HONDA MOTOR CO LTD 6-K 2009
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 2009
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 x 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): ¨
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
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): ¨
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ¨ No ¨
If Yes is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82-
The Board of Directors of Honda Motor Co., Ltd., at its meeting held on May 15, 2009, resolved to propose a matter of Amendments to Articles of Incorporation as follows as an agenda item for the Companys 85th ordinary general meeting of shareholders scheduled to be held on June 23, 2009.
On May 29, 2008, Honda Motor Co., Ltd., issued and sent to its shareholders the Notice of Convocation of the 85th Ordinary General Meeting of Shareholders.
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.
Date: June 25, 2009
May 15, 2009
1-1, Minami-Aoyama 2-chome,
Minato-ku, 107-8556 Tokyo
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 15, 2009, resolved to propose a matter of Amendments to Articles of Incorporation as follows as an agenda item for the Companys 85th ordinary general meeting of shareholders scheduled to be held on June 23, 2009.
Due to the enforcement of The Law for Partial Amendment to the Law Concerning Book-Entry Transfer of Corporate Bonds and Other Securities for the Purpose of Streamlining the Settlement of Trades of Stocks and Other Securities. (Law No. 88 of 2004) as of January 5, 2009, all listed shares of stock concurrently became eligible for book-entry transfer (the so called Dematerialization System). In accordance with the aforementioned enforcement, a proposal has been made to make necessary amendments to the overall text of the Articles of Incorporation, including the deletion of articles which are no longer necessary, such as those concerning share certificates, beneficial shareholders and the register of beneficial shareholders, as well as to alter the numbering of the Articles of Incorporation. In addition, a proposal has also been made to enact Supplementary Provisions in order to provide transitional measures due to the amendment to the Articles of Incorporation. (Article 1 and 2 of the Supplementary Provisions to Proposed Amendment)
Portions of the existing Articles of Incorporation will be amended as follows:
Scheduled date of the ordinary general meeting of shareholders for the purpose of the amendments to the Articles of Incorporation:
Tuesday, June 23, 2009
Scheduled date when amendments to the Articles of Incorporation come into effect:
Tuesday, June 23, 2009
NOTICE OF CONVOCATION OF
THE 85TH ORDINARY GENERAL MEETING OF SHAREHOLDERS
TO BE HELD AT GRAND PACIFIC LE DAIBA, TOKYO, JAPAN
ON JUNE 23, 2009 AT 10:00 A.M.
(This is a translation of the original notice
in the Japanese language mailed on May 29, 2009
to stockholders in Japan, and is for reference purposes only.)
HONDA MOTOR CO., LTD.
(HONDA GIKEN KOGYO KABUSHIKI KAISHA)
May 29, 2009
Notice of Convocation of the 85th
Ordinary General Meeting of Shareholders
You are hereby notified that the 85th 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 one of the two methods 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 6pm on Monday, June 22, 2009.
Request: We request that when arriving at the meeting you present the voting right exercise form enclosed herewith to the meeting hall receptionist.
Matters to be reported:
Matters to be resolved:
Distribution of Dividends
Partial Amendment to the Articles of Incorporation
Election of Twenty-One (21) Directors
Election of One (1) Corporate Auditor
Payment of Bonus to Directors and Corporate Auditors for the 85th Fiscal Year
Details regarding these agenda items are contained in the Business Report for the 85th Fiscal Year, which is appended to this Notice of Convocation.
Japanese http://www.honda.co.jp/investors English http://world.honda.com/investors
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, develop its operations in many countries throughout the world and 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, and the Companys basic policy for dividends is to make dividend distributions after taking into account its long-term strategy and consolidated earnings performance. The Company will also acquire its own stock from time to time with the objectives of improving capital efficiency and flexibly implementing capital policies.
