Toshiba 2015 Annual Report Download

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Table of contents

  • Page 1

  • Page 2
    ... to the inappropriate accounting issue at Toshiba. Following delays due to the inappropriate accounting issue, we submitted our FY2014 Annual Securities Report on September 7, 2015. At the end of the same month, our new management team was launched following the approval by our shareholders at the...

  • Page 3
    ...world community." That commitment will remain unchanged under the new management team. We will engage in CSR management that contributes to society through business activities that place top priority on human life, safety and compliance, and are committed to making every effort to revitalize Toshiba...

  • Page 4
    ... of Toshiba Group's Management Philosophy Basic Commitment of the Toshiba Group Toshiba Group's mission Toshiba Brand Statement United Nations Global Compact* Responsibilities as a global enterprise * UN Global Compact: A voluntary corporate citizenship initiative concerning human rights, labor...

  • Page 5
    ... Business Review Energy & Infrastructure Community Solutions Healthcare Systems & Services Electronic Devices & Components Lifestyle Products & Services Others 17 19 21 22 23 25 26 27 Research & Development and Intellectual Property CSR Management of Toshiba Group 31 Respect for Human Rights CSR...

  • Page 6
    ...Special Investigation Committee comprising internal committee members from the Company as well as an outside attorney-at-law and public certified accountant, and conducted a self-led investigation into the relevant facts. The Special Investigation Committee identified 05 TOSHIBA Annual Report 2015

  • Page 7
    ... Report from the Independent Investigation Committee. Parallel to the above investigations, the Company conducted a self-check of the Company and all of its consolidated subsidiaries as of March 31, 2015, regarding matters such as whether there had been any cases in which accounting standards...

  • Page 8
    ... to the foregoing accounting treatments, the Company also made corrections such as to the recognition or timing of recognition of impairments of fixed assets pertaining to the visual products business, the PC business and the semiconductor business (mainly discrete and system LSIs), and made...

  • Page 9
    ... current and former directors and executive officers of the Company bear liability for negligence in their duties related to the inappropriate accounting, and whether the Company should enforce liability against current and former directors and executive officers. TOSHIBA Annual Report 2015 08

  • Page 10
    ... New organization Management Reform Division Promote measures and policies relating to management revitalization Reform of corporate culture, reform of staff work processes Business Execution Side Representative Executive Officer, President & CEO New organization Internal Management System...

  • Page 11
    ... secure an effective "monitor and supervise business execution" function, the Company decided that outside directors will constitute over half the members of the Board of Directors. iii. Ensuring the composition of a Board of Directors that takes the expertise of its members into account Recognizing...

  • Page 12
    ...the business execution side, the Company established an internal reporting function in the Audit Committee Office. The Company also clarified that all members of the Audit Committee have the right to access all reports made to the business execution side using the whistleblower system. iii. Securing...

  • Page 13
    ...presidents of each in-house company to the executive officer in charge of finance and accounting, in his or her capacity as the chief financial officer (CFO), so as to secure the independence of the finance and accounting functions. Reform of the internal reporting system Together with establishing...

  • Page 14
    ...) per share attributable to shareholders of Toshiba Corporation (EPS) is computed based on the weighted-average number of shares of common stock outstanding during each period. Diluted EPS assumes the dilution that could occur if convertible bonds were converted or stock acquisition rights were...

  • Page 15
    ...and home appliances business in the Lifestyle Products & Services segment, while the Energy & Infrastructure segment recorded higher operating income. Net income (loss) (Billions of yen) Return on sales (%) 2.5 158.3 Total equity attributable to shareholders of Toshiba Corporation (Billions of yen...

  • Page 16
    ... Greenhouse Gases (10kt-CO2) 306 260 274 279 302 In FY2014, Toshiba Group reduced Greenhouse Gases (GHG) emissions by 40,000 tons year on year mainly by installing PFC removal equipment and promoting energy-saving measures. Going forward, we will continue to make steady efforts to reduce total GHG...

