Rsltsfor FY2000-Unaudited-Pt3
Konami Corporation
10 May 2001
PART 3
6. Non-consolidated Financial Statements
(1) Non-consolidated Balance Sheets
(Millions of yen)
March 31, 2000 March 31, 2001
Share Share Year-on-year
of of Change
total total
assets assets
ASSETS:
I Current Assets Y94,522 78.2% Y99,545 49.5% Y5,023
Cash and cash 48,578 48,702 123
equivalents
Trade notes 3 49 46
receivable
Trade accounts 25,723 33,347 7,623
receivable
Marketable 0 - (0)
Treasury stock 1 0 (1)
Finished products 2,187 504 (1,683)
Raw materials and 789 1,487 698
supplies
Work in process 1,808 1,678 (130)
Advances 1,850 2,374 523
Prepaid expenses 1,007 1,730 723
Short-term loans 10,796 6,293 (4,502)
to affiliates
Current portion of 106 - (106)
long-term loans to
affiliates
Deferred tax 1,438 2,692 1,254
Other 416 695 279
Allowance for (186) (11) 174
bad debts
II Fixed Assets 26,337 21.8 101,545 50.5 75,208
1. Tangible fixed 10,216 8.5 9,782 4.9 (434)
assets
Buildings 5,427 5,048 (378)
Structures 154 132 (22)
Machinery 9 6 (2)
Transportation 31 25 (6)
equipment
Tools and 1,105 1,081 (23)
fixtures
Land 3,488 3,488 0
2. Intangible 1,199 1.0 1,156 0.6 (43)
fixed assets
In-house 1,170 1,129 (41)
software
Other 29 26 (2)
3. Investments 14,920 12.3 90,606 45.1 75,686
and other assets
Investment 240 426 186
securities
Investment in 11,846 88,006 76,159
affiliates
Treasury stock 30 - (30)
Long-term loans 55 - (55)
to affiliates
Long-term prepaid 4 28 24
expenses
Lease deposits 1,998 1,527 (470)
Deferred tax 499 561 62
assets
Other 245 55 (189)
Allowance for (0) (0) 0
bad debts
TOTAL ASSETS Y120,859 100.0% Y201,090 100% Y80,231
(Millions of yen)
March 31, 2000 March 31, 2001
Share Share
of of
total total
liabilities liabilities
and and Year-on-
shareholders' shareholders' year
equity equity Change
LIABILITIES:
I Current Liabilities Y36,740 30.4% Y51,273 25.5% Y14,533
Trade notes payable 11,491 14,676 3,185
Trade accounts payable 6,881 11,362 4,480
Short-term loans payable 796 - (796)
Current portion of - 10,000 10,000
straight bonds
Current portion of 1,000 - (1,000)
long-term loans payable
Other accounts payable 3,722 2,868 (853)
Income taxes payable 9,751 9,386 (365)
Accrued expenses 2,430 2,020 (409)
Allowance for bonuses 519 600 81
Notes payable for plant 88 40 (47)
and equipment
Others 60 319 258
II Long-term Liabilities 12,964 10.7 3,507 1.7 (9,456)
Straight bonds 10,000 - (10,000)
Liability for directors' 1,486 1,545 59
retirement benefits
Allowance for loss incurred
by a subsidiary 1,430 1,430 -
Long-term deposits received 47 532 484
TOTAL LIABILITIES 49,704 41.1 54,781 27.2 5,076
SHAREHOLDERS' EQUITY:
I Common Stock 15,793 13.1 47,398 23.6 31,605
II Additional Paid-in Capital 15,516 12.8 47,106 23.4 31,590
III Legal Reserve 1,162 1.0 1,770 0.9 608
IV Retained Earnings 38,682 32.0 50,033 24.9 11,351
Voluntary earned surplus 22,803 18.9 33,243 16.5 10,439
Reserve for advanced
depreciation 225 218 (6)
General reserve 22,578 33,024 10,446
Unappropriated earned surplus 15,878 13.1 16,790 8.3 911
(Net income) (16,236) (18,042) (1,805)