Regarding the year-end dividend for the fiscal year under review, after considering various factors such as the Companys goals of strengthening its condition and developing its business operations, the following conditions are proposed:
(1) Conditions and Total Value of Dividend Assets Allocated to Stockholders
¥8 per share of common stock
Total value of ¥14,516,872,000
(2) Effective Date of Distribution of Dividends
June 24, 2009
SECOND ITEM: Partial Amendment to the Articles of Incorporation
(1) Reasons for Amendment:
Due to the enforcement of The Law for Partial Amendment to the Law Concerning Book-Entry Transfer of Corporate Bonds and Other Securities for the Purpose of Streamlining the Settlement of Trades of Stocks and Other Securities (Law No. 88 of 2004) as of January 5, 2009, all listed shares of stock concurrently became eligible for book-entry transfer (the so-called Dematerialization System). In accordance with the aforementioned enforcement, a proposal has been made to make necessary amendments to the overall text of the Articles of Incorporation, including the deletion of articles which are no longer necessary, such as those concerning share certificates, beneficial shareholders and the register of beneficial shareholders, as well as to alter the numbering of the Articles of Incorporation.
In addition, a proposal has also been made to enact Supplementary Provisions in order to provide transitional measures due to the amendment to the Articles of Incorporation. (Article 1 and 2 of the Supplementary Provisions to Proposed Amendment)
(2) Contents of Amendment:
Portions of the existing Articles of Incorporation will be amended as follows:
(The underlines indicate the portions to be amended.)
THIRD ITEM: Election of Twenty-One (21) Directors
The term of office of each of the twenty-one (21) current Directors is due to expire at the close of this meeting. It is proposed that twenty-one (21) Directors be elected at this meeting. The names and particulars of the twenty-one (21) candidates for the position of Director are provided below.
FOURTH ITEM: Election of One (1) Corporate Auditor
As the term of office of the current Corporate Auditor, Shinichi Sakamoto, is due to expire at the close of this meeting, it is proposed that one (1) Corporate Auditor be elected at the meeting. The name and particulars of the one (1) candidate for the position of Corporate Auditor are provided below.
This proposal has been approved in advance by the Board of Corporate Auditors.
FIFTH ITEM: Payment of Bonus to Directors and Corporate Auditors for the 85th Fiscal Year
It is proposed that the Company, after taking into consideration the business performance for the fiscal year under review, the amount of the bonus that has been paid in the past to the Directors and the Corporate Auditors and other various circumstances, pay a bonus in the total amount of 265 million, 750 thousand yen (¥265,750,000) to the twenty-one (21) Directors in office as of the end of the fiscal year (including the total amount of ¥4,460,000 to the two (2) outside Directors) and a bonus in the total amount of 27 million, 750 thousand yen (¥27,750,000) to the five (5) Corporate Auditors in office as of the end of the fiscal year in order to reward those Directors and Corporate Auditors for their service during the fiscal year. The amount of the bonus payable to each of the Directors and the Corporate Auditors would be left to the determination of the Board of Directors with regard to each Directors bonus, and to the consultation among the Corporate Auditors with regard to each Corporate Auditors bonus.
Business Report for the 85th Fiscal Year
For the Period From: April 1, 2008 To: March 31, 2009
1. OUTLINE OF BUSINESS
(1) Review of Operations
Concerning the economic environment surrounding Honda (Honda, consolidated subsidiaries and affiliates accounted for under the equity method) during the fiscal year ended March 31, 2009, crude oil and raw material prices significantly increased worldwide in the first half, followed by declines in the second half. Although the economies in the United States and Europe continued to grow in the first half, they deteriorated triggered by the financial crisis, to the extent that a further downturn due to the negative economic cycle associated with deterioration of the real economy is feared. On the other hand, in Asia, although the economies of China and India continued to expand, the pace of growth slowed, and certain countries in the region went into recession. In Japan, signs of a rapid deterioration in economic conditions could be seen, such as decreased consumer spending, with a decline in capital expenditures.
