Olympus 2013 Annual Report Download - page 45

86 OLYMPUS Annual Report 2013 87OLYMPUS Annual Report 2013
15. Net Assets
Under the Japanese Corporate Law (the “Law”), the entire amount paid for new shares is required to be designated as common stock.
However, a company may, by a resolution of its Board of Directors, designate an amount not exceeding one-half of the prices of the
new shares as additional paid-in capital, which is included in capital surplus.
Under the Law, in cases where a 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.
Under the Law, all additional paid-in capital and legal earnings reserve may be transferred to other capital surplus and other 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 fi nancial statements
of the Company in accordance with the Law.
(1) March 31, 2011
A summary of information regarding the consolidated statement of changes in net assets for the year ended March 31, 2011 was as follows:
Total number and class of shares issued and treasury stock
Class of shares
As of
April 1, 2010
(Number of shares)
Increase
(Number of shares)
Decrease
(Number of shares)
As of
March 31, 2011
(Number of shares)
Shares issued:
Common stock ................................................................................................. 271,283,608 — — 271,283,608
Treasury Stock:
Common stock (Notes 1 and 2) ........................................................................ 1,315,105 4,227,268 1,193,425 4,348,948
Notes:
1. The increase in the number of shares of common stock in treasury includes 4,222,700 shares through the purchase of common stock and 4,568 shares through the purchase of stock
less than one trading unit.
2. The decrease in the number of shares of common stock in treasury includes 1,193,425 shares through the exchange of shares with shareholders of ITX Corporation. As a result of this
transaction, ITX Corporation became a wholly owned subsidiary of the Company.
Dividends paid
Resolution Class of shares
Amount of
dividends paid
(Millions of yen)
Dividends
per share
(Yen) Record date Effective date
General Shareholders’ Meeting (June 29, 2010) .............. Common Stock ¥4,049 ¥15.00 March 31, 2010 June 30, 2010
Resolution Class of shares
Amount of
dividends paid
(Millions of yen)
Dividends
per share
(Yen) Record date Effective date
Board of Directors (November 5, 2010) ........................... Common Stock ¥4,050 ¥15.00 September 30, 2010 December 3, 2010
There were dividends whose record date was in the year ended March 31, 2011 but whose effective date was in the year ended March
31,2012.
Resolution Class of shares
Amount of
dividends paid
(Millions of yen)
Dividends
per share
(Yen) Record date Effective date
General Shareholders’ Meeting (June 29, 2011) .............. Common Stock ¥4,004 ¥15.00 March 31, 2011 June 30, 2011
Other
As dividends were already paid in accordance with the procedures based on the resolution by the General Meeting of Shareholders and the
Board of Directors, the amount of retained earnings was determined after subtracting the dividends.
14. Income Taxes
Income taxes applicable to the Company and its domestic consolidated subsidiaries consist of corporate tax, inhabitants’ tax and enterprise
tax, which in the aggregate resulted in normal statutory rates of approximately 40.7%, 40.7% and 38.0% for the years ended March 31,
2011, 2012 and 2013, respectively. Income taxes of foreign consolidated subsidiaries are based generally on tax rates applicable in their
countries of incorporation.
The following table summarizes the reconciliation between the statutory tax rates and the Company’s effective tax rates for consolidat-
ed fi nancial statement purposes for the years ended March 31, 2011 and 2013.
The reconciliation for the year ended March 31, 2012 is not stated as net loss before income taxes was recorded.
2011 2012 2013
Japanese statutory tax rates ................................................................................................................. 40.7% — 38.0%
Non-deductible expenses .............................................................................................................. 8.1 — 2.8
Non-taxable income ...................................................................................................................... — — (3.2)
Effect of lower tax rates applied for overseas subsidiaries .............................................................. (19.3) — (8.0)
Increase in valuation allowance ...................................................................................................... 27.7 — 120.7
Amortization of goodwill ................................................................................................................ 17.0 — 16.1
Effect of reorganization of group structure ..................................................................................... — — (109.9)
Other, net ...................................................................................................................................... 4.2 — 0.4
Effective tax rates ................................................................................................................................. 78.4% — 56.9%
Signifi cant components of deferred tax assets and liabilities as of March 31, 2012 and 2013 were as follows:
Millions of yen
Thousands of
U.S. dollars
2012 2013 2013
Deferred tax assets
Inventories ..................................................................................................................................... ¥ 6,461 ¥ 6,825 $ 72,606
Prepaid expenses .......................................................................................................................... 7,382 5,915 62,926
Accrued bonuses .......................................................................................................................... 5,077 4,782 50,872
Investments in consolidated subsidiaries ....................................................................................... 4,859 3,894 41,426
Unrealized intercompany profi ts ..................................................................................................... 1,873 1,969 20,947
Depreciation of property, plant and equipment ............................................................................... 5,593 6,677 71,032
Amortization of intangible assets ................................................................................................... 4,962 4,620 49,149
Provision for retirement benefi ts ..................................................................................................... 8,092 9,630 102,447
Securities ...................................................................................................................................... 9,873 6,519 69,351
Loss carry forward ......................................................................................................................... 25,121 60,479 643,394
Other ............................................................................................................................................. 21,158 32,612 346,935
Sub-total ....................................................................................................................................... 100,451 143,922 1,531,085
Valuation allowance ....................................................................................................................... (61,026) (97,526) (1,037,511)
Total deferred tax assets ....................................................................................................................... 39,425 46,396 493,574
Prepaid pension expenses ............................................................................................................. (7,961) (6,147) (65,394)
Basis differences in assets acquired and liabilities assumed upon acquisition ................................ (18,785) (17,712) (188,426)
Other ............................................................................................................................................. (10,961) (17,236) (183,360)
Total deferred tax liabilities .................................................................................................................... (37,707) (41,095) (437,180)
Net deferred tax assets ......................................................................................................................... ¥ 1,718 ¥ 5,301 $ 56,394
The “Act for Partial Revision of the Income Tax Act etc. for the Purpose of Creating Taxation System Responding to Changes in Economic
and Social Structures” (Act No. 114 of 2011) and the “Act for Special Measures for Securing Financial Resources Necessary to Implement
Measures for Reconstruction following the Great East Japan Earthquake” (Act No. 117 of 2011) were promulgated on December 2, 2011
and the staged reduction of the national corporate tax rate and a special reconstruction corporate tax were introduced effective for fi scal
years beginning on or after April 1, 2012.
As a result, the effective statutory tax rate used to measure the Company’s deferred tax assets and liabilities was changed from 40.7%
to 38.0% for the temporary differences expected to be realized or settled in the period from April 1, 2012 to March 31, 2015, and from
40.7% to 35.6% for temporary differences expected to be realized or settled from fi scal years beginning April 1, 2015. The effect of the
announced reduction of the effective statutory tax rate was to decrease deferred tax assets, net by ¥741 million and net unrealized losses
onhedging derivatives, net of taxes by ¥13 million and increase deferred income taxes by ¥805 million and net unrealized holding gains
(losses) on available-for-sales securities, net of taxes by ¥77 million as of and for the year ended March 31, 2012.