Mazda 2016 Annual Report Download - page 63

11 CONTINGENT LIABILITIES
Contingent liabilities as of March 31, 2016 and 2015 were as follows:
Millions of yen
Thousands of
U.S. dollars
As of March 31 2016 2015 2016
Guarantees of loans and similar agreements ¥8,825 ¥9,591
$78,097
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 dividends. 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 potentially 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 28, 2016, the cash dividends shareholders approved amounting
to ¥8,967 million ($79,354 thousand). Such appropriations have not been accrued in the consolidated
financial statements as of March 31, 2016. This type of appropriations is recognized in the period
in which they are approved by the shareholders.
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, 2016 and 2015 were comprised as follows:
Millions of yen
Thousands of
U.S. dollars
For the years ended March 31 2016 2015 2016
Loss on sales and retirement of property,
plant and equipment, net ¥ (5,869) ¥(5,649) $ (51,938)
Rental income 2,162
1,927 19,133
Loss on sale of receivables (1,814)
(1,091) (16,053)
Impairment loss (1,165)
(2,495) (10,310)
Foreign exchange gain/(loss) (16,026)
432 (141,823)
Gain on sale of investment securities 211
— 1,867
State subsidy 160
— 1,416
Reserve for warranty expenses(*)(40,708)
— (360,248)
Gain on reversal of reserve for loss on business of
subsidiaries and affiliates —
6,131 —
Loss on business of subsidiaries and affiliates (1,971)
(1,149) (17,442)
Reserve for loss on business of subsidiaries
and affiliates (6,909)
— (61,142)
Reserve for environmental measures (2)
(107) (18)
Other (1,334)
670 (11,805)
Total ¥(73,265)
¥(1,331) $(648,363)
(*) With regard to the specific airbag inflator installed in a part of Mazda vehicles, which were manufactured and sold by the Group, the Company
posted the reserve for product warranties in other expenses, since they are likely to be its liability and the amount of the loss can be
reasonably estimated.
14 INCOME TAXES
The effective tax rate reflected in the consolidated statements of income for the years ended
March 31, 2016 and 2015 differs from the statutory tax rate for the following reasons.
For the years ended March 31 2016 2015
Statutory tax rate 32.8 %
35.4 %
Valuation allowance (9.9)
(11.3)
Equity in net income of affiliated companies (4.3)
(2.9)
D ecrease in deferred tax assets at end of year due to the change in
tax rate 2.6 1.5
Other (3.4) 0.1
Effective tax rate 17.8 %
22.8%
Notes to Consolidated Financial Statements
MAZDA ANNUAL REPORT 2016
Financial Section
Message from
Management
Review of Operations
Drivers of Value Creation
Foundations Underpinning
Sustainable Growth
Contents