Isuzu 2005 Annual Report Download - page 27

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Isuzu Motors Limited Annual Report 2005
FINANCIAL SECTION
6. Income Taxes
Accrued income taxes in the balance sheets include corporation taxes,
inhabitant taxes and enterprise taxes.
Income taxes in the statements of operations include corporation
taxes and inhabitant taxes and enterprise taxes.
The significant components of the Company's deferred tax assets and
liabilities as of March 31, 2005 were as follows:
A reconciliation between the normal effective statutory tax rate and
the actual effective tax rates reflected in the accompanying consoli-
dated statements of operations for the years ended March 31, 2005
was as follows:
Thousands of
Millions of yen U.S. dollars
Deferred tax assets:
Retirement benefits
Loss from revaluation of securities and
allowance for doubtful accounts
Accrued expenses
Bonus payment reserve
Inventory write down
Loss carried forward
Unrealized gain
Other
Valuation allowance
Deferred tax liabilities
Reserve for deferred income tax of fixed assets
Depreciation adjustment of foreign subsidiaries
Other
Total deferred tax assets
$ 172,116
780,602
87,497
37,280
9,974
215,047
100,454
381,767
(1,398,752)
(2,245)
(33,869)
(4,801)
$ 345,072
¥ 18,483
83,828
9,396
4,003
1,071
23,093
10,787
40,997
(150,212)
(241)
(3,637)
(515)
¥ 37,057
Deferred tax liabilities:
Reserve for deferred income tax of fixed assets
Unrealized hiding gain on securities
Other
Total deferred tax liabilities
6,797
29,757
7,147
$ 43,704
730
3,195
767
¥ 4,693
2005
Normal effective statutory tax rate
Net valuation allowance
Different tax rate applied to foreign subsidiaries
Retained earnings of foreign subsidiaries
Carry forward deficit of consolidated subsidiaries
Equity in earnings of unconsolidated
subsidiaries and affiliates
Foreign tax credit
Others,net
Actual effective tax rate
7. Shareholders’ Equity
The Code provides that an amount equal to at least 10% of the
amounts to be disbursed as distributions of earnings be appropriated
to the legal reserve until the sum of the legal reserve and additional
paid-in capital equals 25% of the common stock account. The Code
also stipulates that, to the extent that the sum of the additional paid-
in capital account and the legal reserve exceeds 25% of the common
stock account, the amount of any such excess is available for appro-
priation by resolution of the shareholders.
The legal reserves of the consolidated subsidiaries are included
in retained earnings in the accompanying consolidated financial
statements.
The Company’s capital surplus was off-setted with deficit in the
amount of ¥50,000 millions ($465,592 thousands) based on the
approval by the stockholders’ meeting held on December 22, 2004.
The Company issued new common stock due to the exercise of
stock acquisition right. As the effect of the issuance, the Company’s
common stock increased by ¥25,053 millions, the Company’s capi-
tal surplus increased by ¥24,946 millions ($232,299 thousands), and
the Company’s bonds with warrant attached decreased by ¥50,000
million ($462,292 thousands) .
The Company retired Class-II preferred stock with payment to the
shareholders of Class-II preferred stock based on the approval by the
stock holders’ meeting held on December 22, 2004. As the effect of
the retirement of preferred stock, the Company’s common stock and
preferred stock decreased by ¥60,000 millions ($558,711 thousands).
8. Preferred Stock
The Company issued the preferred stock (Class I, Class II, Class III
and Class IV) in the fiscal year 2003. The Company has retired Class-II
preferred stock in fiscal year 2005. Interim dividend shall not be paid
to preferred shareholders or to preferentially registered pledges.
When the amount of dividend to be paid to the preferred sharehold-
ers or preferentially registered pledges in a given business year does
not reach the amount of the preferred dividend, the shortfall will not
be carried over to the next business year for accumulation.
When the residual property of the Company is to be distributed,
¥800 per share of the preferred stocks shall be paid to the preferred
shareholders or to the preferentially registered pledges before the ordi-
nary shareholders or the ordinarily registered pledges.
No other residual property than the above shall not be distributed to
the preferred shareholders or to the preferentially registered pledges.
The Company can always purchase preferred stocks and cancel the
stocks at the purchased price by a profit distributed to shareholders.
The preferred shareholders shall not have a voting right at the General
Meeting of Shareholders.
The Company shall not make the consolidation or division of pre-
ferred stocks unless otherwise stipulated by law.
The Company shall not give preemptive rights, stock acquisition
rights or subscription right of bond with stock acquisition rights to the
preferred shareholders.
Payment of dividends and distribution of residual property to each
40.0%
(37.3)
(5.6)
7.3
5.8
(9.2)
5.6
2.5
9.1