Casio 2009 Annual Report Download - page 46

44 CASIO COMPUTER CO., LTD.
Notes to Consolidated Financial Statements Years ended March 31, 2009 and 2008 Casio Computer Co., Ltd. and Subsidiaries
2. Accounting procedures applied to intra-group transactions
Casio Micronics Co., Ltd. made into a wholly-owned subsidiary of the Company through share exchange
(1) Name of the company subject to intra-group transactions and the lines of the business carried out by the company; legal form of
the transaction, name of the company after transaction and outline of the transaction including the transaction purpose
1) Name of company subject to intra-group transaction:
Casio Micronics Co., Ltd.
2) Lines of business:
Research, development, manufacture and sale of electronics components
(2) Legal form
Share exchange with the purpose of making Casio Micronics a wholly-owned subsidiary of the Company
(3) Name of the company after transaction:
Unchanged
(4) Outline of the transaction including the transaction purpose
1) Purpose of the intra-group transaction
Casio believes that the conversion of Casio Micronics into a wholly owned Casio subsidiary through share exchange will
create a framework for rapid and flexible operational reform including possible alliances with other companies in the Bump-
processing business and would benefit the enterprise value of the entire group.
2) Outline of the intra-group transaction
Based on the share exchange contract signed on May 16, 2008, Casio, with August 1, 2008, as date of entry into effect,
arranged the transfer to Casio of all Casio Micronics shares held by Casio Micronics shareholders as of July 31 (excluding
Casio). In return, Casio Micronics’s shareholders (excluding Casio) received allocations of common shares in Casio, and Casio
Micronics became a wholly owned subsidiary of Casio.
3. Accounting procedures for the intra-group transaction
In line with the stipulations in the “Accounting Standards for Business Combinations” and the “Revised Guidance on Accounting
Standard for Business Combinations and Accounting Standard for Business Divestitures (regarding intra-group transactions),” the
Company carried out share exchanges with minority shareholders of Casio Micronics.
4. Additional investments in the subsidiary
(1) Acquisition cost
Millions of Yen
Thousands of
U.S. Dollars
Ordinary shares of the Company ............................................................................................ ¥2,062 $21,041
Acquisition cost ..................................................................................................................... 2,062 21,041
(2) Share exchange ratio
Casio has allocated 0.4 shares of common stock for every one share of Casio Micronics common stock. There was no allocation
of common stock in Casio Micronics held by Casio.
(3) Calculation of the share exchange ratio
The Company and Casio Micronics made separate requests for the assessment of the fair value of the shares issued by Casio
Micronics to independent third parties (the Company made a request to Ernst & Young Transaction Advisory Services Co., Ltd.,
and Casio Micronics to Daiwa Securities SMBC Co., Ltd.) Taking into full consideration the interests of the minority shareholders,
the Company carried out extensive negotiations with Casio Micronics to determine the appropriate exchange rate within the
ranges calculated by the third-party organizations. As a result, the two parties reached an agreement.
(4) Number of shares of the Company to be delivered and their value:
1,430,374 shares worth ¥2,062 million ($21,041 thousand)
(5) Goodwill generated from the share exchange deals
1) Value of goodwill: ¥2,006 million ($20,469 thousand)
2) Reason for the recognition of goodwill
A goodwill amount of ¥2,006 million ($20,469 thousand) was recognized, as the acquisition cost for the ordinary shares of
Casio Micronics exceeded the value of shares held by minority shareholders.
3) Method and period for amortization of goodwill:
Amortized on a straight-line basis over five years
19. Subsequent Events
At the annual shareholders’ meeting held on June 26, 2009, the Company’s shareholders approved the payment of a cash dividend
of ¥23.00 ($0.23) per share aggregating ¥6,380 million ($65,102 thousand) to shareholders of record as of March 31, 2009.