No.1-7628
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
FOR THE MONTH OF May 2013
COMMISSION FILE NUMBER: 1-07628
HONDA GIKEN KOGYO KABUSHIKI KAISHA
(Name of registrant)
HONDA MOTOR CO., LTD.
(Translation of registrants name into English)
1-1, Minami-Aoyama 2-chome, Minato-ku, Tokyo 107-8556, Japan
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F * Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
CELAYA, Mexico, May 2, 2013 - Honda de Mexico, S.A. de C.V. announced plans to construct a new transmission plant in Celaya, near the city of Guanajuato, on the same site as the new automobile plant currently under construction that will begin production of the Honda Fit in Spring 2014.
The Board of Directors of Honda Motor Co., Ltd. (the Company), at its meeting held on May 16, 2013, resolved to propose a matter of Amendments to Articles of Incorporation as follows as an agenda item for the Companys 89th ordinary general meeting of shareholders scheduled to be held on June 19, 2013.
The Board of Directors of Honda Motor Co., Ltd., at its meeting held on May 16, 2013, resolved to convene the Companys 89th ordinary general meeting of shareholders as follows.
Notice of Convocation of the 89th Ordinary General Meeting of Shareholders of Honda Motor Co., Ltd. (the Company) has become available on May 29, 2013 on the Companys website written below.
http://world.honda.com/investors/stock_bond/meeting/
The English translation of unconsolidated financial information for the fiscal year ended March 31, 2013 included in exhibit of Notice of Convocation of the 89th Ordinary General Meeting of Shareholders of Honda Motor Co., Ltd.
BEIJING, China, May 28, 2013 - Guangqi Honda Automobile Co., Ltd., an automobile production and sales joint venture of Honda in China, held a ceremony to commemorate the start of construction of a third production line and an engine plant within the property of the existing ZengCheng Plant.
Bengaluru, India, May 28, 2013 - Honda Motorcycle & Scooter India Pvt. Ltd., the second largest motorcycle company in India inaugurated its most advanced and latest third motorcycle production plant at Narsapura Area, District Kolar (Karnataka) today.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
HONDA GIKEN KOGYO KABUSHIKI KAISHA (HONDA MOTOR CO., LTD.) |
/s/ Kohei Takeuchi |
Kohei Takeuchi |
Chief Financial Officer |
Honda Motor Co., Ltd. |
Date: June 14, 2013
Honda to Build New Transmission Plant in Celaya, Mexico
CELAYA, Mexico, May 2, 2013Honda de Mexico, S.A. de C.V. announced plans to construct a new transmission plant in Celaya, near the city of Guanajuato, on the same site as the new automobile plant currently under construction that will begin production of the Honda Fit in Spring 2014.
For details, please refer to the website of Honda Motor Co., Ltd
http://world.honda.com/news/2013/c130502New-Transmission-Plant-Mexico/index.html
May 16, 2013
To: | Shareholders of Honda Motor Co., Ltd. | |
From: | Honda Motor Co., Ltd. | |
1-1, Minami-Aoyama 2-chome, | ||
Minato-ku, 107-8556 Tokyo | ||
Takanobu Ito | ||
President and Representative Director |
Notice Concerning Partial Amendments to Articles of Incorporation
The Board of Directors of Honda Motor Co., Ltd. (the Company), at its meeting held on May 16, 2013, resolved to propose a matter of Amendments to Articles of Incorporation as follows as an agenda item for the Companys 89th ordinary general meeting of shareholders scheduled to be held on June 19, 2013.
Particulars
1. | Reasons for Amendments |
The amendments are for making an addition to the Companys business objects for the purpose of conducting electricity generation using renewable energy, etc. and the supply and sale of such electricity (Article 2 of the proposed amendments).
- 1 -
2. | Contents of amendments |
Portions of the existing Articles of Incorporation will be amended as follows:
(The underlines indicate the portions to be amended.)
Present Articles |
Proposed Amendments | |
Chapter I. General Provisions |
Chapter I. General Provisions | |
(Objects) |
(Objects) | |
Article 2. | Article 2. | |
The object of the Company shall be to carry on the following business: | The object of the Company shall be to carry on the following business: | |
1. |
1. | |
| [Provisions omitted] |
| [Same as at present] | |
8. |
8. | |
[Newly established] |
9. Electricity generation and supply and sale of electricity | |
9. [Provisions omitted] |
10. [Same as at present] |
3. | Schedule |
Scheduled date of the ordinary general meeting of shareholders for the purpose of the amendments to the Articles of Incorporation:
Wednesday, June 19, 2013
Scheduled date when amendments to the Articles of Incorporation come into effect:
Wednesday, June 19, 2013
- 2 -
May 16, 2013
To: | Shareholders of Honda Motor Co., Ltd. | |
From: | Honda Motor Co., Ltd. | |
1-1, Minami-Aoyama 2-chome, | ||
Minato-ku, 107-8556 Tokyo | ||
Takanobu Ito | ||
President and Representative Director |
Notice Concerning 89th Ordinary General Meeting of Shareholders
The Board of Directors of Honda Motor Co., Ltd., (the Company), at its meeting held on May 16, 2013, resolved to convene the Companys 89th ordinary general meeting of shareholders as follows.
Particulars
1. | Date and time |
10:00 a.m. on Wednesday, June 19, 2013
2. | Place |
GRAND PACIFIC LE DAIBA
Palais Royal on the first basement level
2-6-1 Daiba, Minato-Ku, Tokyo
3. | Agenda: |
Matters to be reported:
1. | Report on the business report, consolidated financial statements and unconsolidated financial statements for the 89th Fiscal Year (from April 1, 2012 to March 31, 2013); and |
2. | Report on the results of the audit of the consolidated financial statements for the 89th Fiscal Year (from April 1, 2012 to March 31, 2013) by the independent auditors and the Board of Corporate Auditors. |
Matters to be resolved:
First Item:
Distribution of Dividends
Second Item:
Partial Amendments to the Articles of Incorporation
Third Item:
Election of Thirteen (13) Directors
Fourth Item:
Election of One (1) Corporate Auditor
Securities Code Number: 7267 |
NOTICE OF CONVOCATION OF
THE 89TH ORDINARY GENERAL MEETING OF SHAREHOLDERS
TO BE HELD AT GRAND PACIFIC LE DAIBA, TOKYO, JAPAN
ON JUNE 19, 2013 AT 10:00 A.M.
(This is a translation of the original notice
in the Japanese language mailed on May 29, 2013
to stockholders in Japan, and is for reference purposes only.)
HONDA MOTOR CO., LTD.
(HONDA GIKEN KOGYO KABUSHIKI KAISHA)
TOKYO, JAPAN
[Translation]
May 29, 2013
To Stockholders:
Notice of Convocation of the 89th
Ordinary General Meeting of Shareholders
Dear Stockholders:
You are hereby notified that the 89th Ordinary General Meeting of Shareholders will be held as stated below. You are respectfully requested to attend the meeting.
Please note that, if you do not plan to attend the annual meeting, you may vote by the method outlined below. We request that you exercise your vote after examining the reference documents and other materials enclosed that are related to the annual meeting.
Vote by mail: Please indicate whether you are in favor of, or opposed to, the proposals on the enclosed Annual Meeting Proxy Card, and then send the proxy card to arrive no later than 6:00 p.m. on Tuesday, June 18, 2013.
Yours faithfully, |
Honda Motor Co., Ltd. |
1-1, Minami-Aoyama, 2-chome |
Minato-ku, Tokyo |
By: Takanobu Ito |
President and Representative Director |
Request: We request that when arriving at the meeting you present the voting right exercise form enclosed herewith to the meeting hall receptionist.
2
Particulars
1. Time and Date: | 10:00a.m. on June 19, 2013 (Wednesday) | |
2. Place: | GRAND PACIFIC LE DAIBA | |
Palais Royal on the first basement level, at 2-6-1 Daiba, Minato-ku, Tokyo |
3. Agenda:
Matters to be reported:
1. | Report on the Business Report, Consolidated Balance Sheets and Consolidated Statements of Income for the 89th Fiscal Year (from April 1, 2012 to March 31, 2013); |
2. | Report on the results of the audit of the consolidated financial statements for the 89th Fiscal Year (from April 1, 2012 to March 31, 2013) by the independent auditors and the Board of Corporate Auditors. |
Matters to be resolved:
First Item:
Distribution of Dividends
Second Item:
Partial Amendments to the Articles of Incorporation
Third Item:
Election of Thirteen (13) Directors
Fourth Item:
Election of One (1) Corporate Auditor
4. Matters to Be Resolved at the Meeting
(1) | When proxies submitted show no indication of approval or disapproval on the voting right exercise form, these will be treated as votes of approval for proposals. |
(2) | When proxy voting rights are exercised through indications on the voting right exercise form and, in addition, through voting via the Internet and, therefore, voting rights are exercised more than once, the votes submitted via the Internet will be regarded as the effective votes. |
(3) | When voting rights are exercised more than once via the Internet, the last votes submitted via the Internet will be regarded as the effective votes. |
Details regarding these agenda items are contained in the Business Report for the 89th Fiscal Year, which is appended to this Notice of Convocation.
* | In the case that revisions are made to the general shareholders meeting reference materials or attached materials, the revised items will be posted on the Companys website. |
Japanese http://www.honda.co.jp/investors English http://world.honda.com/investors
3
REFERENCE DOCUMENTS
CONCERNING EXERCISE OF VOTING RIGHT
Reference matters with respect to the proposals:
FIRST ITEM: Distribution of Dividends
The Company strives to maintain a global perspective, to develop its operations in many countries throughout the world and to increase its corporate value.
With respect to the distribution of profits, the Company regards the distribution of profits to its stockholders to be one of the most important issues for management. The Company will make dividend distributions after taking into account its long-term strategy and consolidated earnings performance and will also acquire its own stock from time to time with the objectives of improving capital efficiency and flexibly implementing capital policies.
Retained earnings will be allocated toward financing R&D activities that are essential for the future growth of the Company and toward capital expenditures and investment programs that will expand the Companys operations for the purpose of improving business results and strengthening the Companys financial condition.
Regarding the year-end dividends for the fiscal year under review, the following conditions are proposed:
(1) Conditions and Total Value of Dividend Assets Allocated to Stockholders
¥19 per share of common stock
Total value of ¥34,243,648,510
(2) Effective Date of Distribution of Dividends
June 20, 2013
4
SECOND ITEM: Partial Amendments to the Articles of Incorporation
(1) Reasons for Amendments
The amendments were made to make an addition to the Companys business objects for the purpose of conducting electricity generation using renewable energy, etc. and the supply and sale of such electricity (Article 2 of the proposed amendments).
(2) Contents of Amendments
Portions of the existing Articles of Incorporation will be amended as follows:
(The underlines indicate the portions to be amended.)
Present Articles |
Proposed Amendments | |
Chapter I.
(Objects)
Article 2.
The object of the Company shall be to carry on the following business:
1.
| [Provisions omitted]
8.
9. [Provisions omitted] |
Chapter I.
(Objects)
Article 2.
The object of the Company shall be to carry on the following business:
1.
| [Same as at present]
8.
9. Electricity generation and supply and sale of electricity
10. [Same as at present] |
5
THIRD ITEM: Election of Thirteen (13) Directors
The term of office of each of the twelve (12) current Directors is due to expire at the close of this meeting. It is proposed that the total number of directors be increased by one in order to further strengthen the management system so that thirteen (13) Directors will be appointed at this meeting. The names and particulars of the candidates for the position of Director are provided below.
Candidate |
Name (Date of birth) |
Resume, current position and responsibilities * denotes important concurrent positions in other companies or organizations |
Number of shares |
Special interest | ||||
1. |
Fumihiko Ike | Joined Honda in February 1982 | 27,400 | None | ||||
(May 26, 1952) | Chief Operating Officer for Power Product Operations in April 2003 | |||||||
Director of the Company in June 2003 | ||||||||
Chief Operating Officer for Business Management Operations in April 2006 | ||||||||
Managing Director of the Company in June 2007 | ||||||||
Chief Operating Officer for Regional Operations (Asia & Oceania) in April 2008 | ||||||||
President and Director of Asian Honda Motor Co., Ltd. in April 2008 | ||||||||
Senior Managing Officer and Director of the Company in April 2011 | ||||||||
Chief Operating Officer for Business Management Operations in April 2011 | ||||||||
Risk Management Officer in April 2011 | ||||||||
General Supervisor, Information Systems in April 2011 | ||||||||
Chief Operating Officer for IT Operations in April 2012 | ||||||||
Government & Industrial Affairs in April 2012 | ||||||||
Chairman and Representative Director of the Company in April 2013 (present) | ||||||||
2. |
Takanobu Ito | Joined Honda in April 1978 | 26,400 | None | ||||
(August 29, 1953) | Executive Vice President of Honda R&D Americas, Inc. in April 1998 | |||||||
Director of the Company in June 2000 | ||||||||
Senior Managing Director of Honda R&D Co., Ltd. in June 2001 | ||||||||
Managing Director of the Company in June 2003 | ||||||||
Motor Sports in June 2003 | ||||||||
President and Director of Honda R&D Co., Ltd. in June 2003 | ||||||||
General Supervisor, Motor Sports in April 2004 | ||||||||
General Manager of Suzuka Factory of Production Operations in April 2005 | ||||||||
Managing Officer of the Company in June 2005 | ||||||||
Chief Operating Officer for Automobile Operations in April 2007 | ||||||||
Senior Managing Director of the Company in June 2007 | ||||||||
President and Director of Honda R&D Co., Ltd. in April 2009 | ||||||||
President and Director of the Company in June 2009 | ||||||||
President, Chief Executive Officer and Representative Director of the Company in April 2011 (present) | ||||||||
Chief Operating Officer for Automobile Operations in April 2011 |
6
Candidate |
Name (Date of birth) |
Resume, current position and responsibilities * denotes important concurrent positions in other companies or organizations |
Number of shares |
Special interest | ||||
3. |
Tetsuo Iwamura | Joined Honda in April 1978 | 26,400 | None | ||||
(May 30, 1951) | Chief Operating Officer for Parts Operations in April 2000 | |||||||
Director of the Company in June 2000 | ||||||||
Chief Operating Officer for Regional Operations (Latin America) in April 2003 | ||||||||
President and Director of Honda South America Ltda. in April 2003 | ||||||||
President and Director of Moto Honda da Amazonia Ltda. in April 2003 | ||||||||
President and Director of Honda Automoveis do Brasil Ltda. in April 2003 | ||||||||
Managing Director of the Company in June 2006 | ||||||||
Chief Operating Officer for Regional Operations (North America) in April 2007 (present) | ||||||||
President and Director of Honda North America, Inc. in April 2007 (present) | ||||||||
President and Director of American Honda Motor Co., Inc. in April 2007 (present) | ||||||||
Senior Managing Director of the Company in June 2008 | ||||||||
Senior Managing Officer and Director of the Company in April 2011 | ||||||||
Senior Managing Officer of the Company in June 2011 | ||||||||
Executive Vice President and Executive Officer in April 2012 (present) | ||||||||
Representative Director of the Company in June 2012 (present) | ||||||||
Chief Operating Officer for Automobile Operations in April 2013 (present) | ||||||||
Risk Management Officer in April 2013 (present) | ||||||||
(Important concurrent positions in other companies or organizations) | ||||||||
* President and Director of Honda North America, Inc. |
||||||||
* President and Director of American Honda Motor Co., Inc. |
7
Candidate |
Name (Date of birth) |
Resume, current position and responsibilities * denotes important concurrent positions in other companies or organizations |
Number of shares |
Special interest | ||||
4. |
Takashi Yamamoto | Joined Honda in April 1977 | 18,400 | None | ||||
(January 12, 1953) | General Manager of Automobile Purchasing Division 1 for Purchasing Operations in April 2000 | |||||||
Director of the Company in June 2000 | ||||||||
Quality, Certification & Regulation Compliance and Service Technology in April 2002 | ||||||||
Quality, Certification & Regulation Compliance in April 2004 | ||||||||
President and Director of Honda Manufacturing of Alabama, LLC in April 2005 | ||||||||
Operating Officer of the Company in June 2005 | ||||||||
General Manager of Saitama Factory of Production Operations in April 2007 | ||||||||
Managing Officer of the Company in June 2007 | ||||||||
President and Director of Yutaka Giken Co., Ltd. in June 2009 | ||||||||
Managing Officer of the Company in April 2011 | ||||||||
General Manager of Automobile Production Planning Office in Production Operations in April 2011 | ||||||||
Senior Managing Officer of the Company in April 2012 (present) | ||||||||
Chief Operating Officer for Production Operations in April 2012 | ||||||||
Director of the Company in June 2012 (present) | ||||||||
Production Operation in April 2013 (present) | ||||||||
General Manager of Automobile Production Oversight Unit for Automobile Operations in April 2013 (present) | ||||||||
5. |
