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Annual Report
For the Business Year Ended March 31, 2003
Oki Electric Industry Co., Ltd.
2003

Table of contents

  • Page 1
    Oki Electric Industry Co., Ltd. Annual Report 2003 For the Business Year Ended March 31, 2003

  • Page 2
    ... Co., Ltd., utilizes its unique strengths in information systems, telecommunications systems and electronic devices to deliver satisfaction to all its customers. In line with its corporate vision "Oki, Network Solutions for a Global Society," Oki is contributing to the creation of an e-society...

  • Page 3
    ...network solutions network with satisfaction, to transcend the limitations of time and space and provide a rich selection of improved services... of broadband networks is blurring the line between information ...systems. In addition, we possess strong Oki Electric Industry Co., Ltd. Annual Report 2003 1

  • Page 4
    ... resources on areas of our business that are expected to show the highest rates of growth. The thrust of this has been a shift from conventional network systems to Internet Protocol (IP)-based 2 Oki Electric Industry Co., Ltd. Annual Report 2003

  • Page 5
    ... dynamism and flexibility into our corporate culture and is now showing tangible results. At the backbone of network-style company management is the ...systems of accountability. June 2003 Katsumasa Shinozuka President and Chief Executive Officer Oki Electric Industry Co., Ltd. Annual Report 2003...

  • Page 6
    ...our existing IP network-related businesses. In January 2003, we then entered into an agreement with NEC Corporation to cooperate in developing the IP telephony market. Based on both NEC's and Oki's abundant technical know-how and customer support capabilities in voice communications systems, we will...

  • Page 7
    ... banking branch systems, based on Oki's recognized forte in mechatronics technology, in which to develop additional solutions. These are: backyard systems that apply image processing technology; e-banking that utilizes the Internet to support financial service operations; and an IP network solution...

  • Page 8
    ... by setting up sales and marketing bases in these markets. Oki delivered a self-service reservation and ticketing system to several major domestic railway companies, allowing passengers to make their own seat reservations and issue tickets. 6 Oki Electric Industry Co., Ltd. Annual Report 2003

  • Page 9
    ... high-speed color printing, has achieved an enviable reputation among customers worldwide. For the ATM market, Oki not only provides solutions for financial institutions but is also accelerating the introduction of ATMs into convenience stores. Oki Electric Industry Co., Ltd. Annual Report 2003 7

  • Page 10
    ...stop center for resolving IP telephony-related issues, catering to a wide range of users, from telecommunications carriers rolling out IP telephony services to enterprise users considering the adoption of IP telephony on their internal networks. 8 Oki Electric Industry Co., Ltd. Annual Report 2003

  • Page 11
    ... unit (MCU). In the area of SOS technology, which is highly suited to chips for such wireless applications as mobile phones and wireless local area networks (LANs), owing to power consumption at half the level for SOI we are developing products Oki Electric Industry Co., Ltd. Annual Report 2003 9

  • Page 12
    ...have achieved a strong reputation among the world's major mobile phone manufacturers. By utilizing waferlevel chip size package (W-CSP) technology (in the device shown on the right), Oki has made possible even smaller, more lightweight devices. 10 Oki Electric Industry Co., Ltd. Annual Report 2003

  • Page 13
    ... support of IT services. ITIL describes the architecture for establishing and operating IT service management. The network monitoring and diagnostics service of Oki Customer Adtech operates round-the-clock, offering a one-stop lineup of services. Oki Electric Industry Co., Ltd. Annual Report 2003...

  • Page 14
    ... into Web applications. Since the platform utilizes the industry standard SIP Servlet application programming interface (API), it is possible to provide new communications services by using it in conjunction with third-party applications. 12 Oki Electric Industry Co., Ltd. Annual Report 2003

  • Page 15
    ... as well as developing a support business for building Web accessibility in collaboration with an Oki Group consulting company. In fiscal 2003, the Oki Group achieved zero emissions status at all nine of its major domestic manufacturing facilities. Since 1996, the Oki Group has presented 13 blood...

  • Page 16
    ...Director of Sony Corporation Executive Officers Executive Vice President Kazushige Matsui President, System Solutions Company Hironori Kitabayashi President, Silicon Manufacturing Company Hideichi Kawasaki President, Network Systems Company Masayoshi Matsushita EVP, System Solutions Company General...

  • Page 17
    ......Cash dividends per share ...Number of shareholders ...Number of employees ...Ratios (%): Return...annual report are translated from yen, for convenience only, at the rate of ¥120=US$1.00, the approximate exchange rate prevailing on March 31, 2003. Oki Electric Industry Co., Ltd. Annual Report 2003...