TOTAL SHAREHOLDERS' EQUITY 71,154 58.9 146,309 72.8 75,154
TOTAL LIABILITIES AND
TOTAL SHAREHOLDERS'EQUITY Y120,859 100.0% Y201,090 100.0% Y80,231
(2) Non-consolidated Statements of Income (Millions of yen)
Year ended Year ended
March 31 , 2000 March 31, 2001
Share of Share of Year-on-year
net sales net sales Change
I Net Sales Y130,124 100.0% Y148,470 100.0% 18,345 14.1%
II Cost of Sales 87,719 67.4 96,292 64.8 8,572 9.8
Gross Profit 42,404 32.6 52,177 35.2 9,773 23.0
III Selling, General
and
Administrative
Expenses 16,790 12.9 18,085 12.2 1,294 7.7
Operating Income 25,613 19.7 34,092 23.0 8,478 33.1
IV Non-operating
Income 1,372 1.0 681 0.4 (691)(50.4)
Interest income 175 171 (4)
Dividend income 87 220 132
Gain on sale of
marketable
securities 634 0 (634)
Gain on sale of
treasury stock 213 16 (197)
Rental income 114 12 (102)
Foreign exchange
gains - 128 128
Other 146 131 (14)
V Non-operating
Expenses 1,610 1.2 1,535 1.0 (75) (4.7)
Interest expenses 100 110 9
Bond interest
expenses 384 264 (120)
Foreign exchange
losses 615 - (615)
Commission for
syndicate loan - 302 302
Stock issue
expenses - 639 639
Loss on redemption
of bonds 100 - (100)
Other 408 218 (190)
Ordinary Income 25,374 19.5 33,238 22.4 7,863 31.0
VI Extraordinary
Income 8,769 6.7 168 0.1 (8,600)(98.1)
Gain on sale of
fixed assets 56 - (56)
Gain on transfer
of intellectual
property rights 831 - (831)
Gain on sale of
investments in
subsidiaries 7,793 3 (7,789)
Gain on reversal of
allowance for bad
debts 88 164 76
VII Extraordinary
Losses 4,861 3.7 684 0.5 (4,177)(85.9)
Loss on sale and
disposal of
fixed assets 4,759 84 (4,675)
Loss on valuation
of investments in
subsidiaries - 599 599
Loss on sale of
investments in
subsidiaries 101 - (101)
Income before Income
Taxes 29,282 22.5 32,722 22.0 3,439 11.7
Income taxes -
current 13,609 10.4 15,995 10.8 2,385
Income taxes -
deferred (564) (0.4) (1,316) (0.9) (752)
Net Income 16,236 12.5 18,042 12.2 1,805 11.1
Unappropriated
earned surplus
carried forward 914 2,000 1,085
Prior year
adjustment for
deferred tax 1,373 - (1,373)
Reversal of
reserve for
advanced
depreciation due
to adoption of
deferred tax
accounting 163 - (163)
Interim cash
dividends 2,553 2,956 402
Transfer to legal
reserve due to
interim cash
dividends 255 295 40
Unappropriated
Earned Surplus Y15,878 Y16,790 Y911
(3) Appropriation of Earned Surplus (Millions of yen)
Year ended Year ended
March 31, 2000 March 31 , 2001
Unappropriated Earned Surplus at Year-end Y15,878 Y16,790
Reversal of reserve for advanced depreciation 6 5
15,885 16,796
Appropriations:
Transfer to legal reserve 312 393
Cash dividends 2,956 3,604
(Y52.0 per share) (Y28.0 per share)
Directors' bonuses 170 328
General reserve 10,446 8,870
Total 13,885 13,195
Unappropriated Earned Surplus Carried Forward Y2,000 Y3,600
Notes:
1. On December 10, 1999, interim cash dividends amounting to Y2,553
million (Y45.0 per share) were paid, and Y255 million were transferred
to legal reserve.
2. On December 1, 2000, interim cash dividends amounting to Y2,956 million
(Y26.0 per share) were paid, and Y295 million were transferred to legal
reserve.