Yoshiharu Yamamoto | Joined Honda in April 1973 | 18,400 | None | ||||
(March 19, 1953) | Managing Director of Honda R&D Co., Ltd. in June 2005 | |||||||
Senior Managing Director of Honda R&D Co., Ltd. in June 2007 | ||||||||
Executive Vice President and Director of Honda R&D Co., Ltd. in June 2010 | ||||||||
Managing Officer of the Company in April 2011 | ||||||||
President, Chief Executive Officer and Director of Honda R&D Co., Ltd. in April 2011 (present) | ||||||||
Managing Officer and Director of the Company in June 2011 | ||||||||
Senior Managing Officer of the Company in April 2012 (present) | ||||||||
Chief Operating Officer for IT Operations in April 2013 (present) | ||||||||
(Important concurrent positions in other companies or organizations) | ||||||||
* President, Chief Executive Officer and Director of Honda R&D Co., Ltd. |
8
Candidate |
Name (Date of birth) |
Resume, current position and responsibilities * denotes important concurrent positions in other companies or organizations |
Number of shares |
Special interest | ||||
6. |
Masahiro Yoshida | Joined Honda in April 1979 | 22,100 | None | ||||
(March 5, 1957) | Human Resources and Associate Relations for Business Support Operations in April 2007 | |||||||
Operating Officer of the Company in June 2007 | ||||||||
General Manager of Hamamatsu Factory of Production Operations in April 2008 | ||||||||
Chief Operating Officer for Business Support Operations in April 2010 (present) | ||||||||
Director of the Company in June 2010 | ||||||||
Operating Officer and Director of the Company in April 2011 | ||||||||
Compliance Officer in April 2012 (present) | ||||||||
Managing Officer and Director of the Company in April 2013 (present) | ||||||||
7. |
Outside Director candidate Kensaku Hogen (August 2, 1941) |
Ambassador to Canada in April 2001 Director of the Company in June 2005 (present) (Attendance record) Attended all 10 meetings of the Board of Directors |
2,500 | None | ||||
8. |
Outside Director candidate Nobuo Kuroyanagi (December 18, 1941) | President and CEO of Mitsubishi UFJ Financial Group, Inc. (MUFG) in October 2005 | 1,900 | None | ||||
Chairman of The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU) in April 2008 | ||||||||
Director of the Company in June 2009 (present) | ||||||||
Director of MUFG in April 2010 | ||||||||
Advisor of BTMU in April 2012 (present) | ||||||||
(Important concurrent positions in other companies or organizations) | ||||||||
* Advisor of BTMU |
||||||||
* Outside Director of Isetan Mitsukoshi Holdings Ltd. |
||||||||
* Outside Director of Mitsubishi Research Institute, Inc. |
||||||||
* Outside Director of Tokio Marine & Nichido Fire Insurance Co., Ltd. |
||||||||
* Outside Corporate Auditor of Mitsubishi Heavy Industries, Ltd. |
||||||||
(Attendance record) | ||||||||
Attended 9 of 10 meetings of the Board of Directors |
9
Candidate |
Name (Date of birth) |
Resume, current position and responsibilities * denotes important concurrent positions in other companies or organizations |
Number of shares |
Special interest | ||||
9. |
Takeo Fukui | Joined Honda in April 1969 | 45,400 | None | ||||
(November 28, 1944) | President and Director of Honda Racing Corporation in May 1987 | |||||||
Managing Director of Honda R&D Co., Ltd. in May 1987 Director of the Company in June 1988 | ||||||||
Senior Managing Director of Honda R&D Co., Ltd. in June 1990 | ||||||||
Executive Vice President and Director of Honda of America Mfg., Inc. in June 1994 | ||||||||
Managing Director of the Company in June 1996 | ||||||||
President and Director of Honda of America Mfg., Inc. in June 1996 | ||||||||
President and Director of Honda R&D Co., Ltd. in June 1998 | ||||||||
Motor Sports in June 1999 | ||||||||
Senior Managing Director of the Company in June 1999 | ||||||||
President and Director of the Company in June 2003 | ||||||||
Director and Advisor of the Company in June 2009 (present) | ||||||||
10. |
Yuji Shiga | Joined Honda in April 1982 | 10,400 | None | ||||
(October 7, 1958) | General Manager of Operation Office No. 1 in Regional Operations (North America) in April 2009 | |||||||
General Manager of Operation Office No. 2 in Regional Operations (Asia & Oceania) in April 2010 | ||||||||
Operating Officer of the Company in April 2011 | ||||||||
Responsible for CIS countries, the Middle & Near East and Africa for Regional Operations in April 2011 | ||||||||
Chief Operating Officer for Power Product Operations in April 2012 (present) | ||||||||
Operating Officer and Director of the Company in June 2012 (present) | ||||||||
11. |
Kohei Takeuchi | Joined Honda in April 1982 | 10,200 | None | ||||
(February 10, 1960) | General Manager of Accounting Division for Business Management Operations in April 2010 | |||||||
Operating Officer of the Company in April 2011 (present) | ||||||||
Chief Operating Officer for Business Management | ||||||||
Operations in April 2013 (present) | ||||||||
12. |
Shinji Aoyama | Joined Honda in April 1986 | 6,400 | None | ||||
(December 25, 1963) | General Manager of Motorcycle Business Planning Office for Motorcycle Operations in April 2011 | |||||||
Operating Officer of the Company in April 2012 (present) | ||||||||
Chief Operating Officer for Motorcycle Operations in April 2013 (present) | ||||||||
13. |
Noriya Kaihara | Joined Honda in April 1984 | 3,000 | None | ||||
(August 4, 1961) | General Manager of Parts Sales and Service Division for Customer Service Operations in April 2010 | |||||||
General Manager of Automobile Quality Assurance Division in April 2012 | ||||||||
Operating Officer of the Company in April 2013 (present) | ||||||||
Responsible for Quality in April 2013 (present) |
10
Notes: |
1. denotes new candidates. | |
2. Matters related to Outside Director candidates are as follows: | ||
(1) Kensaku Hogen and Nobuo Kuroyanagi are candidates for the position of Outside Director as defined in Article 2, Paragraph 3, Item 7 of the Enforcement Regulations of the Company Law. | ||
(2) Kensaku Hogen has been registered as an Independent Director as provided for in the rules of the Tokyo Stock Exchange and the Osaka Securities Exchange, and if he is elected, he is scheduled to continue to serve as an Independent Director. | ||
(3) Reasons for selection of candidates for the position of Outside Director
Kensaku Hogen is proposed as a candidate because the Company wishes to receive his advice about the Companys activities given from an objective, broad-ranging and high-level perspective, and based on his rich experience and high level of insight regarding diplomacy. Although he has no experience of being engaged in corporate management other than having served as an outside officer in the past, the Company believes that he can perform the duties of an Outside Director based on his experience and insight mentioned above. | ||
Nobuo Kuroyanagi is proposed as a candidate because the Company wishes to receive his advice on the Companys activities given from an objective, broad-ranging and high-level perspective, and based on his rich experience and high level of insight regarding corporate management. | ||
(4) Outline of contents of the limited liability contracts with candidates for the position of Outside Directors | ||
Based on Article 427, Paragraph 1 of the Company Law and Article 28 of the Articles of Incorporation, the Company has entered into contracts with both candidates which limit their liabilities, in accordance with Article 423, Paragraph 1 of the Company Law, to the minimum liability amount that is stipulated in Article 425, Paragraph 1 of the Company Law. | ||
If both candidates are re-elected, the Company plans to extend the term of each of their limited liability contracts. | ||
(5) Incidence of inappropriate corporate operations at other companies for which the candidate was serving as an officer (during the past five years), acts which were done to prevent the occurrence of such incidences and acts which were done as measures taken after the occurrence of such incidence | ||
At The Senshu Ikeda Bank, Ltd., where Nobuo Kuroyanagi served as an Outside Director from June 2010 until June 2012, the following were discovered: an incidence of embezzlement of customers savings by a part-time worker in November 2010, an incidence of fraudulent withdrawal by an employee through the misuse of the maximum amount of overdraft in March 2011 and, finally, an incidence of embezzlement of customers savings by an employee in June 2011. While Nobuo Kuroyanagi was unaware of such facts in advance, he made various recommendations regarding legal compliance, at meetings of the board of directors, on a regular basis and, after the discovery of the aforesaid incidence, Nobuo Kuroyanagi has proactively advised the Company on the implementation of measures to prevent the recurrence of such incidence through the strengthening of the Companys internal systems for checks, etc. and the enhancement of employee training, etc. | ||
(6) Number of years since the candidate initially assumed the position of Outside Director (up to the end of this general meeting of shareholders) |
Kensaku Hogen | Eight years | |||
Nobuo Kuroyanagi | Four years |
11
FOURTH ITEM: Election of One (1) Corporate Auditor
The term of office of the Corporate Auditor Hideki Okada is due to expire at the close of this meeting. It is proposed that one (1) Corporate Auditor be elected at this meeting. The name and particulars of the candidate for the position of Corporate Auditor are provided below. The Board of Corporate Auditors has consented to the submission of this item to this meeting.
Candidate |
Name |
Resume, current position and important concurrent positions in other companies or organizations |
Number of shares |
Special interest | ||||
1. | Kunio Endo | Joined Honda in April 1981 | 4,000 | None | ||||
(August 23, 1957) | General Manager of Finance Division in Business | |||||||
Management Operations in April 2006 | ||||||||
General Manager of Accounting Division for Business | ||||||||
Management Operations in April 2007 | ||||||||
President and Director of American Honda Finance Corp. in November 2010 | ||||||||
President and Director of Honda Canada Finance Inc. in November 2010 |
12
Business Report for the 89th Fiscal Year
For the Period From: April 1, 2012 To: March 31, 2013
1. OUTLINE OF BUSINESS
(1) Review of Operations
Hondas consolidated net sales and other operating revenue for the year amounted to ¥9,877.9 billion, an increase of 24.3% from the previous fiscal year, due primarily to increased revenue in automobile business operations as production recovered from the impact of the Great East Japan Earthquake and the floods in Thailand as well as favorable foreign currency translation effects.
Consolidated operating income for the year amounted to ¥544.8 billion, an increase of 135.5% from the previous fiscal year, due primarily to an increase in sales volume and model mix as well as cost reductions, despite increased SG&A and R&D expenses.
Consolidated income before income taxes and equity in income of affiliates for the year totaled ¥488.8 billion, an increase of 89.9% from the previous fiscal year.
Equity in income of affiliates amounted to ¥82.7 billion for the year, a decrease of 17.6% from the previous fiscal year.
Consolidated net income attributable to Honda Motor Co., Ltd. for the fiscal year ended March 31, 2013 totaled ¥367.1 billion, an increase of 73.6% from the previous fiscal year. Basic net income attributable to Honda Motor Co., Ltd. per common share for the fiscal year amounted to ¥203.71, an increase of ¥86.37 from ¥117.34 for the previous fiscal year.
Motorcycle Business
For the years ended March 31, 2012 and 2013
Unit (thousands) | ||||||||||||||||||||||||||||||||
Honda Group Unit Sales | Consolidated Unit Sales | |||||||||||||||||||||||||||||||
Year
ended Mar. 31, 2012 |
Year ended Mar. 31, 2013 |
Change | (%) | Year
ended Mar.31, 2012 |
Year ended Mar. 31, 2013 |
Change | (%) | |||||||||||||||||||||||||
Motorcycle business |
15,061 | 15,494 | 433 | 2.9 | 8,650 | 9,510 | 860 | 9.9 | ||||||||||||||||||||||||
Japan |
220 | 217 | -3 | -1.4 | 220 | 217 | -3 | -1.4 | ||||||||||||||||||||||||
North America |
200 | 250 | 50 | 25.0 | 200 | 250 | 50 | 25.0 | ||||||||||||||||||||||||
Europe |
198 | 179 | -19 | -9.6 | 198 | 179 | -19 | -9.6 | ||||||||||||||||||||||||
Asia |
12,412 | 13,035 | 623 | 5.0 | 6,001 | 7,051 | 1,050 | 17.5 | ||||||||||||||||||||||||
Other Regions |
2,031 | 1,813 | -218 | -10.7 | 2,031 | 1,813 | -218 | -10.7 |
Note: | Honda Group Unit Sales is the total unit sales of completed products of Honda, its consolidated subsidiaries and its affiliates accounted for under the equity method. Consolidated Unit Sales is the total unit sales of completed products corresponding to consolidated net sales to external customers, which consists of unit sales of completed products of Honda and its consolidated subsidiaries. |
With respect to Hondas sales for the year by business segment, in motorcycle business operations, revenue from sales to external customers decreased 0.7%, to ¥1,339.5 billion from the previous fiscal year, due mainly to unfavorable foreign currency translation effects, despite increased consolidated unit sales. Operating income totaled ¥110.2 billion, a decrease of 22.7% from the previous fiscal year, due primarily to unfavorable foreign currency effects, despite an increase in cost reductions.
13
Automobile Business
For the years ended March 31, 2012 and 2013
Unit (thousands) | ||||||||||||||||||||||||||||||||
Honda Group Unit Sales | Consolidated Unit Sales | |||||||||||||||||||||||||||||||
Year
ended Mar. 31, 2012 |
Year ended Mar. 31, 2013 |
Change | (%) | Year
ended Mar. 31, 2012 |
Year ended Mar. 31, 2013 |
Change | (%) | |||||||||||||||||||||||||
Automobile business |
3,108 | 4,014 | 906 | 29.2 | 2,482 | 3,408 | 926 | 37.3 | ||||||||||||||||||||||||
Japan |
588 | 692 | 104 | 17.7 | 580 | 685 | 105 | 18.1 | ||||||||||||||||||||||||
North America |
1,323 | 1,731 | 408 | 30.8 | 1,323 | 1,731 | 408 | 30.8 | ||||||||||||||||||||||||
Europe |
158 | 171 | 13 | 8.2 | 158 | 171 | 13 | 8.2 | ||||||||||||||||||||||||
Asia |
837 | 1,122 | 285 | 34.1 | 219 | 523 | 304 | 138.8 | ||||||||||||||||||||||||
Other Regions |
202 | 298 | 96 | 47.5 | 202 | 298 | 96 | 47.5 |
Note: | Honda Group Unit Sales is the total unit sales of completed products of Honda, its consolidated subsidiaries and its affiliates accounted for under the equity method. Consolidated Unit Sales is the total unit sales of completed products corresponding to consolidated net sales to external customers, which consists of unit sales of completed products of Honda and its consolidated subsidiaries. Certain sales of automobiles that are financed with residual value type auto loans by our Japanese finance subsidiaries are accounted for as operating leases in conformity with U.S. generally accepted accounting principles and are not included in consolidated net sales to the external customers in our automobile business. As a result, they are not included in Consolidated Unit Sales, but are included in Honda Group Unit Sales of our automobile business. |
In automobile business operations, revenue from sales to external customers increased 32.8%, to ¥7,709.2 billion, from the previous fiscal year due mainly to an increase in consolidated unit sales and favorable foreign currency translation effects. Operating income totaled ¥285.9 billion, an increase of ¥363.1 billion from the previous fiscal year, due primarily to an increase in sales volume and model mix as well as cost reductions, despite increased SG&A expenses and R&D expenses.
Financial Service Business
Revenue from customers in the financial services business increased 6.3%, to ¥548.5 billion, from the previous fiscal year due mainly to an increase in revenue from operating leases and favorable foreign currency translation effects. Operating income decreased 7.0%, to ¥158.1 billion, from the previous fiscal year due mainly to an increase of expenses for lease residual values.
Power Product and Other Businesses
For the years ended March 31, 2012 and 2013
Unit (thousands) | ||||||||||||||||
Honda Group Unit Sales/Consolidated Unit Sales | ||||||||||||||||
Year
ended Mar. 31, 2012 |
Year ended Mar. 31, 2013 |
Change | (%) | |||||||||||||
Power product business |
5,819 | 6,071 | 252 | 4.3 | ||||||||||||
Japan |
392 | 314 | -78 | -19.9 | ||||||||||||
North America |
2,314 | 2,604 | 290 | 12.5 | ||||||||||||
Europe |
1,121 | 1,004 | -117 | -10.4 | ||||||||||||
Asia |
1,472 | 1,572 | 100 | 6.8 | ||||||||||||
Other Regions |
520 | 577 | 57 | 11.0 |
Note: | Honda Group Unit Sales is the total unit sales of completed products of Honda, its consolidated subsidiaries and its affiliates accounted for under the equity method. Consolidated Unit Sales is the total unit sales of completed products corresponding to consolidated net sales to external customers, which consists of unit sales of completed products of Honda and its consolidated subsidiaries. In power product business, there is no discrepancy between Honda Group Unit Sales and Consolidated Unit Sales for the year ended March 31, 2012 and for the year ended March 31, 2013, since no affiliate accounted for under the equity method was involved in the sale of Honda power products. |
Revenue from sales to external customers in power product and other businesses increased 1.3%, to ¥280.6 billion, from the previous fiscal year, due mainly to an increase in consolidated unit sales of power products and favorable foreign currency translation effects, despite decreased revenue in other businesses. Honda reported an operating loss of ¥9.5 billion, a deterioration of ¥5.5 billion from the previous fiscal year due mainly to increased R&D expenses.
