Konica Minolta 2015 Annual Report Download

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Annual Report
2015
Customer-centric
Open and honest
Innovative
Passionate
Inclusive and
collaborative
Accountable
KONICA MINOLTA, INC.

Table of contents

  • Page 1
    KONICA MINOLTA, INC. Open and honest Customer-centric Annual Report 2015 Innovative Passionate Inclusive and collaborative Accountable

  • Page 2
    ...members worldwide. "The Creation of New Value"-this is the reason we exist. Our 6 Values are the essence of our innermost beliefs. Our Vision articulates where we are heading in the future. Our Brand Proposition, "Giving Shape to Ideas," is our pledge to our customers. Konica Minolta is committed to...

  • Page 3
    ... Business Strategies Foundation for Growth Financial Report Open and honest We are convinced that only by acting with integrity and communicating with all our partners in an open and honest way can we create long-lasting partnerships of mutual trust and true significance. Konica Minolta...

  • Page 4
    ... 39 Business Technologies Business (Office Services) 42 Business Technologies Business (Commercial and Industrial Printing) 45 Healthcare Business 47 Industrial Business (Optical Systems for Industrial Use) 49 Industrial Business (Performance Materials) KONICA MINOLTA, INC. Annual Report 2015 3

  • Page 5
    ...-sales Support Quality Management Environmental Management Human Resource Management 59 Corporate Governance 63 Management Members 65 CSR Management Financial Report 73 10-Year Financial Summary 75 Management's Discussion and Analysis 81 Consolidated Financial Statements 141 Company Overview/ Stock...

  • Page 6
    ... 2009 • Announced bizhub, a new office equipment brand • Launched bizhub PRO 1050 and bizhub PRO 1050P for the light production market • Launched Mermaid, the world's first phase contrast mammography system • Launched CS-200 luminance colorimeter for optical device measurement, including...

  • Page 7
    ...business • Acquired Australian MPM giant Ergo • Acquired All Covered Inc., • Acquired UK-based Charterhouse Limited. a U.S.-based IT services company Launched MPM service • Launched the Data Bank Service and Collaboration Box Service to support collaboration between medical image management...

  • Page 8
    ...ratio of -0.02, maintaining a debt rating of A by R&I and A+ by JCR. -44.7 -42.7 -63.4 J-GAAP -55.7-54.1 IFRS -54.0 50 0 -0.01 -0.02 J-GAAP IFRS -0.02 -0.04 2012 2013 2014 (FY) 2010 2011 2012 2013 2014 (FY) KONICA MINOLTA, MINOLTA, INC. INC. Annual Annual Report Report 2015 2015 7

  • Page 9
    ...PBR (IFRS) = Year-end stock price / Equity per share attributable to owners of the company Non-Financial Data R&D expenses, R&D investment as a percentage of sales R&D expenses R&D investment as a percentage of sales (Billions of yen) 100 80 60 40 20 0 2010 J-GAAP IFRS Number of patent rights held...

  • Page 10
    ... digital printing systems: Large global market share * Unit basis, Konica Minolta estimate using external CY2014 data bizhub C554e series bizhub Press C1100 Healthcare Business Industrial Business Healthcare Cassette-type digital radiography systems: Large market share in Japan * Konica Minolta...

  • Page 11
    ... world and more than 40,000 employees, Konica Minolta is a global company that provides the solutions the world needs. Europe / Middle East Asia Pacific Japan North America Latin America Business Companies*1 Global Sites*1 (countries) In Sales and Service*1 (countries) Employees*1 130 2012...

  • Page 12
    ... Growth Strategy Business Strategies Foundation for Growth Financial Report Message from the CEO As a truly customer-centric company, we focus on the creation of new value to achieve sustainable profit growth. Shoei Yamana President and CEO KONICA MINOLTA, INC. Annual Report 2015 11

  • Page 13
    ... a driving force for growth in the field of commercial and industrial printing. MPM services comprehensively manage the printing needs of marketing divisions in major global enterprise customers, providing a wide variety of services including cost-reduction solutions and business process improvement...

  • Page 14
    ... information Company website 3 Personalization 4 Delivery DM/Catalogs/Other printed materials 5 Evaluation Advertisement viewing data Social media Data management platform Marketing automation e-mail Website SNS Purchasing information Digital signage KONICA MINOLTA, INC. Annual Report 2015...

  • Page 15
    ... Output Manufacturing uninï¬,uenced by changes in people, location or country Knowledge Contributing to the realization of a sustainable planet and society, and fulfilling our responsibility as a global company Information Production Control KONICA MINOLTA, INC. Annual Report 2015 14

  • Page 16
    ... and proactively promote the use of global human resources within the Company. Similarly, regarding overseas business development and businesses newly incorporated into the Group as the result of M&As, we do not allow the corporate headquarters to plan and control management. Instead, we utilize the...

  • Page 17
    ... "Eco Vision 2050" as our long-term environmental vision in 2009 and set the ambitious target of reducing CO2 emissions throughout the product lifecycle by 80% by 2050 compared to 2005 levels. We also formulated "Medium-Term Environmental Plan 2016" in line with our new Medium Term Business Plan...

