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68 NIKON REPORT 2016
11. Selling, General and Administrative Expenses
Selling, general and administrative expenses for the years ended March 31, 2015 and 2016 principally consisted of the following:
Millions of Yen
Thousands of
U.S. Dollars
2015 2016 2016
Advertising expenses ¥70,269 ¥61,058 $541,870
Provision for doubtful receivables (71) (405) (3,597)
Provision of warranty costs 2,984 3,703 32,866
Employees’ salaries 35,028 37,977 337,034
Net periodic retirement benet cost 3,142 3,987 35,385
Employees’ bonuses and others 17,360 20,262 179,817
Research and development costs 66,730 66,781 592,659
12. Income Taxes
The Company and its domestic subsidiaries are subject to Japanese national and local income taxes, which, in the aggregate, resulted in a normal
effective statutory tax rate of approximately 35.6% and 33.1% for the years ended March 31, 2015 and 2016, respectively.
The tax effects of signicant temporary differences and tax loss carryforwards, which resulted in deferred tax assets and liabilities at March 31,
2015 and 2016 were as follows:
Millions of Yen
Thousands of
U.S. Dollars
2015 2016 2016
Deferred tax assets:
Write-down of inventories ¥ 24,339 ¥ 22,813 $ 202,456
Liability for employees’ retirement benets 2,612 4,222 37,470
Depreciation and amortization 14,271 12,601 111,826
Impairment loss 5,982 6,838 60,688
Accrued bonuses 3,848 3,591 31,867
Tax loss carryforwards 5,342 5,570 49,436
Other 19,845 20,684 183,562
Subtotal 76,239 76,319 677,305
Less valuation allowance (12,682) (13,763) (122,139)
Total ¥ 63,557 ¥ 62,556 $ 555,166
2005 Stock
Options
2007 Stock
Options
2007 Stock
Options
2008 Stock
Options
2009 Stock
Options
2010 Stock
Options
2012 Stock
Options
2012 Stock
Options
2013 Stock
Options
2014 Stock
Options
2015 Stock
Options
Vested
March 31, 2015-Outstanding 57,000 68,000 21,700 110,300 65,100 64,000 95,700 108,300 119,600 177,400
Vested 207,000
Exercised 44,000 700
Canceled 13,000 6,000
March 31, 2016-Outstanding 62,000 21,000 110,300 65,100 64,000 95,700 108,300 119,600 177,400 207,000
Exercise price ¥ 1,273 ¥ 2,902 ¥ 1 ¥ 1 ¥ 1 ¥ 1 ¥ 1 ¥ 1 ¥ 1 ¥ 1 ¥ 1
Average stock price at exercise ¥ 1,667 ¥ 1,551
Fair value price at grant date ¥ 840 ¥ 3,259 ¥ 734 ¥ 1,408 ¥ 1,527 ¥ 2,037 ¥ 1,726 ¥ 1,632 ¥ 1,183 ¥ 1,040
The assumptions used to measure the fair value of 2016 Stock Options which were granted on July 28, 2015:
Estimate method: Black-Scholes option pricing model
Volatility of stock price: 44.086%
Estimated remaining outstanding period: 15 years
Estimated dividend: ¥32.00 per share
Risk-free interest rate: 0.765%