Among Hondas principal markets, the motorcycle market contracted substantially in the second half of the fiscal year compared with the previous fiscal year. In the United States, demand fell sharply. In Brazil, India and Thailand, although markets there remained favorable in the first half, demand declined in the second half and, for the fiscal year as a whole, was at about the same level as in the previous fiscal year. On the other hand, in Indonesia, the market expanded, propelled by strong demand in the first half. In the automobile market, demand dropped substantially in the second half compared with the same period of the previous fiscal year. Demand fell markedly in North America, Western Europe and Japan. In emerging markets, although there were temporary declines in demand in Brazil, China and India, markets expanded compared with the previous fiscal year.
Amid this operating environment, Honda worked to strengthen its corporate structure to respond quickly and accurately to changes in the diverse needs of its customers and society as a whole. However, to focus limited corporate resources on necessary areas to cope with the sudden changes in the economic environment, future investments and development projects were reassessed. In R&D, Honda took proactive initiatives to develop advanced technologies to enhance safety and environmental technologies as well as the attractiveness of its products. On the production side, Honda undertook further measures to strengthen its manufacturing systems and made global alignment in production based on market demand in each region. Regarding sales, Honda worked aggressively to enhance its product lineup by launching products that offer new value as well as providing products across borders around the world.
Hondas consolidated revenue for the fiscal year ended March 31, 2009 amounted to ¥10,011.2 billion, a decrease of 16.6% from the previous fiscal year, primarily due to currency translation effects and decreased revenue in automobile business. Consolidated operating income for the period totaled ¥189.6 billion, a decrease of 80.1% compared to the previous fiscal year. This decrease in operating income was primarily due to decreased revenue, increased raw material costs, the increase in fixed costs per unit as a result of reduced production, the negative impact of currency effects caused by the appreciation of the Japanese yen and expenses related to withdrawal from some racing activities and cancellations of development of new models, which more than offset continuing cost reduction efforts and decreased R&D expenses. Consolidated income before income taxes, minority interest and equity in income of affiliates for the period totaled ¥161.7 billion, a decrease of 81.9% from the previous fiscal year, and consolidated net income for the fiscal year ended March 31, 2009 totaled ¥137.0 billion, a decrease of 77.2% from the previous fiscal year.
New Product Launches
In motorcycle business during the fiscal year under review, in Japan, Honda launched the brand-new CB223S, a road sports model that offers basic styling along with a fun ride, and an all-new 50cc Monkey leisure model for the first time in 30 years. Also, in Japan, Honda launched the all-new super sports model CBR1000RR and added the CBR1000RRABS to its lineup, featuring the worlds first electronically controlled Combined ABS for a sports model. In North America, Honda newly launched the multi-utility vehicle Big Red that is suited for both transport-related work and leisure. In the United States, Honda launched an all-new, all-terrain vehicle (ATV) FourTrax Rancher. In Europe, the Company newly introduced the sports bike CB1000R, a naked type bike offering a powerful and dynamic performance. In Asia, Honda newly launched the all-new CZ-i 110cc Cub-type bike in Thailand, which offers a highly eco-friendly performance and low fuel consumption, along with the all-new Wave110i, also in Thailand. In other regions, in Brazil, the Company newly introduced the CG150 TITAN MIX, a motorcycle incorporating the worlds first flexible-fuel technology that can run on a mixture of bioethanol and gasoline.
Sales Volume and Profitability
With respect to Hondas motorcycle sales for the fiscal year ended March 31, 2009, unit sales of motorcycles totaled 10,114 thousand units, an increase of 8.5% from the previous fiscal year. Unit sales in Japan totaled 232 thousand units, a decrease of 25.4%. Unit sales outside of Japan totaled 9,882 thousand units, an increase of 9.7%*, due mainly to the increased unit sales of motorcycle knocked-down parts for local production at Hondas affiliates accounted for under the equity method in Asia and increased unit sales in other regions, including Brazil. Revenue from sales to external customers decreased 9.4%, to ¥1,411.5 billion from the previous fiscal year, due mainly to the negative currency translation effects despite increased unit sales outside of Japan. Operating income decreased by 34.0%, to ¥99.9 billion from the previous fiscal year, primarily due to increased raw material costs, negative currency effects and increased SG&A expenses, despite decreased R&D expenses.