  • Page 17
    ...545 4,492 6,957 5,908 Toshiba Group requests its suppliers to consider human rights, labor, occupational health and safety and the environment in their operations, and we hold briefings on CSR management in the supply chain and monitor its implementation at business sites in Japan and overseas. In...

  • Page 18
    ... products Energy & Infrastructure P.19 28% Steam turbines Control rod clusters Transformers Rechargeable battery SCiBTM Railway systems Community Solutions P.21 19% Water treatment systems Elevators Commercial air-conditioning systems Lighting systems POS systems Healthcare Systems & Services...

  • Page 19
    Sales (Billions of yen) Operating income (loss) (Billions of yen) Capital expenditures (Billions of yen) Operating income ratio (%) (Payment basis) R&D expenditure (Billions of yen)... 1.4 1.1 FY10 FY11 FY12 FY13 FY14 FY10 FY11 FY12 FY13 FY14 FY10 FY11 FY12 FY13 FY14 TOSHIBA Annual Report 2015 18

  • Page 20
    ... basis, surveyed by US research company). The Company will continuously put emphasis on receiving new orders and further enhance the service business centering on maintenance, with the aim of expanding the thermal power business in North America. Steam turbine (image) 19 TOSHIBA Annual Report 2015

  • Page 21
    ...wind, hydro, and solar energies, as well as geothermal energy, developing activities to receive orders all over the world. Business Overview / Energy & Infrastructure Kenya's geothermal power complex which started commercial operation Enhancement of marketing system for railway transportation drive...

  • Page 22
    ... products & services Broadcasting systems, Road equipment systems, Water supply and sewerage systems, Environmental systems, Elevators, Escalators, LED lights, Light fixtures, Industrial light parts, Light Bulbs, Commercial air-conditioner, Compressors, POS systems, Multi-function peripherals Sales...

  • Page 23
    ... 2014, Toshiba opened the Healthcare Technology Center. At this center, Toshiba will accelerate creation of new products and services using genomic analysis and biological sensors and also promote development of the next-generation products through collaboration with outside research institutes...

  • Page 24
    ...continuously fulfill a variety of market needs, such as larger capacity and downsizing of memory which is required for SSD for smartphone, tablet PCs, memory cards, data centers, etc. 3D flash memory "BiCS FLASHâ„¢" based on the world's first 48-layer stacking process 23 TOSHIBA Annual Report 2015

  • Page 25
    ... a new company, which will consolidate Oita Operations and Iwate Toshiba Electronics Co., Ltd. into a single business entity, to secure efficient management of the 200mm and 150mm wafer production lines. Going forward, we will concentrate management resources in areas where we anticipate market...

  • Page 26
    ... In April 2014, Toshiba established Toshiba Lifestyle Products & Services Corporation to manage Visual Products and White Goods business integrally under the harsh business conditions. In the Visual Products business, additional business structural reforms were forced through in order to improve...

  • Page 27
    ...ICT-related human resources in the Group to enhance abilities of development, the company will create new IoT businesses which connect "things" such as devices to networks and comprehensively monitor, analyze, and control them. Starting production and shipment of Vegetables at Plant Factory Toshiba...

  • Page 28
    ... Electronic Components, Inc. Toshiba Medical Research Institute.USA., Inc. Development Centers of in-house Companies - IoT Technology Center - Power and Industrial Systems Research and Development Center - Healthcare Development Center - Center for Semiconductor Research and Development Corporate...

  • Page 29
    ... technologies win high evaluations from society. We have received the following major awards: .FY2014 National Commendation for Invention The Prize of Chairman of Japan Business Federation Invention of high performance NAND flash memory .2014 Top 100 Global Innovators TOSHIBA Annual Report 2015...

  • Page 30
    ...-of-sale information management) to a cloud service, where they can be browsed with a smart phone application. In the future we want to take advantage of the accumulated data and aim to commercialize a data management platform that will work with a variety of services. Healthcare Genome analysis...

