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KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2003

Table of contents

  • Page 1
    KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2003

  • Page 2
    ...) technologies, photo imaging, cameras, medical and graphic imaging, and industrial instruments. We are also actively working to cultivate new business domains through the integration of our core technologies. Driven by its corporate message "The essentials of imaging," the new corporate group plans...

  • Page 3
    ...32.5% 2.10 6.46 Note: U.S. dollar amounts above and elsewhere in this report for Konica are translated from yen, for convenience only, at the rate of ¥120.20=US$1, Note: the approximate exchange rate prevailing at March 31, 2003. Minolta Co., Ltd. Millions of yen Thousands of U.S. dollars (Note...

  • Page 4
    ... structure concentrating on free cash flows, with the aim of improving our financial affairs. Using these accomplishments as a springboard, in 2000 we formulated the SAN Plan, a medium-term management plan. We also progressed with digital networking across all of our business domains, and shifted...

  • Page 5
    ...upgrading our optical technologies. > We will increase the synergy between Minolta's camera business and Konica's consumer photo imaging business. 2. To operate our business in a fair and transparent manner, under a new corporate governance scheme Immediate issues and concerns facing management are...

  • Page 6
    ... management integration between Konica and Minolta came about. A. The business environment in which we find ourselves today is undergoing tremendous change on a global scale. We can group these changes into three major categories. The first of these is technological change. Advances in digitization...

  • Page 7
    ... our optics business more solid. Based on the simple sum of the two companies' sales, the new entity would exceed net sales of ¥1 trillion for the fiscal year ended March 31, 2003. The new Dec. 2000 Konica and Minolta's joint venture for polymerized toner, Konica Minolta Supplies Manufacturing Co...

  • Page 8
    ... largest business for both Konica and Minolta, Konica has great strength in the development and marketing of high-speed multifunctional peripherals (MFPs), while Minolta has strong developing and marketing ability in medium- to low-speed MFPs and particularly color MFPs and laser printers Net Sales...

  • Page 9
    ...Business Companies Konica Minolta Business Technologies, Inc. Konica Minolta Opto, Inc. Konica Minolta Photo Imaging, Inc. Konica Minolta Camera, Inc. Konica Minolta Medical and Graphic, Inc. Konica Minolta Sensing, Inc. 161.0 153.0 10.5 Common Function Companies Konica Minolta Technology Center...

  • Page 10
    ...Minolta Opto, Inc., whose business field is optical elements such as optical pickup lenses, microcamera units, and triacetyl cellulose (TAC) film for liquid crystal display (LCD) polarizing plates; Konica Minolta Camera, Inc., which consists primarily of digital cameras; Konica Minolta Photo Imaging...

  • Page 11
    ... for the camera and the photo imaging businesses. A. The first stage for both of these businesses will be to build a medical and graphic imaging business will develop its ability in digital input and output hardware, materials, and software systems products, and its solutions business, including...

  • Page 12
    ... into building a technology knowledge management system. Additionally, in order to improve the materials technology that is a core competency of the enterprise group, we commenced construction in June 2003 of a materials research laboratory within our site in Hachioji, Tokyo. Our materials engineers...

  • Page 13
    ... and the image of the new group? A. Our goal is to further enhance the strengths of the two companies, and through the integration of imaging technologies to consistently deliver fresh, innovative, and exciting products and services to our customers. In order to realize the corporate image that we...

  • Page 14
    ...The principal area of business is in the field of input and output devices focusing on color multifunctional peripherals (MFPs), laser printers (LBPs), and image information-related software, systems, and services. By combining the strengths of Konica and Minolta, the new company will work to create...

  • Page 15
    ...the new company will nurture new markets through an enhanced marketing structure, and innovative solutions that address the network and advanced needs of IT technology. As the trend toward digitization and colorization in image information products advances, Konica's proprietary polymerization toner...

  • Page 16
    ... plastic lenses for optical discs for use with blue-violet lasers, the next-generation lasers, and fortify our patent protection strategy and flexible production capabilities. In particular, both Konica and Minolta have received high praise for their ultra-high-precision metal molding technologies...