New Product Launches
In automobile operations, in Japan, Honda launched the FREED, a brand-new compact minivan that is easy to handle and offers a spacious cabin with stylish design, and the all-new Life. In addition, in Japan and the United States, Honda launched the Insight, a brand-new hybrid vehicle that incorporates a lightweight, compact hybrid system inside a compact body, while offering superior fuel economy and fun driving. In North America, Honda brought out the all-new luxury sedan Acura TL. Also in North America and other regions, Honda launched the all-new Pilot SUV model. In Europe, the all-new Accord was introduced. In Asia, in Taiwan, Honda introduced the redesigned Fit. In addition, in China, the rest of Asia outside of Japan and other regions, the Company newly launched the all-new City entry sedan.
Sales Volume and Profitability
Hondas unit sales of automobiles for the fiscal year ended March 31, 2009 totaled 3,517 thousand units, a decrease of 10.4% from the previous fiscal year. In Japan, unit sales totaled 556 thousand units, a decrease of 9.6% from the previous fiscal year. Unit sales outside of Japan decreased 10.5%, to 2,961 thousand units, due mainly to decreased unit sales in North America, which more than offset the increased unit sales in Asia and other regions, including Brazil. Revenue from sales to external customers decreased 19.1%, to ¥7,674.4 billion from the previous fiscal year, due to the negative impact of the currency translation effects and decreased unit sales. Operating income decreased 96.3%, to ¥24.5 billion from the previous fiscal year, due mainly to decreased revenue, negative currency effects, the increase in fixed costs per unit as a result of reduced production, increased raw material costs and expenses related to withdrawal from some racing activities and cancellations of development of new models, which more than offset continuing cost reduction efforts and decreased R&D activities.
Revenue from sales to external customers in financial services business for the fiscal year ended March 31, 2009 increased 9.1%, to ¥582.2 billion from the previous fiscal year, due mainly to the increased operating lease revenues, despite negative currency translation effects. Operating income decreased 31.5%, to ¥80.6 billion from the previous fiscal year, primarily due to the increased allowance for credit risks and losses on lease residual values.
Power Products and Others
New Product Launches
In power product operations in Japan, Honda newly launched the Yukios SB800, which is compact and lightweight that clears snow with a blade, features easy handling and enables the quick removal of snow without blowing it from one place to another. Also, in Japan, Honda introduced the Pianta FV200, a gas-powered mini-tiller that is easy to handle and uses the same butane gas canisters that are already in wide use among households for powering portable gas stoves. In addition, Honda introduced its original thin-film solar cells that reduce CO2 emissions in manufacturing processes, and satisfy specifications for use in public and industrial applications. In Asia, Honda newly launched engines specially designed for longtail boats, the GX160, the GX200 and the GX390, which are in wide use as a major form of water transportation, featuring improved handling and durability. In addition, in China, Honda newly introduced its superior-performance HRJ196 lawn mowers that are compact, lightweight and easy to use.
Sales Volume and Profitability
Hondas unit sales of power products totaled 5,187 thousand units, down by 14.4% from the previous fiscal year. In Japan, unit sales totaled 516 thousand units, a decrease of 6.2%. Unit sales outside of Japan decreased 15.2%, to 4,671 thousand units, due mainly to the declined sales in North America and Europe. Revenue from sales to external customers in power product and other businesses decreased by 18.5%, to ¥343.0 billion from the previous fiscal year, due mainly to decreased unit sales in power product business and the negative currency translation effects. The operating loss was ¥15.4 billion, a decrease of ¥37.8 billion from the previous fiscal year, primarily due to decreased revenue and increased R&D expenses of other businesses, more than offsetting decreased SG&A expenses.