  • Page 31
    ... and Low Power Hardware-based Network Protocol Processing Technology Contribution Prize Development of variable magnet force motor The Prize of The Chairman of Japan Business Federation Invention of high performance NAND flash memory The Electrical Science and Engineering Promotion Award Electronic...

  • Page 32
    ... Center Working Group Quality Chief Quality Executive Committee Corporate Citizenship Corporate Citizenship Promotion Group Health & Safety Central OH&S Committee Human Rights/ Employee Satisfaction Diversity Strategy Promotion Committee Human Rights Enlightenment Committee In-house companies...

  • Page 33
    ... NGOs Global guidelines and the industry's standards of conduct Evaluations made by investors and SRI organizations Evaluation review points Relevance to Toshiba Group's management strategies Relevance to global business development Initiatives developed by Toshiba Group TOSHIBA Annual Report 2015...

  • Page 34
    ...Technology Industries Association Topics Workshop of Human Rights is held in China and Japan Comment I expect Toshiba to build good In order to promote the understanding of human rights issues within the Toshiba Group, we call on BSR, a US-based non-profit organization which promotes CSR, to hold...

  • Page 35
    ... systems. CSR Management in the Supply Chains Toshiba Group requests our suppliers to consider human rights, labor, occupational health and safety as well as environment in their operations, and we hold briefings on CSR management in the supply chains and monitor their implementation in business...

  • Page 36
    ... resource development, environmental communication and conservation of biodiversity Energy saving & 3R activities in Philippines Human resource development by Toshiba Environmental School Aiming to establish ourselves as one of the world' s foremost eco-companies Topics Excellent ECPs* (product...

  • Page 37
    ...must be observed by all Toshiba Group executives and employees. In order to respond to changes in the global business environment, we revised these standards in October 2014, in order to strengthen our efforts to promote respect for human rights and CSR management in the supply chain, and to enforce...

  • Page 38
    ... based on global standards such as the EICC* Code of Conduct. In FY2014, for example at Toshiba Information Equipment (Philippines), Inc., we audited 12 supplier companies, checked labor conditions such as working hours, safety management at the workplace and other factors, in order to ensure...

  • Page 39
    ... in the Supply Chain" and "Environmental Management"-business departments and corporate-related departments work together to focus on furthering these aims. Product manufacture Sales Distribution Use Disposal Employees, Suppliers Respect for human rights Occupational health and safety Proper...

  • Page 40
    ... Assurance In order to improve the reliability of the environmental and social performance data presented in this report, Toshiba Group requested Lloyd's Register Quality Assurance Ltd.* to conduct a third-party verification of the data. In FY2014, we requested a review of social performance data...

  • Page 41
    ... Encourage Women's Success (Ministry of Economy, Trade and Industry) Toshiba chosen as one of the Nadeshiko Brand FY2014 March 2015 CDP Japan 500 Climate Change Report 2014 Disclosure score is 100/100, and performance is classed in the 'A' band. (Global 1st place) TOSHIBA Annual Report 2015 40

  • Page 42
    ... hand in hand. Shinzo Maeda Chairman of the Board Board of Directors meeting Toshiba's Governance System We have determined, based on the discussions by the Management Revitalization Committee, the basic policy of our corporate governance system described below. 41 TOSHIBA Annual Report 2015

  • Page 43
    ...Board of Directors that takes the expertise of its members into account Enabling an Outside Director to become Chairman of the Board of Directors (2) Reinforcement of the Board of Directors' Supervisory Function Reinforcement of the support structure for Outside Directors Establishment of 'Executive...

  • Page 44
    ... 5 41 PerformanceTotal Fixed based Position Company Amount Compensation Compensation Toshiba Director Corporation Director Executive officer 103 6 108 - - - 103 114 Outside directors Executive officers Toshiba Corporation Attendance Record at Meetings of Board of Directors and Audit Committee...

  • Page 45
    ..., strategy and a renewed commitment to good governance. Shareholder and stakeholder confidence have been damaged by the accounting scandal, but Toshiba is making a concerted effort to reform governance and prevent any recurrence. Everybody who works for Toshiba Group, executives and employees alike...

