Sony 2005 Annual Report Download - page 111

108 Sony Corporation
(2) Common stock:
Changes in the number of shares of common stock issued and
outstanding during the years ended March 31, 2003, 2004 and
2005 have resulted from the following:
Number of shares
Balance at March 31, 2002 . . . . . . . . . . . . . . . . . . . 919,744,355
Conversion of convertible bonds . . . . . . . . . . . . . . . 138,330
Stock issued under exchange offering . . . . . . . . . . . 2,502,491
Balance at March 31, 2003 . . . . . . . . . . . . . . . . . . . 922,385,176
Conversion of convertible bonds . . . . . . . . . . . . . . . 2,944,800
Stock issued under exchange offering . . . . . . . . . . . 1,088,304
Balance at March 31, 2004 . . . . . . . . . . . . . . . . . . . 926,418,280
Conversion of convertible bonds . . . . . . . . . . . . . . . 70,765,533
Exercise of stock acquisition rights . . . . . . . . . . . . . 27,400
Balance at March 31, 2005 . . . . . . . . . . . . . . . . . . . 997,211,213
At March 31, 2005, 55,609,085 shares of common stock
would be issued upon conversion or exercise of all convertible
bonds, warrants and stock acquisition rights outstanding.
On October 1, 2002, Sony Corporation implemented a share
exchange as a result of which Aiwa Co., Ltd. became a wholly-
owned subsidiary. As a result of this share exchange, Sony
Corporation issued 2,502,491 new shares, the minority interest
in Aiwa Co., Ltd. was eliminated from the balance sheet, and
additional paid-in capital increased ¥15,791 million.
On May 1, 2003, Sony Corporation implemented a share
exchange as a result of which CIS Corporation became a
wholly-owned subsidiary. As a result of this share exchange,
Sony Corporation issued 1,088,304 new shares, and additional
paid-in capital increased ¥5,409 million.
On November 20, 1991, Sony Corporation made a free share
distribution of 33,908,621 shares in ratios of one share for each
ten shares held for which no accounting entry was required in
Japan. Had the distribution been accounted for in the manner
adopted by companies in the United States of America,
¥201,078 million would have been transferred from retained
earnings to the appropriate capital accounts. This has been the
only free distribution of common stock where no accounting
entry was required in Japan.
Conversions of convertible bonds into common stock are
accounted for in accordance with the provisions of the Japa-
nese Commercial Code by crediting approximately one-half of
the conversion proceeds to the common stock account and the
remainder to the additional paid-in capital account.
Prior to the amendments to the Japanese Commercial Code
enacted on April 1, 2002, purchase and retirement by Sony
Corporation of its own shares could be made at any time by
resolution of the Board of Directors. No common stock and
subsidiary tracking stock had been acquired under the approval
during the year ended March 31, 2002.
Following the amendments to the Japanese Commercial Code
enacted on April 1, 2002, purchase by Sony Corporation of its
own shares was subject to the prior approval of shareholders at
the Ordinary General Meeting of Shareholders, which included the
maximum number of shares and the maximum total amount to be
purchased for each class of stock. Once such approval of share-
holders was obtained, Sony Corporation could purchase its own
shares at any time during the period up to the conclusion of the
next Ordinary General Meeting of Shareholders.
The Ordinary General Meeting of Shareholders held on June
20, 2002 approved that Sony Corporation acquire up to a total
not exceeding 90 million outstanding shares of its common
stock at an amount in total not exceeding ¥650 billion and a
total not exceeding 300 thousand outstanding shares of the
subsidiary tracking stock at an amount in total not exceeding ¥1
billion until the conclusion of the General Meeting of Sharehold-
ers held for the year ended March 31, 2003. As a result, no
common stock and subsidiary tracking stock had been acquired
under this approval.
The Ordinary General Meeting of Shareholders held on June
20, 2003 approved that Sony Corporation acquire up to a total
not exceeding 90 million outstanding shares of its common stock
at an amount in total not exceeding ¥400 billion and a total not
exceeding 300 thousand outstanding shares of the subsidiary
tracking stock at an amount in total not exceeding ¥1 billion. As a
result, Sony Corporation had acquired 2 million outstanding
shares of its common stock at an amount in ¥8,200 million. No
subsidiary tracking stock had been acquired under this approval.
The Ordinary General Meeting of Shareholders held on June
22, 2004 approved to amend the articles of incorporation that
Sony Corporation may purchase its own shares by a resolution
of the Board of Directors, in accordance with the amendments
to the Japanese Commercial Code enacted on September 25,
2003. With the amendment of the articles of incorporation, Sony
Corporation may purchase its own shares at any time by a
resolution of the Board of Directors up to the retained earnings
available for dividends to shareholders. No common stock and
subsidiary tracking stock had been acquired by the resolution of
the Board of Directors during the year ended March 31, 2005.
(3) Retained earnings:
The amount of statutory retained earnings of Sony Corporation
available for dividends to shareholders as of March 31, 2005
was ¥557,856 million ($5,214million). The appropriation of
retained earnings for the year ended March 31, 2005 including
cash dividends for the six-month period ended March 31, 2005
has been incorporated in the accompanying consolidated
financial statements. This appropriation of retained earnings was
approved at the meeting of the Board of Directors of Sony
Corporation held on May 16, 2005 and was then recorded in the
statutory books of account, in accordance with the Japanese
Commercial Code.
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