14
¡ Net Sales Breakdown
Yen (millions) | ||||||||||||||||
Business Segment |
FY2012 From April 1, 2011 to March 31, 2012 (reference) |
FY2013 From April 1, 2012 to March 31, 2013 |
Change from the previous fiscal year (reference) |
|||||||||||||
(%) | ||||||||||||||||
Grand Total |
7,948,095 | 9,877,947 | 1,929,852 | 24.3 | ||||||||||||
Japan |
1,517,927 | 1,652,995 | 135,068 | 8.9 | ||||||||||||
North America |
3,480,732 | 4,586,412 | 1,105,680 | 31.8 | ||||||||||||
Europe |
515,739 | 534,517 | 18,778 | 3.6 | ||||||||||||
Asia |
1,458,799 | 2,093,034 | 634,235 | 43.5 | ||||||||||||
Other Regions |
974,898 | 1,010,989 | 36,091 | 3.7 | ||||||||||||
Motorcycle Business |
1,348,828 | 1,339,549 | -9,279 | -0.7 | ||||||||||||
Japan |
72,915 | 72,949 | 34 | 0.0 | ||||||||||||
North America |
97,306 | 112,176 | 14,870 | 15.3 | ||||||||||||
Europe |
96,146 | 86,424 | -9,722 | -10.1 | ||||||||||||
Asia |
579,562 | 667,473 | 87,911 | 15.2 | ||||||||||||
Other Regions |
502,899 | 400,527 | -102,372 | -20.4 | ||||||||||||
Automobile Business |
5,805,975 | 7,709,216 | 1,903,241 | 32.8 | ||||||||||||
Japan |
1,329,645 | 1,462,664 | 133,019 | 10.0 | ||||||||||||
North America |
2,855,683 | 3,905,276 | 1,049,593 | 36.8 | ||||||||||||
Europe |
355,963 | 388,464 | 32,501 | 9.1 | ||||||||||||
Asia |
836,301 | 1,385,449 | 549,148 | 65.7 | ||||||||||||
Other Regions |
428,383 | 567,363 | 138,980 | 32.4 | ||||||||||||
Financial Services Business |
516,148 | 548,506 | 32,358 | 6.3 | ||||||||||||
Japan |
28,926 | 34,282 | 5,356 | 18.5 | ||||||||||||
North America |
455,558 | 484,275 | 28,717 | 6.3 | ||||||||||||
Europe |
8,175 | 7,256 | -919 | -11.2 | ||||||||||||
Asia |
2,878 | 3,145 | 267 | 9.3 | ||||||||||||
Other Regions |
20,611 | 19,548 | -1,063 | -5.2 | ||||||||||||
Power Product & Other Businesses |
277,144 | 280,676 | 3,532 | 1.3 | ||||||||||||
Japan |
86,441 | 83,100 | -3,341 | -3.9 | ||||||||||||
North America |
72,185 | 84,685 | 12,500 | 17.3 | ||||||||||||
Europe |
55,455 | 52,373 | -3,082 | -5.6 | ||||||||||||
Asia |
40,058 | 36,967 | -3,091 | -7.7 | ||||||||||||
Other Regions |
23,005 | 23,551 | 546 | 2.4 |
15
(2) Capital Expenditures
Capital expenditures during the fiscal year totaled ¥593,628 million. The breakdown of capital expenditures by business segment was as follows:
Yen (millions), % | ||||||||||||||||
Business Segment |
FY2012 (reference) |
FY2013 | Change in
amount (reference) |
Change (%) (reference) |
||||||||||||
Motorcycle Business |
62,075 | 73,513 | 11,438 | 18.4 | ||||||||||||
Automobile Business |
334,196 | 505,045 | 170,849 | 51.1 | ||||||||||||
Financial Services Business |
316 | 551 | 235 | 74.4 | ||||||||||||
Power Product & Other Businesses |
10,005 | 14,519 | 4,514 | 45.1 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
406,592 | 593,628 | 187,036 | 46.0 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating Lease Assets |
683,767 | 793,118 | 109,351 | 16.0 |
Note: Intangible assets are not included in the table above.
In addition to investments for new model introductions, the Companys capital investments were predominantly utilized for expanding, rationalizing and renovating manufacturing facilities as well as for expanding sales and R&D facilities.
(3) Liquidity and Capital Resources
Funds for financing capital investments in Hondas manufacturing and sales businesses are provided mainly from cash generated by operating activities, bank loans and the issuance of commercial paper. The outstanding balance of funds for Hondas manufacturing and sales businesses at the end of the fiscal year under review was ¥540.2 billion.
Honda funds its financial programs for customers and dealers primarily from medium-term notes, bank loans, securitization of monetary assets, commercial paper, corporate bonds and from operating companies. The outstanding balance of funds for Hondas financial services subsidiaries at the end of the fiscal year under review was ¥4,863.5 billion.
(4) Preparing for the Future
Honda aims to achieve global growth by further encouraging and strengthening innovation and creativity and creating quality products that please the customers and exceed their expectations.
Honda will focus all its energies on the tasks set out below, aiming to get back on a growth trajectory as it pursues the vision toward 2020 of providing good products to customers with speed, affordability and low CO2 emissions.
1. | Research and Development |
In connection with its efforts to develop the most effective safety and environmental technologies, Honda will continue to be innovative in advanced technology and products. Honda aims to create and introduce new value-added products to quickly respond to specific needs in various markets around the world. Honda will also continue its efforts to conduct research on experimental technologies for the future.
2. | Production Efficiency |
Honda will establish and enhance efficient and flexible production systems at its global production bases and supply high quality products, with the aim of meeting the needs of its customers in each region. Learning from the experience of disasters such as the Great East Japan Earthquake and the Thai floods, Honda will work at improving its global supply chain, implementing disaster prevention measures at each place of business and devising more effective business continuity plans (BCPs).
3. | Sales Efficiency |
Honda will remain proactive in its efforts to expand product lines through the innovative use of IT and will show its continued commitment to different customers throughout the world by upgrading its sales and service structure.
4. | Product Quality |
In response to increasing customer demand, Honda will upgrade its quality control by enhancing the functions of and coordination among the development, purchasing, production, sales and service departments.
16
5. | Safety Technologies |
Honda is working to develop safety technologies that enhance accident prediction and prevention, technologies to help reduce the risk of injuries to passengers and pedestrians from car accidents and technologies that enhance compatibility between large and small vehicles, as well as expand its lineup of products incorporating such technologies. Honda will reinforce and continue to advance its contribution to traffic safety in motorized societies in Japan and abroad. Honda also intends to remain active in a variety of traffic safety programs, including advanced driving and motorcycling training programs provided by local dealerships.
6. | The Environment |
Honda will step up its efforts to create better, cleaner and more fuel-efficient engine technologies and to further improve recyclables throughout its product lines. Honda has now set a target to reduce CO2 emissions from its global products by 30% by the end of 2020 compared to year 2000 levels. In addition to reducing CO2 emissions during production and its supply chain, Honda will strengthen its efforts to realize reductions in CO2 emissions through its entire corporate activities. Furthermore, Honda will strengthen its efforts in advancing technologies in the area of total energy management, to reduce CO2 emissions through mobility and peoples everyday lives.
7. | Continuing to Enhance Hondas Social Reputation and Communication with the Community |
In addition to continuing to provide products incorporating Hondas advanced safety and environmental technologies, Honda will continue striving to enhance its social reputation by, among other things, strengthening its corporate governance, compliance and risk management as well as participating in community activities and making philanthropic contributions.
Through these company-wide activities, Honda will strive to be a company that its shareholders, investors, customers and society want to exist.
(5) Employees of the Group and the Parent Company
(a) Honda Employees
Business Segment |
Number of Employees | |||||||||||||||||||||||
FY2012 (reference) | FY2013 | Change (reference) | ||||||||||||||||||||||
Motorcycle Business |
39,954 | (14,540 | ) | 40,430 | (14,404 | ) | 476 | (-136 | ) | |||||||||||||||
Automobile Business |
134,357 | (10,405 | ) | 138,443 | (13,052 | ) | 4,086 | (2,647 | ) | |||||||||||||||
Financial Services Business |
2,145 | (95 | ) | 2,157 | (113 | ) | 12 | (18 | ) | |||||||||||||||
Power Product & Other Businesses |
10,638 | (2,924 | ) | 9,308 | (3,354 | ) | -1,330 | (430 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
187,094 | (27,964 | ) | 190,338 | (30,923 | ) | 3,244 | (2,959 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
(b) Employees of the Parent Company | ||||||||||||||||||||||||
FY2012 (reference) | FY2013 | Change (reference) | ||||||||||||||||||||||
Number of employees |
24,888 | (2,909 | ) | 23,983 | (4,261 | ) | -905 | (1,352 | ) | |||||||||||||||
Average age |
43.6 | 44.3 | 0.7 | |||||||||||||||||||||
Average number of years employed by the Company |
22.5 | 23.0 | 0.5 |
Note: | The number of employees of the Honda Group and the Company refers to full-time employees. The average number of temporary employees is shown in parentheses. |
17
2. COMMON STOCK
(1) Total Number of Shares Issued | 1,811,428,430 shares | |
(2) Number of Stockholders |
221,028 | |
(3) Principal Stockholders |
Name |
Number of Shares Held (thousands) |
Percentage as against
Total Shares Issued (%) | ||
Japan Trustee Services Bank, Ltd. (Trust Account) |
126,568 | 7.0 | ||
The Master Trust Bank of Japan, Ltd. (Trust Account) |
83,741 | 4.6 | ||
Meiji Yasuda Life Insurance Company |
51,199 | 2.8 | ||
Moxley & Co. LLC |
50,169 | 2.8 | ||
Tokio Marine & Nichido Fire Insurance Co., Ltd. |
44,917 | 2.5 | ||
JPMorgan Chase Bank 380055 |
41,688 | 2.3 | ||
SSBT OD05 OMNIBUS ACCOUNTTREATY CLIENTS |
38,029 | 2.1 | ||
The Chase Manhattan Bank, N.A. London, S.L. Omnibus Account |
36,896 | 2.0 | ||
The Bank of Tokyo-Mitsubishi UFJ, Ltd. |
36,686 | 2.0 | ||
Nippon Life Insurance Company |
34,700 | 1.9 |
Notes: | 1. | The number of shares described above rounds off figures of less than 1,000 shares.
| ||
2. | Ownership percentages are calculated using the total number of shares issued minus treasury stock (9,131 thousand shares).
| |||
3. | Moxley & Co. LLC is an official holder of stock of JPMorgan Chase Bank, which is a depositary institution for American Depositary Receipts (ADRs). |
3. STOCK WARRANTS
No relevant information
18
4. CORPORATE OFFICERS
(1) Directors and Corporate Auditors
Title |
Name |
Area of Responsibility or Principal Occupations | ||
President, Chief Executive Officer and Representative Director | Takanobu Ito | Chief Operating Officer for Automobile Operations | ||
Executive Vice President, Executive Officer and Representative Director | Tetsuo Iwamura | Chief Operating Officer for Regional Operations (North America) President and Director of Honda North America, Inc. President and Director of American Honda Motor Co., Inc. | ||
Senior Managing Officer and Director | Tatsuhiro Oyama | Chief Operating Officer for Motorcycle Operations Chief Officer of Driving Safety Promotion Center | ||
Senior Managing Officer and Director | Fumihiko Ike | Chief Operating Officer for Business Management Operations Chief Operating Officer for IT Operations | ||
Risk Management Officer | ||||
Responsible for Government & Industrial Affairs | ||||
Senior Managing Officer and Director | Tomohiko Kawanabe | Responsible for Quality, Certification and Regulation Compliance | ||
Senior Managing Officer and Director | Takashi Yamamoto | Chief Operating Officer for Production Operations | ||
Senior Managing Officer and Director | Yoshiharu Yamamoto | President, Chief Executive Officer and Director of Honda R&D Co., Ltd. | ||
Director | Kensaku Hogen | |||
Director | Nobuo Kuroyanagi | Advisor of The Bank of Tokyo-Mitsubishi UFJ, Ltd. | ||
Outside Director of Isetan Mitsukoshi Holdings Ltd. | ||||
Outside Director of Mitsubishi Research Institute, Inc. | ||||
Outside Director of Tokio Marine & Nichido Fire Insurance Co., Ltd. | ||||
Outside Corporate Auditor of Mitsubishi Heavy Industries, Ltd. | ||||
Director and Advisor | Takeo Fukui | |||
Operating Officer and Director | Masahiro Yoshida | Chief Operating Officer for Business Support Operations | ||
Compliance Officer | ||||
Operating Officer and Director | Yuji Shiga | Chief Operating Officer for Power Product Operations | ||
Corporate Auditor (Full-time) | Masaya Yamashita | |||
Corporate Auditor (Full-time) | Hideki Okada | |||
Corporate Auditor | Hirotake Abe | Certified Public Accountant | ||
Outside Corporate Auditor of ITC NETWORKS CORPORATION | ||||
Outside Corporate Auditor of NIPPON STEEL & SUMITOMO | ||||
METAL CORPORATION | ||||
Corporate Auditor | Tomochika Iwashita | Outside Corporate Auditor of DCM Holdings Co., Ltd. | ||
Corporate Auditor | Toshiaki Hiwatari | Lawyer | ||
Outside Director of Nomura Securities Co., Ltd. | ||||
Outside Corporate Auditor of TOYO KANETSU K.K. | ||||
Advisor of TMI Associates |
19
Notes: | 1. | Directors Kensaku Hogen and Nobuo Kuroyanagi are Outside Directors in accordance with Article 2-15 of the Company Law. | ||
2. | Corporate Auditors Hirotake Abe, Tomochika Iwashita and Toshiaki Hiwatari are Outside Corporate Auditors in accordance with Article 2-16 of the Company Law. | |||
3. | Corporate Auditor Hideki Okada has considerable operating experience regarding financial and accounting departments in the Company and its subsidiaries. In addition, Corporate Auditor Hirotake Abe has extensive knowledge and experience as a certified public accountant. Together, Mr. Okada and Mr. Abe have abundant knowledge related to finance and accounting. | |||
4. | The Company has appointed Kensaku Hogen as an independent (outside) director and Hirotaka Abe and Toshiaki Hiwatari as independent (outside) corporate auditors as provided for by each of the rules of the Tokyo Stock Exchange and the Osaka Securities Exchange and reported their appointment to each of these stock exchanges. | |||
5. | The Bank of Tokyo-Mitsubishi UFJ, Ltd., is one of the Companys principal shareholders, and the Company has transactions relationships with the Bank of Tokyo-Mitsubishi UFJ, including deposits and foreign exchange. In addition, the Tokio Marine & Nichido Fire Insurance Co., Ltd., is one of the Companys principal shareholders, and the Company has transactions relationships with Tokio Marine & Nichido Fire Insurance, including insurance contracts. The Company has transaction relationships with NIPPON STEEL & SUMITOMO METAL CORPORATION and purchases steel and related products from that company. The Company also has transaction relationships with Mitsubishi Heavy Industries, Ltd., and purchases automobile parts from the company. The Company has no other special capital or transactions relationships with other companies. | |||
6. | The Company has introduced the Operating Officer System to strengthen operations in regions and local workplaces and implement quick and appropriate decisions. The Operating Officers of the Company (excluding Operating Officers who also hold the position of Director) are as follows: (As of March 31, 2013) |
Title |
Name |
Area of Responsibility | ||
Senior Managing Officer | Hidenobu Iwata | President and Director of Honda of America Mfg., Inc. | ||
Managing Officer | Manabu Nishimae | Chief Operating Officer for Regional Operations (Europe, the Middle & Near East and Africa) | ||
President and Director of Honda Motor Europe Ltd. | ||||
Managing Officer | Koichi Fukuo | Executive in Charge of Business Unit No. 1, Automobile Operations | ||
Managing Officer | Hiroshi Kobayashi | Chief Operating Officer for Regional Operations (Asia & Oceania) | ||
President and Director of Asian Honda Motor Co., Ltd. | ||||
President and Director of Honda Automobile (Thailand) Co., Ltd. | ||||
Managing Officer | Sho Minekawa | Chief Operating Officer for Regional Sales Operations (Japan) | ||
Managing Officer | Toshihiko Nonaka | Responsible for Products, Automobile Operations | ||
Executive Vice President and Director, Honda R&D Co., Ltd. | ||||
Managing Officer | Takuji Yamada | Executive Vice President and Director of American Honda Motor Co., Inc. | ||
Managing Officer | Masahiro Takedagawa | Chief Operating Officer for Regional Operations (Latin America) | ||
President and Director of Honda South America Ltda. | ||||
President and Director of Honda Automoveis do Brasil Ltda. | ||||
Managing Officer | Yoshiyuki Matsumoto | Executive in Charge of Business Unit No. 3, Automobile Operations | ||
Managing Officer | Ko Katayama | General Manager of Saitama Factory of Production Operations | ||
Operating Officer | Seiji Kuraishi | Chief Operating Officer for Regional Operations (China) | ||
President of Honda Motor (China) Investment Co., Ltd. |
20
Title |
Name |
Area of Responsibility | ||
Operating Officer | Katsushi Watanabe | General Manager of Kumamoto Factory of Production Operations | ||
Operating Officer | Toshiaki Mikoshiba | President of Guangqi Honda Automobile Co., Ltd. | ||
Operating Officer | Yoshi Yamane | General Manager of Suzuka Factory of Production Operations | ||
Operating Officer | Takashi Sekiguchi | President and Director of Honda Canada Inc. | ||
Operating Officer | Takahiro Hachigo | Executive Vice President and Director of Honda Motor Europe Ltd. | ||
Managing Officer of Honda R&D Co., Ltd. | ||||
President and Director of Honda R&D Europe (U.K.) Ltd. | ||||
Operating Officer | Hiroshi Sasamoto | President, Chief Executive Officer and Director of Honda Engineering Co., Ltd. | ||
Operating Officer | Hiroyuki Yamada | Chief Operating Officer for Customer Service Operations | ||
Operating Officer | Chitoshi Yokota | Executive in Charge of Business Unit No. 2, Automobile Operations | ||
Operating Officer | Michimasa Fujino | President and Director of Honda Aircraft Company, LLC. | ||
Operating Officer | Soichiro Takizawa | Executive Vice President and Director of Honda Motor Europe Ltd. | ||
President and Director of Honda of the U.K. Manufacturing Ltd. | ||||
Operating Officer | Kohei Takeuchi | General Manager of Accounting Division for Business Management Operations | ||
Operating Officer | Naoto Matsui | Chief Operating Officer for Purchasing Operations | ||
Operating Officer | Mitsugu Matsukawa | Executive Vice President of Honda Motor (China) Investment Co., Ltd. | ||
Operating Officer | Shinji Aoyama | General Manager of Motorcycle Business Planning Office for Motorcycle Operations |
7. | As of April 1, 2013, the following changes in Representative Director and Operating Officers were announced by the Company. |
Title |
Name |
As of March 31, 2013 | ||
Chairman and Representative Director | Fumihiko Ike | Senior Managing Officer and Director | ||
Senior Managing Officer | Sho Minekawa | Managing Officer | ||
Managing Officer and Director | Masahiro Yoshida | Operating Officer and Director | ||
Managing Officer | Katsushi Watanabe | Operating Officer | ||
Managing Officer | Chitoshi Yokota | Operating Officer | ||
Operating Officer | Noriya Kaihara | General Manager of Automobile Quality Assurance Division |
21
(2) Remuneration of Directors and Corporate Auditors, Etc.