  • Page 46
    ...priorities as a global enterprise. In tackling reform of corporate governance and culture, working with my fellow outside directors, I will engage in candid discussion at meetings of the Board of Directors and in committees, to make sure Toshiba Group is heading in the right direction. Koichi Ikeda...

  • Page 47
    ...to identify growth opportunities. As an outside director, I am committed to assisting Toshiba in its efforts (i) to fundamentally strengthen corporate governance, (ii) renew the business strategy taking into consideration its excellent development capabilities and outstanding production technologies...

  • Page 48
    ... Chief Operating Officer, Asahi Breweries, Ltd. Chairman of the Board, Asahi Breweries, Ltd. Present Advisor to the Board, Asahi Breweries, Ltd Present Outside Director of the Company Kouichi Ikeda Member, the Nomination Committee Member, the Compensation Committee 47 TOSHIBA Annual Report 2015

  • Page 49
    ... 2007 Chief Executive Officer, Deloitte Touche Tohmatsu LLC November 2010 Senior Advisor, Deloitte Touche Tohmatsu LLC (until May 2011) September 2015 Present Outside Director of the Company Ryoji Sato Member, the Nomination Committee Chairman, the Audit Committee TOSHIBA Annual Report 2015 48

  • Page 50
    ... 2014 Present Senior Advisor, SHISEIDO Co., Ltd Directors September 2015 Present Outside Director of the Company Shinzo Maeda Chairman of the Board Member, the Nomination Committee Member, the Compensation Committee Masashi Muromachi Representative Executive Officer President and Chief Executive...

  • Page 51
    ...Representative Executive Officer Corporate Senior Executive Vice President Fumiaki Ushio Representative Executive Officer Corporate Executive Vice President Masayoshi Hirata Representative Executive Officer Corporate Senior Vice President Executive Officers Corporate...TOSHIBA Annual Report 2015 50

  • Page 52
    ..., 2015) Board of Directors Audit Committee Compensation Committee Nomination Committee Audit Committee Office Internal Audit Div. President & Chief Executive Officer Strategic Planning Div. • Corporate Representatives - America, Europe, Asia, China New Energy Solutions Project Team Procurement...

  • Page 53
    ...Electronic Devices & Components Group Lifestyle Products & Services Group Healthcare Company Healthcare Technology Center Toshiba Medical Systems Corp. Semiconductor & Storage Products Company Discrete Semiconductor Div. • Himeji Operations - Semiconductor • Kitakyushu Operations Mixed Signal...

  • Page 54
    ... line-up of turbines. English official trade name changed to "Toshiba Corporation." Japanese official trade name changed to "Toshiba Corporation." Absorbed Nippon Atomic Industry Group Co., Ltd. Introduced corporate executive officer system. Introduced in-house company system. Changed registered...

  • Page 55
    ... Accounted for by the Equity Method 55 57 59 60 61 62 63 64 65 66 Major indices of the Data Section have been compiled chronologically based on the fiscal years. For the details of financial information for the year ended March 31, 2015, please refer to the "Financial Review 2015." TOSHIBA Annual...

  • Page 56
    ...flow*12 Market capitalization*13 Other Data Number of employees (Consolidated) (Thousands) Number of employees (Non-Consolidated) (Thousands) Ratios of Consolidated to Non-Consolidated Performance (Times) (Net sales) • Operating income (loss) has been determined under financial reporting practices...

  • Page 57
    ...(Times) = (Operating income (loss) + Interest and dividends)/ Interest expense *12 Free cash flow = Net cash provided by operating activities + Net cash used in investing activities *13 Market capitalization = Common stock price [Year-end/Yen/Close] Ã- Total issued shares TOSHIBA Annual Report 2015...

  • Page 58
    ... 31 ASSETS Current Assets: Cash and cash equivalents Notes and accounts receivable, trade Notes Accounts Allowance for doubtful notes and accounts Inventories Deferred tax assets Prepaid expenses and other current assets 2011 2012 2013 2014 2015 ¥ 258,840 47,311 1,082,104 (17,079) 851,265...

