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Annual Report 2009
For the year ended March 31, 2009

Table of contents

  • Page 1
    Annual Report For the ye a r ended M a r c h 31, 2009 2009

  • Page 2
    ..., OKI began manufacturing computers containing Japan's ...recycles deposited bills as funds for withdrawals and in 1996 introduced the first Voice-over-Internet Protocol (VoIP) system to the Japanese market. As a company that supports social infrastructure development both in Japan and overseas, OKI...

  • Page 3
    ...Corporate Philosophy - The people of OKI, true to the Company's "enterprising spirit," are committed to creating superior network solutions and providing excellent information and communication services... Nexus Color LED printers Services over DSRC VisualCast IPstage ATM21SX Annual Report 2009 1

  • Page 4
    ...'s first cash recycling ATM, OKI has captured a significant share in recycling ATMs-makes it possible for financial institutions to more effectively manage cash. At present, OKI is positioning itself to be Japan's leading vendor through its ATM products. At the same time, China currently has the...

  • Page 5
    ... communication environments that link work sites to management, office environments that offer no constraints regarding time or place and contact environments for building close ties with customers. OKI's unified communication commence in 1996 when it introduced Japan's first VoIP*1 system, BS1100...

  • Page 6
    ...ETC system unique in the world. As one of its core vendors, OKI has been engaged in R&D into ETC systems from the very beginning. In..., through the connection of DSRC attachments to mobile phones, research is progressing into the development of safety ...Electronic Toll Collection 4 Annual Report 2009

  • Page 7
    ... the United States, United Kingdom and China. Developing its advanced and unique technology even further, OKI is strengthening its position as a global leader of LED printers. *1 LED: Light Emitting Diode *2 dpi: dots per inch Annual Report 2009 advanced and unique technologies- primarily focusing...

  • Page 8
    ... to Revamp OKI's Business Structure...10 Info-Telecom Systems Segment Financial Business 12 Telecom Business 13 Information System Business 14 6 Annual Report 2009 Printers Segment Printer Business 15 Research and Development ...16 Corporate Governance ...18 Corporate Social Responsibility...

  • Page 9
    ...-30 (ended March 31) - 13.6 - 18.8 0 2005 2006 2007 2008 2009 (ended March 31) 2005 2006 2007 2008 2009 OKI Segments at a Glance bInfo-Telecom Systems b Net Sales 400 (Billions of yen)... included with the principal segments reviewed above is OKI's Other segment. Annual Report 2009 7

  • Page 10
    ...% of its shares were transferred to ROHM CO., LTD. Through these actions, the OKI Group has developed a new structure that pivots on the Group's core competencies-the info-telecom convergence business and the mechatronics business, which focuses on ATMs, printers, and others. 8 Annual Report 2009

  • Page 11
    ...segments that exclude semiconductors include demand for privatization of Japan's postal services coming full circle, the appreciation of the yen ... goals, OKI asks for your continued support and understanding. July 2009 Hideichi Kawasaki President Oki Electric Industry Co., Ltd. Annual Report 2009 9

  • Page 12
    ... Optimization of Fixed Costs Amid dramatically changing business conditions, OKI is thoroughly optimizing fixed costs to further bolster its corporate structure. As a result, OKI reduced fixed costs during the fiscal year ended March 31, 2009 by approximately ¥10.0 billion compared to the previous...

  • Page 13
    ... Corporate ...2009 Fiscal year ended March 31, 2009 marks the year in which OKI completed the formulation of its fully restructured business foundation. From the fiscal year ending March 31, 2010 onward, OKI will work to develop businesses that exemplify its identity more fully. Annual Report 2009...

  • Page 14
    ... services as the formulation of contact centers and mobile banking. Financial Business GS21NAVI GS21NAVI Next Generation Bank Branch Terminal Solutions As a core solution for realizing the ubiquitous financial services advocated by OKI, GS21NAVI helps to increase earnings and the level of customer...