  • Page 18
    ... 2003 -26.4% -34,077 - 6,560 - 6.2% 0 -10 -20 -30 -40 (%) 10 10,000 184,704 28,314 163,523 157,856 1,368 30,000 0 Net Sales Net Sales (Overseas Sales) Operating Income (Loss) SG&A Expenses SG&A Expenses to Net Sales Net (Loss) Income ROE 16 Oki Electric Industry Co., Ltd. Annual Report 2003

  • Page 19
    ... costs. Telecommunications Systems Increased sales in the rapidly expanding IP telephony services and enterprise VoIP...2002 2003 356,673 355,802 335,460 109,066 101,323 Total Assets Total Shareholders' Equity Shareholders' Equity Ratio Oki Electric Industry Co., Ltd. Annual Report 2003 17

  • Page 20
    ...and further enhance the Company's corporate governance systems, Oki has established a Management Advisory Committee...equipment. In addition, the Company expects the IP telephony services and VoIP markets to reach critical mass, and envisages ... 18 Oki Electric Industry Co., Ltd. Annual Report 2003

  • Page 21
    ...,150 (25,180) 2,265 (7,016) (14) 109,066 ¥(651,581 565,519 592,924 (258,374) 12,615 (67,485) (838) 844,360 $(5,190,760 Oki Electric Industry Co., Ltd. Annual Report 2003 19

  • Page 22
    ...,150 ¥03,551 8,944 (351) - - 87 - ¥12,231 $(565,519 $(565,519 $(592,924 $(592,924 $(209,840) (54,671) (37) - 6,175 - - $(258,374) 20 Oki Electric Industry Co., Ltd. Annual Report 2003

  • Page 23
    ... (438,604) (1,089) (167,311) (5,977) (135,424) 378,710 833 $(244,118 ¥(07,669 1,092 ¥(08,254 3,406 ¥010,697 1,315 $(063,915 9,104 Oki Electric Industry Co., Ltd. Annual Report 2003 21

  • Page 24
    ... Oki Electric Industry Co., Ltd. Annual Report 2003 ... that, as permitted by the Corporation Tax Law of Japan, the...line method over their estimated useful lives. Significant renewals and betterments are capitalized at cost. Maintenance and repairs...prior service cost are amortized by the straight-line ...

  • Page 25
    ...swaps which meet the required criteria are accounted for by ...and accrued prior service cost of the ...2003 ¥1,130 ¥1,130 ¥1,101 ¥1,101 ¥(28) ¥(28) ¥1,130 ¥1,130 ¥1,069 ¥1,069 ¥(60) ¥(60) $9,416 $9,416 $9,175 $9,175 $(240) $(240) 23 Oki Electric Industry Co., Ltd. Annual Report 2003

  • Page 26
    ... ...Advances ... 2003 Â¥4,510 3,282 2,175 Â¥9,969 2002 Â¥3,698 4,424 1,203 Â¥9,325 2003 $37,590 27,354 18,131 $83,076 24 Oki Electric Industry Co., Ltd. Annual Report 2003 â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹

  • Page 27
    ... prior service cost decreased by Â¥8,745 million at March 31, 2002. (3) Certain consolidated subsidiaries have adopted a simplified method, as permitted, to calculate projected benefit obligation. â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ Oki Electric Industry Co., Ltd. Annual Report 2003 25

  • Page 28
    ...-line method over a period which falls within the average remaining years of service of...its domestic consolidated subsidiaries comprised corporation tax, inhabitants' taxes and ...(78.6.)% -. -. 0.6. 55.3.% 26 Oki Electric Industry Co., Ltd. Annual Report 2003 â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹...

  • Page 29
    ... and a reporting system. The derivative...number of shares of common stock outstanding during each year. â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ Oki Electric Industry Co., Ltd. Annual Report 2003...

  • Page 30
    ...the years ended March 31, 2003, 2002 and 2001 are summarized as follows: Millions of yen Information systems Year ended March 31 Telecommunications systems Electronic devices Other Total Corporate and eliminations Consolidated â-‹ â-‹ Nature of stocks with warrant granted Number of 341,000 shares...

  • Page 31
    ...systems and other Electronics manufacuring services Telecommunications systems Information systems New segment Information systems...systems ¥(13,670) (158) (18,554) (171) (59) Other ¥7,729 43 5,954 314 116 Corporate... ¥037,664 Europe ¥023,964 72...Oki Electric Industry Co., Ltd. Annual Report 2003 29

  • Page 32
    ...Year ended March 31 North America Europe Other Total Eliminations Consolidated 2003 $3,729,860 824,176 4,554,...of the Company's common stock traded on the Tokyo Stock Exchange in the month prior to the...Oki Electric Industry Co., Ltd. Annual Report 2003 â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹ â-‹

  • Page 33
    Report of Independent Auditors Oki Electric Industry Co., Ltd. Annual Report 2003 31

  • Page 34
    ... production for mechatronics and electronic equipment Staging services Solutions to heat dissipation Oki Customer Adtech System network equipment and printer sales Supply office tool sales IT management services Maintenance support services 32 Oki Electric Industry Co., Ltd. Annual Report 2003

  • Page 35
    ...of Oki Data Corporation in the United States. ARM is a registered trademark of ARM Ltd. Gold IP is trademark of United Microelectronics Corp. Other names of companies and products are trademarks or registered trademarks of the respective companies. Oki Electric Industry Co., Ltd. Annual Report 2003...

  • Page 36
    ... Company Financial Solutions Company IP Solutions Company Oki Data Company Network Systems Company Silicon Solutions Company Silicon Manufacturing Company Optical Components Company Manufacturing Service Company Corporate (As of July 2003) 34 Oki Electric Industry Co., Ltd. Annual Report 2003

  • Page 37
    ...: http://www.oki.com BREAKDOWN OF SHARES HELD BY SHAREHOLDER TYPE (As of March 31, 2003) Other Japanese corporations, etc. 8% Foreign corporations and others 5% Financial institutions 45% Japanese individual investors 42% Numazu Engineering and Manufacturing Division Information systems Tel: +81...

  • Page 38
    Oki Electric Industry Co., Ltd. www.oki.com 3Y01636 Published June 2003 Printed in Japan