Omron 1999 Annual Report Download

Download and view the complete annual report

Please find the complete 1999 Omron annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 50

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50

OMRON CORPORATION ANNUAL REPORT 1999
ANNUAL REPORT 1999
YEAR ENDED MARCH 31, 1999

Table of contents

  • Page 1
    ANNUAL REPORT 1999 YEAR ENDED MARCH 31, 1999

  • Page 2
    ... ...1 To Our Shareholders ...2 Management Topics: Reform of Management Structure...5 Board of Directors ...9 Review of Operations ...10 Omron's Environmental Conservation Activities ...16 Financial Section ...18 Independent Auditors' Report...43 International Network ...44 Corporate Data...47

  • Page 3
    ... No. 128. 2. Cash dividends per share are the amounts applicable to the respective year, including dividends to be paid after the end of the year. 3. The U.S. dollar amounts represent translations of Japanese yen at the approximate exchange rate at March 31, 1999, of ¥121=$1. NET SALES (Billion...

  • Page 4
    ... 1999, ended March 31, 1999, OMRON initiated a share buyback program and retired five million shares and introduced a stock option plan for its directors to encourage them to keep growth in investors' value as their chief management goal. O MRON Corporation changed the nature of its corporate...

  • Page 5
    ... that sells personal computers and peripherals; a semiconductor sales business in Japan; and an electronic cash register business in Europe. PERSPECTIVES B A y designating fiscal 2000 as "Year One of OMRON's Corporate Transformation," the Company will further progress with reforms in management...

  • Page 6
    ... strategy, guide decision making, increase shareholder trust, and improve corporate worth. Managing officers, on the other hand, will focus on the management of individual business units and promote business activities that are more clearly focused on customer needs. In addition, in April 1999 OMRON...

  • Page 7
    ... management structure reforms so that the creation of corporate governance and customer-oriented business operations can be thoroughly accomplished. AIMS OF REFORMING THE MANAGEMENT STRUCTURE OMRON is carrying out the necessary management structure reforms for both employees and divisional units...

  • Page 8
    ... group, the Business Development Group, will be established to provide the necessary administrative and management support. Industrial Automation Company The Industrial Automation Company manufactures and sells control components and systems used in automatic systems in industries. Sales by the...

  • Page 9
    ...teller machines (ATMs), ticket vending machines at train stations, automated passenger gates, and traffic control systems. In these domains, the company is a pioneer, anticipating trends and developing new models, thus winning customer confidence. The company also understands such social changes as...

  • Page 10
    ... terminal adapters, image scanners, and uninterrupted power supplies. OAT and SCC provide computer systems that satisfy customers through software and system construction. Masato Mori Senior General Manager, Business Development Group The markets and customers of each division are changing rapidly...

  • Page 11
    ... BOARD OF DIRECTORS Chairman and Representative Director Nobuo Tateisi Representative Director and Chief Executive Officer Yoshio Tateisi Directors and Executive Vice Presidents Soichi Koshio Hideki Masuda Norio Hirai Tatsuro Ichihara Director and Senior Managing Officer Akio Imaizumi CORPORATE...

  • Page 12
    ... both factory information and standardization at manufacturing sites. Enhancing DeviceNet By adapting I/O Link Units (C-200HW-DRT21), Multiple I/O Terminal (GT1 series), Inverter (3GFV), Digital Controller (E5EK), Intelligent Flag (V600), and RS 232C Interface Unit (DRT1232C2) for open networks, we...

  • Page 13
    ...Due to the stricter controls on energy consumption in factories and offices and the increased number of ISO 14000 certification applications by companies, demand for products in this area is growing. Demand for temperature controllers, digital panel meters, and electric-powered monitors is rising as...

  • Page 14
    ... new outlets. However, export of ATMs to other Asian countries was favorable. In the retail systems market, although some overseas sales subsidiaries were sold, sales of maintenance services by domestic subsidiaries increased. As a result of the preceding factors, total sales by the Social Business...

  • Page 15
    ... to growth in the market for security and identity-confirmation products, sales of the FP-1000 scanner for fingerprint recognition are expected to be substantial. Keyless entry systems allow for remote locking and unlocking of vehicle doors and trunks. This power window switch has an antipinching...

  • Page 16
    ..., we will work to develop and offer new retail options in response to changes in consumer buying patterns. '95 '96 '97 '98 '99 OMRON's body-fat monitor creates a new alternative to the present standard for daily health checks. The smallest and lightest blood pressure monitor in the world...

  • Page 17
    ...Co., Ltd. (OMS), of the Open Systems Division, to Soft Bank Corporation. Consequently, OMS was excluded from OMRON's consolidated financial accounts after August 1998. OMS's main areas of business involve the wholesale of PCrelated hardware, various peripheral devices, and software. '95 '96 '97 '98...

  • Page 18
    ...Japan (16 sites) (Nov., '96 to Jan. 99) TAIPEI (Feb. '99) KUALA LUMPUR JAKARTA (Dec. '98) (Aug. '97) ASIA/PACIFIC ACHIEVING ISO 14001 CERTIFICATION • Recognizing that achieving ISO 14001 certification is a passport to becoming a global and "green" corporation, OMRON sees the certification as...