  • Page 17
    ...Camera) The Miniature Optical Zoom Unit has a unique actuator, realizing a compact precision-drive mechanism, and is expected to have broad applications in camera mobile phones and other products. demand and to expand market share in this business by combining our respective expertise in glass lens...

  • Page 18
    ...perform as key businesses as well as the driving force for the new corporate group's brand image. Our mainstay silver-halide color film and color paper business in the photo imaging field is highly impacted by the worldwide expansion of digital cameras. In Japan, North America, and Europe, which are...

  • Page 19
    ...earned accolades for its definitive simplification of the proofing process. Konica Minolta Medical and Graphic, Inc., Kofu site A new medical dry film plant was finished in April 2002 to meet increasing demand for X-ray film as a digital image storage medium, which is expected to grow substantially...

  • Page 20
    ... systems for flat panel displays. VIVID 910 Non-contact 3D digitizer CM-2600d The CM series of spectrophotometers are capable of reading and quantifying subtle differences in shades of color, and are widely used for on-site color quality control in production. CA-210 The CA series of color...

  • Page 21
    ... Minolta Group undertakes stakeholder-oriented business activities in an effort to ensure stakeholder trust and continued support. The Konica Minolta Group produces a wide range of products, from photocopiers and other image information products to optical pickup lenses, color film, and cameras...

  • Page 22
    Bo ard o f Direc to rs Konica Minolta Holdings, Inc. As of August 5, 2003 Chairman of the Board of Directors Tomiji Uematsu ...Hirofumi Sakaguchi Takamasa Shintani Shigeyuki Seki Hiroshi Fujii Shoei Yamana Executive Officers Hiroshi Ishiko Toshiaki Ishihara Mitsuharu Ohura Masaru Oba Kaoru Onodera ...

  • Page 23
    ...of yen 2003 2002 2001 2000 1999 1998 For the Year: Net sales Cost of sales Operating income Net income (loss) Depreciation and amortization Capital expenditures R&D expenditures At Year-End: Total assets Total current assets Property, plant and equipment-net Total current liabilities Long-term debt...

  • Page 24
    Seg m ent Info rm atio n Konica Corporation and Consolidated Subsidiaries For the fiscal years ended March 31 Segment Information by Product Millions of yen 2003 2002 2001 2000 1999 1998 Net sales: Photographic materials Business machines Consolidated Operating income: Photographic materials ...

  • Page 25
    Segment Information by Geographic Region (Note 1) Millions of yen 2003 2002 2001 2000 1999 1998 Net sales: Japan Overseas: North America Europe Asia and other Consolidated Operating income: Japan Overseas: North America Europe Asia and other Total Eliminations and corporate Consolidated Assets: ...

  • Page 26
    ... TAC film for LCD polarization plates and inkjet printing products. The Business Machines segment deals primarily in the production and marketing of cameras, digital cameras, copiers, facsimiles machines, printers, and other business machines, as well as polymerization toner, OPC drums, and optical...

  • Page 27
    ... income in the medical and graphic imaging business declined year on year significantly impacted by depreciation expenses following start up of the Company's Kofu dry film plant. Sales of tri-acetyl cellulose (TAC) film for use in LCD polarization plates, designated a strategic business, increased...

  • Page 28
    ... in copier sales toward value-added products such as medium- and high-speed multifunctional peripherals (MFPs) and strong sales of the next-generation polymerization toners. Operating income in this business surged to ¥22.4 billion. The optical pickup lens business of the Optics Technology business...

  • Page 29
    ... for medical-use dry film and inkjet paper in the photographic materials business. In business machines, cameras, and optical products, the Company undertook expenditures totaling ¥6.7 billion in an effort to bolster production facilities for optical disk non-spherical plastic lenses, copiers, and...

  • Page 30
    ... (Note 3) 2003 Current Assets: Cash and cash equivalents (Note 4) Notes and accounts receivable-trade Less: Allowance for doubtful accounts Inventories Deferred tax assets (Note 7) Other accounts receivable Other current assets Total current assets Property, Plant and Equipment: Land Buildings and...

  • Page 31
    ...2003 2002 Thousands of U.S. dollars (Note 3) 2003 Current Liabilities: Short-term debt (Note 6) Current portion of long-term debt (Note 6) Notes and accounts...Common stock, par value ¥50 per share: Authorized-800,000,000 shares Issued and outstanding-357,655,368 shares Additional paid-in capital ...

