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2013(For the year ended March 31, 2013)ANNUAL REPORT
OKI Annual Report 2013

Table of contents

  • Page 1
    ANNUAL REPORT 2013 (For the year ended March 31, 2013)

  • Page 2
    ...vanguard of technology innovation, 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 deposited bills as funds for withdrawals, developed LED printers, and introduced the...

  • Page 3
    ... built on core mechatronics technology. PRINTERS Business offering printers and multifunction printers leveraged by OKI's unique LED technology. EMS Consigned design and manufacturing business based on design and manufacturing technologies cultivated in info-telecom systems. Annual Report 2013 1

  • Page 4
    ... in this annual report are translated from yen, for convenience only, at ¥93 = U.S.$1.00, the approximate exchange rate prevailing on March 31, 2013. Note ...annual report contains forward-looking statements concerning the OKI Group's future plans, financial targets, technologies, products, services...

  • Page 5
    ... March 31) 0 2010 2011 2012 2013 (As of 2009 March 31) 0 2010 2011 2012 2013 -30 (Ended March 31) 2009 2010 2011 2012 2013 Capital Expenditures Depreciation (property, plant and equipment, at cost) Interest-bearing Debt (left scale) Debt/Equity Ratio (right scale) Annual Report 2013 3

  • Page 6
    ...our customers want and convey the concept of market-in as our business approach. Fiscal year 2013 is the final year of our mid-term business plan. While the business outlook remains... and cooperation of all our stakeholders. July 2013 Hideichi Kawasaki President Oki Electric Industry Co., Ltd. 4

  • Page 7
    ...fields and steadily implement the structural reform of the Printers segment. What are your thoughts on the OKI Group's performance in fiscal year 2012? We ...1.5 23.8 3.0 1.6 22.0 4.0 20.5 2.0 2.0 0 -10 -20 FY2011 FY2012 FY2013 (Projections) (4.3) (6.4) (8.8) (6.1) (6.5) Annual Report 2013 5

  • Page 8
    ...centers on ATMs. The first of their kind in the world, our cash recycling...2013. Assembly lines for banknote cassettes at our ATM manufacturing factory in Shenzhen, China. What is the outlook for the Printers...Featuring superior LED technology, OKI printers play an important role as...Annual Report 2013

  • Page 9
    ...the Printers ...printers against multifunctional copier-printers by highlighting the total cost savings from the self maintenance, low-cost printer...ce printer market ...(copiers) ...Printer Market (printers...OKI...2013 to be a year of concerted effort by the OKI...reform costs for the Printers segment. Achieving the...

  • Page 10
    ... technologies cultivated in info-telecom 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 2013

  • Page 11
    ... printer and cloud computing services NET SALES (Billions of yen) OPERATING INCOME (Billions of yen) FY2012 (ended March 2013)...2013) Results 32.7 FY2013 (ending March 2014) Plan 18.7 17.0 FY2012 (ended March 2013) Results 1.6 FY2013 (ending March 2014) Plan 2.0 3.0 2.0 39.0 Annual Report 2013...

  • Page 12
    ... OKI's operation management system Work process Administration Package (WAP) at their centered-administration centers have realized greater visibility across all administrative processes and achieved greater operational efficiencies through ï¬,exible personnel allocation. 10 Annual Report 2013

  • Page 13
    ... opportunities arising from the increased use of IP networks, and offer competi- tive products and services in this field. In the domestic IP telephony field, we formed alliances with our ...sturdiness, broad PBX functionality, and high channel capacity of the existing model. Annual Report 2013 11

  • Page 14
    ..., comfort, and convenience by delivering products and services that make use of our advanced and unique...communication systems with a level of operability and durability that only OKI can provide, based on our thorough knowledge of operating environments... Organization. 12 Annual Report 2013

  • Page 15
    ... Deposit and Withdrawal Recycling Capability OKI launched "RG7 Currency Exchanger", the world's first currency exchange machine capable of recycling deposits and withdrawals in multiple currencies from a single unit, including the Japanese yen, the U.S. dollar, and the Euro. Annual Report 2013 13

  • Page 16
    ...ve-year warranty. Further, we have also been able to offer maintenance products free of charge under the COREFIDO2 Series. Based on the printer business strategy launched in March 2013, OKI will focus on reorganizing the printers business structure to secure profits by entering new business domains...

  • Page 17
    .... Currently, OKI is providing EMS services in the ...OKI uses its advanced design and manufacturing technologies cultivated in the information-communication field to develop leading-edge technologies and provide one-stop EMS solutions for high-quality, high-reliability products. Annual Report 2013...