  • Page 18
    ... of 2nd quarter (yen) 30 25 20 End of term 15 2.5* 15 10 7.5 10 5 0 7.5 15 10 2014 2015 (plan) (FY) 7.5 2012 7.5 2013 * Commemorative dividend for 10-year anniversary of integration August 2015 Shoei Yamana President and CEO Konica Minolta, Inc. KONICA MINOLTA, INC. Annual Report 2015 17

  • Page 19
    ...Economy/Finance Planet/Environment Information distribution/use Energy/Resources Social trends Big data analysis service Work style transformation Reduce environmental impact Improve quality of life Issues faced by companies Innovate marketing methods Support production of high-quality devices...

  • Page 20
    ... structure as One Konica Minolta. Part of this involved establishing Business Innovation Centers (the BICs) in 5 key regional markets. In fiscal 2015, we will work even more closely with customers to provide solutions from processes further upstream. We are also creating new services together with...

  • Page 21
    Company Overview and Characteristics Growth Strategy Business Strategies Foundation for Growth Financial Report Roadmap for growth in each business segment Phase 0 Maximize color PV Office Services OPS/GMA Solutions by industry type and business category A3 color next-generation engine Phase ...

  • Page 22
    ... Medium-Term Environment Plan 2016 and Fiscal 2014 Results Material issues Business value (1) Creating and providing the green products demanded by customers and society Goals of the Medium-Term Environment Plan 2016 Environmental value Preventing global warming • CO2 reduction during product use...

  • Page 23
    ... Acquire sales opportunities Cost reductions • Reduce cost of distribution and packaging Environment overall • Reduce environmental impact at customer side Preventing global warming • CO2 reduction during distribution: 7 hundred tons Supporting a recycling-oriented society • Resources used...

  • Page 24
    ...through synergies of the Konica Minolta Group. Q3. A ROE of 10% has been established as one of the targets of the Medium Term Business Plan. Please explain the policies and strategies implemented to achieve this? Our focus is on increasing profit for the year, raising employee awareness and moving...

  • Page 25
    ... x financial leverage. There are a number of ways to increase ROE; however, the Konica Minolta Group is placing greatest emphasis on increasing the profit ratio for the year. We have implemented various initiatives such as raising employee awareness and revising assessment systems in order to...

  • Page 26
    ... Transformation Achievement 2 Business transformation in the office services segment - MCS Adelaide Brighton p.29 Developing New Business Domains (Introduction to BIC) Bringing together diverse knowledge from around the world to create innovative business KONICA MINOLTA, INC. Annual Report 2015...

  • Page 27
    ...Strategy Business Strategies Foundation for Growth Financial Report 2 Ensuring sustainability through a corporate culture with integrity, transparency and fairness p.31 Masatoshi Matsuzaki Chairman of the Board of Directors Shoji Kondo Outside Director KONICA MINOLTA, INC. Annual Report 2015...

  • Page 28
    ...• Acquire knowledge and expertise pertaining to printed materials Solutions Deploying Charterhouse's MPM service and letting resident staff centrally manage the creation of various printed materials Renault UK now uses the MPM (Marketing Print Management) service, offered by Konica Minolta Group...

  • Page 29
    ... Business Strategies Foundation for Growth Financial Report automobile industry marketing to provide their expertise concerning techniques. This allowed Renault UK to improve the efficiency of its process for producing printed materials for public consumption, cut printing costs, and invest...

  • Page 30
    ... in 1882 and is an S&P/ASX 100 company. Company Profile Company Name: Adelaide Brighton Ltd Location: Australia Established: 1882 Employees: Over 1,400 Business challenge Streamlining invoice management and the procure-to-pay business process Adelaide Brighton had already laid the foundations...

  • Page 31
    ... Customers and Konica Minolta. Rachel Goh (AP) Entrepreneurial corporate leader with 32 years of IT Solutions • VP, Business Applications (Singapore Telecommunications Limited) • Director, Application Services (HewlettPackard Development Company, L.P.) China Business innovation is a process...

  • Page 32
    ... serve as executive officers. I am one of the seven and also chair the Board. Kondo Konica Minolta has an extremely advanced governance system, one that many listed companies are currently aiming to achieve. This is due to the proactive efforts KONICA MINOLTA, INC. Annual Report 2015 31

  • Page 33
    ... of new products and technologies, as well as tour research laboratories and plants. Matsuzaki Additionally, following my appointment to Chairman of the Board in 2014, upon a request from outside directors to hold informal meetings, we began holding informal KONICA MINOLTA, INC. Annual Report 2015...

  • Page 34
    ... points for improving the operations of the board of directors, items on the evaluation sheet include questions relating to mid- to long-term management issues. Every year, despite their busy schedules, our members provide us with extremely in-depth answers. We plan to further increase our level of...

  • Page 35
    ... management and sound business activities at Konica Minolta. This is also the objective of building a governance system. The starting point is the honest and sincere approach of each and every employee. Matsuzaki I feel the same way. We stated "Open and honest" as the leading line of the Konica...

