Konica Minolta 2006 Annual Report Download - page 46

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Assets pledged as collateral for short-term debt, long-
term debt and guarantees at March 31, 2006 and 2005 are as
follows:
Thousands of
Millions of yen U.S. dollars
March 31 March 31
2006 2005 2006
Property, plant and
equipment ¥821 ¥887 $6,989
7. Income Taxes
At March 31, 2006 and 2005, significant components of
deferred tax assets and liabilities are as follows:
Thousands of
Millions of yen U.S. dollars
March 31 March 31
2006 2005 2006
Deferred tax assets:
Reserve for retirement
benefits ¥32,417 ¥ 31,309 $ 275,960
Net operating tax loss
carried forward 23,529 17,112 200,298
Elimination of unrealized
intercompany profits 14,807 14,651 126,049
Provision for dissolution
of businesses 14,405 —122,627
Write-down of assets 11,457 7,119 97,531
Depreciation and
amortization 7,446 1,497 63,386
Tax effects related to
investments 6,054 —51,537
Accrued bonuses over
deductible limit 5,621 5,993 47,851
Allowance for doubtful
accounts 3,157 1,693 26,875
Provision for special
outplacement program 2,638 —22,457
Enterprise taxes 1,728 1,556 14,710
Other 13,999 12,285 119,171
Gross deferred tax assets 137,265 93,220 1,168,511
Valuation allowance (52,392) (18,264) (446,003)
Total deferred tax assets 84,872 74,955 722,499
Deferred tax liabilities:
Unrealized gains on
securities (7,689) (4,299) (65,455)
Gains on securities
contributed to employees’
retirement benefit trust (3,161) (3,353) (26,909)
Retained profit of
overseas subsidiaries (2,185) (1,870) (18,600)
Special tax-purpose
reserve for condensed
booking of fixed assets (1,448) (1,440) (12,327)
Other (111) —(945)
Gross deferred tax liabilities (14,596) (10,964) (124,253)
Net deferred tax assets ¥70,276 ¥ 63,991 $ 598,246
Deferred tax liabilities
related to revaluation:
Deferred tax liabilities
on land revaluation ¥(4,042) ¥ (3,926) $(34,409)
At March 31, 2006 and 2005, the reconciliation of the
statutory income tax rate to the effective income tax rate is
as follows:
2006 2005
Statutory income tax rate 40.7% 40.7%
(Reconciliation)
Valuation allowance (95.0) (3.5)
Tax deduction 6.5 (8.6)
Amortization of consolidation
goodwill (9.0) 12.9
Effect of the introduction of
a consolidated tax return system —28.6
Other, net 8.0 7.1
Income tax rate per
statements of income (48.8) 77.2%
8. Research and Development Costs
Research and development costs included in cost of sales and
selling, general and administrative expenses for the years
ended March 31, 2006 and 2005 are ¥67,178 million
(US$571,874 thousand) and ¥65,994 million, respectively.
9. Shareholders’ Equity
As a result of huge losses of ¥116.1 billion (exiting of Photo
Imaging business, loss on impairment of fixed assets and
provision for special outplacement program etc.), the com-
pany reported a net loss of ¥54.3 billion and Shareholders’
equity dropped ¥45.9 billion year on year, to ¥293.8 billion.
Shareholders’ equity per share was ¥553.50 and the equity
ratio was 31.1%.
In view of this situation, on May 11, 2006, the Board of
Director’s meeting approved to continue the suspension of
cash dividends.
10. Contingent Liabilities
The companies were contingently liable at March 31, 2006 for
loan guarantees of ¥2,620 million (US$22,304 thousand), and
as of March 31, 2005 for loan guarantees of ¥2,195 million.
11. Loss on Impairment of Fixed Assets
The companies have recognized loss on impairment of
¥32,752 million ($278,812 thousand), for the following group
of assets as of March 31, 2006. Loss on impairment of fixed
assets ¥28,609 million ($243,543 thousand) concerning man-
ufacturing and sales of photographic paper, film, etc was
included in “Loss on discontinued operations”.