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OKI Annual Report 2015
ANNUAL REPORT
2015
(For the year ended March 31, 2015)

Table of contents

  • Page 1
    ANNUAL REPORT 2015 (For the year ended March 31, 2015)

  • Page 2
    ... satisfy customers, while contributing to the development of an information society. Guided by its brand statement, "Open up your dreams," OKI will diligently...services capitalizing on OKI's exceptional know-how in business systems for financial, public sector, transportation, retail, manufacturing...

  • Page 3
    ...systems and services to link people and goods. SOCIAL INFRASTRUCTURE SYSTEMS Business providing customized systems that...OKI's unique LED technology. EMS Consigned design and manufacturing business based on design and manufacturing technologies cultivated in info-telecom systems. Annual Report 2015...

  • Page 4
    ...31, 2015. Forward-looking Statements This annual report contains forward-looking statements concerning the OKI Group's future plans, financial targets, technologies, products, services and performance. These forward-looking statements represent assumptions and beliefs based on data and calculation...

  • Page 5
    ... 2012 2013 2014 2015 March 31) Capital Expenditures Depreciation (property, plant and equipment, at cost) 0 2 0 (As of March 31) 0 2011 2012 2013 2014 2015 -30 (Ended 2011 March 31) 2012 2013 2014 2015 Interest-bearing Debt (left scale) Debt/Equity Ratio (right scale) Annual Report 2015 3

  • Page 6
    ... aggregate full-year dividend of ¥5. OKI considers shareholder return as a management priority and will continue striving to return profit to shareholders in a continuous and stable manner. I look forward to the ongoing support and cooperation of our stakeholders. July 2015 4 Annual Report 2015

  • Page 7
    TO OUR STAKEHOLDERS Hideichi Kawasaki President Oki Electric Industry Co., Ltd. Annual Report 2015 5

  • Page 8
    ...OKI is already generating tangible results for its highly competitive cash recycling ATMs and LED printers, and will take steps to further accelerate business in fiscal year 2015. ATMs are becoming increasingly common in China... • Invest in growth for business expansion 6 Annual Report 2015

  • Page 9
    ...China, at the factory in Shenzhen, China. 3 Preparation for future growth emerging countries in Asia advancing toward future economic development. We believe this trend along with bank needs to improve operating efficiency and customer service... plan targets to build up Annual Report 2015 7

  • Page 10
    ...DEVELOP MARKETS IN EMERGING COUNTRIES Expand the Overseas ATM Business OKI has recorded exponential growth in its shipments of cash recycling ATMs to China in the past 10 years and demand is currently ... high quality of the units to aggressively develop overseas business. 8 Annual Report 2015

  • Page 11
    ... site and proposing optimal solutions for the customers in the Chinese market. We are now taking that approach worldwide. "Know the site" will be our fundamental guiding principle when we confront new, unforeseen challenges, and advance the global development of the ATM business. Annual Report 2015...

  • Page 12
    ... 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 10 Annual Report 2015

  • Page 13
    ...• Expand service provision processes beyond production to include design, staging, and other processes FY2014 (ended March 2015) 40.3 Results FY2015 (ending March 2016) Plan 18.1 19.0 FY2014 (ended March 2015) Results 2.0 FY2015 (ending March 2016) Plan 2.5 3.5 3.5 46.0 Annual Report 2015 11

  • Page 14
    ... Kansai ATM Service Center to bolster our ATM LCM service in western Japan. In addition to ATM monitoring systems, the new center also facilitates business continuity planning (BCP) through duplication of operational support functions in both eastern and western Japan. 12 Annual Report 2015

  • Page 15
    ... types, which have conventionally performed the multi-hop relay function, we have launched coordinator types with wireless master-slave unit functions that aggregate for the purpose of connecting wireless multi-hop networks to online clouds, upper-layer data aggregation devices. Annual Report 2015...