  • Page 18
    ...to the provision of safety and security. OKI is also developing data mining technology to find and utilize hidden...enters an era where security affects the value of services. OKI is researching "quantum cryptography technologies" that will ... technology's practical application. Annual Report 2013

  • Page 19
    ... the connection between the large amount of the collected data and physical phenomena. In order to ï¬,exibly handle such elusive targets and become a research group with highly analytical skills, we always strive to acquire knowledge and skills through a friendly competition. Annual Report 2013 17

  • Page 20
    ...a resolution concerning the Basic Policy for the Establishment of an Internal Control System and OKI has been developing a system to secure appropriate business operations. Pursuant to the Financial ... Committee Information Security Committee Disclosure Committee Audit 18 Annual Report 2013

  • Page 21
    ... of products and services that can serve ... recycling,...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 2013...

  • Page 22
    MANAGEMENT (As of July 1, 2013) President, Representative Director Senior Executive Vice President and Member of the Board, Representative ...Hamaguchi *2 Audit & Supervisory Board Member Kaoru Yoshida *2 20 *1 Outside Director *2 Outside Audit & Supervisory Board Members Annual Report 2013

  • Page 23
    ... Statement of Income Consolidated Statement of Comprehensive Income Consolidated Statement of Changes in Net Assets Consolidated Statement of Cash Flows Notes to Consolidated Financial Statements Report of Independent Auditors Annual Report 2013 21

  • Page 24
    ...8, 2012, the Company announced that improper accounting had been conducted at an overseas consolidated subsidiary. Based on the investigation reports by outside experts, the Company restated the consolidated financial statements and related notes for 2012 and previous years. 22 Annual Report 2013

  • Page 25
    ...services...maintenance ...2013 (Ended March 31) 2011 2012 2013 Printers (Billions of yen) Net Sales (Billions of yen) Operating Loss 150 125.0 107.4 90 111.4 0 120 -2 -4 (4.6) (4.3) 60 -6 30 -8 (8.8) 2012 2013 0 (Ended March 31) 2011 -10 2012 2013 (Ended March 31) 2011 Annual Report 2013...

  • Page 26
    ...OKI... Thailand in...2013 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) 24 Annual Report 2013

  • Page 27
    ...damage in Thailand. Depreciation ...the Printers business... pinned ...OKI Group is unable to keep pace with technological innovations, is burdened with obsolete products, and is unable to deliver products and services...2013 R&D Expenses (left scale) R&D Expenses to Net Sales (right scale) Annual Report 2013...

  • Page 28
    ...Printers segment's performance. (4) Raw Materials and Component Procurement The OKI Group procures a variety of raw materials and components in support of its manufacturing... statutory and regulatory requirements may impact the OKI Group's performance and financial position. 26 Annual Report 2013

  • Page 29
    ... and information leakage attributable to human error, new virus strains other like causes...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 2013 27

  • Page 30
    CONSOLIDATED BALANCE SHEET Oki Electric Industry Co., Ltd. and consolidated subsidiaries As of March 31, 2013 and 2012 Millions of yen Thousands of U.S. dollars (Note 2) ASSETS Current assets: Cash and cash equivalents ...,516 2,256,322 (1,634,494) 621,817 170,548 $ 3,756,150 28 Annual Report 2013

  • Page 31
    ...Note 17) Total liabilities and net assets The accompanying notes are an integral part of these statements. 2013 2012 As restated (Note 1) 2013 ¥ 56,371 18,821 897 74,448 33,688 12,902 197,129 ¥ 53,837 ...838 23,569 (7,053) (30,419) (13,903) 849 5,086 608,870 $ 3,756,150 Annual Report 2013 29

  • Page 32
    ... INCOME Oki Electric Industry Co., Ltd. and consolidated subsidiaries Years ended March 31, 2013 and 2012 Millions of yen Thousands of U.S. dollars (Note 2) 2013 2012 As restated (Note 1) 2013 Net ...,129) 4,172 55,473 200,365 44,150 7,053 51,204 149,161 (2,935) $ 146,225 30 Annual Report 2013

  • Page 33
    ...INCOME Oki Electric Industry Co., Ltd. and consolidated subsidiaries Years ended March 31, 2013 and 2012 Millions of yen Thousands of U.S. dollars (Note 2) 2013 2012 As restated (Note 1) 2013 ...3,408 (23,193) 161 23,301 172,473 15,734 ¥ 305 ¥ 2,830 631 $ 169,182 3,279 Annual Report 2013 31

  • Page 34
    ... STATEMENT OF CHANGES IN NET ASSETS Oki Electric Industry Co., Ltd. and consolidated subsidiaries Years ended March 31, 2013 and 2012 Shareholders' equity (Accumulated ...419) $ (13,903) $ 5,086 $ 608,870 The accompanying notes are an integral part of these statements. 32 Annual Report 2013

  • Page 35
    ... Oki Electric Industry Co., Ltd. and consolidated subsidiaries Years ended March 31, 2013 and 2012 Millions of yen Thousands of U.S. dollars (Note 2) 2013 2012 As restated (Note 1) 2013 ...) 806,408 15,333 - 311 $ 385,956 ¥ 3,040 5,626 ¥ 4,142 2,080 $ 32,688 60,494 Annual Report 2013 33

  • Page 36
    ...) and not recording of existing debt at Oki Systems Iberica S.A.U. which is an overseas consolidated subsidiary of OKI Data Corporation in printer business. As a result of investigation by ... other securities." The cost of other securities sold is computed by the moving 34 Annual Report 2013

  • Page 37
    ...cost. Maintenance and repairs are charged... prior service cost are amortized by...remaining years of service of the participants... on the difference between financial reporting and the tax bases of the...the approximate exchange rate prevailing on March 31, 2013. This translation should not be construed as a...