  • Page 36
    ... *4 Multi-application: Applications of print technology to media other than paper, such as textiles and labels. *5 MPM (Marketing Print Management): Service that offers print solutions optimized for customers' marketing divisions. *6 PP: Production Print KONICA MINOLTA, INC. Annual Report 2015 35

  • Page 37
    ... in devices and systems with service proposals Measuring instruments, optical systems Lenses, components / materials Konica Minolta estimate using CY2014 data Performance Materials TAC films: Large global market share Revenue Revenue ¥60.9 billion ¥100 billion Create new businesses in...

  • Page 38
    ... Minolta's customer base and IT solutions in Canada Konica Minolta acquired the document imaging business of Pitney Bowes Canada, which holds the lion's share of the mailing system market in Canada. To its informity medical ICT service platform, Konica Minolta added clinical test support services...

  • Page 39
    ... solution. This move allows us to create new added value in customers' workï¬,ows and speed up the expansion of our MCS business. Office Services March Creation of a global system for providing MPM services Performance Materials Huis Ten Bosch theme park uses Konica Minolta's OLEDs in the world...

  • Page 40
    ... sales units expanding in all regions. The number of contracts and sales steadily increased for OPS (Optimized Print Services) as well, which optimize a customer's output environment, following efforts to strengthen the sales and support system for major customers globally. Sales units of A4 color...

  • Page 41
    ... engine Document management Branch B Register Web content management Collaboration Konica Minolta share of A3 office MFPs KM Company A Company B Company C Company D Europe (%) 40 30 North America (%) 40 19% 18% 20% 21% 20% 30 20% 20 18% 18% 18% 17% 20 10 0 10 0 2010 2011 2012 2013...

  • Page 42
    ...models as new growth engines and establishing a customer-centric sale style that enables us to provide solutions for different industries and business types. We will also strengthen GMA initiatives (business targeting major accounts with a global presence) for OPS, which optimize customers' printing...

  • Page 43
    ... global system for providing services that cover Europe, Asia Pacific, the U.S., and Japan, MPM and print services saw sales increase 52% year on year. In the production printing segment, new models of digital printing systems such as the bizhub PRESS C1100 and bizhub PRESS C1085 showed strong sales...

  • Page 44
    ... of printing operations Efficient ordering according to specs Company C Company D Advertising agencies Providing value through MPM services Company E Solutions for printed materials Cost reduction Quality control Growth of PP system sales and PV KONICA MINOLTA, INC. Annual Report 2015 43

  • Page 45
    ... as the commercial and industrial printing market overall reaches maturity. In light of the current market environment, Phase 0 will focus on increasing color PV through the sale of the bizhub PRESS C1100 digital printing system-the flagship model among our mid production printers (MPPs)-and global...

  • Page 46
    ... 2014 X-ray diagnostic imaging systems • Despite difficult business conditions in and outside of Japan, unit sales of cassette-type DR (digital radiography) devices increased. • Konica Minolta launched the AeroDR PREMIUM, which features better durability and a lighter weight. Medical IT services...

  • Page 47
    ...-value and strengthening solutions-based business for medical care providers by complementing our modality equipment-including X-ray diagnostic imaging systems and diagnostic ultrasound systems-with IT services. First, in Phase 0, we will bolster and expand sales of our lineup of cassette-type DR...

  • Page 48
    ...ranging product lineup for high-precision measuring equipment. • In our light-source color measuring device segment, we have a number of global major accounts (GMA) mainly among manufacturers of mobile devices, lighting equipment, and automobiles. • With the acquisition of Radiant Vision Systems...

  • Page 49
    ... Report Focused Topic Acquisition of major U.S.-based display inspection system manufacturer As an initiative involving the global display testing market, in August 2015 Konica Minolta acquired Radiant Vision Systems, a leading manufacturer that supplies inspection systems based on customer...

  • Page 50
    ... panels continued to do well. New business areas • We launched a new window film product. • We provided OLED lighting for theme park illumination. Mass production is set to begin in the fall. 58.3 60 60.9 60.9 60.0 40 20 0 J-GAAP IFRS 2013 2014 2016 (plan*) (FY) Market environment...

  • Page 51
    ... we have developed with our customers to provide new value. One example of this is investing technologies, expertise, and resources into automobile window films that provide heat insulation and high polarization performance, as well as QWP films used for device screens, which are easier on...

  • Page 52
    ... ability to execute when building a distribution network • Human Resource Initiatives Human Resource Management (pg. 58) • Acquire patents in Japan, the U.S., China, and other countries • Invest at least 70 billion yen annually in R&D • Work with business partners to control costs...

  • Page 53
    ... and recycle used MFPs and printers • Carry out the Clean Planet Program for collecting toner cartridges 2012 2013 2014 (FY) • Provide support for decreasing customers' environmental impact with OPS • Provide support for customers' environmental management using environmental technologies...

  • Page 54
    ... Strategy Business Strategies Foundation for Growth Financial Report Value Chain Research and Development Developing valuable products and services with a two-pronged strategy involving Japan and local sites Research and development activities The three basic policies governing Konica Minolta...

