Square Enix 2013 Annual Report Download - page 34

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5. Basic Policy for Profit Distribution and Dividends
The Group has made the return of profits to shareholders one of its
most important management tasks. The Group prioritizes investments
that will enhance the value of the Group and toward this end maintains
internal reserves to finance efforts that include expanding existing
businesses, developing new businesses and restructuring business
segments. Funds remaining after the allocation of retained earnings
are appropriated for dividends, keeping in mind returns to shareholders
and seeking an optimal balance of stable returns linked to operating
performance.
For dividends applicable to the fiscal year ending March 31, 2014,
the Company is looking at a consolidated payout ratio target of
30%. However, if net income per share (based on the number of
shares outstanding at the end of the fiscal year; hereafter, the same
shall apply) falls below ¥100, the annual dividend will be set at ¥30
per share (exceeding the consolidated payout ratio target of 30%) in
line with management’s view to ensure stable dividends. Furthermore,
if net income per share should fall below ¥30, the annual dividend
will be whatever the net income per share amount is (for a consolidated
payout ratio of 100%), but in principle ¥10 will be the lower limit for
the annual per-share dividend.
Date of resolution Total dividends
(Millions of yen)
Dividends per share
(Yen)
November 6, 2012
Resolution by the Board of
Directors
¥1,150 ¥10
May 17, 2013
Resolution by the Board of
Directors
2,301 20
6. Risk Factors
The Group identifies the items listed below as potential risk factors
that could affect operating results. Forward-looking statements are
in accordance with management’s judgment as of June 30, 2013.
(1) Changes in the economic environment
In the event of a harsh downturn in the economy causing consumer
expenditures to fall, demand for the Group’s products and services
in the entertainment field may decline. Such circumstances may
lead to an adverse impact on the Group’s business performance.
(2) The Group’s ability to respond to changes in consumer
preferences in the digital content market and the rapid
progress of innovative technology
It is possible that the Group’s business performance will be affected
if the Group is unable to respond promptly and accurately to the
major reforms outlined in 4. Strategic Outlook, Issues Facing
Management and Future Direction.
(3) Changes in game platforms and the Group’s response
The Group’s digital entertainment business could be affected by
diversification, the trend toward increasingly advanced functions
and the general transition of platforms for home-use video game
consoles, smartphones and everyday digital devices, which would
alter the forms by which the Group supplies content, the existing
business model and profitability.
(4) Securing human resources to execute the Group’s growth
strategies concentrating on the creation of new content
and the promotion of global businesses
The Group has been making rapid progress in expanding its
business operations. Delays in securing ideally suited human
resources may adversely affect the Group’s business performance.
(5) Expansion in the Group’s international business
operations
As the Group pursues expansion of its international business
operations, a variety of factors present in the countries and regions
in which the Group operates may affect its business performance.
Such factors include market trends, the political situation, economic
climate, laws and regulations, social conditions, cultural factors,
religious factors and customs.
Management Discussion and Analysis of Operating Results and Financial Position (JPNGAAP)