Summary of Significant Accounting Policies
1. Marketable and Investment Securities
Treasury stock, investments in subsidiaries and affiliated companies and other
securities for which the market value is not readily determinable are stated at
cost based on the moving average method.
Other investment securities for which the market value is readily determinable
are stated at fair value as at balance sheet date. Unrealized holding gain or
loss is reported as a separate component of shareholders' equity. The cost of
securities sold is determined primarily by the moving average method.
2. Derivatives
Foreign exchange forward contracts are stated at fair value.
3. Inventories
Inventories other than merchandise and work in process are stated at cost
determined by the moving average method. Merchandise is stated at the lower of
cost or market, cost being determined mainly by the first-in, first-out method.
Work in process consisting of hardware products is stated at cost
determined by the moving average method while work in process consisting of
software products is stated at cost determined by the specific identification
method.
4. Depreciation Methods
Tangible fixed assets are depreciated mainly using the declining balance method
while intangible fixed assets are amortized mainly using the straight-line
method. For in-house software, amortization is computed using the straight-line
method based on the estimated useful life of 5 years.
Long-term prepaid expenses are amortized on a straight-line basis.
5. Deferred Assets
Research and development expenses and stock issue expenses are charged to income
as incurred.
The issuance of new shares by the public offering on March 22, 2001 was based on
the method (the 'new method') an underwriter purchases shares at an issue price
and sells them at an offer price, which is different from the issue price, to
public inventors.
In the new method, the difference between the issue price and the offer price
represents the proceeds for underwriter, which is effectively equivalent to an
underwriting commission. Therefore, the Company did not pay any underwriting
commission to the underwriter. The total amount of the difference between the
issue price and the offer price for the public offering on March 22, 2001 was
Y2,505 million, which would be accounted for as stock issue expenses if
the underwriter had sold the shares at an offer price that was the same as the
issue price (the 'former method').
For the year ended March 31, 2001, with the new method, stock issue expenses are
recognized Y2,505 million less and ordinary income and net income before income
taxes are recognized to be Y2,505 more compared with the former method.
6. Foreign Currency Translation
Monetary assets and liabilities denominated in foreign currencies are translated
at the current exchange rates as of the balance sheet date, and the translation
gains and losses are credited or charged to income.
7. Provisions
(a) Allowance for bad debts
Generally, allowance for bad debts is calculated based on the actual ratio of
bad debt losses incurred. For specific accounts with higher possibility of bad
debt loss, the allowance is determined by independent judgment.
(b) Allowance for bonuses
As part of estimated bonus payment to employees in the following period,
appropriate amount is provided.
(c) Allowance for retirement benefits (Prepaid pension expense)
Allowance for retirement benefits paid to employees is provided based on the
estimated amount of the projected benefit obligation and the plan assets at the
year-end. The debit balance of the allowance for the year was accounted for as
prepaid pension expense, which is included in prepaid expenses as current
assets. Unrecognized net transition asset of Y122 million is credited to expense
over 13 years on a straight-line basis. Unrecognized actuarial net gain or loss
will be amortized from the following fiscal year within the average remaining
service period of 13 years on a straight-line basis.
(d) Liability for directors' retirement benefits
Required amount for the year was reserved as liability under retirement benefits
paid to directors.
(e) Allowance for loss incurred by a subsidiary
The Company provides an allowance for loss incurred by a subsidiary at amount
determined based on its financial condition.
8. Leases
Finance leases other than those that deem to transfer ownership of the leased
property to the lessee are accounted for as operating lease transactions.
9. Consumption Tax
Consumption tax is excluded from the stated amount of revenue and expenses.
Additional Information
1. Accounting for Retirement Benefits
Since the beginning of the year ended March 31, 2001, the accounting standards
for retirement benefits, which were released by the Business Accounting
Deliberation Council on June 16, 1998, have been adopted. The financial impact
of this change is considered immaterial.
2. Accounting for Financial Instruments
Since the beginning of the year ended March 31, 2001, the accounting standards
for financial instruments, which were released by the Business Accounting
Deliberation Council on January 22, 1999, have been adopted. The financial
impact of this change is considered immaterial. In addition, the securities
classified as 'other investment securities', based on the holding
purpose at the beginning of the year, are stated as investment securities.