  • Page 59
    ...,592 197,559 1,993,015 1,045,005 582,671 230,877 1,858,553 Equity Attributable to Shareholders of Toshiba Corporation: Common stock Additional paid-in capital Retained earnings Accumulated other comprehensive loss Treasury stock, at cost 439,901 399,551 475,474 (519,605) (1,461) 793,860 309,364...

  • Page 60
    ... quarter Year ended March 31 Net sales Operating income (loss) Net income (loss) attributable to shareholders of Toshiba Corporation Basic earnings (loss) per share attributable to shareholders of Toshiba Corporation (¥) 2015 2014 2015 2014 2015 2014 2015 2014 ¥1,369,636 ¥1,414,005 ¥1,608,232...

  • Page 61
    ...826 2013 ¥ 31,587 2014 ¥ 75,270 2015 ¥(19,015) Other Comprehensive Income (Loss), Net of Tax: Net unrealized gains and losses on securities ...Attributable to Noncontrolling Interests Comprehensive Income (Loss) Attributable to Shareholders of Toshiba Corporation TOSHIBA Annual Report 2015 60

  • Page 62
    ...48,662 ¥ 33,777 ¥ 50,997 ¥ 28,194 ¥ 86,846 *1 Includes the acquisition of Landis+Gyr AG in the amount of ¥(129,450) million. *2 Includes the additional purchase of shares of Westinghouse Group from noncontrolling interests in the amount of ¥(124,724) million. 61 TOSHIBA Annual Report 2015

  • Page 63
    ...Community Solutions Net sales Share of net sales (%) Operating income Operating income ratio (%) Number of employees (Thousands) R&D expenditures Depreciation Capital expenditures Total assets Healthcare Systems & Services Net sales Share of net sales....6 419.0 (21.4) TOSHIBA Annual Report 2015 62

  • Page 64
    ...2014 ¥ 47,925 204,781 203,063 235,678 131,568 385,003 - - ¥1,208,018 ¥ 2015 - 198,229 208,754 239,430 163,302 - 340,502 70,555 ¥1,220,772 For more information on corporate bonds and ratings, please visit our IR website at http://www.toshiba.co.jp/about/ir/en/stock/bond.htm 63 TOSHIBA Annual...

  • Page 65
    ...33.9% Securities companies in Japan 20 36.6 38.9 37.3 33.9 Overseas investors 30.9% 2.8% Companies in Japan 0 2011 2012 2013 2014 2015 3.0% Major Shareholders The Master Trust Bank of Japan, Limited (trust accounts) Japan Trustee Service Bank, Limited (trust accounts) Toshiba Stock...

  • Page 66
    Stock Information Common Stock Price Trends Year ended March 31 Common stock price (Yen, fiscal year) High Low Nikkei average (Yen) Number of shares issued (Millions of shares) Market capitalization (Billions of yen) Earnings (Loss) per share attributable to shareholders of Toshiba Corporation (Yen)...

  • Page 67
    ... 20 above * Listed Company in stock market • Toshiba Medical Systems Corporation • Toshiba Plant Systems & Services Corporation* • Toshiba Solutions Corporation • Toshiba TEC Corporation* • Toshiba Trading Inc. Overseas • Advance Energy UK Ltd. • Landis+Gyr A.G. • Landis+Gyr Holding...

  • Page 68
    Corporate Data As of March 31, 2015 1-1, Shibaura 1-chome, Minato-ku, Tokyo, Japan (headquarters) Founded: Number of Employees: Fiscal Year: Authorized Number of Shares: Number of Shares Issued: Number of Shareholders: Stock Exchange Listings: ISIN: Ticker Code on the Tokyo Stock Exchange: ...

  • Page 69
    ... website Toshiba Corporation makes every effort to provide shareholders and investors with reliable information in a timely manner, and toward this we make full and proactive use of the Internet in our IR activities. On our investor relations site we publish a wide range of resources, including news...

  • Page 70
    lssued February 2016