¡ Unit Sales and Net Sales Breakdown
(2) Capital Expenditures
Capital expenditures during the fiscal year totaled ¥599,131 million. The breakdown of capital expenditures by business segment was as follows:
In addition to those for the installation of new equipment, the Companys capital investments included those for expanding, strengthening, rationalizing and renovating manufacturing facilities as well as those for expanding and strengthening marketing and R&D facilities, etc.
(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 ¥766.6 billion.
Honda funds its financial programs for customers and dealers primarily from corporate bonds, medium-term notes, commercial paper, securitization of monetary assets and from operating companies. The outstanding balance of funds for Hondas financial services subsidiaries at the end of the fiscal year under review was ¥4,515.8 billion.
(4) Preparing for the Future
Due to the current economic situation, there are concerns that the economies of Japan, the U.S. and Europe will experience a downturn. In addition, the pace of economic growth of Asian countries outside of Japan is expected to slow down. Moreover, given the many uncertainties in the global business environment in which Honda operates, including political and economic instability, fluctuations in oil and raw material prices, and volatility in the currency and financial markets, Honda expects that this will continue to be an extremely challenging environment in which to do business.
With these circumstances in mind, Honda seeks to further strengthen its corporate structure by making it more flexible and dynamic and therefore better able to meet the needs of its customers and society as a whole as well as respond to changes in the business environment. Also, in order to improve the competitiveness of its products, Honda will endeavor to enhance its R&D, production and sales capabilities. Furthermore, Honda will continue to enhance its reputation in the community through Companywide activities. Honda recognizes that further enhancing the following specific areas is essential to its success:
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.
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.
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 among the world by upgrading its sales and service structure.
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.
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.
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 will also work to advance fuel cell technology and steadily promote its new solar cell business. In addition, Honda will further its efforts to minimize its environmental impact. To this end, Honda sets global targets to reduce the environmental burden as measured by the Life Cycle Assessment*, in all areas of business, spanning production, logistics and sales.
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 Companywide activities, Honda will strive to become a company whose presence is welcomed by our shareholders, customers and society.
(5) Employees of the Group and the Parent Company
(a) Honda Employees
2. COMMON STOCK
(3) Principal Stockholders
3. STOCK WARRANTS
No relevant information
4. CORPORATE OFFICERS
(1) Directors and Corporate Auditors
(2) Remuneration of Directors and Corporate Auditors, Etc.
(3) Outside Corporate Officers
(a) Concurrent Posts as Executive Director, Etc., of Other Companies
(c) Principal Activities during the Fiscal Year under Review
(d) Total Value of Remuneration, Etc., of Outside Corporate Officers
5. FINANCIAL AUDIT COMPANY
(1) Name of Financial Audit Company
KPMG AZSA & Co.
(2) Financial Audit Company Remuneration, Etc., for the Fiscal Year under Review
(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.
6. THE COMPANYS SYSTEMS AND POLICIES
The Companys Board of Directors, based on previous efforts, has passed the following resolutions on basic policies regarding internal control systems.
The Company has prepared Honda Conduct Guideline, which is a document that states the guidelines for conduct that the Companys management and staff will share and stipulates the laws and internal regulations with which compliance is required. The content of these guidelines has been communicated to all members of management and staff and their cooperation has been requested.
The Company will create compliance systems that provide for the designation of a Director to serve as a compliance officer responsible for the promotion of compliance-related efforts and for the creation of such compliance system units as Business Ethics Committee and Business Ethics Improvement Proposal Line.
Regarding information and documents related to the execution of duties by the Directors, such as the minutes of the Board of Directors and other important meetings, appropriate storage and administration procedures will be followed in accordance with the document management policy.
Regarding important items, these will be presented to the meetings of the Board of Directors, management conferences, and regional executive meetings, based on the criteria for deliberation, and following assessments and consideration of risk, related decisions will be made.