Yen (millions) | ||||||||||||||||||||||||
Item |
Directors (Outside Directors) |
Corporate
Auditors (Outside Corporate Auditors) |
Total (Outside Directors and Corporate Auditors) |
|||||||||||||||||||||
Number of persons |
Value of payments |
Number of persons |
Value of payments |
Number of persons |
Value of payments |
|||||||||||||||||||
Remuneration |
|
13 (2 |
) |
|
543 (23 |
) |
|
7 (4 |
) |
|
181 (47 |
) |
|
20 (6 |
) |
|
724 (71 |
) | ||||||
Bonuses |
|
12 (2 |
) |
|
248 (7 |
) |
|
( |
) |
|
( |
) |
|
12 (2 |
) |
|
248 (7 |
) | ||||||
|
|
|
|
|
|
|||||||||||||||||||
Total |
|
792 (30 |
) |
|
181 (47 |
) |
|
973 (78 |
) | |||||||||||||||
|
|
|
|
|
|
Notes: | 1. | Remuneration is limited to ¥1,300 million per month for Directors and ¥270 million per month for Corporate Auditors. | ||
2. | Remuneration shown in the table above is the amount of remuneration that the Company paid to its Directors, Corporate Auditors as well as its Outside Directors and Corporate Auditors during the fiscal year under review. This amount includes remuneration paid to two Directors and two Corporate Auditors who resigned as of the closing of the 88th Ordinary General Meeting of Shareholders that was held on June 21, 2012. | |||
3. | Bonuses to directors are included in the previously mentioned maximum amount for compensation to Directors, and the amount shown was decided by the meeting of the Board of Directors held on April 26, 2013. |
(3) Principal Activities of Outside Corporate Officers during the Fiscal Year under Review
(a) Principal Activities during the Fiscal Year under Review
Post |
Name |
Attendance Record |
Principal Activities during the Fiscal Year under Review | |||
Director | Kensaku Hogen | Attended all 10 meetings of the Board of Directors | Based on abundant experience and considerable knowledge regarding international diplomacy, he provides advice regarding the Companys operations from an objective and highly sophisticated perspective. | |||
Director | Nobuo Kuroyanagi | Attended 9 of 10 meetings of the Board of Directors | Based on abundant experience and considerable knowledge regarding corporate management, he provides advice regarding the Companys operations from an objective and highly sophisticated perspective. | |||
Corporate Auditor | Hirotake Abe | Attended 9 of 10 meetings of the Board of Directors Attended all 10 meetings of the Board of Auditors | Based on abundant experience and considerable knowledge as a certified public accountant, he conducts auditing activities from a broad and sophisticated perspective. | |||
Corporate Auditor | Tomochika Iwashita | Attended all 10 meetings of the Board of Directors Attended all 10 meetings of the Board of Auditors | Based on abundant experience and considerable knowledge regarding corporate management, he conducts auditing activities from a broad and sophisticated perspective. | |||
Corporate Auditor | Toshiaki Hiwatari | Attended all 8 meetings of the Board of Directors Attended all 7 meetings of the Board of Auditors | Based on abundant experience and considerable knowledge as a legal affairs specialist, he conducts auditing activities from a broad and sophisticated perspective. |
All Outside Directors have been selected based on their abundant experience and considerable knowledge, and they provide necessary comments during the deliberation of proposals.
Note: | The record of meetings attended by auditor Toshiaki Hiwatari is based on attendance at the meetings of the Board of Directors and the Board of Auditors following their election on June 21, 2012. |
22
(b) Summary of Content of Liability Limitation Contracts
The Company has entered into liability limitation contracts with all Outside Directors and Outside Corporate Auditors based on the provisions of Article 427, Paragraph 1 of the Company Law and of the Companys Articles of Incorporation, to the effect of limiting the liability for damages provided for in Article 423, Paragraph 1 of the Company Law to the minimum liability amount provided for in Article 425, Paragraph 1 of the Company Law.
5. FINANCIAL AUDIT COMPANY
(1) Name of Financial Audit Company
KPMG AZSA LLC
(2) Financial Audit Company Remuneration, Etc., for the Fiscal Year under Review
(a) |
Remuneration, etc. | ¥ | 422 million | |||
(b) |
Total profit on monetary and other assets to be paid by the Company and its subsidiaries | ¥ | 536 million |
Notes: |
1.
|
The audit contract between the Company and its financial audit company does not itemize remuneration for auditing work based on the Company Law of Japan, auditing work based on the Financial Instruments and Exchange Law of Japan and auditing work based on the Securities Exchange Law of the United States. Because of this and because it is impractical to itemize these categories of remuneration, the figure shown in line item (a) above is a total figure.
| ||
2.
|
In addition to the services specified in Article 2, Paragraph 1 of the Japanese Certified Public Accountants Law, the Company paid the independent accounting firm for advisory and other services related to the application of the International Financial Reporting Standards.
| |||
3.
|
Of the Companys principal subsidiaries, Yachiyo Industry Co., Ltd., as well as overseas subsidiaries are audited by financial audit companies other than the financial audit company employed by the Company.
|
(3) Policy Regarding Dismissal or Non-Re-Employment of Financial Audit Company
In the case that the Companys financial audit company was recognized to have committed a serious legal infraction, sharply lowered the quality of its audit services or otherwise shown grounds for determining it was inappropriate for employment as a financial audit company, the Company has the policy of, in accordance with procedures stipulated in the Company Law, dismissing its financial audit company or submitting resolutions proposing the financial audit companys dismissal or non-re-employment to the general meeting of shareholders.
23
6. THE COMPANYS SYSTEMS AND POLICIES
Systems to Ensure Directors Execution of Duties Complies with Laws and Regulations and the Articles of Incorporation and Other Systems to Ensure the Appropriateness of the Companys Operations
The Companys Board of Directors made the following decisions regarding enhancements in the Companys Internal Control Systems.
1. | Systems for ensuring that the execution of duties by directors and employees complies with the law and the Companys Articles of Incorporation |
The Company has prepared the Honda Conduct Guidelines which provide for conformity with applicable laws and internal rules and regulations as guidelines for conduct which should be shared by the Companys management and employees and implements measures to ensure that all management personnel and employees are made aware of and follow these guidelines. The Company establishes its compliance system such as by appointing a Compliance Officer, who is a director in charge of compliance-related initiatives and by establishing the Business Ethics Committee and the Business Ethics Improvement Proposal Line.
2. | Systems related to retention and management of information on execution of duties by directors |
Information related to the execution of duties by directors, including minutes of Board of Directors meetings and other important meetings, is retained and stored appropriately in accordance with the Companys document management policy.
3. | Regulations and other systems related to risk management |
Important management issues are taken up by the Board of Directors, Executive Council and/or Regional Operating Boards, which discuss them in accordance with established rules of procedure, assess associated risks and make decisions after due consideration.
A Risk Management Officer is appointed as a director in charge of promoting risk management initiatives. The Risk Management Officer playing the main role, risk information is collected and evaluated (of these risks, significant risk is promptly reported to the division in charge along with instructions on the countermeasures, and its progress is then monitored). For large-scale disasters requiring Company-level crisis management, the Company organizes the system, such as by establishing the Corporate Crisis Management Policy and Honda Crisis Response Rules.
4. | Systems for ensuring that the execution of duties by directors is being conducted efficiently |
The Company has established a system for operating its organizational units that reflects its fundamental corporate philosophy. For example, separate headquarters have been set up for each region, business and function, and an operating officer has been assigned to each headquarters and main division. In addition, we have implemented a system that enables prompt and appropriate decision making by having the Executive Council and Regional Operating Boards deliberate on important management issues.
To conduct management efficiently and effectively, business plans are prepared on an annual basis and for the medium term, and measures are taken to share these plans.
5. | Systems for ensuring that the corporate group, comprised of the Company and its subsidiaries, conducts business activities appropriately |
The Company and its subsidiaries share the Honda Conduct Guidelines and basic policies regarding corporate governance. In addition, each subsidiary works to promote activities that are in compliance with the laws of countries in which they operate and practices observed in their respective industries as they endeavor to enhance corporate governance. The Company examines the state of internal control in each subsidiary, and confirms how the Internal Control Systems are established and operated, through enlightenment efforts with subsidiary directors and liaising with the compliance officer of each subsidiary. As for the business execution of the subsidiary, the Company helps with the establishment of account settlement rules. When it comes to important management issues, the Company requests the subsidiary to obtain prior approval from the Company or to report to the Company according to its internal rules. The business control division of the Company regularly receives reports on the subsidiarys business plans to confirm the appropriateness of the operation. The Business Ethics Office of the Company works with the proposal line of the subsidiary in an effort to support an appropriate and swift response to a risk or problem. The Audit Office, an independent unit supervising operations and directly reporting to the president and CEO, effectively supervises the state of work in progress at each division and subsidiary and works with the internal supervision division of subsidiaries, aiming at the completion of the internal supervision system in the Honda Group.
In the case of a company accounted for by the equity method, the Company works to improve corporate governance throughout the Group by seeking the understanding and cooperation of such companies with Hondas basic corporate governance policies.
6. | Provision of employees when assistance is requested by corporate auditors and independence of such employees from directors The Corporate Auditors Office has been established as a supportive staff organization directly under the Board of Corporate Auditors to provide support to corporate auditors. |
24
7. | Systems for ensuring directors and employees report to corporate auditors and other systems related to the reporting to corporate auditors |
In addition to regularly reporting the state of operations at the Company and its subsidiaries and the state of implementation and operation of internal control systems, including those related to compliance and risk management, any information that may have a significant impact on the Companys operations is also reported to the corporate auditors.
8. | Other systems for ensuring the effectiveness of audits by corporate auditors |
Corporate auditors work closely with the Audit Office, which serves as the Companys internal audit department, to conduct business audits of the Company and its subsidiaries. Additionally, corporate auditors attend the Executive Council and other important meetings.
7. POLICY REGARDING DECISIONS FOR DISTRIBUTION OF DIVIDENDS, ETC.
The Company strives to carry out its operations worldwide from a global perspective and to increase its corporate value. With respect to the redistribution of profits to our shareholders, which we consider to be one of the most important management issues, the Companys basic policy for dividends is to make distributions after taking into account its long-term consolidated earnings performance.
The Company will also acquire its own shares at the optimal timing with the goal of improving efficiency of the Companys capital structure and implementing a flexible capital policy. The present goal is to maintain a shareholders return ratio (i.e., the ratio of the total of the dividend payment and the repurchase of the Companys own shares to consolidated net income attributable to Honda Motor Co., Ltd.) of approximately 30%. Retained earnings will be allocated toward financing R&D activities that are essential for the future growth of the Company and capital expenditures and investment programs that will expand its operations for the purpose of improving business results and strengthening the Companys financial condition.
The Company plans to distribute year-end cash dividends of ¥19 per share for the year ended March 31, 2013. As a result, total cash dividends for the year ended March 31, 2013, together with the first quarter cash dividends of ¥19, the second quarter cash dividends of ¥19 and the third quarter cash dividends of ¥19, are planned to be ¥76 per share, an increase of ¥16 per share from the annual dividends paid for the year ended March 31, 2012.
Also, please note that the year-end cash dividends for the year ended March 31, 2013 is a matter to be resolved at the general meeting of shareholders.