  • Page 55
    ... Konica Minolta, key parts and items that use Konica Minolta's proprietary technologies such as toners are primarily manufactured in Japan. Our manufacturing contractors in Asia make the general parts and units, and China and Malaysia handle final assembly. This system improves equipment production...

  • Page 56
    ...and the business environment change. In order to improve customer satisfaction and develop opportunities to profit while maintaining strong connections with customers, Konica Minolta delves deep into its customers' business processes to provide solutions that combine equipment and services. With the...

  • Page 57
    ... for Growth Financial Report Quality Management Ensuring safety and reliability for products and services while building an integrated quality assurance system Group-wide A quality assurance system in line with our quality policy Konica Minolta aspires to maximize customer satisfaction and...

  • Page 58
    ... global warming 17 30 9 45 10 5 9 15 11 48 1 2 1 13 73 14 100 80 Products Procurement Medium-Term Environmental Plan 2016 Konica Minolta has established the Medium-Term Environmental Plan 2016, which is in step with our business plans as a further measure towards achieving Eco Vision 2050...

  • Page 59
    ..., Trade and Industry and the Tokyo Stock Exchange selected Konica Minolta as a company that represents enhanced corporate value through health and productivity management. This selection recognizes listed companies that strategically implement employee health programs from a business perspective...

  • Page 60
    ...for Growth Financial Report Corporate Governance Management and Governance Structure Konica Minolta has adopted a company with committees system, enabling the management supervisory function of the directors to be separated from the business execution function of the executive officers. Corporate...

  • Page 61
    ...-year term of office in principle. In June 2015, Mr. Hiroshi Tomono was appointed as a new outside director. All four outside directors have been appointed as independent executives in compliance with regulations established by the Tokyo Stock Exchange. KONICA MINOLTA, INC. Annual Report 2015 60

  • Page 62
    ...Hiroshi Tomono* Konica Minolta regards it as important to clearly indicate the Company's policy on compensation for directors and executive officers, together with the ratio of incentive compensation for the achieved performance. Consequently, the compensation policy in the business report for the...

  • Page 63
    ... in place, and checks to ensure that the risk management system is functioning effectively, making revisions where necessary. Risks deemed particularly important are addressed by the Group under the leadership of executive officers appointed by the Committee Chairperson. Konica Minolta has...

  • Page 64
    ...Officer and General Manager of the Technology Strategy Division and as Senior Executive Officer and General Manager at Business Development Headquarters at Konica Minolta, Inc., among other positions, became Director and Senior Executive Officer in June 2015. KONICA MINOLTA, INC. Annual Report 2015...

  • Page 65
    ... Senior Executive Officer Senior Executive Officer Executive Officer Shoei Yamana* Takashi Sugiyama General Manager, Business Technologies Business R&D Headquarters In charge of Corporate Social Responsibility Operations, Corporate SCM Center and Business Technologies Business Quality Assurance...

  • Page 66
    ... diffusion of environmentally friendly technologies. Environment Principle 8: Principle 9: Anti-Corruption Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery. Management Philosophy The Creation of New Value Konica Minolta Group Charter of...

  • Page 67
    ... • Annual reports • IR website Customers Business Partners Konica Minolta procures raw materials, parts and components from different companies depending on the type of business. The majority of these suppliers are located in Japan, China, and elsewhere in Asia. Since Konica Minolta has...

  • Page 68
    Company Overview and Characteristics Growth Strategy Business Strategies Foundation for Growth Financial Report CSR Management Identify Material CSR Themes and Setting Goals At Konica Minolta, Inc., the CSR, Corporate Communications & Branding Division coordinates with the corporate planning ...

  • Page 69
    ... Financial Report Konica Minolta's Material CSR Themes Material CSR Themes Higher Boundary GRI G4* Aspects Assuring product safety and preventing quality-related problems Increasing customer satisfaction Promoting CSR throughout the supply chain Higher Effect on Business Group Group Suppliers...

  • Page 70
    ... Minolta stock • Feed individual investors' opinions back and disseminate information that helps make Konica Minolta a more attractive investment choice Employees Leveraging and developing diverse human resources • Promote globally shared HR policies based on a platform for human resources...

  • Page 71
    ..., and sales working together based on customer feedback • In the Healthcare Business, increased the rate of issues resolved by the Call Center from 60% when it was opened to 80% • Conducted EICC audits on Konica Minolta group production sites • Considered support programs for suppliers...

  • Page 72
    ... Operating Results by Segment Cash Flows Capital Expenditure, etc. Research and Development Expenses Financial Position and Liquidity 75 75 75 76 77 78 78 79 80 Financial Report Dividend Policy Outlook for the Fiscal Year Ending March 31, 2016 80 KONICA MINOLTA, INC. Annual Report 2015 71

  • Page 73
    ... 102 103 105 35. Contingencies 36. Events after the reporting period 37. Disclosure of interests in other entities 38. First-time adoption 13. Impairment losses on non-financial assets 107 14. Investments accounted for using the equity method 108 KONICA MINOLTA, INC. Annual Report 2015 72

  • Page 74
    ... income / Net sales 100 (%) Ordinary profit ratio = Ordinary profit / Revenue 100 (%) *3. Net income ratio = Net income / Net sales 100 (%) Profit for the year ratio = Profit for the year / Revenue 100 (%) *4. EPS = Profit attributable to owners of the company / Average number of outstanding shares...

