Toshiba 2004 Annual Report Download - page 62

60
earnings of the foreign subsidiaries not subject to deferred tax liabilities were ¥95,908 million ($904,792 thousand),
and ¥107,328 million, respectively. It is not practicable to estimate the amount of the deferred income tax liabilities
on such earnings.
16. ISSUANCE OF STOCK BY A SUBSIDIARY
In March 2004, Toshiba Samsung Storage Technology Corporation (“ TSST” ), issued 294 shares of its common stock to
Samsung Electronics Co., Ltd. for ¥13,713 million ($129,368 thousand). TSST is engaged in the business of product
development, manufacturing outsourcing and sales of optical disk drives and was established in December 2003 as a
wholly owned subsidiary of the Company. As a result of this transaction, the Company recognized a gain of ¥6,391
million ($60,292 thousand), representing the excess of issuance price per share of ¥47 million ($443 thousand) over
its average carrying amount of the net equity held in TSST. The gain from stock issuance by TSST is included under
the caption Other income in the accompanying statement of income for the year ended March 31, 2004. The
transaction decreased the Company’s interest in TSST to 51%.
17. SHAREHOLDERS’ EQUITY
> RETAINED EARNINGS Retained earnings at March 31, 2004 and 2003 include a legal reserve of ¥13,122 million
($123,792 thousand) and ¥12,869 million, respectively. The Japanese Commercial Code provides that an amount
equal to at least 10 percent of cash dividends and other distributions from retained earnings paid by Toshiba
Corporation and its Japanese subsidiaries be appropriated as a legal reserve. No further appropriations are required
when the total amount of the additional paid-in capital and the legal reserve equals 25 percent of their respective
stated capital. The Japanese Commercial Code also provides that to the extent that the sum of the additional paid-in
capital and the legal reserve exceeds 25 percent of the stated capital, the amount of the excess (if any) is available for
appropriations by the resolution of the shareholders.
The amount of retained earnings available for dividends is based on Toshiba Corporation’s retained earnings
determined in accordance with generally accepted accounting principles in Japan and the Japanese Commercial Code.
Retained earnings at March 31, 2004 do not reflect current year-end dividends of ¥9,650 million ($91,038 thousand)
which will be payable in June 2004.
Retained earnings at March 31, 2004 included the Company’s equity in undistributed earnings of affiliated
companies accounted for by the equity method in the amount of ¥20,498 million ($193,377 thousand).
> ACCUMULATED OTHER COMPREHENSIVE LOSS An analysis of the changes in accumulated other comprehensive
loss, net of tax, for the years ended March 31, 2004 and 2003 is shown below:
Thousands of
Millions of yen U.S. dollars
March 3 1 2004 2003 2004
Unrealized gains on securities:
Balance at beginning of year ¥ 15,636 ¥ 25,186 $ 147,510
Current year change 11,189 (9,550) 105,556
Balance at end of year ¥ 26,8 25 ¥ 15,636 $ 253,066
Foreign currency translation adjustments:
Balance at beginning of year ¥ (59,5 89) ¥ (41,951) $ (56 2,161)
Current year change (19,7 01) (17,638) (185,858)
Balance at end of year ¥ (79,290) ¥ (59,589) $ (748,019)
Minimum pension liability adjustment:
Balance at beginning of year ¥(405,069) ¥(279,939) $(3,821,40 6)
Current year change 170,786 (125,130) 1,611,18 9
Balance at end of year ¥ (234 ,283) ¥(405,069) $(2,210,217)
Unrealized gains (losses) on derivative instruments:
Balance at beginning of year ¥ (1,753) ¥ (2,088) $ (16,537)
Current year change 2,60 7 335 24,594
Balance at end of year ¥ 854 ¥ (1,753) $ 8,05 7