Olympus 2014 Annual Report Download - page 54

(2) Reduction in Legal Capital Surplus and Legal Earnings Reserve and Appropriation of Surplus
The Company made a resolution at a meeting of its Board of Directors held on May 9, 2014 to place the matter of reduction in legal capital
surplus and legal earnings reserve and appropriation of surplus as a matter to be resolved at the 146th Ordinary General Meeting of
Shareholders held on June 26, 2014 and this was resolved and approved by the general shareholder meeting on that date.
(1) Purpose of reduction in legal capital surplus and legal earnings reserve and appropriation of surplus
The Company recorded accumulated defi cits carried forward of ¥49,435,478,406 ($479,956,101.03) in the non-consolidated fi nan-
cial statements for the fi scal year ended March 31, 2014. To eliminate the defi cit and protect the fl exibility and agility of future capital
policy, pursuant to the provisions of Article 448, Paragraph 1 of the Companies Act, the Company shall reduce the amount of its legal
capital surplus and transfer the same amount to other capital surplus, and it shall reduce the amount of legal earnings reserve and
transfer the same amount to retained earnings carried forward. Moreover, pursuant to the provisions of Article 452 of the Companies
Act, the Company shall transfer the amount of other capital surplus to retained earnings carried forward.
(2) Outline of reduction in legal capital surplus and legal earnings reserve
i) Outline of reduction of amounts of legal capital surplus and legal earnings reserve
Legal capital surplus ¥8,275,923,138 ($80,348,768) out of ¥99,216,032,696 ($963,262,453)
Legal earnings reserve Full amount of ¥6,626,182,483 ($64,331,869)
ii) Line items describing surplus to be increased and respective amounts
Other capital surplus ¥8,275,923,138 ($80,348,768)
Retained earnings carried forward ¥6,626,182,483 ($64,331,869)
(3) Outline of appropriation of surplus
i) Line item describing surplus to be reduced and respective amount
Other capital surplus Full amount of ¥40,931,170,614 ($397,390,006)
ii) Line item describing surplus to be increased and respective amount
Retained earnings carried forward ¥40,931,170,614 ($397,390,006)
(4) Schedule for the reduction in legal capital surplus and legal earnings reserve and appropriation of surplus
i) Date of resolution of Board of Directors May 9, 2014 (Friday)
ii) Date of resolution of General Meeting of Shareholders June 26, 2014 (Thursday)
iii) Effective date June 30, 2014 (Monday)
As this matter applies to the exemption under the provision of Article 449, Paragraph 1 of the Companies Act, the formal objection
procedure of creditors is not required.
(5) Future outlook
As this matter involves a transfer between accounts within the “net assets” section, there is no change to the net assets in total.
Accordingly, there will be no impact on the fi nancial results of the Company.
(3) Prepayment of Debt
In order to reduce interest-bearing debt from the perspective of fi nancial soundness, the Company made prepayment of debt on June 26,
2014 to Mizuho Bank, Ltd.
(1) The amount of prepayment ¥20,000 million ($194 million)
(Balance as of March 31, 2014: ¥20,000 million ($194 million))
(2) Interest rate 1.98% (Fixed interest rate)
(3) Date of borrowing December 26, 2008
(4) Initial terms of repayment Lump sum repayment
(5) Initial date of repayment December 26, 2017
(6) Date of prepayment June 26, 2014
(7) Expenses related to prepayment ¥807 million ($8 million)
(8) Interest saved by prepayment ¥1,388 million ($13 million)
2. Accounting treatment
(1) Gain on transfer of business, which is reported as and included in “Gain on sales of investment securities in subsidiaries and affi liates,
net” for the year ended March 31, 2013
¥17,600 million ($187,234 thousand)
(2) Carrying amount of assets and liabilities of the transferred business consisted of the following:
Millionsofyen
Current assets ................................................................................................................................................................................................. ¥57,427
Non-current assets .......................................................................................................................................................................................... 26,317
Total assets ..................................................................................................................................................................................................... ¥83,744
Current liabilities .............................................................................................................................................................................................. ¥48,208
Non-current liabilities ....................................................................................................................................................................................... 1,832
Total liabilities ................................................................................................................................................................................................... ¥50,040
3. Reportable segment in which divested business was included
Information and Communication Business
4. Estimated net sales and operating income of the divested business in the consolidated statement of operations for the year ended
March 31, 2013
Net sales .......................................................................................................................................................................................... ¥114,243 million
Operating income ............................................................................................................................................................................. ¥ 1,704 million
For the year ended March 31, 2014
There was no material business combination to be disclosed during the year ended March 31, 2014.
35. Subsequent Events
(1) Filing of Lawsuit
A lawsuit has been fi led against the Company. An overview of the lawsuit is as follows:
(1) Date of fi ling lawsuit
April 7, 2014
(2) Names of plaintiffs
Mitsubishi UFJ Trust and Banking Corporation
The Master Trust Bank of Japan, Ltd.
Japan Trustee Services Bank, Ltd.
Trust & Custody Services Bank, Ltd.
The Nomura Trust and Banking Co., Ltd.
State Street Trust and Banking Co., Ltd.
(3) Details of the lawsuit and amount of claim
A total of six banks including Mitsubishi UFJ Trust and Banking Corporation and fi ve other trust banks fi led a lawsuit against the
Company seeking compensation for damages in the total amount of ¥27,915 million ($271,019 thousand) pursuant to Articles 709
and 715 of the Civil Code, Article 350 of the Companies Act and Article 21-2 of the Financial Instruments and Exchange Act, resulting
from the Company’s false statements for the purpose of the Company’s deferral of the recognition of losses contained in the Annual
Securities Reports, Semi-Annual Reports and Quarterly Reports for the periods from the fi scal year ended March 31, 2001 through
the fi rst quarter of the fi scal year ended March 31, 2012.
The amount of compensation for damages claimed consists of ¥27,915 million ($271,019 thousand) and 5% per annum interest
on the amount attributable to each of the shares from the day immediately following the share acquisition trade date of each of the
shares that incurred losses up to the payment of the principal.
(4) Future outlook
The lawsuit’s effect on the fi nancial results of the Company is uncertain since its fi nancial impact is not estimable at this stage.
Notes to the Consolidated Financial Statements
105
OLYMPUS Annual Report 2014
104 OLYMPUS Annual Report 2014