For risks that specific departments must respond to, each department will work to establish preventive measures and response policies, and, for crisis management at the Companywide level in times of major disasters and other such occurrences, the Company has prepared its Corporate Crisis Management Policy and its Honda Crisis Response Rules as well as appointed a risk management officer from among the Directors to take charge of risk management and established the necessary management systems.
In line with its fundamental philosophy, the Company will create organizational operating systems, including headquarters for individual regions, business fields, and functional fields; assign Directors and Executive Officers to each such headquarters and major organizational units; and establish management conferences and regional executive conferences to deliberate important management items. The objectives of these measures will be to create systems for making quick and appropriate management decisions.
To conduct efficient and effective management, the Company will prepare medium-term and annual business plans and these will be shared in common.
(Comprising the Parent Company and Its Subsidiaries)
The Company and its subsidiaries will endeavor to share in common Honda Conduct Guideline and basic policies for corporate governance. Subsidiaries also will work to promote compliance with the laws of various countries and their activities in line with the practices of the industries where they conduct their business operations and endeavor to enhance their corporate governance.
In the conduct of their business activities, subsidiaries will upgrade their rules for approvals, and, for important management matters, will obtain prior approval from the Company and present reports to the Company based on their internal regulations. The Companys business management related departments, etc., will receive periodically business plans and reports, and will confirm the appropriateness of operations.
The Audit Office, which is an independent supervisory department reporting directly to the president, audits the conduct of business in each department and works to improve the internal auditing systems of the Group. For companies accounted for under the equity method, the Company requests their understanding of and cooperation with its basic policy for corporate governance and works to enhance corporate governance for the Group as a whole.
Created as a support staff unit reporting directly to the Board of Corporate Auditors, the Corporate Auditors Office will work to provide the Corporate Auditors with support.
In addition to regular reports to Corporate Auditors regarding such matters as the business situation of the Company, its subsidiaries and other Group units and the situation regarding the creation and functioning of compliance systems, risk management systems and other internal control systems, reports to Corporate Auditors are to be made in the case of any other matters that may have a considerable impact on the Company.
The Corporate Auditors and the Audit Officean internal operations audit unitwill closely cooperate in conducting operational audits of the Company, subsidiaries, etc., and Corporate Auditors will participate in management conferences and other important meetings.
The Company strives to carry out its operations 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. 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) 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 ¥8 per share for the year ended March 31, 2009. As a result, total cash dividends for the year ended March 31, 2009, together with the first quarter cash dividends of ¥22, the second quarter cash dividends of ¥22 and the third quarter cash dividends of ¥11, are planned to be ¥63 per share, a decrease of ¥23 per share from the annual dividends paid for the year ended March 31, 2008.
Also, please note that the year-end cash dividends for the year ended March 31, 2009 are matters to be resolved at the general meeting of shareholders.
The Company plans to distribute quarterly cash dividends of ¥8 per share for each quarter for the year ending March 31, 2010. As a result, total cash dividends for the year ending March 31, 2010 are planned to be ¥32 per share, a decrease of ¥31 from the annual dividends paid for the year ended March 31, 2009.
The Company intends to continue doing its utmost to meet shareholders expectations.
Trends in Dividends (reference)
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Stockholders Equity and Comprehensive Income
Consolidated Statements of Cash Flows (Reference)
The Notes to the Consolidated Statutory Report
Significant Accounting Policies:
Number of consolidated subsidiaries: 396
American Honda Motor Co., Inc., Honda of America Mfg., Inc., Honda Motor Europe Ltd., American Honda Finance Corporation, Honda R&D Co., Ltd.