Trends in Dividends (reference)
Yen | ||||||||||||||||||||||||||||||||||||||||
FY2010 | FY2011 | FY2012 | FY2013 | |||||||||||||||||||||||||||||||||||||
Classification |
First quarter |
Second quarter |
Third quarter |
Year- end |
Total | First quarter |
Second quarter |
Third quarter |
Year- end |
Total | First quarter |
Second quarter |
Third quarter |
Year- end |
Total | First quarter |
Second quarter |
Third quarter |
Year- end |
Total | ||||||||||||||||||||
Dividends |
8 | 8 | 10 | 12 | 38 | 12 | 12 | 15 | 15 | 54 | 15 | 15 | 15 | 15 | 60 | 19 | 19 | 19 | 19 (planned) |
76 (planned) |
25
Consolidated Balance Sheets
Yen (millions) | ||||||||
As of March 31, 2012 and 2013 |
2012 | 2013 | ||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
¥ | 1,247,113 | ¥ | 1,206,128 | ||||
Trade accounts and notes receivable |
812,155 | 1,005,981 | ||||||
Finance subsidiariesreceivables, net |
1,081,721 | 1,243,002 | ||||||
Inventories |
1,035,779 | 1,215,421 | ||||||
Deferred income taxes |
188,755 | 234,075 | ||||||
Other current assets |
373,563 | 418,446 | ||||||
|
|
|
|
|||||
Total current assets |
4,739,086 | 5,323,053 | ||||||
|
|
|
|
|||||
Finance subsidiariesreceivables, net |
2,364,393 | 2,788,135 | ||||||
Investments and advances: |
||||||||
Investments in and advances to affiliates |
434,744 | 459,110 | ||||||
Other, including marketable equity securities |
188,863 | 209,680 | ||||||
|
|
|
|
|||||
Total investments and advances |
623,607 | 668,790 | ||||||
|
|
|
|
|||||
Property on operating leases: |
||||||||
Vehicles |
1,773,375 | 2,243,424 | ||||||
Less accumulated depreciation |
300,618 | 400,292 | ||||||
|
|
|
|
|||||
Net property on operating leases |
1,472,757 | 1,843,132 | ||||||
|
|
|
|
|||||
Property, plant and equipment, at cost: |
||||||||
Land |
488,265 | 515,661 | ||||||
Buildings |
1,492,823 | 1,686,638 | ||||||
Machinery and equipment |
3,300,727 | 3,832,090 | ||||||
Construction in progress |
191,107 | 288,073 | ||||||
|
|
|
|
|||||
5,472,922 | 6,322,462 | |||||||
Less accumulated depreciation and amortization |
3,499,464 | 3,922,932 | ||||||
|
|
|
|
|||||
Net property, plant and equipment |
1,973,458 | 2,399,530 | ||||||
|
|
|
|
|||||
Other assets |
614,298 | 612,717 | ||||||
|
|
|
|
|||||
Total assets |
¥ | 11,787,599 | ¥ | 13,635,357 | ||||
|
|
|
|
26
Yen (millions) | ||||||||
2012 | 2013 | |||||||
LIABILITIES AND EQUITY |
||||||||
Current liabilities: |
||||||||
Short-term debt |
¥ | 964,848 | ¥ | 1,238,297 | ||||
Current portion of long-term debt |
911,395 | 945,046 | ||||||
Trade payables: |
||||||||
Notes |
26,499 | 31,354 | ||||||
Accounts |
942,444 | 956,660 | ||||||
Accrued expenses |
489,110 | 593,570 | ||||||
Income taxes payable |
24,099 | 48,454 | ||||||
Other current liabilities |
221,364 | 283,304 | ||||||
|
|
|
|
|||||
Total current liabilities |
3,579,759 | 4,096,685 | ||||||
|
|
|
|
|||||
Long-term debt, excluding current portion |
2,235,001 | 2,710,845 | ||||||
Other liabilities |
1,454,937 | 1,630,085 | ||||||
|
|
|
|
|||||
Total liabilities |
7,269,697 | 8,437,615 | ||||||
|
|
|
|
|||||
Equity: |
||||||||
Honda Motor Co., Ltd. stockholders equity: |
||||||||
Common stock |
86,067 | 86,067 | ||||||
Capital surplus |
172,529 | 171,117 | ||||||
Legal reserves |
47,184 | 47,583 | ||||||
Retained earnings |
5,758,641 | 5,995,626 | ||||||
Accumulated other comprehensive income (loss), net |
(1,646,078 | ) | (1,236,792 | ) | ||||
Treasury stock |
(26,117 | ) | (26,124 | ) | ||||
|
|
|
|
|||||
Total Honda Motor Co., Ltd. stockholders equity |
4,392,226 | 5,037,477 | ||||||
|
|
|
|
|||||
Noncontrolling interests |
125,676 | 160,265 | ||||||
|
|
|
|
|||||
Total equity |
4,517,902 | 5,197,742 | ||||||
|
|
|
|
|||||
Commitments and contingent liabilities |
||||||||
Total liabilities and equity |
¥ | 11,787,599 | ¥ | 13,635,357 | ||||
|
|
|
|
27
Consolidated Statements of Income
Yen (millions) | ||||||||
Years ended March 31, 2012 and 2013 |
2012 | 2013 | ||||||
Net sales and other operating revenue |
¥ | 7,948,095 | ¥ | 9,877,947 | ||||
Operating costs and expenses: |
||||||||
Cost of sales |
5,919,633 | 7,345,162 | ||||||
Selling, general and administrative |
1,277,280 | 1,427,705 | ||||||
Research and development |
519,818 | 560,270 | ||||||
|
|
|
|
|||||
Total operating costs and expenses |
7,716,731 | 9,333,137 | ||||||
|
|
|
|
|||||
Operating income |
231,364 | 544,810 | ||||||
Other income (expenses): |
||||||||
Interest income |
33,461 | 25,742 | ||||||
Interest expense |
(10,378 | ) | (12,157 | ) | ||||
Other, net |
2,956 | (69,504 | ) | |||||
|
|
|
|
|||||
Total other income (expenses) |
26,039 | (55,919 | ) | |||||
|
|
|
|
|||||
Income before income taxes and equity in income of affiliates |
257,403 | 488,891 | ||||||
Income tax expense: |
||||||||
Current |
86,074 | 125,724 | ||||||
Deferred |
49,661 | 53,252 | ||||||
|
|
|
|
|||||
Total income tax expense |
135,735 | 178,976 | ||||||
|
|
|
|
|||||
Income before equity in income of affiliates |
121,668 | 309,915 | ||||||
Equity in income of affiliates |
100,406 | 82,723 | ||||||
|
|
|
|
|||||
Net income |
222,074 | 392,638 | ||||||
Less: Net income attributable to noncontrolling interests |
(10,592 | ) | 25,489 | |||||
|
|
|
|
|||||
Net income attributable to Honda Motor Co., Ltd. |
¥ | 211,482 | ¥ | 367,149 | ||||
|
|
|
|
|||||
Yen | ||||||||
Basic net income attributable to Honda Motor Co., Ltd. per common share |
¥ | 117.34 | ¥ | 203.71 | ||||
|
|
|
|
28
Consolidated Statements of Changes in Equity
Yen (millions) | ||||||||||||||||||||||||||||||||||||
Common stock |
Capital surplus |
Legal reserves |
Retained earnings |
Accumulated other comprehensive income (loss), net |
Treasury stock |
Total Honda Motor Co., Ltd. stockholders equity |
Non- controlling interests |
Total equity |
||||||||||||||||||||||||||||
Balance at March 31, 2011 |
¥ | 86,067 | ¥ | 172,529 | ¥ | 46,330 | ¥ | 5,656,151 | ¥ | (1,495,380 | ) | ¥ | (26,110 | ) | ¥ | 4,439,587 | ¥ | 132,937 | ¥ | 4,572,524 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Transfer to legal reserves |
854 | (854 | ) | | | |||||||||||||||||||||||||||||||
Dividends paid to Honda Motor Co., Ltd. shareholders |
(108,138 | ) | (108,138 | ) | (108,138 | ) | ||||||||||||||||||||||||||||||
Dividends paid to noncontrolling interests |
(15,763 | ) | (15,763 | ) | ||||||||||||||||||||||||||||||||
Capital transactions and others |
(783 | ) | (783 | ) | ||||||||||||||||||||||||||||||||
Comprehensive income (loss): |
||||||||||||||||||||||||||||||||||||
Net income |
211,482 | 211,482 | 10,592 | 222,074 | ||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax |
||||||||||||||||||||||||||||||||||||
Adjustments from foreign currency translation |
(116,812 | ) | (116,812 | ) | (1,323 | ) | (118,135 | ) | ||||||||||||||||||||||||||||
Unrealized gains (losses) on marketable securities, net |
5,899 | 5,899 | (87 | ) | 5,812 | |||||||||||||||||||||||||||||||
Unrealized gains (losses) on derivative instruments, net |
(29 | ) | (29 | ) | (29 | ) | ||||||||||||||||||||||||||||||
Pension and other postretirement benefits adjustments |
(39,756 | ) | (39,756 | ) | 103 | (39,653 | ) | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Total comprehensive income |
60,784 | 9,285 | 70,069 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Purchase of treasury stock |
(8 | ) | (8 | ) | (8 | ) | ||||||||||||||||||||||||||||||
Reissuance of treasury stock |
1 | 1 | 1 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance at March 31, 2012 |
86,067 | 172,529 | 47,184 | 5,758,641 | (1,646,078 | ) | (26,117 | ) | 4,392,226 | 125,676 | 4,517,902 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Transfer to legal reserves |
399 | (399 | ) | | | |||||||||||||||||||||||||||||||
Dividends paid to Honda Motor Co., Ltd. shareholders |
(129,765 | ) | (129,765 | ) | (129,765 | ) | ||||||||||||||||||||||||||||||
Dividends paid to noncontrolling interests |
(6,250 | ) | (6,250 | ) | ||||||||||||||||||||||||||||||||
Capital transactions and others |
(1,412 | ) | (1,412 | ) | 1,189 | (223 | ) | |||||||||||||||||||||||||||||
Comprehensive income (loss): |
||||||||||||||||||||||||||||||||||||
Net income |
367,149 | 367,149 | 25,489 | 392,638 | ||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax |
||||||||||||||||||||||||||||||||||||
Adjustments from foreign currency translation |
415,462 | 415,462 | 15,350 | 430,812 | ||||||||||||||||||||||||||||||||
Unrealized gains (losses) on marketable securities, net |
7,933 | 7,933 | 51 | 7,984 | ||||||||||||||||||||||||||||||||
Unrealized gains (losses) on derivative instruments, net |
(52 | ) | (52 | ) | (52 | ) | ||||||||||||||||||||||||||||||
Pension and other postretirement benefits adjustments |
(14,057 | ) | (14,057 | ) | (1,240 | ) | (15,297 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Total comprehensive income |
776,435 | 39,650 | 816,085 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Purchase of treasury stock |
(8 | ) | (8 | ) | (8 | ) | ||||||||||||||||||||||||||||||
Reissuance of treasury stock |
1 | 1 | 1 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance at March 31, 2013 |
¥ | 86,067 | ¥ | 171,117 | ¥ | 47,583 | ¥ | 5,995,626 | ¥ | (1,236,792 | ) | ¥ | (26,124 | ) | ¥ | 5,037,477 | ¥ | 160,265 | ¥ | 5,197,742 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29
Consolidated Statements of Cash Flows
Yen (millions) | ||||||||
Years ended March 31, 2012 and 2013 |
2012 | 2013 | ||||||
Cash flows from operating activities: |
||||||||
Net income |
¥ | 222,074 | ¥ | 392,638 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation excluding property on operating leases |
345,105 | 335,536 | ||||||
Depreciation of property on operating leases |
209,762 | 254,933 | ||||||
Deferred income taxes |
49,661 | 53,252 | ||||||
Equity in income of affiliates |
(100,406 | ) | (82,723 | ) | ||||
Dividends from affiliates |
95,106 | 84,705 | ||||||
Provision for credit and lease residual losses on finance subsidiariesreceivables |
13,032 | 10,059 | ||||||
Impairment loss on investments in securities |
1,062 | | ||||||
Damaged and impairment loss on long-lived assets and goodwill excluding property on operating leases |
10,590 | | ||||||
Impairment loss on property on operating leases |
1,514 | 4,773 | ||||||
Loss (gain) on derivative instruments, net |
(1,847 | ) | 35,027 | |||||
Decrease (increase) in assets: |
||||||||
Trade accounts and notes receivable |
(35,475 | ) | (90,495 | ) | ||||
Inventories |
(154,222 | ) | (74,662 | ) | ||||
Other current assets |
2,883 | 2,019 | ||||||
Other assets |
(24,000 | ) | (27,243 | ) | ||||
Increase (decrease) in liabilities: |
||||||||
Trade accounts and notes payable |
242,814 | (95,192 | ) | |||||
Accrued expenses |
(25,718 | ) | 52,021 | |||||
Income taxes payable |
(7,568 | ) | 21,764 | |||||
Other current liabilities |
(12,395 | ) | (4,489 | ) | ||||
Other liabilities |
(14,744 | ) | (4,384 | ) | ||||
Other, net |
(55,690 | ) | (66,795 | ) | ||||
|
|
|
|
|||||
Net cash provided by operating activities |
761,583 | 800,744 | ||||||
|
|
|
|
|||||
Cash flows from investing activities: |
||||||||
Increase in investments and advances |
(23,129 | ) | (34,426 | ) | ||||
Decrease in investments and advances |
14,647 | 19,850 | ||||||
Payment for purchase of available-for-sale securities |
(1,784 | ) | (5,642 | ) | ||||
Proceeds from sales of available-for-sale securities |
1,879 | 1,347 | ||||||
Payment for purchase of held-to-maturity securities |
(26,078 | ) | (5,186 | ) | ||||
Proceeds from redemption of held-to-maturity securities |
47,193 | 17,005 | ||||||
Proceeds from sales of investments in affiliates |
9,957 | | ||||||
Capital expenditures |
(397,218 | ) | (626,879 | ) | ||||
Proceeds from sales of property, plant and equipment |
23,260 | 44,182 | ||||||
Proceeds from insurance recoveries for damaged property, plant and equipment |
16,217 | 9,600 | ||||||
Acquisitions of finance subsidiariesreceivables |
(1,784,720 | ) | (1,951,802 | ) | ||||
Collections of finance subsidiariesreceivables |
1,765,204 | 1,833,669 | ||||||
Purchase of operating lease assets |
(683,767 | ) | (793,118 | ) | ||||
Proceeds from sales of operating lease assets |
365,270 | 418,086 | ||||||
Other, net |
| 3,558 | ||||||
|
|
|
|
|||||
Net cash used in investing activities |
(673,069 | ) | (1,069,756 | ) | ||||
|
|
|
|
|||||
Cash flows from financing activities: |
||||||||
Proceeds from short-term debt |
6,778,336 | 6,775,636 | ||||||
Repayment of short-term debt |
(6,882,932 | ) | (6,621,897 | ) | ||||
Proceeds from long-term debt |
1,151,971 | 1,101,469 | ||||||
Repayment of long-term debt |
(967,588 | ) | (970,702 | ) | ||||
Dividends paid |
(108,138 | ) | (129,765 | ) | ||||
Dividends paid to noncontrolling interests |
(15,763 | ) | (6,250 | ) | ||||
Sales (purchases) of treasury stock, net |
(7 | ) | (7 | ) | ||||
Other, net |
(24,109 | ) | (28,917 | ) | ||||
|
|
|
|
|||||
Net cash provided by (used in) financing activities |
(68,230 | ) | 119,567 | |||||
|
|
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents |
(52,150 | ) | 108,460 | |||||
|
|
|
|
|||||
Net change in cash and cash equivalents |
(31,911 | ) | (40,985 | ) | ||||
Cash and cash equivalents at beginning of the year |
1,279,024 | 1,247,113 | ||||||
|
|
|
|
|||||
Cash and cash equivalents at end of the period |
¥ | 1,247,113 | ¥ | 1,206,128 | ||||
|
|
|
|
30
The Notes to the Consolidated Statutory Report
Significant Accounting Policies:
1. | Consolidated subsidiaries |
Number of consolidated subsidiaries: 369
Corporate names of principal consolidated subsidiaries:
American Honda Motor Co., Inc., Honda of America Mfg., Inc., Honda Canada Inc., Honda R&D Co., Ltd., American Honda
Finance Corporation
2. | Affiliated companies |
Number of affiliated companies: 86
Corporate names of major affiliated companies accounted for under the equity method:
Dongfeng Honda Automobile Co., Ltd., Guangqi Honda Automobile Co., Ltd., P.T. Astra Honda Motor
3. | Changes of consolidated subsidiaries and affiliated companies |
Consolidated subsidiaries:
Newly formed consolidated subsidiaries: 16
Reduced through reorganization: 25
Affiliated companies:
Newly formed affiliated companies: 0
Reduced through reorganization: 2
4. | The Company prepares its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America in accordance with Article 120-2 (1) of the Companies Act. The Company omits some disclosure items and notes in accordance with the second sentence of Article 120-2 (1) of the Companies Act. |
5. | Inventories are stated at the lower of cost, determined principally by the first-in, first-out method, or market. |
6. | Honda classifies its debt and equity securities in the following categories: available-for-sale, trading or held-to-maturity. Debt securities that are classified as held-to-maturity securities are reported at amortized cost. Debt and equity securities classified as trading securities are reported at fair value, with unrealized gains and losses included in earnings. Other marketable debt and equity securities are classified as available-for-sale securities and are reported at fair value, with unrealized gains or losses, net of deferred taxes, included in accumulated other comprehensive income (loss) in the stockholders equity section of the consolidated balance sheets. |
7. | Goodwill, all of which is allocated to Hondas reporting units, is not amortized but instead is tested for impairment at least annually. |
8. | Depreciation of property, plant and equipment is calculated principally by the straight-line method based on estimated useful lives and salvage values of the respective assets. |
Previously, Honda used principally the declining-balance method for calculating the depreciation of property, plant and equipment, excluding property on operating leases. In recent years, because sales of global strategic product models are increasing, Honda has been enhancing its production systems and the versatility of production equipment to have better flexibility to meet changes in global customer demand. Further, Honda has resumed more normalized capital expenditures which Honda had previously held down due to financial crisis beginning in the fiscal year ended March 31, 2009. Effective April 1, 2012, Honda changed to the straight-line method of depreciation because management believes it better reflects the future economic benefit from the usage of property, plant and equipment under this more flexible and versatile production arrangement. The effect of the change in depreciation method is recognized prospectively as a change in accounting estimate in accordance with the FASB Accounting Standards Codification (ASC) 250 Accounting Changes and Error Corrections.
As a result of the change in depreciation method, depreciation expense for the year ended March 31, 2013 decreased by approximately ¥56,300 million. Net income attributable to Honda Motor Co., Ltd. and Basic net income attributable to Honda Motor Co., Ltd. per common share for the year ended March 31, 2013 increased by approximately ¥35,746 million and ¥19.83.
9. | Honda applies hedge accounting for certain foreign currency forward contracts related to forecasted foreign currency transactions between the Company and its subsidiaries. |
10. | The allowance for credit losses on finance subsidiariesreceivables is maintained at an amount management deems adequate to cover estimated losses on finance receivables. The allowance is based on managements evaluation of many factors, including current economic trends, industry experience, inherent risks in the portfolio and the borrowers ability to pay. |
11. | The allowance for losses on lease residual values is maintained at an amount management deems adequate to cover estimated losses on the uninsured portion of the vehicles lease residual values. The allowance is also based on managements evaluation of many factors, including current economic conditions, industry experience and the finance subsidiaries historical experience with residual value losses. |
12. | Provisions for retirement benefits are provided based on the fair value of both projected benefit obligations and plan assets at the end of the fiscal year to cover for employees retirement benefits. The Company recognizes its overfunded or underfunded status for the defined benefit postretirement plan as an asset or liability in its consolidated balance sheets and recognizes changes in the funded status in accumulated comprehensive income (loss), net of taxes. Prior service cost (benefit) is amortized by using the straight-line method and the estimated average remaining service years of employees. Actuarial loss is amortized if unrecognized net gain or loss exceeds ten percent of the greater of the projected benefit obligation or the market-related value of plan assets by using the straight-line method and the estimated average remaining service years of employees. |
31
13. | Estimated warranty expenses are provided based on historical warranty claim experience with consideration given to the expected level of future warranty costs as well as current information on repair costs. Included in warranty expense accruals are costs for general warranties on vehicles Honda sells and product recalls. |
14. | Hondas common stock-to-ADS exchange ratio is one share of common stock to one ADS. |
Changes in Accounting Policy
Adoption of New Accounting Pronouncements
In June 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-05 Presentation of Comprehensive Income, which amends the FASB Accounting Standards Codification (ASC) 220 Comprehensive Income. This amendment requires reporting entities to report other comprehensive income as components of comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements and is effective retrospectively.
In December 2011, the FASB issued ASU 2011-12 Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05, which defers the effective date of pending amendments to current accounting guidance prescribed in ASU 2011-05.
Honda adopted ASU 2011-05 as amended by ASU 2011-12, effective April 1, 2012, and discloses consolidated statements of comprehensive income as two separate but consecutive statements.
