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NEC Corporation
Annual Report 2010
Year ended March 31, 2010

Table of contents

  • Page 1
    Annual Report 2010 Year ended March 31, 2010 NEC Corporation

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    V2012-Beyond boundaries, Toward "V2012" is a milestone for achieving the NEC Group Vision 2017 2012 2010 01 NEC Corporation Annual Report 2010

  • Page 3
    ... 2013) Mid-term Growth Plan Objective Aim to achieve the NEC Group Vision 2017 through customer-driven solutions leveraging our competitive strength in the integration of IT and networks Focus on "C&C Cloud Strategy" Expand Global Business Create New Businesses NEC Corporation Annual Report 2010...

  • Page 4
    ... of NEC's products and services in highly competitive markets, (iv) NEC's ability to expand into foreign markets, such as China, (v) regulatory change and uncertainty and potential legal liability relating to NEC's business and operations, (vi) NEC's ability to restructure, or otherwise adjust, its...

  • Page 5
    FINANCIAL HIGHLIGHTS NEC Corporation and Consolidated Subsidiaries For the years ended March 31, 2008, 2009 and 2010 In millions of yen 2008 2009 2010 In millions of U.S. dollars 2010 Percent change 2010/2009 For the year: Net sales ...Â¥4,617,153 Operating income (loss) ...Ordinary income (loss...

  • Page 6
    TO OUR SHAREHOLDERS 05 NEC Corporation Annual Report 2010

  • Page 7
    ... the previous fiscal year. NEC has decided to pay an annual dividend of ¥4 per share for fiscal 2010. In February 2010, NEC unveiled its Mid-Term Growth Plan "V2012-Beyond boundaries, Toward our Vision," which sets forth NEC's medium-term management strategy for the next 3 years. The NEC Group sees...

  • Page 8
    ..., Japan March 1981 Awarded doctoral degree by the Graduate School of Science and Engineering, Tokyo Institute of Technology April 1981 Joined NEC Corporation April 2003 General Manager, Mobile and Wireless Division July 2005 Senior General Manager, Mobile Network Operations Unit April 2006 Associate...

  • Page 9
    ...batteries business from NEC TOKIN Corporation into a newly established company, NEC Energy Devices, Ltd., in April 2010. Changing our business structure: Business portfolio realignment Integrated NEC Electronics Corporation with Renesas Technology Corp. Integrated mobile handset business with Casio...

  • Page 10
    ...fiscal year, mainly by reducing costs for outsourcing engineering and consignment of activities, as well as labor and other fixed costs. Furthermore, in order to speed up business management at the Group level, raise operating efficiency and reduce maintenance and operation costs for IT systems, NEC...

  • Page 11
    ... in fiscal 2013. To reach these business targets, NEC has established three key initiatives that it will focus on over the next three years. The first initiative is focusing on the "C&C Cloud Strategy," integrating NEC's strength in IT and network technologies, which NEC has developed extensively...

  • Page 12
    ... "Platform" business for developing foundations supporting the first two areas. In fiscal 2013, NEC aims to generate net sales of ¥1,000 billion from "C&C Cloud Strategy" related businesses, including outsourcing and wireless broadband access equipment. Cloud computing will significantly change the...

  • Page 13
    ...as part of its track record in the implementation, operation and maintenance of large-scale cloud service provision platforms. NEC aims to establish new service businesses in the core systems field, and expand a wide range of cloud-oriented service businesses. NEC Corporation Annual Report 2010 12

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    ... 2013, NEC is targeting net sales of ¥100 billion from this business. In future, we aim to create new businesses by fusing power storage technology developed in our battery business with IT and network technologies. Specifically, we are targeting smart meters and home energy management systems...

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    ... for the NEC Group. Power stations Together with Nissan Motor Co., Ltd., NEC has Home-use energy Smart smart meter meters launched an electrode business focused on this crucial management systems component of automotive lithium-ion rechargeable batteries. Electric vehicles Batteries Rapid chargers...

  • Page 16
    ... Routers/Switching Systems, Wireless LAN) Network Control Platform Systems Network Service Delivery Platform Systems "PASOLINK" ultracompact microwave communications system Cloud Platform Suiteâ„¢ is a cloud-oriented service platform Submarine cable system 15 NEC Corporation Annual Report 2010

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    ... Capacitors  LCD Panels  Lighting Equipment   (Monitors, Projectors) Digital terrestrial TV transmitter for overseas markets Automotive lithium-ion rechargeable battery produced by Automotive Energy Supply Corporation, a joint venture with Nissan Motor Co., Ltd. NEC Corporation Annual...

  • Page 18
    ... IT, and our global business expertise in networks. In other areas, NEC is engaged in the development of new mobile cloud services with KDDI Corporation, using SDIO*3 card-compatible RFID multi-reader/ writers embedded in mobile handsets. In this manner, NEC is actively working to create and expand...

  • Page 19
    ... their group companies), in order to strengthen information security and reduce total cost of ownership. Leveraging NEC's latest distinctive technologies, NEC intends to contribute to their business process reforms. In the field of the enterprise telephony business, NEC took the No. 1*3 share of...

