Square Enix 2006 Annual Report Download - page 63

6 0 6 1
A n n u a l R e p o r t 2 0 0 6
The total amount of undistributed earnings of foreign
subsidiaries for income tax purposes was approximately ¥2,273
million, ¥4,377 million and ¥5,128 million for the years ended
March 31, 2006, 2005 and 2004, respectively. It is the Com-
pany’s intention to reinvest undistributed earnings of its foreign
subsidiaries and thereby indefinitely postpone their remittance.
Accordingly, no provision has been made for the Japanese
income taxes which may become payable if undistributed
earnings of foreign subsidiaries were paid as dividends to
the Company.
1 7 . S t o c k h o ld e r s ’ E q u it y
Merger
On April, 2003, the Company issued 51,167,293 shares of
common stock in exchange for shares of former Square as a
result of the statutory merger. The merger was accounted for
using “ pooling of interest method of accounting” for JCC pur-
poses, and accordingly, the stockholders’ equity of liquidated
Square was combined with that of the Company. The Company
made cash payments to stockholders of former Square in the
total amount of ¥4,153 million in lieu of dividend for the final
year of Square ended March 31, 2003.
Dividend
Both the JCC and the JCL require that dividends declared to be
paid out of retained earnings of the Company and such retained
earnings available for dividend shall be calculated in accordance
with the related JCC or JCL requirements and the JPNGAAP.
Comprehensive Income
Accumulated other comprehensive (loss) income as of March
31, 2006 and 2005 are as follows:
Thousands of
Millions of yen U.S. dollars
2006 2005 2006
Foreign currency translation adjustments:
Balance, beginning of year ¥ (907) ¥(956) $(7,731)
Aggregate adjustment for the year
resulting from translation of foreign
currency financial statements 963 49 8,195
Balance, end of year ¥0,056 ¥(907) $(0,464
Net unrealized gains on
available-for-sale securities:
Balance, beginning of year ¥0,428 ¥(319 $(3,650
Net increase 59 109 505
Balance, end of year ¥0,487 ¥(428 $(4,155
Total accumulated other
comprehensive income:
Balance, beginning of year ¥ (479) ¥(637) $(4,081)
Adjustments for the year 1,022 158 8,700
Balance, end of year ¥0,543 ¥(479) $(4,619
Tax effects allocated to each component of other compre-
hensive income (loss) and adjustments are as follows:
Millions of yen
Pretax Tax benefit Net of tax
2006 amount (expense) amount
Foreign currency translation
adjustments ¥963 ¥— ¥963
Net unrealized gain on
available-for-sale securities:
Unrealized gain arising during
the year 145 86 59
Less: reclassification for gain
included in net income ———
Net unrealized gain ¥145 ¥86 ¥059
Thousands of U.S. dollars
Pretax Tax benefit Net of tax
2006 amount (expense) amount
Foreign currency translation
adjustments $8,195 — $8,195
Net unrealized gain on
available-for-sale securities:
Unrealized gain arising during
the year 1,242 737 505
Less: reclassification for gain
included in net income ———
Net unrealized gain $1,242 $737 $0,505
Millions of yen
Pretax Tax benefit Net of tax
2005 amount (expense) amount
Foreign currency translation
adjustments ¥049 — ¥049
Net unrealized gain on
available-for-sale securities:
Unrealized gain arising during
the year 268 ¥159 109
Less: reclassification for gain
included in net income — — —
Net unrealized gain ¥268 ¥159 ¥109
Millions of yen
Pretax Tax benefit Net of tax
2004 amount (expense) amount
Foreign currency translation
adjustments ¥(999) — ¥(999)
Net unrealized gain (loss) on
available-for-sale securities:
Unrealized gain (loss) arising during
the year 539 ¥220 319
Less: reclassification for gain (loss)
included in net income (39) (16) (23)
Net unrealized gain (loss) ¥(500 ¥204 ¥(296