Suzuki 2006 Annual Report Download - page 43

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SUZUKI MOTOR CORPORATION
NOTE 13: Contingent liabilities
As of March 31, 2006, the Company and certain consolidated subsidiaries had the following
contingent liabilities:
Millions of Thousands of
yen U.S. dollars
Guarantee of indebtedness of affiliates and others .
¥5,748 $48,932
Trade notes discounted ....................................... 1,369 11,662
¥7,118 $60,594
Operating lease transactions as of March 31, 2006 and 2005 were as follows:
As a lessee Thousands of
Millions of yen U.S. dollars
2006 2005 2006
Future lease payments
Due within one year ..................................... ¥224 ¥227 $1,914
Thereafter ..................................................... 183 340 1,566
¥408 ¥567 $3,480
Thousands of
Millions of yen U.S. dollars
2006 2005 2006
Future lease revenues
Due within one year ..................................... ¥53 ¥ 46 $457
Thereafter ..................................................... 36 70 311
¥90 ¥117 $769
As a lessor
NOTE 12: Shareholders’ equity
The Commercial Code requires that at least 50% of the issue price of new shares be included in a
company’s stated capital. The portion to be recorded as stated capital is determined by resolution of
the board of directors. Proceeds in excess of the stated capital should be credited to “additional
paid-in capital”.
The Commercial Code provides that an amount equivalent to a minimum of 10% of cash dividends
and bonuses paid to directors and corporate auditors should be appropriated as a legal reserve
until the reserve reaches a certain limit, defined as 25% of the stated capital less certain capital
reserves.
The Commercial Code allows both the capital reserve, including “additional paid-in capital”, and
the legal reserve to be transferred to the stated capital, by resolution of the board of directors, or to
be used to reduce a deficit following the approval at a shareholders’ meeting. In addition, under the
Commercial Code, the capital reserve and the legal reserve may be available for dividends to the
extent that the total of the capital and legal reserve taken together do not fall below 25% of the
stated capital. The legal reserves of the Company and its subsidiaries are included in “retained
earnings” on the consolidated balance sheet and are not shown separately.
According to the revision of the Commercial Code, the Articles of the Company allows to
repurchase treasury stock and dispose of such treasury stock by resolution of the board of directors.
CONSOLIDATED FINANCIAL STATEMENTS OF 2006
43