Pioneer 2014 Annual Report Download - page 44

b. Increases/Decreases and Transfer of
Common Stock, Reserve and Surplus
The Companies Act 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 Companies Act, the total amount of additional
paid-in capital and legal reserve may be reversed
without limitation. The Companies Act 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’
meeting.
c. Treasury Stock and Treasury Stock
Acquisition Rights
The Companies Act also provides for companies to
purchase treasury stock and dispose of such treasury
stock by resolution of the board of directors. The
amount of treasury stock purchased cannot exceed
the amount available for distribution to the share-
holders which is determined by a specified formula.
Under the Companies Act, stock acquisition rights
are presented as a separate component of equity.
The Companies Act 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.
d. Issuance of New Shares Through Third-Party
Allotments
(a) Capital business alliance with NTT DOCOMO, INC.
and issuance of new shares through third-party
allotment
Pursuant to the resolution at the Board of Direc-
tors’ meeting held on May 13, 2013, the Company
issued new shares through a third-party allotment
to NTT DOCOMO, INC., with the aim to build the
business alliance smoothly with respect to the
business related to cloud information services for
automobile users, as follows:
(1) Number of shares newly issued:
25,773,100 shares of common stock
(2) Issue price: ¥194 per share ($1.88)
(3) Total amount issued:
¥4,999,981,400 ($48,544 thousand)
(4) Issue price transferred to capital:
¥97 per share ($0.94)
(5) Total issue amount transferred to capital:
¥2,499,990,700 ($24,272 thousand)
(6) Payment date: June 28, 2013
(7) Allottee: NTT DOCOMO, INC.
(8) Purposes:
The Company expects to use the fund for (1) the
investment to strengthen technology in respect of
the service engine, the contents, and collection and
utilization of the probe information (vehicle tracking
data), in the cloud infrastructure, which provides
services in connection with Intelligent Transport
Systems; (2) investment relating to external sales
using the cloud infrastructure; and (3) investment in
connection with the expansion of existing business
utilizing the cloud infrastructure.
(b) Strengthening capital business alliance with
Mitsubishi Electric Corporation and issuance of new
shares through third-party allotment
Pursuant to the resolution at the Board of Directors’
meeting held on May 13, 2013, the Company issued
new shares through a third-party allotment to
Mitsubishi Electric Corporation, with the aim to further
strengthen the alliance with Mitsubishi Electric Cor-
poration with respect to the development of platforms
for car navigation systems, as follows:
(1) Number of shares newly issued:
20,356,500 shares of common stock
(2) Issue price: ¥194 per share ($1.88)
(3) Total amount issued:
¥3,949,161,000 ($38,341 thousand)
(4) Issue price transferred to capital:
¥97 per share ($0.94)
(5) Total issue amount transferred to capital:
¥1,974,580,500 ($19,171 thousand)
(6) Payment date: June 28, 2013
(7) Allottee: Mitsubishi Electric Corporation
(8) Purposes:
The Company expects to use the fund for the joint
development, etc. with Mitsubishi Electric Corpo-
ration of the hardware and software platforms for
next generation car navigation systems.
42 Pioneer Corporation
Annual Report 2014