Oki 2004 Annual Report Download - page 36

A reconciliation between the statutory and effective tax rate for the year ended March 31, 2002 is not provided (as permitted) because the difference
between the two tax rates was less than 5% of the statutory tax rate.
Statutory rate
Additions to (deductions from) income taxes resulting from:
Increase in valuation allowance for deferred tax assets
Intercompany profit in excess of taxable income
Permanent nondeductible differences such as entertainment expenses
Permanent differences unrecognized for tax purposes such as dividends received
Net operating loss carryforwards at beginning of year of consolidated subsidiaries
for initial consolidated tax return
Decrease in deferred tax assets resulting from change in enterprise tax rate
Per capita portion of inhabitants’ taxes
Other, net
Effective tax rate
2004 2003
42.0%
(38.2)
—
19.5
—
—
—
6.7
6.3
36.3%
42.0%
(55.4)
(9.4)
(13.4)
4.3
(8.7)
(37.7)
—
(0.3)
(78.6)%
The Commercial Code of Japan (the “Code”) provides that an amount
equal to at least 10% of the amounts to be disbursed as distributions of
earnings be appropriated to the legal reserve until the sum of the reserve
and additional paid-in capital equals 25% of the common stock account.
The Code also stipulates that, to the extent that the sum of the additional
paid-in capital account and the legal reserve exceeds 25% of the
common stock account, the amount of any such excess is available for
appropriation by resolution of the shareholders.
The retained earnings account in the accompanying consolidated
financial statements at March 31, 2004 included a legal reserve of ¥8,141
million ($77,535 thousand).
9. Shareholders’ equity
Depreciation expenses of property, plant and equipment for the years ended March 31, 2004, 2003 and 2002 were as follows:
10. Depreciation
2004
Thousands of U.S. dollars
2004 2002
Millions of yen
$ 232,780¥ 24,441 ¥ 37,593
2003
¥ 29,958
Income taxes applicable to the Company and its domestic consolidated subsidiaries comprised corporation tax, inhabitants’ taxes and enterprise tax,
which, in the aggregate, resulted in a statutory tax rate of approximately 42% for the years ended March 31, 2004, 2003 and 2002. Income taxes of the
foreign consolidated subsidiaries are based generally on the tax rates applicable in their countries of incorporation.
A reconciliation between the statutory tax rate and the effective tax rates as a percentage of income before income taxes for the years ended March 31,
2004, 2003 and 2002 is summarized as follows:
Net deferred tax assets are included in the consolidated balance sheets as follows:
Other current assets
Other assets
Other current liabilities
Net deferred tax assets
2004
Thousands of U.S. dollars
2004 2003
Millions of yen
$ 102,711
196,117
—
$ 298,829
¥ 10,784
20,592
—
¥ 31,377
¥ 9,924
26,260
—
¥ 36,184
36 ANNUAL REPORT 2004