  • Page 75
    ...equity (times) *18. Price-earnings ratio (PER) = Year-end stock price / EPS *19. PBR (J-GAAP) = Year-end stock price / Net assets per share PBR (IFRS) = Year-end stock price / Equity per share attributable to owners of the company *20. As of April 1, 2013 KONICA MINOLTA, INC. Annual Report 2015 74

  • Page 76
    ...world economy in fiscal year ended March 31, 2015, strong individual spending in the U.S. supported by robust jobs numbers and a bullish stock market drove global growth. Uncertainty remained in Europe amid ongoing fears concerning Greece's financial problems and the problem involving Ukraine. China...

  • Page 77
    ... year, worldwide sales of core Konica Minolta products increased. Unit sales saw an uptick for AeroDR, a mainstay cassette-type digital X-ray imaging system. We also released the SONIMAGE HS1, a new product developed by Konica Minolta for the diagnostic ultrasound system business that we are working...

  • Page 78
    ... Foundation for Growth Financial Report • Industrial Business In the field of optical systems for industrial use, robust sales were seen for mainstay products such as spectrophotometers for measuring device displays and lenses for industrial and professional use in the optics field. In the...

  • Page 79
    ... Expenses A new R&D center opened at Konica Minolta Tokyo Site Hachioji, the Group's core technology development campus, in April 2014. The new building integrates overall development functions for digital printing systems, a growth driver of the Group's mainstay Business Technologies Business. In...

  • Page 80
    ... Technologies Business and investments into new businesses in the Industrial Business. Goodwill and intangible assets climbed ¥6.5 billion to ¥126.1 billion. Other financial assets grew to ¥41.4 billion due in part to a ¥2.9 billion increase in investment in securities caused by a rising stock...

  • Page 81
    ... Operating profit Operating profit ratio Profit attributable to owners of the company Capital investment Depreciation Free cash flow Investment and financing * Assumed exchange rates: 1 U.S. dollar = ¥120; 1 euro = ¥130 1,100 77 7.0 % 50 55 55 15 35 KONICA MINOLTA, INC. Annual Report 2015 80

  • Page 82
    Company Overview and Characteristics Growth Strategy Business Strategies Foundation for Growth Financial Report Consolidated Statement of Financial Position Konica Minolta, Inc. and Subsidiaries As of March 31, 2015, 2014 and April 1, 2013 Millions of yen Thousands of U.S. dollars 2013 2015 ...

  • Page 83
    Company Overview and Characteristics Growth Strategy Business Strategies Foundation for Growth Financial Report Millions of yen Thousands of U.S. dollars 2013 2015 Liabilities Current liabilities Trade and other payables Bonds and borrowings Income tax payables Provisions Note 2015 2014...

  • Page 84
    Company Overview and Characteristics Growth Strategy Business Strategies Foundation for Growth Financial Report Consolidated Statement of Profit or Loss Konica Minolta, Inc. and Subsidiaries For the fiscal years ended March 31, 2015 and 2014 Millions of yen Note 2015 2014 Thousands of U.S. ...

  • Page 85
    Company Overview and Characteristics Growth Strategy Business Strategies Foundation for Growth Financial Report Consolidated Statement of Comprehensive Income Konica Minolta, Inc. and Subsidiaries For the fiscal years ended March 31, 2015 and 2014 Millions of yen Note 2015 2014 Thousands of ...

  • Page 86
    Company Overview and Characteristics Growth Strategy Business Strategies Foundation for Growth Financial Report Consolidated Statement of Changes in Equity Konica Minolta, Inc. and Subsidiaries For the fiscal years ended March 31, 2015 and 2014 Millions of yen Note Share capital Share premium ...

  • Page 87
    Company Overview and Characteristics Growth Strategy Business Strategies Foundation for Growth Financial Report Thousands of U.S. dollars Share capital Share premium Retained ...(4,094) $382,000 (190,405) $4,397,370 2,397 $8,912 (188,000) $4,406,291 KONICA MINOLTA, INC. Annual Report 2015 86

  • Page 88
    ... expenses Impairment losses Share of profit or loss in investments accounted for using the equity method Interest and dividend income Interest expenses (Gain) loss on sales and disposals of property, plant and equipment and intangible assets Loss (gain) on sales of investments in...

  • Page 89
    ... and 2013 1. Reporting company Konica Minolta, Inc. (the "Company") is a company incorporated and located in Japan and listed on the First Section of the Tokyo Stock Exchange. The consolidated financial statements of the Konica Minolta Group (the "Group") as of and for the year ended March 31, 2015...

  • Page 90
    ... control, over the financial and operating policies of these entities. Investments in associates are accounted for using the equity method. Investments in associates are initially recognized at cost. Subsequent to initial recognition, The Group's share in the profit or loss and other comprehensive...