Notes to Consolidated Balance Sheets:
1. | The allowance for assets are as follows: Yen (millions) |
Mar. 31, 2012 | Mar. 31, 2013 | |||||||
The allowance for doubtful trade accounts and notes receivables |
7,293 | 7,885 | ||||||
The allowance for credit losses for finance subsidiariesreceivables |
20,616 | 17,828 | ||||||
The allowance for losses on lease residual values for finance subsidiariesreceivables |
5,366 | 3,354 | ||||||
The allowance for doubtful accounts for other assets |
23,036 | 22,754 |
2. | Net book value of property, plant and equipment that were subject to specific collateral securing indebtedness and debt-related mortgages are as follows: Yen (millions) |
Mar. 31, 2012 | Mar. 31, 2013 | |||||||
Mortgaged assets: |
||||||||
Trade accounts and notes receivables |
10,119 | 12,422 | ||||||
Inventories |
3,289 | 11,154 | ||||||
Property, plant and equipment |
22,102 | 26,169 | ||||||
Finance subsidiariesreceivables |
570,655 | 724,399 | ||||||
Mortgage-related debts: |
||||||||
Short-term debt |
305,069 | 397,297 | ||||||
Long-term debt |
280,747 | 351,591 |
3. | Honda has entered into various guarantee and indemnification agreements which are primarily for employee bank loans to cover their housing costs as follows: Yen (millions) |
Mar. 31, 2012 | Mar. 31, 2013 | |||||||
Bank loans of employees for their housing costs |
28,165 | 26,475 |
If an employee defaults on his/her loan payments, Honda is required to perform under the guarantee. The undiscounted maximum amount of Hondas obligation to make future payments in the event of defaults is shown above. As of March 31, 2013, no amount has been accrued for any estimated losses under these obligations, as it is probable that the employees will be able to make all scheduled payments.
32
Notes to Consolidated Statements of Stockholders Equity:
Mar. 31, 2012 | Mar. 31, 2013 | |||||||
1. The number of shares outstanding |
1,811,428,430 | 1,811,428,430 | ||||||
Mar. 31, 2012 | Mar. 31, 2013 | |||||||
2. The number of treasury shares |
9,128,871 | 9,131,140 |
3. The total amount of dividends for the fiscal year ended March 31, 2013, was ¥129,765 million. The Company intends to distribute year-end cash dividends of ¥136,974 million to the stockholders of record on March 31, 2013.
Note on Financial Instruments:
Current Status of Financial Instruments
1. | Policy Regarding Financial Instruments |
The policy of Honda is to support its business activities by maintaining sufficient capital resources, a sufficient level of liquidity and a sound balance sheet. In its cash management activities, the Company invests principally in highly safe, short-term financial instruments. Honda meets its operating capital requirements primarily through cash generated by operations, bank loans and the issuance of commercial paper. In addition, the Companys finance subsidiaries fund those financial programs for customers and dealers primarily from medium-term notes, bank loans, securitization of finance receivables, commercial paper, corporate bonds and intercompany loans.
2. | Risk Associated with Financial Instruments and Related Risk Management System |
The Company reduces the credit risk arising from trade accounts and notes receivables and finance subsidiariesreceivables by requiring compliance with its internal credit management regulations. To minimize the foreign currency fluctuation risk of the foreign currency denominated receivables, the Company enters into foreign currency forward exchange contracts and foreign currency purchased option contracts. Regarding the lease receivables held by the Companys finance subsidiaries, losses may be incurred when proceeds from the sale of the returned vehicles are less than the contractual residual value. The Companys finance subsidiaries periodically review the estimated residual value of the leased vehicles to monitor the residual value risk.
Available-for-sale securities mainly consist of equity securities. Held-to-maturity securities mainly consist of government and agency debt securities. In order to manage the price fluctuation risk, the Company periodically estimates the fair value of these securities.
To manage the liquidity risk associated with short-term and long-term debt, the Company diversifies its sources of funds. To reduce the interest rate fluctuation risk, the Company enters into interest rate swap contracts. To minimize the foreign currency fluctuation risk of the foreign currency denominated payables, the Company enters into currency swap contracts.
The Company enters into derivative contracts within the actual demand of its business activities in accordance with the risk management policy. The derivative instruments contain an element of risk in the event the counterparties are unable to meet the terms of the agreement. However, Honda minimizes the risk exposure by limiting the counterparties to major international banks and financial institutions meeting established credit guidelines.
The Company applies hedge accounting for certain foreign currency forward exchange contracts related to forecasted foreign currency transactions between the Company and its subsidiaries.
33
Fair Value of Financial Instruments
The carrying amount, estimated fair value and difference of financial instruments at March 31, 2013 are as follows: Yen (millions)
Carrying Amount | Estimate Fair Value | Difference | ||||||||||
Finance subsidiariesreceivables |
4,278,460 | 4,326,333 | 47,873 | |||||||||
Available-for-sale securities |
128,848 | 128,848 | | |||||||||
Held-to-maturity securities |
16,511 | 16,556 | 45 | |||||||||
Short-term and long-term debt |
(4,894,188 | ) | (4,966,318 | ) | (72,130 | ) | ||||||
Derivative instruments |
54,883 | 54,883 | |
Note: | The book value of the previously mentioned finance subsidiariesreceivables excludes direct finance leases (net) from the amount of finance subsidiariesreceivables appearing on the balance sheets. The amount of direct finance leases (net) at the end of the fiscal year under review was ¥425,870 million. Also, the previously mentioned finance subsidiariesreceivables include the amount of finance subsidiariesreceivables, which is presented in the balance sheet items trade accounts and notes receivable and other assets. The amount of such finance subsidiariesreceivables at the end of the fiscal year under review was ¥673,193 million. |
The methodologies and assumptions used to estimate the fair values of financial instruments are as follows:
1. | Cash and cash equivalents, trade receivables and trade payables |
The carrying amounts approximate fair values because of the short maturity of these instruments.
2. | Finance subsidiariesreceivables |
The fair values of retail receivables and commercial loans are estimated by discounting future cash flows using the current rates for these instruments of similar remaining maturities. Given the short maturities of wholesale flooring receivables, the carrying amount of those receivables approximates fair value.
3. | Available-for-sale securities |
The fair value of marketable equity securities is estimated by using quoted market prices. To estimate fair value of auction rate securities, Honda uses third-party developed valuation model which obtains a wide array of market observable inputs, as well as unobservable inputs, including probability of passing or failing auction at each auction.
4. | Held-to-maturity securities |
The fair value of Government bonds is estimated by using quoted market prices. The fair value of U.S. government agency debt securities is estimated based on proprietary pricing models provided by specialists and/or market makers and the models obtain a wide array of market observable inputs such as credit ratings and discount rates.
5. | Debt |
The fair values of bonds are estimated by using quoted market prices. The fair values of short-term loans and long-term loans are estimated by discounting future cash flows using interest rates currently available for loans of similar terms and remaining maturities.
6. | Derivative instruments |
The Company holds foreign currency and interest rate derivative instruments. The fair values of foreign currency forward exchange contracts and foreign currency option contracts are estimated using market observable inputs such as spot exchange rates, discount rates and implied volatility. The fair values of currency swap agreements and interest rate swap agreements are estimated by discounting future cash flows using market observable inputs such as LIBOR rates, swap rates, and foreign exchange rates. The credit risk of Honda and its counterparties are considered on the valuation of foreign exchange and interest rate instruments.
Non-marketable securities are excluded from the above table as it is not possible to estimate the future cash flow and it is deemed to be extremely difficult to measure the fair value. The carrying amount of non-marketable securities is ¥11,749 million at March 31, 2013.
Notes to Information about Per Common Share:
Honda Motor Co., Ltd. shareholders equity per common share and basic net income attributable to Honda Motor Co., Ltd. per common share are as follows: Yen
Mar. 31, 2012 | Mar. 31, 2013 | |||||||
Honda Motor Co., Ltd. shareholders equity per common share |
2,437.01 | 2,795.03 | ||||||
Basic net income attributable to Honda Motor Co., Ltd. per common share |
117.34 | 203.71 |
34
Honda Motor Co., Ltd. shareholders equity per common share has been computed by dividing Honda Motor Co., Ltd. shareholders equity by the number of shares outstanding at the end of each period. The numbers of common shares, at the end of the years ended March 31, 2012 and 2013 were 1,802,299,559 and 1,802,297,290, respectively. Basic net income attributable to Honda Motor Co., Ltd. per common share has been computed by dividing net income attributable to Honda Motor Co., Ltd. by the weighted average number of shares outstanding during each period. The weighted average numbers of shares outstanding for the years ended March 31, 2012 and 2013 were 1,802,300,720 and 1,802,298,819, respectively. There were no potentially dilutive shares issued during the years ended March 31, 2012 or 2013.
Note: | Honda corrects Honda Motor Co., Ltd. shareholders equity for the year ended March 31, 2012. Honda Motor Co., Ltd. shareholders equity per common share is also adjusted. For detailed information, please refer to Consolidated Financial Summary [10] Other. 3. Immaterial corrections of the prior years Consolidated Balance Sheets and Consolidated Statements of Changes in Equity. |
Other
1. | Impairment loss on investments in affiliates |
For the fiscal year ended March 31, 2013, Honda recognized an impairment loss of ¥12,757 million, net of tax, on certain investments in affiliates which have quoted market values because of an other-than-temporary decline in fair value below their carrying values. The fair values of the investments were based on quoted market price. The impairment loss is included in equity in income of affiliates in the accompanying consolidated statement of income.
2. | Impact on the Companys consolidated financial position or results of operations of the floods in Thailand |
In October 2011, Thailand suffered from severe floods that caused damage to inventories and machinery and equipment of certain consolidated subsidiaries and affiliates of the Company. Accordingly, production activities in plant facilities at Honda and its affiliates had been temporarily affected by the floods for the year ended March 31, 2012.
Honda recognized ¥23,420 million in costs and expenses, of which ¥10,680 million is included in cost of sales and ¥12,740 million is included in selling, general and administrative expenses in the accompanying consolidated statement of income for the year ended March 31, 2012. These costs and expenses mainly consist of losses on damaged inventories of ¥7,330 million, which is included in cost of sales, and losses on damaged property, plant and equipment of ¥7,654 million, which is included in selling, general and administrative expenses.
In addition, Honda recognized insurance recoveries of ¥21,725 million and ¥16,278 million for the years ended March 31, 2012 and 2013, respectively, which are included in selling, general and administrative expenses in the accompanying consolidated statement of income. Honda recognizes insurance recoveries in excess of the incurred losses when settlements with insurance companies are reached.
3. | Immaterial corrections of the prior years Consolidated Balance Sheets and Consolidated Statements of Changes in Equity Honda corrected its attribution method used to calculate the projected benefit obligation for certain pension plans, which resulted in an increase in other liabilities for prior fiscal years. Cumulative effect adjustments have been made as of April 1, 2011, the earliest period presented, to increase other liabilities by ¥17,228 million and to decrease retained earnings by ¥10,388 million, net of tax. Honda believes that the effects of this correction were inconsequential to the Companys consolidated financial statements for the fiscal year ended March 31, 2012; therefore, no other adjustments were made to those consolidated financial statements. |
4. | Immaterial corrections of the prior years Consolidated Statements of Cash Flows |
Adjustments have been made to correct previous understatements in both depreciation excluding property on operating leases, which is included in cash flows from operating activities, and payments of other debt, which is included in Other, net in cash flows from financing activities, in the consolidated statements of cash flows for the year ended March 31, 2012. These adjustments increased previously reported net cash provided by operating activities and increased previously reported net cash used in financing activities by ¥24,109 million for the year ended March 31, 2012.
Regarding the Notes for the Previous Fiscal Year
The notes for the previous fiscal year contain additional information for reference.
35
¡ Segment Information (reference)
(a) Business Segment Information
For the year ended March 31, 2012
Yen (millions) | ||||||||||||||||||||||||||||
Motorcycle Business |
Automobile Business |
Financial Services Business |
Power Product & Other Businesses |
Segment Total |
Reconciling Items |
Consolidated | ||||||||||||||||||||||
Net sales and other operating revenue: |
||||||||||||||||||||||||||||
External customers |
1,348,828 | 5,805,975 | 516,148 | 277,144 | 7,948,095 | | 7,948,095 | |||||||||||||||||||||
Intersegment |
| 16,767 | 10,428 | 12,590 | 39,785 | (39,785 | ) | | ||||||||||||||||||||
Total |
1,348,828 | 5,822,742 | 526,576 | 289,734 | 7,987,880 | (39,785 | ) | 7,948,095 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Cost of sales, SG&A and R&D expenses |
1,206,226 | 5,899,948 | 356,570 | 293,772 | 7,756,516 | (39,785 | ) | 7,716,731 | ||||||||||||||||||||
Segment income (loss) |
142,602 | (77,206 | ) | 170,006 | (4,038 | ) | 231,364 | | 231,364 | |||||||||||||||||||
Assets |
1,006,684 | 4,955,791 | 5,644,380 | 305,235 | 11,912,090 | (124,491 | ) | 11,787,599 | ||||||||||||||||||||
Depreciation and amortization |
43,564 | 289,845 | 211,325 | 10,133 | 554,867 | | 554,867 | |||||||||||||||||||||
Capital expenditures |
62,075 | 349,605 | 686,495 | 10,005 | 1,108,180 | | 1,108,180 | |||||||||||||||||||||
For the year ended March 31, 2013
|
|
|||||||||||||||||||||||||||
Yen (millions) | ||||||||||||||||||||||||||||
Motorcycle Business |
Automobile Business |
Financial Services Business |
Power Product & Other Businesses |
Segment Total |
Reconciling Items |
Consolidated | ||||||||||||||||||||||
Net sales and other operating revenue: |
||||||||||||||||||||||||||||
External customers |
1,339,549 | 7,709,216 | 548,506 | 280,676 | 9,877,947 | | 9,877,947 | |||||||||||||||||||||
Intersegment |
| 14,374 | 11,750 | 10,994 | 37,118 | (37,118 | ) | | ||||||||||||||||||||
Total |
1,339,549 | 7,723,590 | 560,256 | 291,670 | 9,915,065 | (37,118 | ) | 9,877,947 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Cost of sales, SG&A and R&D expenses |
1,229,316 | 7,437,599 | 402,098 | 301,242 | 9,370,255 | (37,118 | ) | 9,333,137 | ||||||||||||||||||||
Segment income (loss) |
110,233 | 285,991 | 158,158 | (9,572 | ) | 544,810 | | 544,810 | ||||||||||||||||||||
Assets |
1,095,357 | 5,759,126 | 6,765,322 | 309,149 | 13,928,954 | (293,597 | ) | 13,635,357 | ||||||||||||||||||||
Depreciation and amortization |
34,665 | 290,522 | 256,166 | 9,116 | 590,469 | | 590,469 | |||||||||||||||||||||
Capital expenditures |
73,513 | 540,625 | 794,869 | 14,519 | 1,423,526 | | 1,423,526 |
Notes:
1. | Intersegment sales and revenues are generally made at values that approximate arms-length prices. |
2. | Unallocated corporate assets, included in reconciling items, amounted to ¥399,732 million as of March 31, 2012 and ¥293,583 million as of March 31, 2013, respectively, which consist primarily of cash and cash equivalents, available-for-sale securities and held-to-maturity securities held by the Company. Reconciling items also include elimination of intersegment transactions. |
3. | Depreciation and amortization of Financial Services Business include ¥209,762 million for the year ended March 31, 2012 and ¥254,933 million for the year ended March 31, 2013, respectively, of depreciation of property on operating leases. |