  • Page 32
    ...Konica Corporation and Consolidated Subsidiaries For the fiscal years ended March 31, 2003 and 2002 Millions of yen 2003 2002 Thousands of U.S. dollars (Note 3) 2003...pension scheme... Stock: Net income Cash dividends The accompanying Notes to Consolidated Financial Statements are an integral part of...

  • Page 33
    ... Statem ents o f Shareho ld ers' Eq uity Konica Corporation and Consolidated Subsidiaries For the fiscal years ended March 31, 2003 and 2002 Shares of issued common stock (thousands) Millions of yen Common stock Additional paid-in capital Retained earnings Unrealized gains on securities Foreign...

  • Page 34
    ... of unrecognized net obligation at transition Net gain resulting from the change of pension scheme Loss on liquidation of affiliated company Provision of reserve for reorganization/liquidation expenses Decrease in notes and accounts receivable Decrease in inventories Increase (decrease) in notes and...

  • Page 35
    ... by Konica Corporation (the "Company") and its consolidated subsidiaries in accordance with the provisions set forth in the Japanese Commercial Code (the "Code") and the Securities and Exchange Law, and in conformity with accounting principles and practices generally accepted in Japan, which...

  • Page 36
    ... Report)" issued by the Japanese Institute of Certified Public Accountants. The effect to the statements of income resulting from the accounting treatment applied is described in Note 12. Retirement Benefits Plan. On April 30, 2003, the Company, upon enactment of Defined Contribution Pension Plan...

  • Page 37
    ... consolidated balance sheet date 6. Short-Term & Long-Term Debt with Banks Short-term and long-term debt as of March 31, 2003 and 2002 are summarized as follows: Millions of yen Thousands of U.S. dollars Original purchase value Unrealized gains or losses 2003 (Interest rate) 2002 2.09 1.71 0.92...

  • Page 38
    ... than those which are deemed to transfer the ownership of the leased assets to lessees are accounted for mainly by a method similar to that used for ordinary operating leases. Lessee 1. Finance Leases Millions of yen Thousands of U.S. dollars 2003 Gross deferred tax assets: Tax effect on loss of...

  • Page 39
    ... of future lease rental income on such lease contracts as of March 31, 2003 and 2002 are as follows: Millions of yen Thousands of U.S. dollars a. Service costs b. Interest costs c. Expected return on plan assets d. Amortization of transition amount e. Actuarial differences that are accounted for as...

  • Page 40
    ... exchange process. Outline of Minolta Head office: Chuo-ku, Osaka Representative: Yoshikatsu Ota, President Capital: ¥25,832 million 1) Business: Manufacture and sale of products including copiers, printers, cameras, optical units, radiometric instruments, and planetariums. 2) Sales and net income...

  • Page 41
    ... and others. The business machines segment includes plain-paper copiers, printers, facsimile machines, cameras, optical products, and others. By Product Millions of yen Photographic materials Business machines Total Eliminations and corporate Consolidation 2003: Net sales Outside Intersegment...

  • Page 42
    By Geographic Region North America Millions of yen Asia and Other Eliminations and Corporate Japan Europe Total Consolidation 2003: Net sales Outside Intersegment Total Operating expenses Operating income Assets ¥323,524 121,857 445,382 401,412 ¥ 43,969 ¥340,141 ¥124,964 8,424 133,388 128...

  • Page 43
    ...the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards, procedures and practices generally accepted and applied in Japan. Those standards require that we plan...

  • Page 44
    ...of yen 2003 2002 2001 2000 1999 1998 For the Year: Net sales Cost of sales Operating income Net income (loss) Depreciation and amortization Capital expenditures R&D expenditures At Year-End: Total assets Total current assets Property, plant and equipment-net Total current liabilities Long-term debt...

  • Page 45
    ...2003 Net Sales Cost of Sales Gross profit Selling , General and Administrative Expenses Operating income Other Income (Expenses): Interest and dividend income Interest expense Gain on return of substitutional portion of employee welfare pension fund plan...428 ¥ (34,350) $4,401,292 2,442,300 1,958,...