  • Page 91
    ... or loss in the period of disposal. (4) Cash and cash equivalents Cash and cash equivalents comprises cash on hand, deposits that can be withdrawn as needed, and short-term investments that are easily converted into cash with little risk from a change in value. (5) Financial instruments The Group...

  • Page 92
    ... measured at FVTOCI are recognized as profit or loss in finance income. 2) Non-derivative financial liabilities Non-derivative financial liabilities are initially recognized at fair value less any directly attributable transaction costs. After initial KONICA MINOLTA, INC. Annual Report 2015 91

  • Page 93
    ... the change occurs. The estimated useful lives of major assets are as follows: Buildings and structures: 3-50 years Machinery and vehicles: 2-15 years Tools and equipment: Lease assets: (8) Goodwill Goodwill indicates the amount by which the cost of the NCI acquired in a business combination exceeds...

  • Page 94
    ... for Growth Financial Report Goodwill is not amortized. It is allocated to an asset, cash-generating unit (CGU) or group of CGUs that are identified according to locations and types of business and tested for impairment annually or when there is any indication of impairment. Impairment losses on...

  • Page 95
    ... The Group has in place for directors (excluding outside directors) and officers of the Company a share option plan as an equitysettled share-based payment plan. Share options are estimated at fair value at grant date and are recognized as an expense over KONICA MINOLTA, INC. Annual Report 2015 94

  • Page 96
    ... grant as deferred income at fair value when there is reasonable assurance that the grant will be received and that the Group will comply with the conditions attached to it. Grants associated with assets are recognized in profit or loss on a systematic basis over the useful lives of the assets. For...

  • Page 97
    ... are described in note 19 "Provisions". 3) Employee benefits The Group has in place various post-retirement benefit plans, including defined benefits plans. The present value of defined benefit obligations on each of these plans and the service costs are calculated based on actuarial assumptions...

  • Page 98
    ..., manufacture, sale and provision of services for diagnostic imaging systems, e.g. digital X-ray diagnostic imaging systems and diagnostic ultrasound systems, etc. Development, manufacture and sale of sensing equipment, lenses for industrial and professional use, etc...

  • Page 99
    ... losses on non-financial assets Segment liabilities Investments accounted for using the equity method Capital expenditures on property, plant and equipment and intangible assets 29,591 (Note) Inter-segment revenue is based on market prices, etc. KONICA MINOLTA, INC. Annual Report 2015...

  • Page 100
    ... that are not attributable to any reportable segment. These corporate assets comprise operating funds (cash and cash deposits and securities), long-term investment funds (investment securities), property, plant and equipment and intangible assets, etc. KONICA MINOLTA, INC. Annual Report 2015 99

  • Page 101
    ...non-financial assets $354,864 35,183 4,360 $323,850 $3,104 $3,453 $40,667 7,964 $56,304 $398,644 43,147 4,360 $383,623 Investments accounted for using the equity method Capital expenditures on property, plant and equipment and intangible assets KONICA MINOLTA, INC. Annual Report 2015...

  • Page 102
    ... year ended March 31, 2015. 7. Trade and other receivables The components of trade and other receivables as of March 31, 2015, 2014, and the Transition Date are as follows: Millions of yen 2015 2014 2013 Thousands of U.S. dollars 2015 Notes and accounts receivable-trade Finance lease receivables...

  • Page 103
    .... For fiscal year ended March 31, 2015, in line with the mid-term management plan to improve asset efficiency, the Group resolved to sell land, buildings, and other items in North America and Japan that are not attributable to reportable segments. KONICA MINOLTA, INC. Annual Report 2015 102

  • Page 104
    Company Overview and Characteristics Growth Strategy Business Strategies Foundation for Growth Financial Report 11. Property, plant and equipment Changes in the carrying amounts of property, plant and equipment for fiscal years ended March 31, 2015... KONICA MINOLTA, INC. Annual Report 2015 103

  • Page 105
    Company Overview and Characteristics Growth Strategy Business Strategies Foundation for Growth Financial Report (Accumulated depreciation and impairment losses) Millions of yen Buildings and structures Machinery and vehicles Tools and equipment Rental assets Land Construction in progress Total...

  • Page 106
    Company Overview and Characteristics Growth Strategy Business Strategies Foundation for Growth Financial Report The carrying amount of property, plant and equipment as of March 31, 2015, 2014 and the Transition Date includes the carrying amount of the following leased assets: (Carrying amount ...

  • Page 107
    ... is no significant internally generated intangible asset as of March 31, 2014 and 2015. Thousands of U.S.dollars Goodwill Customer relationships Softwares Others Total Balance at March 31, 2015 $647,774 $140,434 $163,876 $97,520 $1,049,613 KONICA MINOLTA, INC. Annual Report 2015 106

  • Page 108
    ... equipments of optical products and film manufacturing equipments located in Japan in the Industrial Business segment due to reduced utilization rates, and on company-wide idle assets, etc., due to reduced utilization rates and review of asset values. With regard to sales sites in Europe...

  • Page 109
    Company Overview and Characteristics Growth Strategy Business Strategies Foundation for Growth Financial Report 14. Investments accounted for using the equity method Information related to associates is below. The Company has no material associates. Millions of yen 2015 2014 2013 Thousands of...