  • Page 38
    ... 2013 Amount...2013 and 2012 were as follows: Millions of yen Thousands of U.S. dollars 2013 Finished goods Work in process Raw materials and supplies Total ¥ 31,215 18,856 24,890 ¥ 74,963 2012 ¥ 24,696 18,424 25,106 ¥ 68,227 2013 $ 335,645 202,752 267,634 $ 806,053 36 Annual Report 2013

  • Page 39
    ...the obligations with any cash deposited with the bank. The aggregate annual maturities of long-term debt subsequent to March 31, 2013 were summarized as follows: Year ending March 31, 2014 2015 ... available to the Group at March 31, 2013 was ¥16,285 million ($175,107 thousand). Annual Report 2013 37

  • Page 40
    ... 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, 2013 and 2012 were summarized as...to discount at a reasonable rate. Derivative transactions Described in Note15. 38 Annual Report 2013

  • Page 41
    ... The Company and the domestic consolidated subsidiaries that joined the OKI Pension Fund transferred some portion of their lump-sum retirement ... service cost of benefits earned during the year. (3) Other cost is the contributions paid for defined contribution pension plans. Annual Report 2013 ...

  • Page 42
    ...2013 Discount rate: Expected rates of return: 1.40% 2.50% 2012 2.10% 1.50% Amortization period for prior service...service...service of...2013 and 2012 consisted of the following: Millions of yen Thousands of U.S. dollars 2013...) ¥ 6,691 2013 $ 358,806 130...of U.S. dollars 2013 Other current assets ...

  • Page 43
    ...dollars 2013 Â¥ 13,982 2012 Â¥ 13,109 2013 $ 150,344 12. INSURANCE INCOME For the year ended March 31, 2012, certain subsidiaries recorded insurance compensation for losses arising from ï¬,ooding in Thailand. 13... the business liquidation for the year ended March 31, 2013. Annual Report 2013 41

  • Page 44
    ... Total Accounts receivable Accounts payable ¥ 7,174 2,769 ¥ 9,943 ¥ - - ¥ - ¥ (194) 31 ¥ (163) Note: Fair value is based on the quotes presented by the financial institutions. 42 Annual Report 2013

  • Page 45
    ...2013 Hedged item Contract amount Contract amount over 1 year Fair value Contract amount 2013...ended March 31, 2013 and 2012, ...2013 and 2012 were as follows: Millions of yen Thousands of U.S. dollars 2013... 467 2,453 438 2013 $ 8,322 215 ...subsequent to March 31, 2013 required under operating leases with...

  • Page 46
    ...a officials subsidiaries subsidiaries subsidiary subsidiary Common stock 815,000 shares ¥384 July 1, 2005- June 26, 2013 Common stock 452,000 shares ¥458 July 1, 2006- June 28, 2014 Common stock 442,000 shares ¥...Number of shares reserved Exercise price Exercisable period 44 Annual Report 2013

  • Page 47
    ...the goodwill Investments in equity-method affiliates Increase in property, plant, equipment and intangible assets Printers EMS Subtotal ¥ 293,034 3,203 296,238 ¥ 23,815 ¥ 183,527 4,913 ... 720 ¥ 25,694 1,015 - 28 661 ¥ 76,812 1,326 (0) ¥ 3,170 1,363 ¥ ¥ 11,353 Annual Report 2013 45

  • Page 48
    ... Printers EMS...Services division of Itautec S.A. -Grupo Itautec and turn it into the subsidiary of the Company, based on the Board of Directors meeting of the Company held on May 14, 2013. The Company will acquire the stake by the end of fiscal year ending March 31, 2014. 46 Annual Report 2013

  • Page 49
    REPORT OF INDEPENDENT AUDITORS Annual Report 2013 47

  • Page 50
    ...) 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 51
    ...Banking Co., Ltd. Contact for Further Information Investor Relations Public Relations Division Oki Electric Industry Co., Ltd. 1-7-12 Toranomon, Minato-ku, Tokyo 105...this฀annual฀report฀ are฀trademarks฀ or฀ registered trademarks of each of the companies they represent. Annual Report 2013 ...

  • Page 52
    This report is printed with VOC (volatile organic compounds) free vegetable based ink, using "waterless printing" on FSCTM certified paper.