Sharp 2013 Annual Report Download - page 66

64 SHARP CORPORATION
Financial Section
Adjustments of segment income or loss were ¥(33,954) mil-
lion ($(365,097) thousand), and comprised elimination of in-
tersegment transactions and corporate expenses not allocated to
each reportable segment. The elimination of intersegment trans-
actions was ¥1,117 million ($12,011 thousand). Corporate ex-
penses not allocated to each reportable segment were ¥(36,306)
million ($(390,387) thousand). Corporate expenses were mainly
attributable to basic R&D expenses and expenses related to the
administrative groups of the Company’s headquarters.
Adjustments of segment assets were ¥463,172 million
($4,980,344 thousand), and comprised elimination of interseg-
ment transactions and corporate assets not allocated to each re-
portable segment. The elimination of intersegment transactions
was ¥(11,217) million ($(120,613) thousand). Corporate assets
not allocated to each reportable segment were ¥474,389 million
($5,100,957 thousand). Corporate assets not allocated to each
reportable segment were mainly attributable to cash and cash
equivalents, the Company’s investments in securities, and depre-
ciable assets related to the Company’s R&D groups as well as the
administrative, sales and distribution groups of the Company’s
headquarters.
Adjustments of investments in nonconsolidated subsidiar-
ies and affiliates accounted for using the equity methods were
¥25,245 million ($271,452 thousand), and mainly comprised in-
vestments in Sharp Finance Corporation.
Adjustments of increase in plant, equipment and intangible
assets was ¥8,142 million ($87,548 thousand), and mainly com-
prised increase in the Company’s R&D groups and the admin-
istrative, sales and distribution groups of the Company’s head-
quarters.
Depreciation and amortization includes the amortization of
long-term prepaid expenses.
Increase in plant, equipment and intangible assets includes
the increase in long-term prepaid expenses.
The Company passed a resolution at its board of directors meet-
ing held on May 14, 2013 to submit a proposal on reduction of
common stock, capital reserve and legal reserve, and on appro-
priation of surpluses to the Ordinary General Meeting of Share-
holders to be held on June 25, 2013, and the resolution was
then approved.
(a) Purpose of Reduction of Common Stock, Capital
Reserve and Legal Reserve, and Appropriation of
Surpluses
The Company recorded a ¥525,030,530,462 loss of retained
earnings carried forward for the year ended March 2013. In
order to regain financial strength at an early stage, and to
prepare for mobile and flexible implementation of future capi-
tal policy, by covering the deficit, the Company will reduce
common stock, capital reserve and legal reserve pursuant to
the provisions of Article 447, Paragraph 1 and Article 448,
Paragraph 1, of the Companies Act, and will then appropriate
the surpluses pursuant to the provision of Article 452 of the
Companies Act.
In addition, since these actions are accounting transfers within
the “Net Assets section” in the balance sheet of the Com-
pany, they will not change the Company’s net assets, and will
not affect the total number of issued shares and the number
of shares owned by each shareholder, etc.
(b) Details of Reduction of Common Stock
The Company will reduce common stock by ¥162,336,938,238
out of the amount of common stock as of March 31, 2013, of
¥212,336,938,238, and will transfer the entire amount of the
reduction of common stock to other capital surplus.
(c) Details of Reduction of Capital Reserve and Legal
Reserve
(1) Capital Reserve
The Company will reduce capital reserve by
¥256,576,762,667 out of the amount of capital reserve as
of March 31, 2013, of ¥269,076,762,667, and will trans-
fer the entire amount of the reduction of capital reserve to
other capital surplus.
Reduction of Common Stock, Capital Reserve and Legal Reserve, and Appropriation of Surpluses