  • Page 16
    ... network technology, is fed various sensor data such as water levels and precipitation amounts from gauges set up at observations points along rivers via wireless transmission, enabling monitoring centers to collect data in real time and confirm changing river conditions. 14 Annual Report 2015

  • Page 17
    ... operating efficiencies. OKI Brasil, established in January 2014, is taking various steps to improve its earnings power such as making more parts internally, standardizing them, and improving the way production lines are put together by harnessing parent company know-how. Annual Report 2015 15

  • Page 18
    ... had been produced in China mainly for the Japanese market, has been transferred back to a plant in Fukushima City, a move that resulted in productivity gains and better quality thanks to efforts to improve production processes in ways that prioritized quality improvements. 16 Annual Report 2015

  • Page 19
    ...manufacturing technologies of the OKI Group, we develop high-end electronic manufacturing services as the virtual factory of our customers. The EMS business provides consigned design and manufacturing services...high-precision lamination and high-precision drilling technologies. Annual Report 2015 17

  • Page 20
    ...sensors and equipment to be connected to networks regardless of the environment. The technology can potentially be integrated with data mining technology for use in the structural monitoring field. Data Mining OKI is developing data... to replicate human intellectual functions. 18 Annual Report 2015

  • Page 21
    ... carried out manually. OKI has combined its energy efficient wireless multihop technology and MEMS sensor technology and created Structural monitoring technology Gateway Acceleration sensors Head end... technologies that enable stress-free and comfortable speech communication. Annual Report 2015 19

  • Page 22
    ... Board members audit the performance of duties by directors. Executive Officer System OKI appoints executive officers to implement operations based on management policies determined by the...Executive officers) Audit A Business Sections, Subsidiaries and Affiliates 20 Annual Report 2015

  • Page 23
    ... OKI Group's Activities Stakeholders Employees Social Responsibilities in Business OKI Group's CSR For more information, please refer to "CSR" and "Environmental Activity" at the following site: CSR Environmental activity http://www.oki.com/en/csr/ http://www.oki.com/en/eco/ Annual Report 2015...

  • Page 24
    MANAGEMENT (As of June 24, 2015) President, Representative Director Senior Executive Vice President and Member of... Yuichiro Katagiri Kuninori Hamaguchi*2 Audit & Supervisory Board Member Kaoru Yoshida*2 22 Annual Report 2015 *1 Outside Directors *2 Outside Audit & Supervisory Board Members

  • Page 25
    ... 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 2015 23

  • Page 26
    ... Per share amounts: Net income (loss) per share Cash dividends per share Number of shareholders Number of employees ¥ 40.03 ¥ 5.00 84,926 20,653 36.21 ... annual report are translated from yen, for convenience only, at ¥120 = U.S. $1.00, the approximate exchange rate prevailing on March 31, 2015....

  • Page 27
    ...Annual Report for Oki Electric Industry Co., Ltd. and its Consolidated Subsidiaries OVERVIEW OF THE FISCAL YEAR ENDED MARCH 31, 2015... ¥352.5 billion. In the solutions & services business, despite a decrease in financial systems,...in China, and the effect of consolidation of the subsidiary in Brazil....

  • Page 28
    ...new customers as OKI ...2015 Net Income (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) 26 Annual Report 2015

  • Page 29
    ... to customers, its performance and financial position may be affected. (Billions of yen) R&D Expenses/ R&D Expenses to Net Sales 6.0 20 14.0 13.0 10 3.1 2.7 13.8 3.0 2.6 0 (Ended March 31) 0 2013 2014 2015 R&D Expenses (left scale) R&D Expenses to Net Sales (right scale) Annual Report 2015...