3. Accounting for Foreign Currency Transactions
Since the beginning of the year ended March 31, 2001, the amended accounting
standards for foreign currency transactions, which were released by the Business
Accounting Deliberation Council on October 22, 1999, have been adopted. The
financial impact of this change is considered immaterial.
Notes to Non-consolidated Financial Statements
Notes to Balance Sheets
1. Accumulated depreciation of tangible fixed assets is Y6,227 million and
Y5,760 million for the years ended March 31, 2001 and 2000, respectively.
2. Assets and liabilities to subsidiaries and affiliated companies are as
follows:
(Millions of yen)
March 31, 2001
Trade accounts receivable 32,598
Advances 2,120
Trade accounts payable 5,267
(Millions of yen)
March 31, 2000
Trade accounts receivable 10,122
Advances 1,119
Trade accounts payable 831
Other accounts payable 566
3. Number of shares at year-ends is as follows:
March 31, 2001 March 31, 2000
Shares authorized 450,000,000 shares 129,700,000 shares
Shares issued and outstanding 128,737,566 shares 56,868,783 shares
Treasury stock:
Listed under current assets 28 shares 81 shares
(Amount) (Y0 million) (Y1 million)
Listed under fixed assets - 15,000 shares
(Amount) - (Y30 million)
During the year ended March 31, 2001, the number of shares issued and
outstanding increased by 56,868,783 shares for the stock split made on May 19,
2000, and 15,000,000 shares newly issued as public offering on March 23, 2001.
4. The Company guarantees subsidiaries’ loans payable to financial
institutions as follows:
(Millions of yen)
March 31, 2001 March 31, 2000
Konami Capital, Inc 4,667 5,477
- -
Konami of America, Inc. 2,044 1,273
(USD 16.5 million) (USD 12.0 million)
Konami of Europe GmbH. 559 417
(DEM 10.0 million) (DEM 8.0 million)
Konami Computer Entertainment 520 318
of America, Inc. (USD 4.2 million) (USD 3.0 million)
Konami (Singapore) Pte. Ltd. - 30
- (SGD 0.5 million)
Total 7,791 7,519
5. Trade notes matured on the balance sheet date are settled on the exchange
date of the notes. Since March 31, 2001 was a holiday for financial
institutions, the following matured trade notes are included in each ending
balance.
(Millions of yen)
March 31, 2001
Trade notes receivable 49
Trade notes payable 3,049
Notes to Statements of Income
1. Statements of income include intercomapny transactions as follows:
(Millions of yen)
Year ended
March 31, 2001
Net Sales 90,477
Dividend income 220
(Millions of yen)
Year ended
March 31, 2000
Net Sales 33,198
Interests income 118
2. Selling, general and administrative expenses include the following:
(Millions of yen)
Year ended
March 31, 2001
Advertising expenses 5,263
Salaries expenses 2,153
Addition to allowance for bonuses 561
Addition to allowance for directors'
retirement benefits 78
Depreciation expense 694
Rental expenses 1,794
Commissions 2,131
Selling expenses portion 46.9%
General and administrative
expenses portion 53.1%
(Millions of yen)
Year ended
March 31, 2000
Sales promotion expenses 921
Advertising expenses 3,929
Salaries expenses 1,896
Addition to allowance for bonuses 240
Addition to allowance for directors'
retirement benefits 472
Depreciation expense 761
Rental expenses 1,365
Commissions 1,808
Selling expenses portion 43.2%
General and administrative
expenses portion 56.8%
3. General and administrative expenses include research and development expenses
of Y118 million and Y342 million for the years ended March 31, 2001 and 2000,
respectively.