  • Page 110
    ... Foundation for Growth Financial Report (2) As lessor 1)Finance leases The Group primarily leases business technologies equipments based on finance lease agreements. Gross investment in leases under finance lease agreements and the present value of minimum lease payments receivables are as...

  • Page 111
    ...of the current fiscal year is as follows; Millions of yen 2015 2014 2013 Thousands of U.S. dollars 2015 5 years or less More than 5 years Total ¥ 636 14,988 ¥ 7,721 22,929 ¥30,651 ¥ 5,122 47,084 ¥52,207 $ 5,293 124,723 ¥15,625 $130,024 KONICA MINOLTA, INC. Annual Report 2015 110

  • Page 112
    Company Overview and Characteristics Growth Strategy Business Strategies Foundation for Growth Financial Report (2)Income tax expense 1) Income tax expense recognized in profit or loss Millions of yen 2015 2014 Thousands of U.S. dollars 2015 Current income tax expense Deferred income tax ...

  • Page 113
    ..., 2018 - $166,431 83,215 166,431 166,431 $582,508 (Note 4) Bonds, long-term borrowings and lease obligations that are as due for repayment after one year but within five years of the end of the fiscal year are listed in note 32 "Financial instruments". KONICA MINOLTA, INC. Annual Report 2015 112

  • Page 114
    ... for rationalization or business restructuring to improve the profitability of the Group's businesses. Payment periods are affected by future business plans and other factors. (Note 3) Asset retirement obligations are provided for the Group's obligation to restore leased offices, buildings and other...

  • Page 115
    Company Overview and Characteristics Growth Strategy Business Strategies Foundation for Growth Financial Report 21. Employee benefits The Group has in place a corporate pension plan and a lump-sum payments on retirement plan as defined benefit pension plans, and a defined contribution-type ...

  • Page 116
    ...) Employee pension trust (Domestic equity securities) Life insurance company general accounts Others Total $224,765 32,204 59,507 162,703 157,535 89,881 235,641 $ 99,193 67,330 $ 224,765 32,204 59,507 162,703 157,535 89,881 99,193 302,979 $1,128,809 KONICA MINOLTA, INC. Annual Report 2015 115

  • Page 117
    Company Overview and Characteristics Growth Strategy Business Strategies Foundation for Growth Financial Report Principal actuarial assumptions used to measure defined benefit obligations are as follows: % 2015 2014 2013 Discount rate 0.71 1.00 1.42 The table below indicates the effect ...

  • Page 118
    ...fair value held by associates. Thousands of U.S. dollars Net gain (loss) on revaluation of financial assets measured at fair value through other comprehensive income Share of other comprehensive income of investments accounted for using the equity method Remeasurements of defined benefit plans Net...

  • Page 119
    ... 81 3,249 ¥6,817 ¥ 624 809 3,433 ¥4,866 $29,009 674 27,037 $56,728 (Note) The gain on sale of property, plant and equipment and intangible assets in the current fiscal year was primarily attributable to the sale of idle assets in Japan. KONICA MINOLTA, INC. Annual Report 2015 118

  • Page 120
    ... of sales sites in Europe and North America for the Business Technologies Business, a review of the production system for lens units used in mobile phones in the Industrial Business and termination of the Group's film production in the Healthcare Business, as well as extra retirement payments to...

  • Page 121
    Company Overview and Characteristics Growth Strategy Business Strategies Foundation for Growth Financial Report 28. Finance income and costs The components of finance income and costs, for fiscal years ended March 31, 2015 and 2014 are as follows: Millions of yen 2015 2014 Thousands of U.S. ...

  • Page 122
    ...,539) 31,955 Net of tax effects Net gain (loss) on revaluation of financial assets measured at fair value Amount arising during the year Income tax expense Net of tax effects Share of other comprehensive income of investments accounted for using the equity method Amount arising during the...

  • Page 123
    ... and Characteristics Growth Strategy Business Strategies Foundation for Growth Financial Report 31. Share-based payments The Group's share-based payments arise from the share options to the Company's directors (excluding outside directors) and executive officers. No vesting conditions are...

  • Page 124
    ...credit lines are limited to 100 billion Japanese yen and with expire at the end of September 2019. Temporary surpluses are invested in extremely safe financial assets. Under "TRANSFORM 2016," the Group's three-year medium-term plan from fiscal year 2014 through fiscal year 2016, the Group is working...

  • Page 125
    Company Overview and Characteristics Growth Strategy Business Strategies Foundation for Growth Financial Report (2)Categories of financial instruments 1) The Group classifies financial instruments as follows: Millions of yen 2015 2014 2013 Thousands of U.S. dollars 2015 Financial assets Cash ...

  • Page 126
    ... information to analyze individual credit conditions. The Group's policy is to set credit limits for each customer and monitor these on an ongoing basis. The Group uses derivative transactions to hedge foreign exchange fluctuation risk and interest rate fluctuation risk. The financial institutions...