  • Page 19
    ..., many issues must be addressed. OMRON will continue to develop and improve upon its technologies and products utilizing the four Rs as its guide. ECO-PRODUCTS CERTIFICATION SYSTEM OMRON's Eco-Products Certification System was introduced before the introduction of the ISO 14021 Environmental Label...

  • Page 20
    ... per share data) 1999 1998 1997 1996 1995 Net Sales: Control Components and Systems ...Â¥267,503 Social Business ...135,872 Specialty Products ...51,338 Healthcare ...43,729 Open Systems ...31,908 Others ...24,930 ...Costs and Expenses: Cost of sales...Selling, general and administrative expenses...

  • Page 21
    ... production, machine tool, and measurement control businesses in the United States as well as sluggish economies in Asia. In contrast, there was a slight sales increase in Europe. SOCIAL BUSINESS: The Social Business Division was formed in 1998 by combining the Electronic Fund Transfer Systems...

  • Page 22
    ...our compact car related products manufactured under the new standard contributed to a rise in sales of automotive electronic components in the domestic market. Overseas, sales of automotive electronic components were brisk, supported by the strong automotive industry in the United States. HEALTHCARE...

  • Page 23
    ...previous fiscal year-end. MEASURES TO ACCOMODATE THE EURO OMRON has started shifting the currency for most of its business transactions with its subsidiaries in Europe to the euro since April 1999. Group subsidiaries' sales in countries that use the euro account for approximately 10% of consolidated...

  • Page 24
    ...to ensure a stable supply of products to customers after the start of the year 2000. 2. Current Situation The implementation of countermeasures in each field is proceeding as per the completion deadlines set out in OMRON's Year 2000 Guidebook. In some cases, the implementation of countermeasures may...

  • Page 25
    ...systems Production line facilities and equipment Personal use PCs and associated networks CAD tools, design and development equipment Building facilities and common equipment at business locations Equipment located at logistics centers Confirming the readiness of parts vendors and OMRON distributors...

  • Page 26
    ... BALANCE SHEETS OMRON Corporation and Subsidiaries March 31, 1999 and 1998 Millions of yen Thousands of U.S. dollars (Note 2) 1999 ASSETS 1999 1998* Current Assets: Cash and cash equivalents ...Â¥ 88,900 Short-term investments (Note 4) ...1,054 Notes and accounts receivable-trade ...134,183...

  • Page 27
    ...' EQUITY 1999 1998* Current Liabilities: Bank loans (Note 5) ...Â¥ 27,946 Notes and accounts payable-trade...70,971 Accrued expenses...20,924 Income taxes payable ...9,020 Other current liabilities...26,625 Current portion of long-term debt (Note 5) ...2,167 Total Current Liabilities ...Long...

  • Page 28
    ... (Note 2) 1999 Net Sales ...Â¥555,280 Costs and Expenses: Cost of sales ...364,314 Selling, general and administrative expenses ...136,734 Research and development expenses ...42,383 Interest expenses, net (Note 5) ...862 Foreign exchange loss-net ...2,766 Other income, net ...(28) Total ...Income...

  • Page 29
    ... for the portion realized upon sale or liquidation of investments in foreign entities ...Net change in foreign currency translation adjustments during the year...Minimum pension liability adjustments ...Unrealized gains on available-for-sale securities: Unrealized holding gains arising during...

  • Page 30
    CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY OMRON Corporation and Subsidiaries Years ended March 31, 1999, 1998 and 1997 Millions of yen Accumulated other comprehensive income (loss)* Number of common shares issued Common stock Additional paid-in capital Legal reserve Retained earnings ...

  • Page 31
    ... and investment securities...(1,725) Termination and retirement benefits ...4,178 Deferred income taxes ...(6,358) Minority interests ...31 Loss on sale of business entities...286 Changes in assets and liabilities, net of effects of business entities sold: Notes and accounts receivable-trade, net...

  • Page 32
    ... termination and retirement benefits, accrual of deferred income taxes relating to these adjustments and other temporary differences, and accounting for prior years' stock dividends at market value. Certain reclassifications have been made to amounts previously reported in order to conform to 1999...

  • Page 33
    ...organized into five principal business units, as described below. Control Components and Systems include a wide range of products, including sensors, relays, switches, printed circuit boards and computer systems for factory automation. These products are primarily used by manufacturers of electronic...

  • Page 34
    ... use by the automotive industry and high-technology electronic components and equipment directed at the office automation industries. Healthcare includes blood pressure monitors, nebulizers and infrared therapy devices aimed at both the consumer and institutional markets. Open Systems supply network...

  • Page 35
    ...165 8,546 8,711 Debt securities...91 Equity securities ...322,893 Total marketable investment securities ...322,984 - 136,876 136,876 - 91 (52,298) 407,471 (52,298) 407,562 Total ...$329,116 $140,174 $(53,017) $416,173 Net unrealized holding gains on available-for-sale securities, net of related...