4. Loss on sale and disposal of fixed assets consists of the following:
(Millions of yen)
Year ended Year ended
March 31, 2001 March 31, 2000
Sale of land - 2,382
Sale of buildings - 2,037
Sale of transportation equipment 4 -
Disposal of buildings and structures 7 256
Disposal of tools and fixtures 60 82
Disposal of software 10 -
Total 84 4,759
5. Loss on valuation of investments in subsidiaries consists of Y299 million for
Konami Computer Entertainment Nagoya, Inc. and Y299 million for Konami Computer
Entertainment Kobe, Inc.
Leases
Finance leases other than those that deem to transfer ownership of leased
property to the lessee:
1. Equivalents of acquisition cost, accumulated depreciation, and ending balance
of leased assets
(Millions of yen)
March 31, 2001 March 31, 2000
Acquisition Accumulated Ending Acquisition Accumulated Ending
Cost depreciation balance cost depreciation balance
Tools and
fixtures 1,250 307 942 518 184 334
Total 1,250 307 942 518 184 334
2. Obligations under finance leases
(Millions of yen)
March 31, 2001 March 31, 2000
Due within one year 395 157
Due after one year 547 176
Total 942 334
3. Lease payments and depreciation equivalents
(Millions of yen)
Year ended Year ended
March 31, 2001 March 31, 2000
Lease payments 132 118
Depreciation equivalents 132 118
4. Depreciation equivalents are computed according to the straight-line method
with lease term as useful life and salvage value of zero.
Note:
Since the total obligation for unexpired leases at balance sheet date occupies
only a small part of the ending balance of tangible fixed assets, acquisition
cost equivalent and obligation for unexpired leases at the end of the year are
calculated including interest expenses.
Investment Securities
1. Investments in subsidiaries and affiliated companies (as of March 31, 2001)
(Millions of yen)
Unrealized
Balance sheet Market gains or losses
amount value
Investments in subsidiaries 69,770 86,739 16,969
Investments in affiliated
companies 3,686 9,015 5,329
Total 73,456 95,755 22,299
Income Taxes
1. Deferred tax assets and deferred tax liabilities consist of the following:
(Millions of yen)
March 31, 2001
Deferred tax assets:
Enterprise taxes payable 865
Liability for directors’ retirement benefits 649
Allowance for loss incurred by a subsidiary 600
Loss on valuation of investments in subsidiaries 251
Accrued expenses 212
Allowance for bonuses 183
Inventories 1,394
Other 428
Sub total 4,585
Less: Valuation allowance (1,157)
Total deferred tax assets 3,427
Deferred tax liabilities:
Reserve for deferred gains on sales of fixed assets (154)
Other (18)
Total deferred tax liabilities (173)
Deferred tax assets - net 3,254
2. A reconciliation between the normal effective statutory tax rate and the
actual effective tax rates reflected in the accompanying consolidated statements
of income is as follows:
March 31, 2001
Normal effective statutory tax rate 42.1%
Permanently non-deductible expenses 1.6
Permanently non-taxable income (0.3)
Per capita portion of inhabitants taxes 0.1
Valuation allowance 1.7
Other - net (0.3)
Actual effective tax rate 44.9%
7. Changes in Board of Directors
(Effective June 21, 2001)
1. Changes in Directors
(1) New Representative Director candidate
NORIAKI YAMAGUCHI (current Director and Executive Corporate Officer)
(2) Retiring Directors
HIROYUKI MIZUNO (former Executive Vice President, Matsushita Electric
Industrial Co., Ltd.,
current Vice President, Kochi University of Technology)
(3) Resigning Directors
KAZUMI KITAUE* (continues as Executive Corporate Officer)
FUMIAKI TANAKA* (continues as Executive Corporate Officer)
AKIHIKO NAGATA* (continues as Executive Corporate Officer)
SHUJI KIDO* (continues as Executive Corporate Officer)
MAMORU OTA* (continues as Executive Corporate Officer)
SHIGEO KODAIRA* (continues as Corporate Officer)
HARUHIKO YOSHIDA (to be named as Member of Advisory Board)
Divisional directors with asterisk (*) resign Director and be reappointed as
Executive Corporate Officer or Corporate Officer on effective June 21, 2001, to
distinguish between business administration and business execution as a part of
strengthening corporate governance.
2. Changes in Corporate Auditors
No changes
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