  • Page 30
    ...number of risks specific to overseas business activities, including country risk and foreign currency ï¬,uctuation risk. The OKI Group operates production sites in Thailand, China, and Brazil. The OKI... may impact the OKI Group's performance and financial position. 28 Annual Report 2015

  • Page 31
    ...Fluctuations The OKI Group holds shares in listed companies as part of its investment securities portfolio. Falling share prices may lead to valuation losses or declines in unrealized gains on such holdings, which may impact the OKI Group's performance and financial position. Annual Report 2015 29

  • Page 32
    CONSOLIDATED BALANCE SHEET Oki Electric Industry Co., Ltd. and consolidated subsidiaries As of March 31, 2015 Millions of yen Thousands of U.S. dollars (Note 2) ASSETS Current assets: Cash and cash equivalents (...,025 6,541 1,758,008 (1,281,541) 476,466 161,025 $ 3,661,316 30 Annual Report 2015

  • Page 33
    ... retirement benefits (Note 8) Other long-term liabilities (Notes 7 and 9) Total long-term liabilities Total liabilities ¥ 2015 2014 2015 44,981 18,348 689 93,780 38,589 15,191 211,580 ¥ 55,410 49,067 859 88,067 ...86,941) 122,916 104,466 658 14,233 1,011,783 $ 3,661,316 Annual Report 2015 31

  • Page 34
    ... STATEMENT OF INCOME Oki Electric Industry Co., Ltd. and consolidated subsidiaries Year ended March 31, 2015 Millions of yen Thousands of U.S. dollars (Note 2) 2015 2014 2015 Net sales Cost... - (1,266) 42,633 312,766 34,825 29,550 (19,658) 44,708 268,050 (7,700) $ 275,758 32 Annual Report 2015

  • Page 35
    ...COMPREHENSIVE INCOME Oki Electric Industry Co., Ltd. and consolidated subsidiaries Year ended March 31, 2015 Millions of yen Thousands of U.S. dollars (Note 2) 2015 2014 2015 Income ...Â¥ 205 $ 268,050 32,750 2,641 (683) 26,233 (141) 60,791 $ 328,850 $ 336,625 $ (7,766) Annual Report 2015 33

  • Page 36
    ...NET ASSETS Oki Electric Industry Co., Ltd. and consolidated subsidiaries Year ended March 31, 2015 Shareholders' equity...875 - - $ 658 (11,625) (11,625) 49,250 283,483 Numbers of shares issued (Thousands) Balance at March 31, 2014 Cumulative effects of changes ... statements. 34 Annual Report 2015

  • Page 37
    ...OF CASH FLOWS Oki Electric Industry Co., Ltd. and consolidated subsidiaries Year ended March 31, 2015 Millions of yen Thousands of U.S. dollars (Note 2) 2015 2014 2015 Cash ï¬,ows ...22,400 423,883 366 - $ 446,650 Â¥ 2,423 Â¥ 5,495 Â¥ 2,546 Â¥ 1,396 $ $ 20,191 45,791 Annual Report 2015 35

  • Page 38
    ... are capitalized at cost. Maintenance and repairs are charged to income. ...line method over their respective estimated useful lives. (i) Leases Depreciation of assets on finance leases which do not transfer ownership of the leased assets to the lessee is calculated by the 36 Annual Report 2015

  • Page 39
    ... only, at ¥120 = U.S.$1.00, the approximate exchange rate prevailing at March 31, 2015. This translation should not be construed as a representation that yen have been, could have been, or could in the future be, converted into U.S. dollars at the above or any other rate. Annual Report 2015 37

  • Page 40
    ... and affiliates at March 31, 2015 and 2014 were as follows: Millions of yen Thousands of U.S. dollars 2015 Investments stated: By the equity method At cost or less Advances Total ¥ 5,162 849 223 ¥ 6,236 2014 ¥ 4,698 997 34 ¥ 5,730 2015 $ 43,016 7,075 1,858 $ 51,966 38 Annual Report 2015

  • Page 41
    ...the obligations with any cash deposited with the bank. The aggregate annual maturities of long-term debt subsequent to March 31, 2015 were summarized as follows: Year ending March 31, 2016 2017 ... available to the Group at March 31, 2015 was ¥24,777 million ($206,475 thousand). Annual Report 2015 39

  • Page 42
    ...and accounts receivable from customers, which are operating receivables, by carrying out customer credit investigations in ... Oki Group's policy. (b) Disclosure about fair value of financial instruments The fair values of financial instruments at March 31, 2015 ... sheets. 40 Annual Report 2015

  • Page 43
    ... the length of service. The lump-sum...2015 966,625 23,983 19,108 39,333 (48,208) - $ 1,000,858 *The plan assets include the Company's retirement benefit trust of ¥48,044 million ($400,366 thousand) and ¥48,414 million for the years ended March 31, 2015 and 2014, respectively. Annual Report 2015...

