content_image/188441.jpg content_image/188442.jpg content_image/188443.jpg content_image/188444.jpg
## 13. 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 39.5% for the years ended March 31, 2010 and 2009. Foreign subsidiaries are subject to income taxes of the countries in which they operate. 

The tax effects of significant temporary differences and tax loss carryforwards which resulted in deferred tax assets and liabilities at March 31, 2010 and 2009 are as follows: 

<img src='content_image/188441.jpg'>

At March 31, 2010, certain subsidiaries have tax loss carryfor- wards aggregating approximately ¥26,049 million ($279,979 thou- sand) which are available to be offset against taxable income of such subsidiaries in future years. These tax loss carryforwards, if not utilized, will expire as follows: 

<img src='content_image/188442.jpg'>

## 14. Research and Development Expenses 

A reconciliation between the normal effective statutory tax rate and the actual effective tax rate reflected in the accompanying consolidated statement of operations for the year ended March 31, 2010 is as follows: 

<img src='content_image/188443.jpg'>

Research and development expenses are included in selling, general and administrative expenses and production cost, and the amounts are as follows: 

<img src='content_image/188444.jpg'>

