Konica Minolta 2005 Annual Report Download - page 6

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4
in Wuxi, China to expand equipment manufacturing capacity and new facilities for
increased polymerized toner production capacity in Japan in response to the ongoing
shift to color products. In addition, we are investing to increase direct sales capacity
and acquiring dealers in order to expand marketing capacity.
In the optics business, construction has begun on the third and the fourth plants for
TAC film used in liquid crystal displays (LCDs) in response to expanding demand.
BALANCE SHEET IMPROVEMENTS
During the fiscal year, interest-bearing debt continued to decline, falling by ¥21.6
billion from the previous fiscal year-end to ¥246.3 billion.
Shareholders’ equity increased by ¥4.3 billion from the end of the previous fiscal
year to ¥339.7 billion. As a result, shareholders’ equity ratio at the end of the fiscal
year improved by 1 percentage point from the previous year-end.
PENDING ISSUES
As the market environment is likely to become even more severe, we need to remain
vigilant. In particular, the shift to color in the MFP market is occurring faster than
anticipated, and we believe the keys to win will be timely responses to market
opportunities and global market share expansion. Given this environment, Konica
Minolta intends to actively expand sales of popular color products, while
emphasizing increased sales of optical devices and components as well as LCD
materials in the Optics segment.
On the other hand, we believe the Photo Imaging segment will continue to be
plagued by shrinking demand, pricing competition and a generally severe operating
environment. We therefore intend to achieve thorough structural reforms by
implementing early corrective measures to address structural earnings deficiencies
in the business.
CORPORATE GOVERNANCE PHILOSOPHY
Konica Minolta regards the strengthening of corporate governance as a key manage-
ment issue and, in addition to adopting a committee-based corporate governance
system, aims to improve management transparency and efficiency. During the fiscal
year under review, the functioning of the Group’s corporate governance organs—
from the Board of Directors to the Audit Committee, the Nominating Committee and
the Compensation Committee—was strengthened and policies were implemented
with these goals in mind. All of these efforts reflect Konica Minolta’s emphasis on
achieving fair returns for all stakeholders. For our shareholders in particular, Konica
Minolta’s management priority is the early achievement of our business performance
goals as a means of enhancing corporate value.
June 2005
Fumio Iwai
President & CEO, Representative Executive Officer
0
600
450
300
150
20072006 2008 2009
Shareholders’ Equity
Interest-Bearing Debt
Shareholders’ Equity /
Interest-Bearing Debt
(Planned 2006–2009)
(Billions of Yen)
0
0.8
0.6
0.4
0.2
Debt/Equity Ratio
(Planned 2006–2009)
(Times)
20072006 2008 2009
The goal is to further enhance
management transparency and
efficiency.