Number of affiliated companies: 105
Principal affiliated companies:
Guangzhou Honda Automobile Co., Ltd., Dongfeng Honda Automobile Co., Ltd., P.T. Astra Honda Motor
Newly formed consolidated subsidiaries: 12
Reduced through reorganization: 13
Newly formed affiliated companies: 4
Reduced through reorganization: 3
Significant Accounting Policy Change
In December 2008, the Board of Directors of the Company has approved an amendment to the Honda Pension Fund, of which the Company and a part of its domestic subsidiaries and affiliates accounted for under the equity method were members. This plan amendment, effective from April 1, 2009, mainly revises pension benefits for those employees who retire on or after April 1, 2009, to be calculated using annuity pension conversion rates which are linked to market interest rates and contain a ceiling and a floor. Subsequent to the approval of the plan amendment, the Company remeasured and decreased its projected benefit obligation. The resulting prior service benefit has been amortized over the average remaining service period since January 1, 2009.
In addition, the Company recalculated the fair value of assets of this pension fund as of December 31, 2008. As a result of the previously mentioned changes and this recalculation, obligations for pension payments on the consolidated balance sheets have been reduced.
Notes to Consolidated Balance Sheets:
If an employee defaults on his/her loan payments, Honda is required to perform under the guarantee. The undiscounted maximum amounts of Hondas obligation to make future payments in the event of defaults were shown as above. As of March 31, 2009, no amount has been accrued for any estimated losses under the obligations, as it is probable that the employees will be able to make all scheduled payments.
Notes to Consolidated Statements of Stockholders Equity:
Honda adjusted the balance of stockholders equity as of the previous fiscal year ended. Stockholders equity per common share was also adjusted. Please refer to the Significant Accounting Policy Change for details. Basic net income per common share has been computed by dividing net income available to common stockholders by the weighted average number of shares outstanding during each period. The weighted average number of shares outstanding for the years ended March 31, 2008 and 2009 were 1,815,356,440 and 1,814,560,728, respectively. There were no potentially dilutive shares issued during the years ended March 31, 2008 or 2009.
Revisions of Classifications:
Certain revisions for misclassifications have been made to the consolidated financial statements for the fiscal year ended March 31, 2008 to conform to the presentation used for the fiscal year ended March 31, 2009.
Regarding the Notes for the Previous Fiscal Year
The notes for the previous fiscal year, including the note entitled Revisions of Classifications, contain additional information for reference.
¡ Segment Information (reference)
(a) Business Segment Information
(b) Geographic Segment Information
(c) Overseas Sales
Unconsolidated Balance Sheets
Yen amounts described above are rounded down to the nearest one million yen.
Unconsolidated Statements of Operations
Yen amounts described above are rounded down to the nearest one million yen.
Unconsolidated Statements of Stockholders Equity
The Related Notes
Significant Accounting Policies
The net retirement benefit obligation at transition is amortized by the straight-line method over 15 years.
Prior service costs are amortized by the straight-line method over the average remaining years of service of the employees. Actuarial gains or losses are amortized in the years following the year in which gains or losses are recognized by the straight-line method over the average remaining years of service of the employees.
Significant Accounting Policy Changes
Changes in Methods of Presentation
(Unconsolidated Balance Sheets)
Please note that at the end of the fiscal year, finished goods and parts for sale presented in the item finished goods and parts for sale were ¥57,912 million and ¥35,800 million, respectively. In addition, raw materials and supplies presented in the item raw materials and supplies were ¥20,015 million and ¥21,082 million, respectively.
Please note that the amount of accrued consumption taxes contained in others at the end of the fiscal year under review amounted to ¥17,086 million.
Notes for Balance Sheets (as of March 31, 2008 and 2009)
2. Guarantee issued and similar activities are as follows:
Similar activities comprise keep-well agreements between the Company and subsidiaries, which were issued for credit enhancement to support the subsidiaries financing.
The Company has been examined with regard to transfer pricing taxation for the period from the year ended March 31, 2003 to the year ended March 31, 2007. The Company has not yet recognized any tax liability related to this examination in the financial statement as of March 31, 2008 as the examination has not been completed.
Notes for Statements of Income (for the fiscal years ended March 31, 2008 and 2009)