  • Page 36
    ...any price in the open market or otherwise and may be redeemed at the Company's option prior to maturity. The convertible bonds are redeemable, in whole or in part, beginning October 1997 at 106% of face value, decreasing 1% per year. The number of contingently issuable shares of common stock related...

  • Page 37
    ...benefit obligations and the fair value of the plan assets at March 31: Millions of yen 1999 1998 Thousands of U.S. dollars 1999 Change in benefit obligations: Benefit obligations at beginning of year...Â¥154,614 Service...Amounts recognized in the statement of cash flows consist of: Accrued liability ...

  • Page 38
    ...% of the issue price of new shares, with the minimum of the par value thereof, to be recorded as common stock. The portion which is to be recorded as common stock is determined by resolution of the Board of Directors. Proceeds in excess of the amounts designated as common stock have been credited to...

  • Page 39
    ...152 Termination and retirement benefits...6,266 Enterprise taxes ...568 Intercompany profits...2,522 Marketable securities...- Allowance for doubtful receivables...407 Gain on sale of land ...- Minimum pension liability adjustment ...5,834 Other temporary differences...4,709 Tax credit carryforwards...

  • Page 40
    ... 31, 1999, 1998 and 1997 were as follows: Millions of yen 1999 1998 1997 Thousands of U.S. dollars 1999 Net sales ...Â¥167,546 Total assets ...122...1999, the assumed exercise of stock options, giving effect to the incremental shares, was anti-dilutive and has been excluded from the computation. Cash...

  • Page 41
    ...for the year ...Ending balances ...Unrealized gains on available-for-sale securities: Beginning balances ...Change for the year ...Ending balances ...Total accumulated other comprehensive income (loss): Beginning balances ...Change for the year ...(11,954) (1,401) (5,737) (7,138) 6,598 (1,518) 5,080...

  • Page 42
    ... bonds, the fair values are estimated based on quoted market prices. For other issues, except capital lease obligations, the fair values are estimated using the present value of discounted future cash flow analysis, based on the Companies' current incremental issuing rates for similar types...

  • Page 43
    ... or losses of open contracts. Dealer quotes are available for most of the Companies' derivatives; otherwise, pricing or valuation models are applied to current market information to estimate fair value. The Companies do not use derivatives for trading purposes. (1) Interest rate swap contracts: The...

  • Page 44
    ... their short-term cash investments with high-credit-quality financial institutions. Concentrations of credit risk with respect to trade receivables, as approximately 75% of total sales are concentrated in Japan, are limited due to the large number of well-established customers and their dispersion...

  • Page 45
    INDEPENDENT AUDITORS' REPORT To the Board of Directors and Shareholders of OMRON Corporation We have audited the accompanying consolidated balance sheets of OMRON Corporation and subsidiaries as of March 31, 1999 and 1998, and the related consolidated statements of income, comprehensive income, ...

  • Page 46
    ... City, Metro Manila, The Philippines Phone: 63-2811-2831 Fax: 63-2811-2582 --India Representative Office 59 Hemkunt, Opp. Nehru Place, New Delhi 110 048, India Phone: 91-11-623-8431 Fax: 91-11-623-8434 MARKETING AND MANUFACTURING OF SOCIAL BUSINESS SYSTEMS OMRON Business Systems Singapore (Pte...

  • Page 47
    ...C A S OMRON Dualtec Automotive Electronics, Inc. 2270 Bristol Circle, Oakville, Ontario, L6H 5S3 Canada Phone: 1-905-829-0136 Fax: 1-905-829-0432 North America REGIONAL HEADQUARTERS OMRON Management Center of America, Inc. 1300 Basswood, Suite 100, Schaumburg, IL 60173, U.S.A. Phone: 1-847-884-0322...

  • Page 48
    ...Bosch, The Netherlands Phone: 31-73-6481811 Fax: 31-73-6420195 OMRON Electronics Manufacturing of Germany G.m.b.H. Robert-Bosch Strasse 1, P.O. Box 1165, D-71154 Nufringen, Germany Phone: 49-70-32-8110 Fax: 49-70-32-81199 MARKETING AND/OR MANUFACTURING OF CONTROL COMPONENTS AND SYSTEMS OMRON Europe...

  • Page 49
    ... Number of shareholders: 27,733 STOCK LISTINGS Tokyo Stock Exchange Osaka Securities Exchange Kyoto Stock Exchange Nagoya Stock Exchange Frankfurt Stock Exchange TRANSFER AGENT The Mitsubishi Trust and Banking Corporation 1-4-5, Marunouchi, Chiyoda-ku, Tokyo 100-8388, Japan (As of March 31, 1999...

  • Page 50
    Karasuma Nanajo, Shimogyo-ku, Kyoto 600-8530, Japan Phone: (075) 344-7000 Fax: (075) 344-7001 Home page: http://www.omron.co.jp (Japanese) http://www.omron.com (English) This annual report is printed on paper made using a mixture of bagasse and recycled paper. Printed in Japan