  • Page 15
    ... outdoors. Tangram Customer Interaction Center located in Kunshan, China, Adopts CTstage Tangram, a major call center outsourcing service company based in Shanghai, built a 5,000-seat call center, one of the largest outsourcing call centers in China, in cooperation with Kunshan City. OKI's system...

  • Page 16
    ... telephony and video imaging systems, and contact center systems. Hereafter, OKI will actively develop the core technologies that... compact with a common platform and basic devices, and enables customers to add optional units such as 2D barcode readers and document... two faces. 14 Annual Report 2009

  • Page 17
    ... in China for color and multi-functional printers is increasing across the board in manufacturing industries as well as in the business-use market, with the number of printers required to meet this demand expected to exceed 3.5 million units in 2009. In addition to conventional IT channels, OKI Data...

  • Page 18
    ... and management at the store headquarters with regard to environment and energy usage at all store outlets. In addition, Green IT Awards 2008 Commendation Ceremony wider application of the system to facilities other than store outlets helped OKI earn high evaluations. 16 Annual Report 2009

  • Page 19
    ...Japan and G-PON system in the United States and Europe (2.5Gbps) are used mainly to transmit data... delivery service. The... Line Terminal...number of microphones, and based on this technology, OKI realized a small sound source separation module that can be mounted on a mobile phone...Annual Report 2009 17

  • Page 20
    ...Committee Internal Auditing Division Corporate Business Divisions Accounting Auditors (Board of) Auditors CSR Committee Compliance Committee Information Security Committee Disclosure Committee Subsidiaries and Affiliates Selection / Dismissal Audit Collaboration Supervision 18 Annual Report 2009

  • Page 21
    ...two Group company sites in China, making the total number certified 42 sites throughout the Group. The consolidation of production sites in China into the program enables OKI to consolidate information regarding chemical substances in products that have recently increased in interest and data on the...

  • Page 22
    ... Officer Toshiya Hatakeyama Executive Officer Masahiko Morioka Executive Officer *1 External Director *2 External Auditors Kazunari Kobayashi Executive Officer Toshinao Takeuchi Executive Officer (As of June 25, 2009) Yasushi Kiriku 20 Annual Report 2009

  • Page 23
    ... Consolidated Statements of Operations ...30 Consolidated Statements of Cash Flows ...31 Consolidated Statements of Changes in Net Assets ...32 Notes to Consolidated Financial Statements ...34 Report of Independent Auditors ...47 Annual Report 2009 21

  • Page 24
    ...: Net income (loss) per share Cash dividends per share Number of shareholders Number of employees Ratios (%) (Note 2): Return on equity Return on... in this annual report are translated from yen, for convenience only, at ¥98=US$1.00, the approximate exchange rate prevailing on March 31, 2009. Note 2:...

  • Page 25
    ... shrinking markets worldwide, shipments of dot-impact printers declined. 200 Net Sales Billions of yen Years ended March 31 2007 2008 2009 187.1 185.8 160.7 Operating Income Billions of yen 8.6 1.7 Years ended March 31 2009 2007 0 7.8 2007 2008 2008 2009 (Printers) Annual Report 2009 23

  • Page 26
    ...toward the in-house manufacture of LSIs. In...Europe In the European market, OKI's performance in Printers...printer shipment despite increased ATM shipments to China...2009 âˆ'80 2007 Years ended March 31 2008 âˆ'59.5 2009 âˆ'34.9 âˆ'19.4 âˆ'22.9 28.1 18.9 âˆ'25 Net Income ROE (%) 24 Annual Report 2009...

  • Page 27
    ...shipments to China are expected...line...corporate sector are expected to decrease, reflecting the deteriorating economic environment. In Printers segment, OKI...2009 0 2007 Years ended March 31 2008 2009 Capital Expenditures Depreciation R&D Expenses R&D Expenses to Net Sales (%) Annual Report 2009...

