Mazda 2015 Annual Report Download - page 57

1 1 CONTINGENT LIABILITIES
Contingent liabilities as of March 31, 2015 and 2014 were as follows:
Millions of yen
Thousands of
U.S. dollars
As of March 31 2015 2014 2015
Guarantees of loans and similar agreements ¥9,591 ¥14,728
$79,925
12 NET ASSETS
Under Japanese laws and regulations, the entire amount paid for new shares is required to
be designated as common stock. However, a company may, by a resolution of the Board of
Directors, designate an amount not exceeding one half of the price of the new shares as
additional paid-in capital, which is included in capital surplus.
Under the Corporate Law (“the Law”), in cases where dividend distribution of surplus is
made, the smaller of an amount equal to 10% of the dividend or the excess, if any, of 25%
of common stock over the total of additional paid-in capital and legal earnings reserve,
must be set aside as additional paid-in capital or legal earnings reserve. Legal earnings
reserve is included in retained earnings in the accompanying consolidated balance sheets.
Legal earnings reserve and additional paid-in capital could be used to eliminate or reduce
a deficit or could be capitalized by a resolution of the shareholders’ meeting.
Additional paid-in capital and legal earnings reserve may not be distributed as divi-
dends. Under the Law, all additional paid-in capital and legal earnings reserve may be
transferred to other capital surplus and retained earnings, respectively, which are poten-
tially available for dividends.
The maximum amount that the Company can distribute as dividends is calculated
based on the non-consolidated financial statements of the Company in accordance with
the Law.
Cash dividends charged to retained earnings during the fiscal year are year-end cash
dividends for the preceding fiscal year and interim cash dividends for the current fiscal
year. At the annual shareholders’ meeting held on June 23, 2015, the cash dividends
shareholders approved amounting to ¥5,978 million ($49,817 thousand). Such appropria-
tions have not been accrued in the consolidated financial statements as of March 31, 2015.
This type of appropriations is recognized in the period in which they are approved by the
shareholders.
On August 1, 2014, the Company reduced the total number of shares authorized to be
issued by 4.8 billion from 6 billion to 1.2 billion following a partial revision of the Articles of
Incorporation through a resolution at the 148th Ordinary General Meeting of Shareholders
held on June 24, 2014. Also, on August 1, 2014, the Company consolidated its common
stock at a ratio of five shares to one based on a resolution at the Meeting of Shareholders.
As a result, the total number of shares outstanding declined by 2,399,501,920 from
2,999,377,399 to 599,875,479. At the same time, the number of treasury stock declined in
the same ratio.
13 OTHER INCOME / (EXPENSES)
The components of “Other, net” in Other income/(expenses) in the consolidated statements
of income for the years ended March 31, 2015 and 2014 were comprised as follows:
Millions of yen
Thousands of
U.S. dollars
For the years ended March 31 2015 2014 2015
L oss on retirement and sale of property,
plant and equipment, net ¥(5,649) ¥ (4,230) $(47,075)
Rental income 1,927
2,910 16,058
Loss on sale of receivables (1,091)
(972) (9,092)
Loss on impairment of long-lived assets (2,495)
(2,754) (20,792)
Foreign exchange gain/(loss) 432
(42,215) 3,600
Subsidy income (*1) —
224 —
Compensation received for the exercise of
eminent domain 41
123 342
Gain on reversal of reserve for loss from business of
subsidiaries and affiliates 6,131
— 51,092
Loss on business of subsidiaries and affiliates (1,149)
— (9,575)
Reserve for loss from business of affiliates (*2) —
(36,616) —
Reserve for environmental measures (107)
(8) (892)
Other 629
(722) 5,242
Total ¥(1,331)
¥(84,260) $(11,092)
(*1) Restoration and construction subsidy for facilities and equipment of small and medium enterprises in Fukushima prefecture, which was granted
to our consolidated subsidiary, affected by the Great East Japan Earthquake.
(*2) Reserve for loss related to the losses of domestic and foreign subsidiaries’ and affiliates’ businesses.
14 INCOME TAXES
The effective tax rate reflected in the consolidated statements of income for the years ended
March 31, 2015 and 2014 differs from the statutory tax rate for the following reasons.
For the years ended March 31 2015 2014
Statutory tax rate 35.4 %
37.8 %
Valuation allowance (11.3)
(74.3)
Equity in net income of affiliated companies (2.9)
(3.8)
D ecrease in deferred tax assets at end of year due to the change in
tax rate 1.5 3.5
Other 0.1 (0.2)
Effective tax rate 22.8 %
(37.0)%
Mazda Annual Report 2015
55
C
CONTENTS
Growth Strategy
Message from Management
Introduction
Review of Operations
Foundations Underpinning
Sustainable Growth