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ANNUAL REPORT
2012
For the year ended March 31, 2012
OKI Annual Report 2012

Table of contents

  • Page 1
    AN N U AL R E P O R T 2012 For the year ended March 31, 2012

  • Page 2
    ...OKI began selling computers containing Japan's first domestically developed core memories, developed the world's first cash recycling automated teller machine (ATM) that recycles...on OKI's exceptional know-how in business systems for financial, public sector, transportation, retail, manufacturing, ...

  • Page 3
    ... social infrastructure mainly for government agencies and local governments. PRINTERS Business offering printers leveraged by OKI's unique LED technology. EMS Consigned manufacturing business based on design and manufacturing technologies cultivated in info-telecom systems. Annual Report 2012 1

  • Page 4
    ...to OKI as of the date of publication, and therefore OKI does not guarantee the accuracy of statements are subject to changes attributable to business risks and uncertainties, which may affect OKI's performance and consequently cause actual results to differ from our forecasts. 2 Annual Report 2012

  • Page 5
    ... 2008 March 31) 0 2009 2010 2011 2012 2008 (As of March 31) 2009 2010 2011 2012 0 -30 2008 (Ended March 31) 2009 2010 2011 2012 Capital Expenditures Depreciation (property, plant and equipment, at cost) Interest-bearing Debt (left scale) Debt/Equity Ratio (right scale) Annual Report 2012 3

  • Page 6
    ...review, notwithstanding the damage of the flood in Thailand and the impact of the appreciation of the yen, the OKI Group worked together as one in addressing these challenges... of all our stakeholders. July 2012 Hideichi Kawasaki President Oki Electric Industry Co., Ltd. 4 Annual Report 2012

  • Page 7
    ... impact of the strong yen. Substitute manufacturing systems that were constructed in Japan and China covered for Thailand, and the manufacturing facility in Thailand resumed The Thailand printer plant that fully full operations by March recovered in March 2012 after being temporarily shut down due...

  • Page 8
    ...., that are ap6 Annual Report 2012 proaching their renewal periods...OKI will make sure these businesses generate more stable profits through the provision of high-quality products that satisfy customer needs and accumulated trust. The second measure is the "expansion of profits from the maintenance...

  • Page 9
    ...the reason that OKI can be entrusted with maintenance in new ...ghting headquarters of Gifu City where OKI's ...manufacturing business and the provision of reliability evaluations on a consignment basis, etc. Cash recycling ATMs installed at a bank *LCM: Life Cycle Management in China...Annual Report 2012 7

  • Page 10
    ... technologies cultivated in infotelecom systems • Design and manufacturing of electronic products requiring high-density mounting, high quality, and high-speed detection technology • Design and manufacturing of mechatronics products requiring high-precision mechanisms 8 Annual Report 2012

  • Page 11
    ... are required FY2011 (ended March 2012) Results 31.3 FY2013 (ending March 2014) Plan 17.6 55.0 FY2011 (ended March 2012) Results 1.5 FY2013 (ending March 2014) Plan 2.0 2.5 * The figures for the FY2013 Plan show the combined total for EMS and Other Businesses. Annual Report 2012 9

  • Page 12
    ...OKI's other strong points include salary payment systems for government agencies, ticket reservations and issuing systems for the travel and transportation industries, and business systems for the manufacturing... communities through the use of telecommunications technologies. 10 Annual Report 2012

  • Page 13
    ... headquarters nationwide...OKI is a leader in ATMs, with a leading share in the domestic market. In China, as well, we are solidifying our position as a top vendor of cash recycling...manufacturer by offering products that match the needs of customers in Japan and overseas. Annual Report 2012 11

  • Page 14
    ...warranty for maintenance products, marking an industry first. * Among A3 Color LED/laser printers (Source: OKI's data as of October 2011) In the printers business, OKI specializes in ... belief, we will continue delivering comprehensive "monozukuri" (manufacturing) solutions. 12 Annual Report 2012

  • Page 15
    ...environmental friendliness; and comfort at households, offices, malls, and other places. Smart Network OKI was the first in the world to develop a 920 MHz bandwidth wireless multi-hop network ... is regarded as a big step forward toward the technology's practical application. Annual Report 2012 13

  • Page 16
    ...corporate governance, OKI established the Compensation Committee, whose members include an outside director. The Committee is responsible for ensuring transparency in the criteria and mechanisms... and Affiliates Information Security Committee Disclosure Committee Audit 14 Annual Report 2012

  • Page 17
    ...Economic Forum meeting held in January 1999. The OKI ...OKI Group's Activities Stakeholders Employees Social Responsibilities in Business OKI Group's CSR For more information, please refer to the "Social and Environmental Report" at the following site: http://www.oki.com/en/csr/ Annual Report 2012...

