content_image/86444.jpg content_image/86445.jpg
The balance of treasury stock recorded in the shareholders’ equity section as of March 31, 2001 includes treasury stock purchased for the purpose of reissuance upon the exercise of stock options granted to directors and key employees. As of March 31, 2001, stock options for 93 thousand shares have been granted and are exercisable through June 30, 2006. 

Dividends are approved by the shareholders at a meeting held subsequent to the fiscal year to which the dividends are applicable. Semi-annual interim dividends may also be paid upon resolu- tion of the Board of Directors, subject to limitations imposed by the Code. 

Under the Code, the amount available for dividends is based on retained earnings as recorded on the Company’s books. At March 31, 2001, retained earnings recorded on the Company’s books were ¥95,273 million. Such retained earnings included ¥80,869 million which is designat- ed as general and specific reserves but is available for future dividends subject to approval by shareholders and legal reserve requirements. 

9. Income Taxes 

The Company and its domestic subsidiaries are subject to Japanese national and local income taxes which, in the aggregate, resulted in a normal effective statutory tax rate of approximately 42% for the years ended March 31, 2001 and 2000. 

The tax effects of significant temporary differences and loss carryforwards which resulted in deferred tax assets and liabilities at March 31, 2001 and 2000 are as follows: 

<img src='content_image/86444.jpg'>

The actual effective income tax rates reflected in the accompanying statements of income dif- fered from the normal statutory rates for the following reasons: 

<img src='content_image/86445.jpg'>

10. Research and Development Costs 

Research and development costs charged to income were ¥24,039 million and ¥21,111 million for the years ended March 31, 2001 and 2000, respectively. 

