Suzuki 1998 Annual Report Download - page 25

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7. Shareholders’ equity
Under the Commercial Code of Japan, at least 50 per cent of the issue price of new
shares, with a minimum of the par value, is required to be designated as common stock, and
proceeds in excess of the amounts designated as common stock may be transferred to
additional paid-in capital.
It also provides that an amount equivalent to at least 10 per cent of cash dividends and
directors' and statutory auditors' bonuses shall be appropriated to a legal reserve until such
reserve equals 25 per cent of common stock. The reserve is not available for dividends but
may be used to reduce a deficit by resolution of the shareholders or may be capitalized in the
form of share split of common stock by resolution of the Board of Directors.
Operating lease transactions as of 31st March, 1998 were as follows:
8. Contingent liabilities
As of 31st March, 1998, the Company and certain consolidated subsidiaries had the
following contingent liabilities:
Millions of Thousands of
yen U.S. dollars
Guarantee of indebtedness of non-consolidated
subsidiaries, affiliates and others ..................................... ¥ 3,358 $ 25,422
Trade notes discounted .......................................................... 3,203 24,249
¥ 6,561 $ 49,671
9. Income taxes
The effective income tax rates on income before income taxes in the consolidated financial
statements differ from the normal statutory rate in Japan. The principal reasons for such
differences are (a) not to provide for deferred income taxes arising from all of the timing
differences between financial and tax reporting; (b) certain expenses which are not
deductible for income tax purposes; and (c) tax credit for certain qualified expenditures.
10.Segment Information
(a)Information by industry segment
The Company and certain consolidated subsidiaries operate mainly in a single industry
known as motor business (included motorcycle business). In the fiscal years of both 1998
and 1997, motor business represented more than 90 per cent, all of gross assets, net
sales and operating profit.
Thousands of
Millions of yen U.S. dollars
1998 1997 1998
Future lease payments
Within one year .......................................... ¥ 255 — $ 1,933
More than one year .................................... 1,101 — 8,340
1,357 — 10,274
Future lease revenues
Within one year .......................................... 32 — 246
More than one year .................................... 102 — 779
¥ 135 — $ 1,025