  • Page 127
    ...,510 Provisions made Provisions utilized Provisions reversed Effects of changes in foreign exchange rates Balance, end of the year Taking into account such factors as customers' financial conditions and past-due status, impairment losses recognized on trade and other receivables were ¥6,000...

  • Page 128
    ... those used. Millions of yen 2015 2014 Thousands of U.S. dollars 2015 U.S. dollar Euro Pound sterling ¥246 (9) ¥ 17 ¥127 (17) ¥ 67 $2,047 (75) $ 141 (b) Share price fluctuation risk The Group holds shares in other listed companies in the interest of cultivating business relationships...

  • Page 129
    .... The Company uses these derivative transactions according to defined policies for the purpose of reducing risk. No interest rate sensitivity analysis is conducted, as interest rate payments have only a slight impact on profits and losses on the Group's performance. (4) Fair value of financial...

  • Page 130
    ... quoted price in the active market Level 2: Fair value that is calculated using the observable market inputs other than quoted price directly or indirectly Level 3: Fair value that is calculated based on valuation techniques which include inputs that are not based on observable market data Transfers...

  • Page 131
    ...(losses) Profit for the year Other comprehensive income Acquisitions Disposals and settlements Business combinations $15,154 58 50 8,130 (0) (158) $23,242 $ 4,111 (4,152) 33 $ - Effects of changes in foreign exchange rates Balance at March 31, 2015 KONICA MINOLTA, INC. Annual...

  • Page 132
    ... rate swaps. (Note 2) In addition to the items, from the current fiscal year, hedging instruments are designated to hedge foreign-currency borrowings of ¥5,587 million as part of the net investments in foreign operations, and a net investment hedge is used. KONICA MINOLTA, INC. Annual Report 2015...

  • Page 133
    ...., Ltd Wuxi, China Konica Minolta Business Technologies (Malaysia) Sdn. Bhd Melaka, Malaysia Konica Minolta Medical & Graphic Imaging Europe B.V. Konica Minolta Sensing Americas, Inc. Instrument Systems GmbH Konica Minolta Sensing Europe B.V. Konica Minolta Medical & Graphic (Shanghai...

  • Page 134
    ..., the Group acquired, in cash, 100% of the shares in Radiant Vision Systems, LLC ("Radiant"), a US-based, leading provider of testing and measurement systems for flat panel displays. Radiant develops and offers fully integrated testing and measurement systems precisely engineered to meet customer...

  • Page 135
    Company Overview and Characteristics Growth Strategy Business Strategies Foundation for Growth Financial Report 37. Disclosure of interests in other entities Principal subsidiaries For information on principal subsidiaries and associates, please refer to note 33 "Related parties". The Group has...

  • Page 136
    Company Overview and Characteristics Growth Strategy Business Strategies Foundation for Growth Financial Report Reconciliation of equity as of the Transition Date (April 1, 2013) Japanese GAAP Accounts Amounts Differences in Reclassification recognition and measurement IFRS Amounts Notes ...

  • Page 137
    ... Goodwill and intangible assets Investments accounted for using the equity method F Other financial assets Deferred tax assets Other non-current assets Total non-current assets Total assets A,B,F, 74,348 G,H,I,J 6,080 415,687 ¥985,239 24,422 ¥24,322 KONICA MINOLTA, INC. Annual Report 2015 136

  • Page 138
    ...,519 203,421 Share capital Share premium Retained earnings Treasury shares Subscription rights to shares Other components of equity D A,B,C, 239,453 E,G,H, I,J,K (17,322) 910 C,D,E, 28,100 F,G,H, I,K KONICA MINOLTA, INC. Annual Report 2015 137

  • Page 139
    ... not be reclassified to profit or loss Remeasurements of defined benefit (1,428) G pension plans (net of tax) Net gain (loss) on revaluation of 1,776 F financial assets measured at fair value (net of tax) Share of other comprehensive income of investments accounted 2 for using the equity method (net...

  • Page 140
    .... •Financial assets and liabilities are presented separately. •Investments accounted for using the equity method are presented separately. •Non-current assets or disposal groups held for sale are presented separately. N. Changes in presentation in the consolidated statements of profit or loss...

  • Page 141
    Company Overview and Characteristics Growth Strategy Business Strategies Foundation for Growth Financial Report KONICA MINOLTA, INC. Annual Report 2015 140

  • Page 142
    ...Chiyoda-ku, Tokyo 100-7015, Japan Nishi-honmachi Intes, 2-3-10, Nishi-honmachi, Nishi-ku, Osaka-shi, Osaka 550-0005, Japan Establishment as joint-stock company Capital Number of employees Head office Kansai office Stock Information Stock Information (as of March 31, 2015) Major shareholders (the...

  • Page 143
    ...for customers using our own supplier network. Konica Minolta acquired Charterhouse PM Limited (headquartered in the UK) and Ergo Asia Pty Limited (headquartered in Australia), both major print management service providers, to strengthen our global MPM business. • MPS Abbreviation for Managed Print...

  • Page 144
    KONICA MINOLTA, INC. JP TOWER, 2-7-2 Marunouchi, Chiyoda-ku, Tokyo 100-7015, Japan Phone: +81-3-6250-2111 http://konicaminolta.com