  • Page 18
    MANAGEMENT (As of June 28, 2012) President, Representative Director Senior Executive Vice President and Member of the Board, ... 2 Kuninori Hamaguchi * Company Auditor Senior Vice President Shinya Kamagami 2 Kaoru Yoshida * 16 Annual Report 2012 *1 Outside Director *2 Outside Company Auditors

  • Page 19
    ... Statements of Comprehensive Income 28 Consolidated Statements of Changes in Net Assets 29 Consolidated Statements of Cash Flows 30 Notes to Consolidated Financial Statements 43 Report of Independent Auditors Annual Report 2012 17

  • Page 20
    ...Oki Electric Industry Co., Ltd. and consolidated subsidiaries Years ended March 31 Millions of yen Thousands of U.S. dollars (Note) 2012 2011 2010 2009 2008 2012...13.0 0.6% 0.1 16.6 Note: The U.S. dollar amounts in this annual report are translated from yen, for convenience only, at ¥82 = ...

  • Page 21
    FINANCIAL REVIEW Annual Report for Oki Electric Industry Co., Ltd. and its Consolidated Subsidiaries OVERVIEW OF THE FISCAL YEAR ENDED MARCH 31, 2012 NET SALES AND OPERATING INCOME In the fiscal year under review, the global economy moved toward gradual recovery; despite the backdrop of the ...

  • Page 22
    ...in Thailand ...OKI...2012 Net Income (Loss) (left scale) Return on Equity (ROE) (right scale) Cash Flows from Operating Activities Cash Flows from Investing Activities Cash Flows from Financing Activities Capital Expenditures Depreciation (property, plant and equipment, at cost) 20 Annual Report 2012

  • Page 23
    ...as China,...OKI Group will ensure revenues by focusing on securing replacement demand in financial and telecom systems, expanding profits in the maintenance...the flood damage in Thailand recorded in the previous...2012 R&D Expenses (left scale) R&D Expenses to Net Sales (right scale) Annual Report 2012...

  • Page 24
    ...OKI...manufacturing and sales activities across a variety of countries and regions. Accordingly, it is subject to a number of risks specific to overseas business activities, including country risk and foreign currency fluctuation risk. The OKI Group operates production sites in Thailand and China... OKI ...

  • Page 25
    ... recycling. In the event the OKI...leakage attributable to human error, new virus strains ...career employees. In an effort to foster exceptional human resources, the OKI Group also conducts on-the-job training, education and a variety of training activities. In the event the OKI...Annual Report 2012 23

  • Page 26
    CONSOLIDATED BALANCE SHEETS Oki Electric Industry Co., Ltd. and consolidated subsidiaries As of March 31, 2012 and 2011 Millions of yen Thousands of U.S. dollars (Note 2) ASSETS Current assets: Cash and cash equivalents ...500 2,426,024 (1,784,658) 641,365 177,146 $ 4,571,085 24 Annual Report 2012

  • Page 27
    ... liabilities (Note 20) Total liabilities and net assets The accompanying notes are an integral part of these statements. 2012 2011 2012 ¥ 53,799 22,797 2,671 74,782 31,608 9,187 194,847 ¥ 73,938 44,125 2,565...22,134) (11,865) (53,207) (87,231) 963 560 823,463 $ 4,571,085 Annual Report 2012 25

  • Page 28
    ... OF OPERATIONS Oki Electric Industry Co., Ltd. and consolidated subsidiaries Years ended March 31, 2012 and 2011 Millions of yen Thousands of U.S. dollars (Note 2) 2012 2011 2012 Net sales ...426) (4,536 2,365 (65,560) 146,804 31,585 10,000 41,597 105,207 (7,646) $ 97,560 26 Annual Report 2012

  • Page 29
    ... INCOME Oki Electric Industry Co., Ltd. and consolidated subsidiaries Years ended March 31, 2012 and 2011 Millions of yen Thousands of U.S. dollars (Note 2) 2012 2011 2012 Income... (5,217) (32,150) (32,207) ¥ 57 $ 105,207 1,280 121 (1,475) 817 743 105,963 98,268 $ 7,695 Annual Report 2012 27

  • Page 30
    CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS Oki Electric Industry Co., Ltd. and consolidated subsidiaries Years ended March 31, 2012 and 2011 Shareholders' equity Accumulated other...) $ (53,207) $ (87,231) The accompanying notes are an integral part of these statements. 28 Annual Report 2012

  • Page 31
    ... OF CASH FLOWS Oki Electric Industry Co., Ltd. and consolidated subsidiaries Years ended March 31, 2012 and 2011 Millions of yen Thousands of U.S. dollars (Note 2) 2012 Cash ï¬,ows from...,609) 971,280 2,353 (7,536) $ 925,487 Â¥ 4,102 2,080 Â¥ 4,636 1,594 $ 50,024 25,365 Annual Report 2012 29

  • Page 32
    ... 31, 2012 1. SIGNIFICANT ACCOUNTING POLICIES (a) Basis of presentation The accompanying consolidated financial statements of Oki Electric Industry... renewals and betterments are capitalized at cost. Maintenance and repairs are charged to income. (h) Intangible assets ...assets. 30 Annual Report 2012

  • Page 33
    ... based on the difference between financial reporting and the tax bases of the ... which meet certain criteria are accounted for ...rate swaps which meet the required criteria are accounted for by a ... the approximate exchange rate prevailing on March 31, 2012. This translation should not be construed as a ...