  • Page 46
    ..., net Deferred income taxes Other investments Total investments and long-term receivables Property, Plant and Equipment: Land Buildings and structures Machinery and equipment Construction in progress Accumulated depreciation Property, plant and equipment, net Intangible Assets 27,503 63,517 183...

  • Page 47
    ...-term liabilities 36,887 23,483 99 5,975 8,490 74,934 46,538 31,357 185 6,167 8,485 92,732 307,391 195,692 825 49,792 70,750 624,450 Minority Interests Contingent Liabilities Shareholders' Equity: Common stock: Authorized-800,000,000 shares Issue-280,207,681 shares in 2003 and 2002 Capital...

  • Page 48
    ...Minolta Co., Ltd. and Consolidated Subsidiaries Years ended March 31, 2003 and 2002 Millions of yen 2003 2002 Thousands of U.S. dollars 2003 Common stock Balance at beginning and end of the year Capital...608) $ 336,041 ¥ 25,833 ¥ 25,833 $ 215,275 KONICA M INOLTA HOLDINGS, INC. 2 0 0 3 Pag e 46

  • Page 49
    ... Loss on valuation of investments in securities Gain on sales of property, plant and equipment Changes in operating assets and liabilities: Notes and accounts receivable Inventories Notes and accounts payable Accrued consumption taxes Other, net Subtotal Interest and dividend income received...

  • Page 50
    ... 2003 Business Companies Konica Photo Imaging Corporation Konica Medical and Graphic Corporation Konica Business Technologies Corporation Konica Opto Corporation Overseas Operations North America & Central America Konica Headquarters North America, Inc.* 725 Darlington Avenue, Mahwah, NJ 07430...

  • Page 51
    ... Konica UK Ltd. Plane Tree Crescent, Feltham, Middlesex TW13 7HD, U.K. Tel: (44) 20-8751-6121 Konica Business Machines (U.K.) Ltd. Konica House, Miles Gray Road, Basildon, Essex SS14 3AR, U.K. Tel: (44) 1268-53-4444 Konica Asia Headquarters Pte. Ltd. 401 Commonwealth Drive #01-04, Singapore...

  • Page 52
    ..., Virginia Beach VA 23456, U.S.A. Tel: (1) 757-499-8901 Astro-Tec Manufacturing, Inc. 550 Elm Ridge Avenue, Canal Fulton, OH 44614 U.S.A. Tel: (1) 330-854-2209 Minolta Systems Laboratory Inc.* 2940 North First Street, San Jose, CA 95134 U.S.A. Tel: (1) 408-383-0477 Minolta Advance Technology...

  • Page 53
    ... Business Equipment Sweden AB P.O.Box 9062, Albygatan 114, 17109 Solna, Sweden Tel: (46) 8-627-7500 Minolta Malaysia Sdn. Bhd. No.12, Jalan SS8/2, Sungai Way Free Trade Zone, 47300 Petaling Jaya, Selangor, Darul Ehsan, Malaysia Tel: (60) 3-7876-1133 Minolta Norway AS Nedre Rommen 3, N-0988 Oslo...

  • Page 54
    ... 5, 2003 Konica Minolta Holdings, Inc. Marunouchi Center Building, 1-6-1 Marunouchi, Chiyoda-ku, Tokyo 100-0005, Japan Tel: Fax: (81) 3-6250-2100 (81) 3-3218-1368 URL: http://konicaminolta.net Established August 2003 Paid-in Capital ¥37,519 million (US$312 million) Number of Employees Parent...

  • Page 55
    ... and Banking Company, Limited 07. Trust & Custody Services Bank, Ltd. 08. Sompo Japan Insurance Inc. 09. Nippon Life Insurance Company 10. Konica Employee Shareholders Association 10.4 5.9 5.0 4.8 2.9 2.9 2.7 2.2 2.1 1.9 01. The Master Trust Bank of Japan, Ltd. 02. Daido Life Insurance Company 03...

  • Page 56
    Marunouchi Center Building, 1-6-1 Marunouchi, Chiyoda-ku, Tokyo 100-0005, Japan Tel. (81) 3-6250-2100 Fax. (81) 3-3218-1368 http://konicaminolta.net This report is printed on recycled paper. Printed with ink made from aroma-free soy bean oil. Printed in Japan