4. | Capital expenditures of Financial Services Business include ¥683,767 million for the year ended March 31, 2012 and ¥793,118 million for the year ended March 31, 2013, respectively, of purchase of operating lease assets. |
5. | Previously, Honda used principally the declining-balance method for calculating the depreciation of property, plant and equipment, excluding property on operating leases. Effective April 1, 2012, Honda changed to the straight-line method of depreciation. As a result of the change in depreciation method, depreciation expense for the year ended March 31, 2013 decreased by approximately ¥6,358 million in Motorcycle Business, ¥48,568 million in Automobile Business, ¥77 million in Financial Services Business and ¥1,297 million in Power Product & Other Businesses, respectively. It resulted in an increase of segment income. For further information, refer to Changes in accounting policy, (b) Change in depreciation method. |
6. | For the years ended March 31, 2012 and 2013, impacts of the floods in Thailand are mainly included in Cost of sales, SG&A and R&D expenses of Automobile business. For further information, refer to Other, 2. Impact on the Companys consolidated financial position or results of operations of the floods in Thailand. |
7. | Honda corrected the amounts of Assets for the year ended March 31, 2012. For detailed information, refer to Other, 3. Immaterial corrections of the prior years Consolidated Balance Sheets and Consolidated Statements of Changes in Equity. |
8. | The amounts of Depreciation and amortization for the year ended March 31, 2012 have been corrected from the amounts previously disclosed. |
36
(b) Geographic Segment Information
For the year ended March 31, 2012
Yen (millions) | ||||||||||||||||||||||||||||||||
Japan | North America |
Europe | Asia | Other Regions |
Total | Reconciling Items |
Consolidated | |||||||||||||||||||||||||
Net sales and other operating revenue: |
||||||||||||||||||||||||||||||||
External customers |
1,774,573 | 3,500,245 | 519,329 | 1,276,621 | 877,327 | 7,948,095 | | 7,948,095 | ||||||||||||||||||||||||
Transfers between geographic areas |
1,588,379 |
|
214,511 |
|
|
61,463 |
|
|
213,857 |
|
|
15,805 |
|
|
2,094,015 |
|
(2,094,015 | ) |
|
|
| |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
3,362,952 | 3,714,756 | 580,792 | 1,490,478 | 893,132 | 10,042,110 | (2,094,015 | ) | 7,948,095 | |||||||||||||||||||||||
Cost of sales, SG&A and R&D expenses |
3,472,786 | 3,491,463 | 592,901 | 1,413,608 | 836,176 | 9,806,934 | (2,090,203 | ) | 7,716,731 | |||||||||||||||||||||||
Operating income (loss) |
(109,834 | ) | 223,293 | (12,109 | ) | 76,870 | 56,956 | 235,176 | (3,812 | ) | 231,364 | |||||||||||||||||||||
Assets |
3,112,901 | 6,333,851 | 568,790 | 1,070,331 | 611,818 | 11,697,691 | 89,908 | 11,787,599 | ||||||||||||||||||||||||
Long-lived assets |
1,048,402 | 1,970,631 | 111,354 | 274,182 | 130,339 | 3,534,908 | | 3,534,908 | ||||||||||||||||||||||||
For the year ended March 31, 2013
|
| |||||||||||||||||||||||||||||||
Yen (millions) | ||||||||||||||||||||||||||||||||
Japan | North America |
Europe | Asia | Other Regions |
Total | Reconciling Items |
Consolidated | |||||||||||||||||||||||||
Net sales and other operating revenue: |
||||||||||||||||||||||||||||||||
External customers |
1,925,333 | 4,612,361 | 536,856 | 1,926,434 | 876,963 | 9,877,947 | | 9,877,947 | ||||||||||||||||||||||||
Transfers between geographic areas |
1,968,179 | 244,741 | 105,254 | 379,213 | 19,504 | 2,716,891 | (2,716,891 | ) | | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
3,893,512 | 4,857,102 | 642,110 | 2,305,647 | 896,467 | 12,594,838 | (2,716,891 | ) | 9,877,947 | |||||||||||||||||||||||
Cost of sales, SG&A and R&D expenses |
3,715,084 | 4,648,184 | 641,650 | 2,158,889 | 860,773 | 12,024,580 | (2,691,443 | ) | 9,333,137 | |||||||||||||||||||||||
Operating income |
178,428 | 208,918 | 460 | 146,758 | 35,694 | 570,258 | (25,448 | ) | 544,810 | |||||||||||||||||||||||
Assets |
3,264,383 | 7,645,540 | 673,667 | 1,523,192 | 660,856 | 13,767,638 | (132,281 | ) | 13,635,357 | |||||||||||||||||||||||
Long-lived assets |
1,167,236 | 2,481,097 | 124,088 | 434,827 | 143,570 | 4,350,818 | | 4,350,818 |
Notes:
1. | Major countries or regions in each geographic area: |
North America | United States, Canada, Mexico | |
Europe | United Kingdom, Germany, France, Italy, Belgium | |
Asia | Thailand, Indonesia, China, India, Vietnam | |
Other Regions | Brazil, Australia |
2. | Sales and revenues between geographic areas are generally made at values that approximate arms-length prices. |
3. | Unallocated corporate assets, included in reconciling items, amounted to ¥399,732 million as of March 31, 2012 and ¥293,583 million as of March 31, 2013, respectively, which consist primarily of cash and cash equivalents, available-for-sale securities and held-to-maturity securities held by the Company. Reconciling items also include elimination of transactions between geographic areas. |
4. | Previously, Honda used principally the declining-balance method for calculating the depreciation of property, plant and equipment, excluding property on operating leases. Effective April 1, 2012, Honda changed to the straight-line method of depreciation. As a result of the change in depreciation method, depreciation expense for the year ended March 31, 2013 decreased by approximately ¥42,486 million in Japan, ¥9,602 million in North America, ¥1,068 million in Europe and ¥3,144 million in Asia, respectively. It resulted in an increase in operating income. For further information, refer to Changes in accounting policy, (b) Change in depreciation method. |
5. | For the years ended March 31, 2012 and 2013, impacts of the floods in Thailand are included in Cost of sales, SG&A and R&D expenses of Asia. For further information, refer to Other, 2. Impact on the Companys consolidated financial position or results of operations of the floods in Thailand. |
6. | Honda corrected the amounts of Assets for the year ended March 31, 2012. For detailed information, refer to Other, 3. Immaterial corrections of the prior years Consolidated Balance Sheets and Consolidated Statements of Changes in Equity. |
37
Independent Auditors Report
Independent Auditors Report
The Board of Directors |
May 9, 2013 | |
Honda Motor Co., Ltd. |
KPMG AZSA LLC | ||||
Takuji Kanai (Seal) | Designated Limited Liability Partner, Engagement Partner and Certified Public Accountant | |||
Kenji Tanaka (Seal) | Designated Limited Liability Partner, Engagement Partner and Certified Public Accountant | |||
Hideaki Koyama (Seal) | Designated Limited Liability Partner, Engagement Partner and Certified Public Accountant |
We have audited the consolidated financial statements, comprising the consolidated balance sheet, the consolidated statements of income, the consolidated statements of changes in equity and the related notes of Honda Motor Co., Ltd. as at March 31, 2013 and for the year from April 1, 2012 to March 31, 2013 in accordance with Article 444-(4) of the Companies Act.
Managements Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the second sentence of Article 120-2 (1) of the Ordinance of Companies Accounting that prescribes some omissions of disclosure items required under accounting principles generally accepted in the United States of America, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatements, whether due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on the consolidated financial statements based on our audit as independent auditor. We conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgement, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entitys preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, while the objective of the financial statement audit is not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements referred to above, which were prepared in accordance with the second sentence of Article 120-2 (1) of the Ordinance of Companies Accounting that prescribes some omissions of disclosure items required under accounting principles generally accepted in the United States of America, present fairly, in all material respects, the financial position and the results of operations of Honda Motor Co., Ltd. and its consolidated subsidiaries for the period, for which the consolidated financial statements were prepared.
Emphasis of Matter
As described in Note 8 of Significant Accounting Policies in The Notes to the Consolidated Statutory Report, the Company changed the depreciation method of property, plant and equipment, excluding property on operating leases, effective April 1, 2012. Our opinion is not qualified in respect of this matter.
Other Matter
Our firm and engagement partners have no interest in the Company which should be disclosed pursuant to the provisions of the Certified Public Accountants Law of Japan.
Notes to the Reader of Independent Auditors Report:
The Independent Auditors Report herein is the English translation of the Independent Auditors Reports as required by the Companies Act.
38
Audit Report of the Board of Corporate Auditors
Audit Report
Mr. Takanobu Ito
President and Representative Director of
Honda Motor Co., Ltd.
The Board of Corporate Auditors has prepared this Audit Report regarding the performance of duties by the Directors for the 89th fiscal year from April 1, 2012 to March 31, 2013, upon deliberation based on the audit reports prepared by each Corporate Auditor, and hereby reports as follows:
1. Auditing Methods Employed by the Corporate Auditors and the Board of Corporate Auditors and Details of Such Methods
The Board of Corporate Auditors established auditing policies, assignment of duties, etc., and received reports from each Corporate Auditor regarding their execution of audits and results thereof, and received reports from the Directors, etc. and the Accounting Auditor regarding performance of their duties, and sought explanations as necessary.
Each Corporate Auditor, in accordance with the auditing standards of Corporate Auditors established by the Board of Corporate Auditors, following the auditing policies, assignment of duties and other relevant matters, communicated with the Directors, the Audit Office and other employees, etc., made efforts to collect information and establish the environment for auditing, and participated in the meetings of the Board of Directors and other important meetings, received reports from the Directors and employees regarding performance of their duties, sought explanations as necessary, examined important documents on business decisions, etc., and surveyed the status of operations and assets at the head office and principal business offices. In addition, each Corporate Auditor monitored and verified the content of the resolution of the Board of Directors regarding the establishment of the system for ensuring that the performance of duties by the Directors as recorded in the Business Report conforms to the laws and regulations and Articles of Incorporation and other systems stipulated in Paragraphs 1 and 3 of Article 100 of the Enforcement Regulations of the Corporation Law as being necessary for ensuring appropriateness of the Companys operations, and the status of the systems established based on such resolution (Internal Control Systems) by receiving periodic reports from the Directors and employees on the structuring and operation of these systems, and, as necessary, requesting explanations and asking for expression of opinions. With respect to subsidiaries, Corporate Auditors communicated and exchanged information with Directors and Corporate Auditors of subsidiaries, and received business reports from subsidiaries as necessary. Based on the above methods, Corporate Auditors examined the business report and the accompanying detailed statements for this fiscal year.
Furthermore, Corporate Auditors monitored and verified whether the Accounting Auditor maintained its independence and implemented appropriate audits, and received reports from the Accounting Auditor regarding the performance of its duties and sought explanations as necessary. In addition, Corporate Auditors received notice from the Accounting Auditor that System for ensuring that duties are performed properly (matters set forth in each item of Article 131 of the Company Accounting Regulations) is established in accordance with the Quality Control Standards Regarding Audits (Business Accounting Council, October 28, 2005), etc., and sought explanations as necessary. Based on the above methods, Corporate Auditors examined the unconsolidated financial statements (unconsolidated balance sheets, unconsolidated statements of operations, unconsolidated statements of stockholders equity and notes to the unconsolidated financial statements) and the supplementary schedules thereto, and the consolidated financial statements (the consolidated balance sheet, the consolidated statement of income, the consolidated statements of change in equity and notes to consolidated financial statements) for this fiscal year.
2. Results of Audit
(1) | Results of Audit of Business Report, etc. |
1. | The business report and the supplementary schedules thereto fairly represent the status of the Company in accordance with the applicable laws and regulations and Articles of Incorporation. |
2. | No misconduct or material violation of laws, regulations or the Articles of Incorporation was found with regard to the performance of duties by the Directors. |
3. | The content of the resolution of the Board of Directors regarding the Internal Control Systems is appropriate. In addition, no matters were found for comment with regard to the content of the business report as it is related to Internal Control Systems or with regard to the performance of duties by the Directors. |
(2) | Results of Audit of unconsolidated financial statements and the supplementary schedules thereto. |
The methods and results of the audit performed by the Accounting Auditor, KPMG AZSA LLC, are appropriate.
(3) | Results of Audit of consolidated financial statements. |
The methods and results of the audit performed by the Accounting Auditor, KPMG AZSA LLC, are appropriate.
May 14, 2013
Board of Corporate Auditors
Honda Motor Co., Ltd.
Corporate Auditor (Full-time) | Masaya Yamashita (Seal) | |||||
Corporate Auditor (Full-time) | Hideki Okada (Seal) | |||||
Corporate Auditor (Outside) | Hirotake Abe (Seal) | |||||
Corporate Auditor (Outside) | Tomochika Iwashita (Seal) | |||||
Corporate Auditor (Outside) | Toshiaki Hiwatari (Seal) |
39
REFERENCE
Forecasts for the Fiscal Year Ending March 31, 2014
In regard to the forecasts of the financial results for the fiscal year ending March 31, 2014, Honda projects consolidated and unconsolidated results to be as shown below:
These forecasts are based on the assumption that the average exchange rates for the Japanese yen to the U.S. dollar and the euro will
be ¥95 and ¥120, respectively, for the full year ending March 31, 2014.
Consolidated
Yen (billions)/Changes from the previous fiscal period |
||||||||
Fiscal year ending March 31, 2014 |
||||||||
Net sales and other operating revenue |
12,100 | (+22.5 | %) | |||||
Operating income |
780 | (+43.2 | %) | |||||
Income before income taxes and equity in income of affiliates |
780 | (+59.5 | %) | |||||
Net income attributable to Honda Motor Co., Ltd. |
580 | (+58.0 | %) |
This announcement contains forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based on managements assumptions and beliefs taking into account information currently available to it. Therefore, please be advised that Hondas actual results could differ materially from those described in these forward-looking statements as a result of numerous factors, including general economic conditions in Hondas principal markets and foreign exchange rates between the Japanese yen and the U.S. dollar, the euro and other major currencies, as well as other factors detailed from time to time.
Shareholders
Categories |
FY2010 Year-End (As of March 31, 2011) |
FY2011 Year-End (As of March 31, 2012) |
FY2012 Year-End (As of March 31, 2013) |
|||||||||||||||||||||
Thousand shares | Number of shareholders |
Thousand shares | Number of shareholders |
Thousand shares | Number of shareholders |
|||||||||||||||||||
Individuals |
176,239 | 210,526 | 180,246 | 215,138 | 181,719 | 218,121 | ||||||||||||||||||
National and Local Public Entities |
| | 3 | 1 | | | ||||||||||||||||||
Financial Institutions |
784,292 | 270 | 769,527 | 260 | 736,115 | 260 | ||||||||||||||||||
Securities Companies |
29,106 | 72 | 30,558 | 65 | 22,254 | 76 | ||||||||||||||||||
Other Domestic Corporations |
179,845 | 1,573 | 176,507 | 1,538 | 158,924 | 1,562 | ||||||||||||||||||
Foreigners |
632,818 | 1,034 | 645,456 | 964 | 703,282 | 1,008 | ||||||||||||||||||
Treasury Stock |
9,126 | 1 | 9,128 | 1 | 9,131 | 1 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
1,811,428 | 213,476 | 1,811,428 | 217,967 | 1,811,428 | 221,028 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Note: The numbers of shares above disregard and round off amounts of less than one thousand.
40
Honda Motor Co., Ltd.
