Changes in common stock, additional paid-in capital, legal reserve, cumulative translation adjustments and treasury stock are shown below:
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In thousands of
In millions of yen U.S. dollars
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Year ended March 31 1995 1996 1997 1997
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Common stock:
Balance at beginning of year........................... Y 188,764 Y 189,005 Y 191,294 $ 1,542,693
Conversion of convertible debt......................... 241 2,289 9,109 73,460
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Balance at end of year................................. Y 189,005 Y 191,294 Y 200,403 $ 1,616,153
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Additional paid-in capital:
Balance at beginning of year........................... Y 297,418 Y 298,095 Y 300,374 $ 2,422,371
Conversion of convertible debt......................... 225 2,279 10,207 82,314
Change in interest in consolidated subsidiaries........ 452 - 1,611 12,992
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Balance at end of year................................. Y 298,095 Y 300,374 Y 312,192 $ 2,517,677
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Legal reserve:
Balance at beginning of year........................... Y 26,186 Y 27,857 Y 29,826 $ 240,533
Transfer from retained earnings........................ 1,683 1,969 2,159 17,411
Transfer to minority interest arising from change
in interest in a consolidated subsidiary............. (3) - - -
Deconsolidation of an affiliated company............... (9) - - -
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Balance at end of year................................. Y 27,857 Y 29,826 Y 31,985 $ 257,944
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Cumulative translation adjustments:
Balance at beginning of year........................... Y (36,768) Y (48,910) Y (25,536) $ (205,935)
Translation adjustment for the year.................... (12,142) 23,374 29,137 234,976
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Balance at end of year................................. Y (48,910) Y (25,536) Y 3,601 $ 29,041
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Treasury stock, at cost:
Balance at beginning of year........................... Y (6) Y (2) Y (7) $ (56)
Net change resulting from purchase and sales of
fractional shares of less than "One Unit" as defined
by the Japanese Commercial Code...................... 4 (5) (8) (65)
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Balance at end of year................................. Y (2) Y (7) Y (15) $ (121)
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(1) Common stock and additional paid-in capital
Issuances of common stock in connection with conversions of convertible debt for the years ended March 31, 1995, 1996 and 1997 were 1,150,138 shares, 4,874,097 shares and 19,454,109 shares, respectively.
Prior to 1985, the parent company made free share distributions of 233,182,146 shares. The cumulative amount of the fair value of these shares at the time of issuance was Y258,755 million. Had the company accounted for these free share distributions in the manner used by United States companies, that amount would have been transferred from retained earnings to appropriate capital accounts.
During the year ended March 31, 1995, a certain consolidated investee issued shares to third parties upon conversions of convertible debt to common stock at an amount per share in excess of the company's average per share carrying value. This resulted in an increase of Y452 million in the shareholders' equity of the investee applicable to the company and that amount was credited to additional paid-in capital.
(2) Legal reserve and retained earningsThe Japanese Commercial Code provides that an amount equal to at least 10 percent of cash dividends and other distributions from retained earnings paid by the parent company and its Japanese subsidiaries be appropriated as a legal reserve. No further appropriation is required when the legal reserve equals 25 percent of their respective stated capital.
The amount of retained earnings available for dividends is based on the parent company's retained earnings determined in accordance with generally accepted accounting principles and the Commercial Code in Japan. The appropriations of retained earnings for the year ended March 31, 1997, as incorporated in the accompanying consolidated financial statements, include year-end dividends of Y8,611 million ($69,444 thousand) which, in accordance with the Japanese Commercial Code, will be proposed for approval at the Ordinary General Meeting of Shareholders to be held on June 27, 1997 and will be recorded in the statutory books of account on that date.