  • Page 20
    ... NEC will continue to actively promote operations support systems, including our service platform-related products. In other areas, NEC will work to develop new businesses and markets, such as the field of smart grid, in addition to winning orders for large-scale projects for submarine cable systems...

  • Page 21
    ... emissions by raising logistics efficiency, and smart grids that control electric power supply through IT. In the aerospace and defense systems field, our goal is to expand the IT and network solutions business using satellites by building up expertise in commercial satellites through the alliance...

  • Page 22
    ...01B: a slim mobile phone featuring a French nail polish design FISCAL 2010 PERFORMANCE AND MAIN ACCOMPLISHMENTS Business segment sales declined 13% year time. As a result, NEC's PCs held on to the top share of the Japanese market*2. In addition, Internet service "BIGLOBE" developed new businesses...

  • Page 23
    ... and secure society. (Additional explanation and chart below.) Over the mid-term, NEC will closely follow this R&D policy, as it establishes key research areas to expand and enhance "C&C Cloud Strategy" related businesses, the Smart Energy and Green business, and other operations. At the same time...

  • Page 24
    ... to promote new business innovation using newly developed technologies. Overseas, NEC has three research sites located in the US, Europe and China to conduct R&D activities leveraging the local characteristics of each region. These research sites work closely with the research centers in Japan to...

  • Page 25
    ...including digital signage (electronic advertisements), as well as user interface applications for mobile phones, home appliances, ATMs, automobiles and so forth. Eyeing further growth in opportunities to use these face recognition technologies, Central Research Laboratories are directing research at...

  • Page 26
    ... using this technology to automatically construct virtual networks based on service details and to automatically allocate IT and network resources in line with service usage status. NEC plans to develop a commercial OpenFlow technology product for data centers within the fiscal year ending March 31...

  • Page 27
    ... EXECUTIVE COMMITTEE around 20 corporate officers BUSINESS PROGRESS COMMITTEE corporate officers and general managers of business units, etc. (Corporate Officers) Business Units/Corporate Staff/Affiliate Companies BUSINESS EXECUTION Internal Audits NEC Corporation Annual Report 2010 26

  • Page 28
    ... Company, for which the Chairman, Representative Director is Shinichi Yokoyama, who is an Outside Corporate Auditor of NEC, such as sales of NEC's products and provision of services including, without limitation, system construction, operation and maintenance. 27 NEC Corporation Annual Report 2010

  • Page 29
    ... risk management systems efficiently and comprehensively under a consistent companywide policy in accordance with internal rules. Business divisions properly implement risk management systems related to their operations and corporate staff divisions support such business divisions' activities. NEC...

  • Page 30
    ...managers. Efforts are also focused on improving disclosure of information on NEC's website, including the disclosure of materials, audio streams and other information issued at presentations and other events, both in Japanese and English, and enhancing investor relations activities on a global scale...

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    ... 15 of Article 2 of the Company Law of Japan *2 Outside Corporate Auditors as stipulated in Item 16 of Article 2 of the Company Law of Japan *3 NEC has notified the securities exchanges of Tokyo, Osaka, Nagoya, Fukuoka and Sapporo, on which NEC has listed its shares, of the independent Directors and...

  • Page 32
    .../Employees...which sets forth basic Build trust Provide active approaches and rules An information society friendly through disclosure to humans and the earth that must be shared communication and feedback by the NEC Group, with the aim of strengthening Daily work consolidated Fiscal year management...

  • Page 33
    ... years, allowing them to experience actual business operations abroad. In fiscal 2010, we stationed 17 new employees as trainees to learn about operations at business sites in Africa, India and other locations worldwide. DEVELOPMENT OF THE e-PATHOLOGIST CANCER DIAGNOSIS ASSISTANCE SYSTEM: REALIZING...

  • Page 34
    ... STATEMENTS OF CHANGES IN NET ASSETS 53 CONSOLIDATED STATEMENTS OF CASH FLOWS 57 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 127 INDEPENDENT AUDITORS' REPORT * Figures in the Financial Section represent results based on the former segment classification. 33 NEC Corporation Annual Report 2010

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    ... 4.08% Japanese Individuals and Others 36.38% Number of shareholders 271,737 STOCK PRICE RANGE ON THE TOKYO STOCK EXCHANGE (Yen) 1,200 800 400 0 I II III 2006 IV I II III 2007 IV I II III 2008 IV I II III 2009 IV I II III 2010 IV (Year ended March 31) NEC Corporation Annual Report 2010 128

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    ... BUSINESS SEGMENTS NEC Corporation 7-1, Shiba 5-chome, Minato-ku, Tokyo 108-8001, Japan July 17, 1899 Nobuhiro Endo ¥397.2 billion (As of March 31, 2010) 2,604,732,635 shares (As of March 31, 2010) ¥3,583.1 billion (Year ended March 31, 2010) IT Services Business Platform Business Carrier Network...

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    7-1, Shiba 5-chome, Minato-ku, Tokyo 108-8001, Japan Telephone: +81-3-3454-1111 NEC home page: http://www.nec.com Investor Relations home page: http://www.nec.co.jp/ir/en ISSN 0910-0229 ©NEC Corporation 2010 Printed in Japan