Nikon 2002 Annual Report Download - page 30

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¥5,412 million as of March 31, 2002 and 2001, respectively. Under the Code, companies may issue new common shares to existing shareholders
without consideration as a stock split pursuant to a resolution of the Board of Directors. Prior to October 1, 2001, the amount calculated by divid-
ing the total amount of shareholders’ equity by the number of outstanding shares after the stock split could not be less than ¥50. The revised
Code eliminated this restriction.
Prior to October 1, 2001, the Code imposed certain restrictions on the repurchase and use of treasury stock. Effective October 1, 2001, the
Code eliminated these restrictions allowing companies to repurchase treasury stock by a resolution of the shareholders at the general sharehold-
ers meeting and dispose of such treasury stock by resolution of the Board of Directors after March 31, 2002. The repurchased amount of treasury
stock cannot exceed the amount available for future dividend plus amount of stated capital, additional paid-in capital or legal reserve to be
reduced in the case where such reduction was resolved at the general shareholders meeting.
The Code permits companies to transfer a portion of additional paid-in capital and legal reserve to stated capital by resolution of the Board of
Directors. The Code also permits companies to transfer a portion of unappropriated retained earnings, available for dividends, to stated capital by
resolution of the shareholders.
On March 1, 2002, the Company made Tochigi Nikon Corporation a wholly owned subsidiary through exchange offer procedures. The share
exchange ratios were 1 common share of Tochigi Nikon Corporation for 0.58 shares of the Company. As a result, 17,748 shares of the Company’s
common stock were issued and additional-paid in capital was increased by ¥14 million ($111 thousand).
Dividends are approved by the shareholders at a meeting held subsequent to the fiscal year to which the dividends are applicable. Semiannual
interim dividends may also be paid upon resolution of the Board of Directors, subject to certain limitations imposed by the Code.
The stock option plan provides for granting options to directors and employees to purchase up to 60 thousand shares and 39 thousand
shares, respectively, of the Company’s common stock in the period from June 29, 2003 to June 28, 2011. The options will be granted at an exer-
cise price of 105 percent of the higher of the average of daily closing prices on the market of the Company’s common stock during the month pro-
ceeding the month in which the option is issued, and the closing price of the Company’s stock on the market on the day the option is issued.
Under the Code, the amount available for dividends is based on retained earnings as recorded on the Company’s books. At March 31,2002,
retained earnings as recorded on the Company’s books were ¥56,493 million ($423,959 thousand), which was available for future dividends sub-
ject to the approval of the shareholders and legal reserve requirements.
9. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses for the fiscal years ended March 31, 2002 and 2001 principally consisted of the following:
Thousands of
Millions of Yen U.S. Dollars
2002 2001 2002
Advertising expenses ¥27,182 ¥19,655 $203,995
After service costs 2,533 18,387 19,012
Provision of warranty costs 6,366 6,034 47,777
Service revenue received (30,812)
Employees’ salaries 29,988 27,152 225,048
Employees’ retirement benefit plan 3,663 2,951 27,490
Employees’ bonuses and others 14,653 14,662 109,965
Research and development costs 27,313 22,794 204,977
10. INCOME TAXES
The Company and its domestic subsidiaries are subject to Japanese national and local income taxes, which, in the aggregate, resulted in a normal
effective statutory tax rate of approximately 42 per cent. for the respective years.
The tax effects of significant temporary differences which result in deferred tax assets and liabilities, which were presented in other current
assets, investments and other assets, other current liabilities and long-term liabilities at March 31, 2002 and 2001, were as follows: