Epson 2008 Annual Report Download - page 39

72 Seiko Epson Corporation
73
Annual Report 2008
24. Segment information
(1) Business segment information
Epson engages primarily in the development, manufacture and sale of
computer printers, liquid crystal displays (“LCDs”), semiconductor
products and other products.
Epson operates manufacturing facilities in Japan, Asia, the
Americas and Europe, and markets its products internationally through
a global network of local sales subsidiaries.
Epson engages principally in the following three business
segments categorized based on the nature of products, markets and
marketing methods.
Information-related equipment segment mainly includes color
inkjet printers, page printers, dot matrix printers, large format inkjet
printers and related supplies, color image scanners, mini-printers,
printers for use in POS systems, 3LCD projectors, LCD monitors, label
writers and personal computers.
Electronic devices segment mainly includes small- and medium-
sized LCDs, HTPS-TFT panels for 3LCD projectors, crystal units,
crystal oscillators, optical devices and CMOS LSI.
Precision products segment mainly includes watches, watch
movements, plastic corrective lenses, precision industrial robots, IC
handlers and industrial inkjet equipment.
Operations not categorized in any of the above segments, such as
services offered within Epson and new businesses still in the start-up
phase, are categorized within “Other.”
On April 1, 2006, the Company’s optical device business
(excluding the corrective lens business) was transferred to a
consolidated subsidiary, Epson Toyocom Corporation. The Company’s
optical device business, which boasts expertise in optical components
for 3LCD projectors, was merged with Epson Toyocom’s optical device
business, which specializes in areas such as image correction for
digital cameras and optical pickup components for DVD recorders.
This reorganization seeks to efficiently combine markets, technologies,
and development resources with the objective of bolstering the Epson’s
technology development capabilities, enhancing its market
competitiveness, and increasing the value of its business.
With this reorganization, the results of the Company’s optical
device business, which were formerly reported under precision
products segment, are reported under electronic devices segment.
This change is effective from the year beginning April 1, 2006. The
effect of the reorganization on segment information is immaterial and is
thus not reported herein.
Millions of yen
Thousands of
U.S. dollars
March 31 March 31,
2007 2008 2008
Balances:
With Sunritz —
Other investments ¥2 ¥1 $17
With SE GAKUEN —
Other current assets 7 6 61
With International Scholarship Foundation —
Other current assets — 0 7
22. Contingent liabilities
Contingent liabilities for guarantee of employees’ housing loans from banks at March 31, 2007 and 2008 were ¥2,447 million and ¥2,038 million
($20,346 thousand), respectively.
23. Related party transactions
The Company has entered into real estate lease agreements with K.K.
Sunritz (“Sunritz”). Mr. Yasuo Hattori, a vice-chairman and director of
the Company, and his relatives own 9.5% and 71.3% of the outstanding
shares of Sunritz, respectively.
Mr. Saburo Kusama, a chairman and director of the Company, is a
chairman of SE GAKUEN Educational Foundation (“SE GAKUEN”) and
a chairman of Epson International Scholarship Foundation
(“International Scholarship Foundation”). Mr. Saburo Kusama owns
0.0% of the outstanding shares of the Company.
Transactions with these related parties for the years ended March
31, 2006, 2007 and 2008, and related balances at March 31, 2007
and 2008, were as follows:
Millions of yen
Thousands of
U.S. dollars
Year ended March 31
Year ended
March 31,
2006 2007 2008 2008
Transactions:
With Sunritz —
Rental expenses for real estates ¥71 ¥19 ¥19 $194
With SE GAKUEN —
Rental income for buildings — — 42 428
Recharge of personnel — — 54 546
Other incomes 45 84 — —
With International Scholarship Foundation —
Recharge of personnel — — 4 40
Donation for enhanced operational foundation — — 5 49
Other expenses — 20 — —
With other related companies —
Other expenses 2 — — —
Future lease payments for non-cancelable operating leases as a lessee at March 31, 2007 and 2008 were as follows:
Millions of yen
Thousands of
U.S. dollars
March 31 March 31,
Future lease payments 2007 2008 2008
Due within one year ¥ 5,307 ¥ 4,949 $ 49,404
Due after one year 10,705 6,651 66,393
Total ¥16,012 ¥11,601 $115,797