  • Page 28
    ...markets of Japan, North America, Europe and Asia and changes in the import-export policy for foreign products may impact its business performance and financial position. (2) Sudden Technological Innovation The OKI Group's principal business segments, comprising Info-Telecom Systems and Printers, are...

  • Page 29
    tuations in foreign currency exchange rates may affect the OKI Group's performance and financial position. The OKI Group operates production sites in Thailand and China. The OKI Group's performance and financial position may therefore be affected in the event of economic recession and political ...

  • Page 30
    Consolidated Balance Sheets Oki Electric Industry Co., Ltd. and consolidated subsidiaries As of March 31, 2009 and 2008 Thousands of U.S. dollars (Note 2) Millions of yen ASSETS Current assets: Cash and ...,102 1,415,887 8,020 2,301,336 (1,677,142) 624,183 266,540 $ 4,050,642 28 Annual Report 2009

  • Page 31
    ... liabilities (Note 20) Total liabilities and net assets The accompanying notes are an integral part of these statements. 2009 ¥ 83,541 25,619 3,159 55,390 23,379 14,874 205,965 2008 ¥ 98,798 53,935...142 (6,051) (4,765) (35,204) (46,030) 806 70,897 598,806 $4,050,642 Annual Report 2009 29

  • Page 32
    ...2009 Net sales Cost of sales Gross profit Selling, general and administrative expenses Operating income (loss) Other income (expenses): Interest expense Interest and dividend income Royalty income from corporate...) (274) (75) ¥ (36,446) (450,775) (4,969) (3,540) $ (459,295) 30 Annual Report 2009

  • Page 33
    ...of Cash Flows Oki Electric Industry Co., Ltd. and consolidated subsidiaries Years ended March 31, 2009, 2008 and 2007 Thousands of U.S. dollars (Note 2) Millions of yen 2009 Cash flows ...508,632 - - - $ 657,428 ¥ 6,137 1,713 ¥ 7,084 3,245 ¥ 6,993 1,353 $ 62,622 17,479 Annual Report 2009 31

  • Page 34
    ... Assets Oki Electric Industry Co., Ltd. and consolidated subsidiaries Years ended March 31, 2009, 2008 and 2007 Shareholders' equity (Accumulated deficit) retained earnings Numbers of ...684,256 - $785,102 - $476,979 (460,408) $(685,234) (173) $(3,693) (460,581) $ 573,142 32 Annual Report 2009

  • Page 35
    ...) (2,000) $(4,765) 47,775 47,775 $(35,204) 32,612 32,612 $(46,030) - $806 2,969 2,969 $70,897 35,591 (424,989) $ 598,806 Annual Report 2009 33

  • Page 36
    ...are depreciated by the straight-line method over their respective estimated useful lives. Significant renewals and betterments are capitalized at cost. Maintenance and repairs are charged to income.... of the projected retirement benefit obligation and the pension fund assets. 34 Annual Report 2009

  • Page 37
    ... service cost are amortized by the straight-line method...which meet the required criteria are accounted for by ...the selling price less additional estimated manufacturing costs and direct selling expenses.... to reflect the revision to the Corporation Tax Law which went into effect ...Annual Report 2009 35

  • Page 38
    ... exchange rate prevailing on March 31, 2009. This translation should not be construed...March 31, 2009 and 2008 are summarized as ...2009... 2009 and 2008 are summarized as follows: Thousands of U.S.... sheet 2009 Held-to... business partnership ¥ - 2008 ¥ 0 $ 2009 - 0 101 213 1,408 11,231 1,...

  • Page 39
    ...,224 20,000 12,000 168,582 (53,935) ¥114,646 2009 $ - 1,104,326 - 122,448 1,226,775 (261,418) $ 965,357 *1 The zero coupon convertible bonds with stock acquisition rights due 2008 are exercisable during the period... Company at a conversion price of ¥ 504 ($ 5.0) per share. Annual Report 2009 37

  • Page 40
    ...*3 The Company redeemed the "Zero coupon convertible bonds with stock acquisition rights ...service cost Obligation recognized in the consolidated balance sheets Prepaid pension cost Allowance for retirement benefits 2009...reported in the accompanying consolidated balance sheets. 38 Annual Report 2009

  • Page 41
    ...service cost Net periodic pension cost 2009...2009 ...2009...line method over a period which falls within the average remaining years of service...line method over a period which falls within the average remaining years of service...2009 and 2008 consisted of the following: Millions of yen 2009...12,398 2009 $ 309...

