Toyota 2008 Annual Report Download - page 114

112 TOYOTA •Annual Report 2008 •
Financial Section
The Corporation Act provides that an amount equal to 10%
of distributions from surplus paid by the parent company and
its Japanese subsidiaries be appropriated as a capital reserve or
a retained earnings reserve. No further appropriations are
required when the total amount of the capital reserve and the
retained earnings reserve reaches 25% of stated capital.
The retained earnings reserve included in retained earnings
as of March 31, 2007 and 2008 was ¥151,102 million and
¥160,229 million ($1,599 million), respectively. The Corporation
Act provides that the retained earnings reserve of the parent
company and its Japanese subsidiaries is restricted and unable
to be used for dividend payments, and is excluded from the cal-
culation of the profit available for dividend.
The amounts of statutory retained earnings of the parent
company available for dividend payments to shareholders were
¥5,680,249 million and ¥6,073,271 million ($60,618 million) as of
March 31, 2007 and 2008, respectively. In accordance with cus-
tomary practice in Japan, the distributions from surplus are not
accrued in the financial statements for the corresponding peri-
od, but are recorded in the subsequent accounting period after
shareholders’ approval has been obtained. Retained earnings at
March 31, 2008 include amounts representing year-end cash
dividends of ¥236,196 million ($2,357 million), ¥75 ($0.75) per
share, which were approved at the Ordinary General
Shareholders’ Meeting, held on June 24, 2008.
Retained earnings at March 31, 2008 include ¥1,427,712 mil-
lion ($14,250 million) relating to equity in undistributed earnings
of companies accounted for by the equity method.
On June 23, 2004, at the Ordinary General Shareholders’
Meeting, the shareholders of the parent company approved to
purchase up to 65 million shares of its common stock at a cost
up to ¥250,000 million during the period until the next Ordinary
General Shareholders’ Meeting which was held on June 23,
2005, and in accordance with former Japanese Commercial
Code, also approved to change the Articles of Incorporation to
authorize the Board of Directors to repurchase treasury stock on
the basis of its resolution. During this approved period of time,
the parent company purchased approximately 59 million of
shares.
On June 23, 2005, at the Ordinary General Shareholders’
Meeting, the shareholders of the parent company approved to
purchase up to 65 million shares of its common stock at a cost
up to ¥250,000 million during the period until the next Ordinary
General Shareholders’ Meeting which was held on June 23,
2006. As a result, the parent company repurchased approxi-
mately 38 million shares during the approved period of time.
On June 23, 2006, at the Ordinary General Shareholders’
Meeting, the shareholders of the parent company approved to
purchase up to 30 million shares of its common stock at a cost
up to ¥200,000 million during the purchase period of one year
from the following day. As a result, the parent company repur-
chased approximately 28 million shares during the approved
period of time.
On June 22, 2007, at the Ordinary General Shareholders’
Meeting, the shareholders of the parent company approved to
purchase up to 30 million shares of its common stock at a cost
up to ¥250,000 million during the purchase period of one year
from the following day. As a result, the parent company repur-
chased 30 million shares during the approved period of time.
On February 5, 2008, the Board of Directors resolved to pur-
chase up to 12 million shares of its common stock at a cost up
to ¥60,000 million in accordance with the Corporation Act. As a
result, the parent company repurchased approximately 10 mil-
lion shares.
On the same date, the Board of Directors also resolved to
retire 162 million shares of its common stock, and then the par-
ent company retired its common stock on March 31, 2008. This
retirement, in accordance with the Corporation Act and related
regulations, is treated as a reduction from additional paid-in
capital and retained earnings. As a result, treasury stock, addi-
tional paid-in capital and retained earnings decreased by
¥646,681 million ($6,455 million), ¥3,499 million ($35 million) and
¥643,182 million ($6,420 million), respectively.
On June 24, 2008, at the Ordinary General Shareholders’
Meeting, the shareholders of the parent company approved to
purchase up to 30 million shares of its common stock at a cost
up to ¥200,000 million during the purchase period of one year
from the following day. These approvals by the shareholders
are not required under the current regulation.
Changes in the number of shares of common stock issued have resulted from the following:
For the years ended March 31,
2006 2007 2008
Common stock issued
Balance at beginning of year ................................................................................................ 3,609,997,492 3,609,997,492 3,609,997,492
Issuance during the year........................................................................................................— — —
Purchase and retirement........................................................................................................ ——(162,000,000)
Balance at end of year ....................................................................................................... 3,609,997,492 3,609,997,492 3,447,997,492
Shareholders’ equity: 17 .
Interest and penalties related to income tax liabilities are
included in “Other income, net”. The amounts of interest and
penalties accrued as of and recognized for the year ended
March 31, 2008 were not material.
Toyota remains subject to income tax examination for the tax
returns related to the years beginning on and after January 1,
2000, with various tax jurisdictions including Japan.