Pioneer 2010 Annual Report Download - page 42

9. Equity
Since May 1, 2006, Japanese companies have been subject
to the Company Law of Japan (the “Company Law”). The
significant provisions in the Company Law that affect financial
and accounting matters are summarized below:
a. Dividends
Under the Company Law, companies can pay dividends at any
time during the fiscal year in addition to the year-end dividend
upon resolution of the shareholders meeting. For companies
that meet certain criteria such as; (1) having a board of direc-
tors, (2) having independent auditors, (3) having a board of
corporate auditors, and (4) the term of service of directors is
prescribed as one year rather than two years by its articles of
incorporation, the board of directors may declare dividends
(except for dividends in kind) at any time during the fiscal year if
the company has prescribed so in its articles of incorporation.
Semiannual interim dividends may also be paid once a
year upon resolution by the board of directors if the articles
of incorporation of the company so stipulate. The Company
Law provides certain limitations on the amounts available for
dividends or the purchase of treasury stock. The limitation is
defined as the amount available for distribution to the share-
holders, but the amount of net assets after dividends must
be maintained at no less than ¥3 million.
b. Increases/Decreases and Transfer of Common
Stock, Reserve and Surplus
The Company Law requires that an amount equal to 10% of
dividends must be appropriated as an additional paid-in
capital (a component of capital surplus) or as a legal reserve
(a component of retained earnings) depending on the equity
account charged upon the payment of such dividends until
the aggregate amount of additional paid-in capital and legal
reserve equals 25% of the common stock. Under the
Company Law, the total amount of additional paid-in capital
and legal reserve may be reversed without limitation. The
Company Law also provides that common stock, legal
reserve, additional paid-in capital, other capital surplus and
retained earnings can be transferred among the accounts
under certain conditions upon resolution of the shareholders.
c. Treasury Stock and Treasury Stock
Acquisition Rights
The Company Law also provides for companies to purchase
treasury stock and dispose of such treasury stock by resolu-
tion of the board of directors. The amount of treasury stock
purchased cannot exceed the amount available for distribu-
tion to the shareholders which is determined by a specified
formula. Under the Company Law, stock acquisition rights
are presented as a separate component of equity. The
Company Law also provides that companies can purchase
both treasury stock acquisition rights and treasury stock.
Such treasury stock acquisition rights are presented as a
separate component of equity or deducted directly from
stock acquisition rights.
For the year ended March 31, 2010, the Company issued new shares as follows:
Yen Millions of Yen
Thousands of
U.S. Dollars
Number of New
Shares Issued
(Shares of
Common Stock)
Paid Amount
(Issue Price)
per Share
Aggregate
Paid
Amount
Aggregate
Paid
Amount
International offering 92,000,000 ¥318.16 ¥29,270 $314,730
Third-party allotment to Mitsubishi Electric Corporation 7,530,000 332 2,500 26,882
Third-party allotment to Mitsubishi Chemical Corporation 1,800,000 332 598 6,430
Third-party allotment to Honda Motor Co., Ltd. 14,700,000 170 2,498 26,860
Total 116,030,000 – ¥34,866 $374,902
Millions of Yen Thousands of U.S. Dollars
Increase in
Common
Stock
Increase in
Capital
Surplus
Increase in
Common
Stock
Increase in
Capital
Surplus
International offering ¥14,635 ¥14,635 $157,365 $157,365
Third-party allotment to Mitsubishi Electric Corporation 1,250 1,250 13,441 13,441
Third-party allotment to Mitsubishi Chemical Corporation 299 299 3,215 3,215
Third-party allotment to Honda Motor Co., Ltd. 1,249 1,249 13,430 13,430
Total ¥17,433 ¥17,433 $187,451 $187,451
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PIONEER CORPORATION Annual Report 2010