  • Page 44
    ... service cost Unrecognized actuarial loss/(gain) Unrecognized transition obligation arising from the initial adoption of a new method of accounting Total ¥ (4,642) (23,435) - ¥ (28,078) 2014 ¥ (8,161) (20,836) 2,120 ¥ (26,877) 2015 $ (38,683) (195,291) - $ (233,983) 42 Annual Report 2015

  • Page 45
    ...36% of the total plan assets for the year ended 31 March, 2015 and 42% of the total plan assets for the year ended 31 ...2015 $ 129,483 126,500 42,291 38,641 26,050 23,375 16,000 13,641 10,858 46,341 473,225 (350,925) 122,300 (111,508) (31,316) (28,375) (11,833) (183,041) $ (60,741) Annual Report 2015...

  • Page 46
    ... reserve equals 25% of the capital stock account. 11. RESEARCH AND DEVELOPMENT EXPENSES Research and development expenses for the years ended March 31, 2015 and 2014 were as follows: Millions of yen Thousands of U.S. dollars 2015 ¥ 13,755 2014 ¥ 12,959 2015 $ 114,625 44 Annual Report 2015

  • Page 47
    ... Accounts receivable Accounts receivable Accounts payable ¥ 123 993 ¥ (0) 4 30 ¥ 33 4,901 ¥ 6,017 Note: Fair value is based on the quotes presented by the financial institutions. Annual Report 2015 45

  • Page 48
    ...2015 ¥ 28 - 20 ¥ 7 2014 ¥ 175 6 160 ¥ 21 2015 $ 233 - 166 $ 58 Depreciation is computed by applying the straight-line method over the estimated useful lives of the related assets assuming that the Company guarantees a nil residual value at the end of the term of each lease. 46 Annual Report...

  • Page 49
    ...March 31, 2015, the following employee stock option plans of the Company had been approved by the shareholders: Date of approval by shareholders Grantees Type of shares to be issued Number of shares ...of a subsidiary Common stock 509,000 shares ¥ 248 July 1, 2009- June 25, 2017 Annual Report 2015 47

  • Page 50
    ...063 ¥ 483,112 - 483,112 27,196 412,514 13,204 11 4,698 13,424 Thousands of U.S. dollars 2015 Segments Info-Telecom Systems For the year ended March 31 $ 2,937,541 $ 1,077,258 Sales to third parties ...thousand) and ¥209,605 million at March 31, 2015 and 2014, respectively. 48 Annual Report 2015

  • Page 51
    REPORT OF INDEPENDENT AUDITORS Annual Report 2015 49

  • Page 52
    ... OKI IDS OKI Data OKI Digital Imaging M L Supply OKI Data Manufacturing and Engineering Service OKI Micro Engineering OKI Techno Power Systems OKI Metaltech OKI Sensor Device OKI Engineering OKI Proserve OKI Electric Cable AMERICAS OKI Data Americas OKI Data de Mexico OKI Brasil OKI Data do Brasil...

  • Page 53
    ... Held by Shareholder Type (As of March 31, 2015) Japanese corporations and others Foreign corporation and others 11.8% 26.4% Japanese individual investors Japanese financial institutes 23.3% 38.5% • All company and product names included in this annual report are trademarks or registered...

  • Page 54
    This report is printed with VOC (volatile organic compounds) free vegetable based ink, using "waterless printing" on FSCTM certified paper.