Sony 2006 Annual Report Download - page 128

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14,000 shares at ¥204,600 per share with a total value of
¥2,864 million in connection with its initial public offering. In
March 2005, SCN, which had owned a 27.7% interest in DeNA
Co., Ltd., sold 2,000 shares of DeNA Co., Ltd. at ¥204,600 per
share with a total value of ¥409 million. As a result of these
transactions, Sony recorded a ¥686 million gain on issuance of
stock by DeNA Co., Ltd. and provided deferred taxes on this
gain. In addition, Sony recorded a ¥76 million gain on the sale of
its shares of DeNA Co., Ltd.. These transactions reduced Sony’s
ownership interest from 27.7% to 24.8%.
In addition to the above transactions, for the fiscal year ended
March 31, 2005, Sony recognized ¥1,911 million of other gains
on change in interest in subsidiaries and equity investees resulting
in total gains of ¥16,322 million.
In June 2005, SCN sold 17,935 shares of So-net M3 Inc., at
¥694,600 ($5,937) per share with a total value of ¥12,458 million
($106 million). As a result of this sale, Sony recorded a ¥11,979
million ($102 million) gain and provided deferred taxes on this
gain. This sale reduced Sony’s ownership interest from 74.8%
to 60.8%.
In June 2005, SCN sold 7,000 shares of DeNA Co., Ltd. at
¥863,040 ($7,376) per share with a total value of ¥6,041 million
($52 million). In March 2006, DeNA Co., Ltd. issued 14,300
shares at ¥314,138 ($2,685) per share with a total value of
¥4,492 million ($38 million) in connection with its private offering.
As a result of these transactions, Sony recorded an ¥821 million
($7 million) gain on issuance of stock by DeNA Co., Ltd. and
provided deferred taxes on this gain. In addition, Sony recorded
a ¥5,817 million ($50 million) gain on the sale of its shares of
DeNA Co., Ltd. These transactions reduced Sony’s ownership
interest from 24.8% to 19.1%.
In September 2005, Sony Corporation sold 230,000 shares of
Monex Beans Holdings, Inc. at ¥119,040 ($1,017) per share
with a total value of ¥27,379 million ($234 million). As a result of
this sale, Sony recorded a ¥20,590 million ($176 million) gain
and provided deferred taxes on this gain. This sale reduced
Sony’s ownership interest from 20.1% to 10.3%. See Note 6 for
more information on this transaction.
In December 2005, SCN issued 20,000 shares at ¥320,960
($2,743) per share with a total value of ¥6,419 million ($55
million) in connection with its initial public offering. Sony Corpo-
ration and Sony Finance International Inc., which had owned
82.6% and 17.4% interests in SCN, respectively, sold 66,000
shares and 4,000 shares of SCN, respectively, at ¥320,960
($2,743) per share with a total value of ¥22,467 million ($192
million). In January 2006, Sony Corporation sold 12,000 shares
of SCN at ¥320,960 ($2,743) per share with a total value of
¥3,852 million ($33 million). As a result of these transactions,
Sony recorded a ¥4,226 million ($36 million) gain on issuance
(3) Shipping and handling costs:
Shipping and handling costs for finished goods included in
selling, general and administrative expenses for the fiscal years
ended March 31, 2004, 2005 and 2006 were ¥106,590 million,
¥107,983 million and ¥114,500 million ($979 million), respec-
tively, which included the internal transportation costs of
finished goods.
20. Gain on change in interest in subsidiaries and
equity investees
In January 2004, FeliCa Networks, Inc., whose field of business
is Mobile FeliCa IC chip development and production/sales
licensing and operation of the Mobile FeliCa service platform,
issued 115,000 shares at ¥100,000 per share with a total value
of ¥11,500 million in connection with its private offering. As a
result of this issuance, Sony recorded a gain of ¥3,364 million
and provided deferred taxes on this gain. This issuance reduced
Sony’s ownership interest from 100% to 60%.
In addition to the above transaction, for the fiscal year ended
March 31, 2004, Sony recognized ¥1,506 million of other gains
on change in interest in subsidiaries and equity investees resulting
in total gains of ¥4,870 million.
In August 2, 2004, Monex Inc., which provided on-line secu-
rity trading services in Japan, and Nikko Beans, Inc. established
Monex Beans Holdings, Inc. by way of share transfer of the then
existing shares of Monex Inc. and Nikko Beans, Inc.. At this
establishment, 1 share of Monex Beans Holdings, Inc. was
allotted to each share of Monex Inc. and 3.4 shares of Monex
Beans Holdings, Inc. were allotted to each share of Nikko
Beans, Inc.. As a result of this share transfer, Monex Beans
Holdings, Inc. issued 2,344,687 shares and Sony recorded a
gain of ¥8,951 million and provided deferred taxes on this gain.
This issuance reduced Sony’s ownership interest from 29.9%
to 20.1%.
In September 2004, So-net M3 Inc., which provides medical
services via the Internet in Japan, issued 2,800 shares at
¥850,000 per share with a total value of ¥2,380 million in con-
nection with its initial public offering. SCN, a parent company of
So-net M3 Inc., sold 3,260 shares of So-net M3 Inc., at
¥790,500 per share with a total value of ¥2,577 million. In
October 2004, SCN sold 740 shares of So-net M3 Inc., at
¥790,500 per share with a total value of ¥585 million. As a result
of these transactions, Sony recorded a ¥1,823 million gain on
issuance of stock by So-net M3 Inc. and provided deferred
taxes on this gain. In addition, Sony recorded a ¥2,876 million
gain on the sale of its shares of So-net M3 Inc. These transac-
tions reduced Sony’s ownership interest from 90.0% to 74.8%.
In January 2005, DeNA Co., Ltd., whose field of business is
the operation of on-line auction websites in Japan, issued