  • Page 34
    ... at March 31, 2012 and 2011 were as follows: Millions of yen Thousands of U.S. dollars 2012 2011 2012 Finished goods Work in process Raw materials and supplies Total ¥ 24,331 18,424 25,106 ¥ 67,862 ¥ 26,189 16,979 21,775 ¥ 64,944 $ 296,719 224,682 306,170 $ 827,585 32 Annual Report 2012

  • Page 35
    ...the obligations with any cash deposited with the bank. The aggregate annual maturities of long-term debt subsequent to March 31, 2012 are summarized as follows: Year ending March 31, 2013 2014... available to the Group at March 31, 2012 was ¥27,118 million ($330,707 thousand). Annual Report 2012 33

  • Page 36
    ...derivative transactions in accordance with Oki Group's policy. (b) Disclosure about fair value of financial instruments The fair values of financial instruments at March 31, 2012 and 2011 are summarized as... at a reasonable rate. Derivative transactions Described in Note 18. 34 Annual Report 2012

  • Page 37
    ...employment with the Group. The Company and the domestic consolidated subsidiaries that joined the OKI Pension Fund transferred some portion of their lumpsum retirement payment plans to defined contribution... and it is included in "Loss on revision of retirement benefit plan." Annual Report 2012 35

  • Page 38
    ... Years ending March 31, 2012 2011 Discount rate: Expected ...2012 and 2011 consisted of the following: Millions of yen Thousands of U.S. dollars 2012 2011 2012...follows: Millions of yen Thousands of U.S. dollars 2012 2011 2012 Other current assets Other assets Other current liabilities Other...

  • Page 39
    ...follows: Millions of yen Thousands of U.S. dollars 2012 2011 2012 ¥ 13,109 ¥ 13,768 $ 159,865 12. GAIN ON NEGATIVE GOODWILL For the year ended March 31, 2011, the Company recognized gain due to the share exchange in which a subsidiary became a whollyowned subsidiary. Annual Report 2012 37

  • Page 40
    ...2012, certain subsidiaries recorded insurance compensation for losses arising from ï¬,ooding in Thailand. 14. LOSS ON NATURAL DISASTERS Due to ï¬,ooding in Thailand... subsidiaries, which joined the OKI Pension Fund, will transfer...quotes presented by the financial institutions. 38 Annual Report 2012

  • Page 41
    ...Interest rate swaps Millions of yen Thousands of U.S. dollars 2012 Contract amount Contract amount over 1 year Fair value Contract amount 2012 Contract amount over 1 year Fair value Hedged item Pay...Fair value is based on the quotes presented by the financial institutions. Annual Report 2012 39

  • Page 42
    ... per share are based on the number of shares of common stock outstanding at the year end. Yen U.S. dollars 2012 2011 2012 Net income (loss) : Basic Diluted ¥ 9.14 7.07 Yen ¥ (37.35) - $ 0.11 0.09 U.S. dollars 2012 2011 2012 Net assets ¥ 49.36 ¥ 40.15 $ 0.60 40 Annual Report 2012

  • Page 43
    .... The segment information for the years ended March 31, 2012 and 2011 is summarized as follows: Millions of yen 2012 Segments Year ended March 31 Sales to third parties Inter-... 11,049 ¥ 372,192 ¥ 12,988 ¥ ¥ ¥ 60 4,378 9,830 ¥ (6,734) ¥ 82,760 1,518 (0) 3,095 1,398 Annual Report 2012 41

  • Page 44
    ...474 million ($78,951 thousand) and ¥6,894 million for the years ended March 31, 2012 and 2011, respectively. (2) Adjustment of total assets consist principally of the Company's surplus funds...($2,068,841 thousand) and ¥166,050 million at March 31, 2012 and 2011, respectively. 42 Annual Report 2012

  • Page 45
    REPORT OF INDEPENDENT AUDITORS Annual Report 2012 43

  • Page 46
    ...) OKI Software Technology OKI Trading (Beijing) OKI Data Dalian OKI Systems Korea OKI Data (Singapore) OKI Data Manufacturing (Thailand) OKI Precision (Thailand) OKI Systems (Thailand) OKI Data (Australia) EUROPE OKI Europe OKI (UK) OKI Systems (UK) OKI Systems (Danmark) OKI Systems (Holland) OKI...

  • Page 47
    ...Investor Relations Public Relations Division Oki Electric Industry Co., Ltd....2012) Japanese corporations and others Foreign corporation and others 7.6% 14.8% Japanese individual investors Japanese financial institutes 26.0% 51.6% • All company and product names included in this annual report...

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