Yen (million) | ||||||||
As of March 31, 2012 and 2013 |
2012 | 2013 | ||||||
Assets |
||||||||
Current assets |
||||||||
Cash and bank deposits |
136,648 | 51,242 | ||||||
Notes receivable |
4 | | ||||||
Accounts receivable |
366,508 | 417,528 | ||||||
Securities |
176,509 | 149,550 | ||||||
Finished goods |
100,718 | 70,107 | ||||||
Work in process |
26,278 | 29,620 | ||||||
Raw materials and supplies |
25,571 | 27,320 | ||||||
Advance payments |
25,430 | 13,974 | ||||||
Prepaid expenses |
4,307 | 6,799 | ||||||
Deferred income taxes |
67,949 | 108,832 | ||||||
Short-term loans receivablesubsidiaries and affiliates |
22,280 | 29,869 | ||||||
Other receivables |
99,438 | 88,368 | ||||||
Others |
21,199 | 13,961 | ||||||
Allowance for doubtful accounts |
(2,810 | ) | (2,875 | ) | ||||
|
|
|
|
|||||
Total current assets |
1,070,034 | 1,004,300 | ||||||
|
|
|
|
|||||
Fixed assets |
||||||||
Tangible fixed assets |
||||||||
Buildings |
611,995 | 669,584 | ||||||
Accumulated depreciation |
(402,283 | ) | (408,953 | ) | ||||
|
|
|
|
|||||
Buildings, net |
209,712 | 260,631 | ||||||
|
|
|
|
|||||
Structures |
127,699 | 130,512 | ||||||
Accumulated depreciation |
(94,257 | ) | (95,388 | ) | ||||
|
|
|
|
|||||
Structures, net |
33,442 | 35,123 | ||||||
|
|
|
|
|||||
Machinery and equipment |
594,245 | 601,639 | ||||||
Accumulated depreciation |
(533,001 | ) | (525,372 | ) | ||||
|
|
|
|
|||||
Machinery and equipment, net |
61,244 | 76,267 | ||||||
|
|
|
|
|||||
Vehicles |
15,738 | 15,921 | ||||||
Accumulated depreciation |
(13,103 | ) | (12,523 | ) | ||||
|
|
|
|
|||||
Vehicles, net |
2,635 | 3,397 | ||||||
|
|
|
|
|||||
Tools, furniture and fixtures |
223,122 | 212,038 | ||||||
Accumulated depreciation |
(205,685 | ) | (191,319 | ) | ||||
|
|
|
|
|||||
Tools, furniture and fixtures, net |
17,437 | 20,719 | ||||||
|
|
|
|
|||||
Land |
336,378 | 335,703 | ||||||
Lease assets |
2,656 | 3,671 | ||||||
Accumulated depreciation |
(1,428 | ) | (1,250 | ) | ||||
|
|
|
|
|||||
Lease assets, net |
1,227 | 2,421 | ||||||
|
|
|
|
|||||
Construction in progress |
65,333 | 55,047 | ||||||
|
|
|
|
|||||
Total tangible fixed assets |
727,410 | 789,312 | ||||||
|
|
|
|
|||||
Intangible assets |
||||||||
Patents |
38 | 26 | ||||||
Leaseholds |
2,094 | 2,101 | ||||||
Trademarks |
13 | 17 | ||||||
Software |
10,003 | 32,131 | ||||||
Lease assets |
52 | 8 | ||||||
Others |
286 | 543 | ||||||
|
|
|
|
|||||
Total intangible assets |
12,489 | 34,829 | ||||||
|
|
|
|
|||||
Investments and other assets |
||||||||
Investment securities |
86,538 | 92,752 | ||||||
Investment securitiessubsidiaries and affiliates |
429,109 | 432,242 | ||||||
Investments and other assets |
24 | 24 | ||||||
Investmentssubsidiaries and affiliates |
93,065 | 93,065 | ||||||
Long-term loans receivableemployees |
177 | 139 | ||||||
Long-term loans receivablesubsidiaries and affiliates |
4,714 | 3,928 | ||||||
Receivables in bankruptcy |
6,711 | 6,462 | ||||||
Long-term prepaid expenses |
517 | 551 | ||||||
Deferred income taxes |
151,589 | 89,570 | ||||||
Others |
35,123 | 23,587 | ||||||
Allowance for doubtful accounts |
(7,670 | ) | (7,442 | ) | ||||
|
|
|
|
|||||
Total investments and other assets |
799,901 | 734,882 | ||||||
|
|
|
|
|||||
Total fixed assets |
1,539,801 | 1,559,023 | ||||||
|
|
|
|
|||||
Total assets |
2,609,835 | 2,563,324 | ||||||
|
|
|
|
Yen (million) | ||||||||
2012 | 2013 | |||||||
Liabilities |
||||||||
Current liabilities |
||||||||
Notes payabletrade |
639 | 1,854 | ||||||
Accounts payable |
357,527 | 237,888 | ||||||
Short-term bonds payable |
| 39,998 | ||||||
Short-term loans payable |
17,905 | 24,033 | ||||||
Current portion of long-term loans payable |
31 | 28 | ||||||
Current portion of bonds |
70,000 | | ||||||
Lease debt |
527 | 733 | ||||||
Other payables |
39,783 | 98,530 | ||||||
Accrued expenses |
122,633 | 99,669 | ||||||
Income taxes payable |
| 936 | ||||||
Advances received |
2,889 | 4,413 | ||||||
Deposits received |
2,693 | 3,850 | ||||||
Deferred revenue |
126 | 142 | ||||||
Current portion of accrued product warranty |
29,991 | 30,011 | ||||||
Accrued employees bonuses |
27,068 | 29,651 | ||||||
Accrued directors bonuses |
274 | 272 | ||||||
Accrued operating officers bonuses |
467 | 449 | ||||||
Provision for loss on disaster |
17,294 | 1,145 | ||||||
Derivatives liabilities |
19,038 | 49,423 | ||||||
Others |
1,855 | 3,395 | ||||||
|
|
|
|
|||||
Total current liabilities |
710,748 | 626,429 | ||||||
|
|
|
|
|||||
Non-current liabilities |
||||||||
Long-term loans payable |
165 | 131 | ||||||
Lease debt |
845 | 1,853 | ||||||
Accrued product warranty |
33,392 | 36,141 | ||||||
Accrued employees retirement benefits |
122,922 | 124,048 | ||||||
Asset retirement obligation |
596 | 662 | ||||||
Others |
6,618 | 10,575 | ||||||
|
|
|
|
|||||
Total non-current liabilities |
164,540 | 173,413 | ||||||
|
|
|
|
|||||
Total liabilities |
875,288 | 799,843 | ||||||
|
|
|
|
|||||
Total net assets |
||||||||
Stockholders equity |
||||||||
Common stock |
86,067 | 86,067 | ||||||
Capital surplus |
||||||||
Capital reserve |
170,313 | 170,313 | ||||||
|
|
|
|
|||||
Total capital surplus |
170,313 | 170,313 | ||||||
|
|
|
|
|||||
Retained earnings |
||||||||
Legal reserves |
21,516 | 21,516 | ||||||
Other retained earnings |
||||||||
Reserve for dividends |
| | ||||||
General reserve |
1,333,300 | 1,243,300 | ||||||
Reserve for special depreciation |
1,551 | 1,199 | ||||||
Reserve for reduction of acquisition cost of fixed assets |
14,235 | 16,276 | ||||||
Earnings to be carried forward |
104,029 | 217,288 | ||||||
|
|
|
|
|||||
Total retained earnings |
1,474,633 | 1,499,582 | ||||||
|
|
|
|
|||||
Treasury stock |
(26,215 | ) | (26,222 | ) | ||||
|
|
|
|
|||||
Total stockholders equity |
1,704,799 | 1,729,740 | ||||||
|
|
|
|
|||||
Difference of appreciation and conversion |
||||||||
Net unrealized gains on securities |
29,932 | 33,977 | ||||||
Deferred loss (gain) on hedges |
(184 | ) | (237 | ) | ||||
|
|
|
|
|||||
Total difference of appreciation and conversion |
29,747 | 33,740 | ||||||
|
|
|
|
|||||
Total net assets |
1,734,546 | 1,763,480 | ||||||
|
|
|
|
|||||
Total liabilities and net assets |
2,609,835 | 2,563,324 | ||||||
|
|
|
|
Unconsolidated Statements of Income
Yen (million) | ||||||||
Year ended March 31, 2012 and 2013 |
2012 | 2013 | ||||||
Net sales |
2,740,052 | 3,244,070 | ||||||
Cost of sales |
||||||||
Finished goods and parts for sale at beginning of year |
81,540 | 100,718 | ||||||
Production cost |
1,756,702 | 1,697,268 | ||||||
Others |
326,053 | 520,331 | ||||||
|
|
|
|
|||||
Total |
2,164,296 | 2,318,318 | ||||||
|
|
|
|
|||||
Transfer to other accounts |
1,571 | 2,566 | ||||||
Finished goods and parts for sale at end of year |
100,718 | 70,107 | ||||||
|
|
|
|
|||||
Cost of finished goods sold |
2,062,006 | 2,245,643 | ||||||
|
|
|
|
|||||
Gross profit |
678,045 | 998,426 | ||||||
|
|
|
|
|||||
Selling, general and administrative expenses |
814,803 | 894,494 | ||||||
|
|
|
|
|||||
Operating income (loss) |
(136,757 | ) | 103,932 | |||||
|
|
|
|
|||||
Non-operating income |
||||||||
Interest income |
1,656 | 1,181 | ||||||
Dividend income |
182,182 | 156,492 | ||||||
Rental income |
22,829 | 23,585 | ||||||
Others |
6,389 | 6,186 | ||||||
|
|
|
|
|||||
Total non-operating income |
213,057 | 187,446 | ||||||
|
|
|
|
|||||
Non-operating expenses |
||||||||
Interest expenses |
97 | 99 | ||||||
Contributions |
558 | 570 | ||||||
Foreign exchange loss |
9,969 | 78,884 | ||||||
Others |
25,285 | 17,999 | ||||||
|
|
|
|
|||||
Total non-operating expenses |
35,911 | 97,553 | ||||||
|
|
|
|
|||||
Ordinary income |
40,388 | 193,825 | ||||||
|
|
|
|
|||||
Extraordinary income |
||||||||
Gain on sale of fixed assets |
632 | 2,549 | ||||||
Subsidy income |
457 | 1,337 | ||||||
Gain on transfer of intellectual property rights |
23,977 | | ||||||
Gain of reversal of provision for loss on disaster |
3,511 | | ||||||
Others |
2,803 | 677 | ||||||
|
|
|
|
|||||
Total extraordinary income |
31,383 | 4,564 | ||||||
|
|
|
|
|||||
Extraordinary losses |
||||||||
Loss on disposal of fixed assets |
1,844 | 3,354 | ||||||
Loss on devaluation of investment securitiessubsidiaries and affiliates |
8,328 | | ||||||
Compensation expenses to affiliated company |
13,564 | | ||||||
Others |
5,612 | 285 | ||||||
|
|
|
|
|||||
Total extraordinary losses |
29,348 | 3,640 | ||||||
|
|
|
|
|||||
Income before income taxes |
42,422 | 194,750 | ||||||
|
|
|
|
|||||
Income taxes - current |
18,620 | 21,055 | ||||||
Income taxes - deferred |
(22,478 | ) | 18,980 | |||||
|
|
|
|
|||||
Total income tax |
(3,857 | ) | 40,036 | |||||
|
|
|
|
|||||
Net income |
46,280 | 154,714 | ||||||
|
|
|
|
Unconsolidated Statement of Changes in Net Assets
Yen (million) | ||||||||
2012 | 2013 | |||||||
Stockholders equity |
||||||||
Common stock |
||||||||
Balance at March 31, 2012 |
86,067 | 86,067 | ||||||
|
|
|
|
|||||
Balance at March 31, 2013 |
86,067 | 86,067 | ||||||
|
|
|
|
|||||
Capital surplus |
||||||||
Legal capital surplus |
||||||||
Balance at March 31, 2012 |
170,313 | 170,313 | ||||||
|
|
|
|
|||||
Balance at March 31, 2013 |
170,313 | 170,313 | ||||||
|
|
|
|
|||||
Total capital surplus |
||||||||
Balance at March 31, 2012 |
170,313 | 170,313 | ||||||
|
|
|
|
|||||
Balance at March 31, 2013 |
170,313 | 170,313 | ||||||
|
|
|
|
|||||
Retained earnings |
||||||||
Legal reserves |
||||||||
Balance at March 31, 2012 |
21,516 | 21,516 | ||||||
|
|
|
|
|||||
Balance at March 31, 2013 |
21,516 | 21,516 | ||||||
|
|
|
|
|||||
Other retained earnings |
||||||||
Reserve for dividends |
||||||||
Balance at March 31, 2012 |
113,300 | | ||||||
Changes of items during the period |
||||||||
Reversal of reserve for dividends |
(113,300 | ) | | |||||
|
|
|
|
|||||
Total changes of items during the period |
(113,300 | ) | | |||||
|
|
|
|
|||||
Balance at March 31, 2013 |
| | ||||||
|
|
|
|
|||||
General reserve |
||||||||
Balance at March 31, 2012 |
1,273,300 | 1,333,300 | ||||||
Changes of items during the period |
||||||||
Provision of general reserve |
60,000 | | ||||||
|
|
|
|
|||||
Reversal of general reserve |
| (90,000 | ) | |||||
|
|
|
|
|||||
Total changes of items during the period |
60,000 | (90,000 | ) | |||||
|
|
|
|
|||||
Balance at March 31, 2013 |
1,333,300 | 1,243,300 | ||||||
|
|
|
|
|||||
Reserve for special depreciation |
||||||||
Balance at March 31, 2012 |
2,145 | 1,551 | ||||||
Changes of items during the period |
||||||||
Provision of reserve for special depreciation |
93 | 271 | ||||||
Reversal of reserve for special depreciation |
(687 | ) | (623 | ) | ||||
|
|
|
|
|||||
Total changes of items during the period |
(593 | ) | (351 | ) | ||||
|
|
|
|
|||||
Balance at March 31, 2013 |
1,551 | 1,199 | ||||||
|
|
|
|
|||||
Reserve for reduction entry |
||||||||
Balance at March 31, 2012 |
12,979 | 14,235 | ||||||
Changes of items during the period |
||||||||
Provision of reserve for reduction entry |
1,345 | 2,316 | ||||||
Reversal of reserve for reduction entry |
(89 | ) | (275 | ) | ||||
|
|
|
|
|||||
Total changes of items during the period |
1,256 | 2,041 | ||||||
|
|
|
|
|||||
Balance at March 31, 2013 |
14,235 | 16,276 | ||||||
|
|
|
|
|||||
Retained earnings brought forward |
||||||||
Balance at March 31, 2012 |
113,249 | 104,029 | ||||||
Changes of items during the period |
||||||||
Reversal of reserve for dividends |
113,300 | | ||||||
Provision of general reserve |
(60,000 | ) | | |||||
Reversal of general reserve |
| 90,000 | ||||||
Provision of reserve for special depreciation |
(93 | ) | (271 | ) | ||||
Reversal of reserve for special depreciation |
687 | 623 | ||||||
Provision of reserve for reduction entry |
(1,345 | ) | (2,316 | ) | ||||
Reversal of reserve for reduction entry |
89 | 275 | ||||||
Dividends from surplus |
(108,138 | ) | (129,765 | ) | ||||
Net income |
46,280 | 154,714 | ||||||
Disposal of treasury stock |
(0 | ) | (0 | ) | ||||
|
|
|
|
|||||
Total changes of items during the period |
(9,219 | ) | 113,259 | |||||
|
|
|
|
|||||
Balance at March 31, 2013 |
104,029 | 217,288 | ||||||
|
|
|
|
|||||
Total retained earnings |
Yen (million) | ||||||||
2012 | 2013 | |||||||
Balance at March 31, 2012 |
1,536,491 | 1,474,633 | ||||||
Changes of items during the period |
||||||||
Reversal of reserve for dividends |
| | ||||||
Provision of general reserve |
| | ||||||
Reversal of general reserve |
| | ||||||
Provision of reserve for special depreciation |
| | ||||||
Reversal of reserve for special depreciation |
| | ||||||
Provision of reserve for reduction entry |
| | ||||||
Reversal of reserve for reduction entry |
| | ||||||
Dividends from surplus |
(108,138 | ) | (129,765 | ) | ||||
Net income |
46,280 | 154,714 | ||||||
Disposal of treasury stock |
(0 | ) | (0 | ) | ||||
|
|
|
|
|||||
Total changes of items during the period |
(61,857 | ) | 24,948 | |||||
|
|
|
|
|||||
Balance at March 31, 2013 |
1,474,633 | 1,499,582 | ||||||
|
|
|
|
|||||
Treasury stock |
||||||||
Balance at March 31, 2012 |
(26,209 | ) | (26,215 | ) | ||||
Changes of items during the period |
||||||||
Purchase of treasury stock |
(7 | ) | (8 | ) | ||||
Disposal of treasury stock |
1 | 1 | ||||||
|
|
|
|
|||||
Total changes of items during the period |
(6 | ) | (6 | ) | ||||
|
|
|
|
|||||
Balance at March 31, 2013 |
(26,215 | ) | (26,222 | ) | ||||
|
|
|
|
|||||
Total stockholders equity |
||||||||
Balance at March 31, 2012 |
1,766,662 | 1,704,799 | ||||||
Changes of items during the period |
||||||||
Dividends from surplus |
(108,138 | ) | (129,765 | ) | ||||
Net income |
46,280 | 154,714 | ||||||
Purchase of treasury stock |
(7 | ) | (8 | ) | ||||
Disposal of treasury stock |
1 | 1 | ||||||
|
|
|
|
|||||
Total changes of items during the period |
(61,863 | ) | 24,941 | |||||
|
|
|
|
|||||
Balance at March 31, 2013 |
1,704,799 | 1,729,740 | ||||||
|
|
|
|
|||||
Valuation and translation adjustments |
||||||||
Valuation difference on available-for-sale security |
||||||||
Balance at March 31, 2012 |
25,348 | 29,932 | ||||||
Changes of items during the period |
||||||||
Net changes of items other than shareholders equity |
4,583 | 4,045 | ||||||
|
|
|
|
|||||
Total changes of items during the period |
4,583 | 4,045 | ||||||
|
|
|
|
|||||
Balance at March 31, 2013 |
29,932 | 33,977 | ||||||
|
|
|
|
|||||
Deferred gains or losses on hedges |
||||||||
Balance at March 31, 2012 |
(156 | ) | (184 | ) | ||||
Changes of items during the period |
||||||||
Net changes of items other than shareholders equity |
(28 | ) | (52 | ) | ||||
|
|
|
|
|||||
Total changes of items during the period |
(28 | ) | (52 | ) | ||||
|
|
|
|
|||||
Balance at March 31, 2013 |
(184 | ) | (237 | ) | ||||
|
|
|
|
|||||
Total valuation and translation adjustments |
||||||||
Balance at March 31, 2012 |
25,192 | 29,747 | ||||||
Changes of items during the period |
||||||||
Net changes of items other than shareholders equity |
4,555 | 3,992 | ||||||
|
|
|
|
|||||
Total changes of items during the period |
4,555 | 3,992 | ||||||
|
|
|
|
|||||
Balance at March 31, 2013 |
29,747 | 33,740 | ||||||
|
|
|
|
|||||
Total net assets |
||||||||
Balance at March 31, 2012 |
1,791,854 | 1,734,546 | ||||||
Changes of items during the period |
||||||||
Dividends from surplus |
(108,138 | ) | (129,765 | ) | ||||
Net income |
46,280 | 154,714 | ||||||
Purchase of treasury stock |
(7 | ) | (8 | ) | ||||
Disposal of treasury stock |
1 | 1 | ||||||
Net changes of items other than shareholders equity |
4,555 | 3,992 | ||||||
|
|
|
|
|||||
Total changes of items during the period |
(57,308 | ) | 28,934 | |||||
|
|
|
|
|||||
Balance at March 31, 2013 |
1,734,546 | 1,763,480 | ||||||
|
|
|
|
Guangqi Honda Begins Construction of Third Automobile Production Line and a New Engine Plant
BEIJING, China, May 28, 2013Guangqi Honda Automobile Co., Ltd., an automobile production and sales joint venture of Honda in China, held a ceremony to commemorate the start of construction of a third production line and an engine plant within the property of the existing ZengCheng Plant.
For details, please refer to the website of Honda Motor Co., Ltd
http://world.honda.com/news/2013/c130528Guangqi-Honda-New-Engine-Plant/index.html
Honda Inaugurates New Motorcycle Plant in Karnataka
Bengaluru, India, May 28, 2013Honda Motorcycle & Scooter India Pvt. Ltd., the second largest motorcycle company in India inaugurated its most advanced and latest third motorcycle production plant at Narsapura Area, District Kolar (Karnataka) today.
For details, please refer to the website of Honda Motor Co., Ltd
http://world.honda.com/news/2013/c130528Motorcycle-Plant-Karnataka/index.html