  • Page 42
    ..., net Effective tax rates 9. SHAREHOLDER S' EQUIT Y Corporation Law of Japan (the "Law") provides that amounts from additional paid-...2009, 2008 and 2007 was as follows: Thousands of U.S. dollars Millions of yen 2009 ¥18,768 2008 ¥26,841 2007 ¥27,263 2009 $191,510 40 Annual Report 2009

  • Page 43
    ...certain production lines of Miyagi Oki Electric Industry Co., Ltd...2009. 17. LOSS ON DISPOSITION OF FOREIGN CURRENC Y TR ANSL ATION ADJUSTMENT S Excluding from the scope of consolidation of the certain overseas subsidiaries resulted in the loss for the year ended March 31, 2009. Annual Report 2009...

  • Page 44
    ...a reporting system...March 31, 2009, 2008 ... 2009 and 2008...2009 ¥6,039 1,861 4,280 ¥3,620 2008 ¥24,439 4,305 10,701 ¥18,043 2009 $61,622 18,989 43,673 $36,938 Depreciation is computed by applying the straight-line...to March 31, 2009 required under operating... At March 31, 2009, the Company and ...

  • Page 45
    ... 9 directors, 10 executive officers, 6 management officials and 1 director of a subsidiary Common stock 509,000 shares ¥248 July 1, 2009- June 25, 2017 Type of shares with warrants granted Number of shares with warrants granted Option price per warrant Exercisable period Annual Report 2009 43

  • Page 46
    ...¥ 34,957 ¥ 43,730 Year ended March 31, Info-Telecom Systems Semiconductors Printers 2009 Corporate and Other Subtotal eliminations Consolidated Sales to third parties Inter-segment sales and transfers ...568,163 - 5,568,163 5,563,979 $ 4,183 $4,050,642 $ 264,142 $ 193,765 44 Annual Report 2009

  • Page 47
    ...the products or services rendered and ...55 million in Semiconductors segment, Printers segment and Other segment, respectively)...¥396,963 Year ended March 31, Japan North America Europe 2008 Corporate and Asia Subtotal eliminations Consolidated Sales to ...410) ¥628,398 Annual Report 2009 45

  • Page 48
    ...Japan North America Europe 2009 Corporate...exports to Japan), totaled...2009, 2008 and 2007, respectively. (2) Effective the year ended March 31, 2009...Board of Japan on ...Japan) for the year ended March 31, 2009...revision to the Corporation Tax Law ...in Japan) for...in Japan) for...the "Zero coupon convertible bonds ...

  • Page 49
    Report of Independent Auditors Annual Report 2009 47

  • Page 50
    ... Sistem ve Yazici Çözümleri Ticaret OKI Software Technology OKI Trading (Beijing) OKI Data Dalian OKI Systems Korea OKI Data (Singapore) OKI Data Manufacturing (Thailand) OKI Precision (Thailand) *In December 2008, the company name changed from OKI Banking Systems (Shenzhen). Annual Report 2009

  • Page 51
    ... Register Mizuho Trust & Banking Co., Ltd. Contact for Further Information Investors Relations Corporate Planning Department Oki Electric Industry Co., Ltd. 3-16-11 Nishi-Shimbashi, Minato-ku, Tokyo 105-8460, Japan Tel: +81-3-5403-1211 E-mail: [email protected] Common Stock Price Range on the Tokyo...

  • Page 52
    This report is printed with 100% VOC (volatile organic compounds) free soy ink, using "waterless printing" on FSC certified paper.