's non-consolidated business results are expected to be lower
than the initial plan for the reasons listed below. However, due to the
expected posting of an adjusted amount of approximately ¥1.0 billion in
corporate and other taxes, which will be derived from deferred tax assets
recognized beginning this term at Brainyworks, Ltd., a consolidated subsidiary
of the company, the forecast for full-year consolidated business results
has not been revised.
(2) Non-consolidated business results
Since the abolishment of the retirement allowance system is expected to
necessitate the posting of an extraordinary loss of ¥1.6 billion (impact
of approximately ¥1.0 billion on net income) for this fiscal year (ending
March 31, 2002) along with the liquidation of the lump-sum severance system,
the forecast of business results has been revised as outlined above.
[Remarks about this press release] In case where the information contained in these documents falls within the definition of "Material Information" under the Securities and Exchange Law of Japan, Article 166, Paragraph 2, if you read these documents before the time of "Publication" (which is defined under the Securities and Exchange Law of Japan and the Enforcement Ordinance, Article 30, as twelve hours after release; i.e. approximately 3:00 a.m. on Feb 27, 2002 [JST]), you and other persons who come to know the contents of these documents may be prohibited from purchasing, selling or making other transactions of ISID's stocks or other securities before the time of Publication. |
