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ANNUAL REPORT 1999
YEAR ENDED MARCH 31, 1999
CONTENTS
Financial Highlights ........................................................................ 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
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HIGHLIGHTS
OMRON Corporation and Subsidiaries
Years ended March 31, 1999, 1998 and 1997
Millions of yen
(except per share data)
Thousands of
U.S. dollars (Note 3)
(except per share data)
1999
1998
1997
1999
Net sales............................................................................................ ¥555,280
8,249
Income before income taxes and minority interests .........................
2,174
Net income ........................................................................................
Net income per share (yen and U.S. dollars, Note 1):
¥611,795
42,243
18,704
¥594,261
39,248
15,739
Basic..............................................................................................
¥ 8.3
Diluted ...........................................................................................
8.3
13.0
Cash dividends per share (yen and U.S. dollars, Note 2)..................
Total assets ....................................................................................... ¥580,586
321,258
Total shareholders’ equity .................................................................
36,696
Capital expenditures (cash basis) .....................................................
42,383
Research and development expenses ..............................................
¥71.4
69.8
13.0
¥593,129
343,066
35,896
39,914
¥60.1
58.8
13.0
¥610,930
333,102
29,956
35,188
$4,589,091
68,174
17,967
$0.07
0.07
0.11
$4,798,231
2,655,025
303,273
350,273
Notes: 1. Net income per share amounts are computed based on the Statement of Financial Accounting Standards (SFAS) No. 128, “Earnings per Share,” which is
effective from the fiscal year ended March 31, 1998. All prior years’ data presented has been restated to conform with the provisions of SFAS 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 ¥)
612
564
555
525
490
INCOME BEFORE
INCOME TAXES
AND MINORITY
INTERESTS
(Billion ¥)
42
39
32
25
NET INCOME
(Billion ¥)
TOTAL ASSETS
(Billion ¥)
NET INCOME
PER SHARE
(DILUTED)
(¥)
19
16
15
12
613 611
587
593 581
69.8
58.8
54.5
49.4
8
2
8.3
’95 ’96 ’97 ’98 ’99
’95 ’96 ’97 ’98 ’99
’95 ’96 ’97 ’98 ’99
’95 ’96 ’97 ’98 ’99
’95 ’96 ’97 ’98 ’99
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TO OUR SHAREHOLDERS
Yoshio Tateisi
Representative Director and Chief Executive Officer
OMRON’S CORPORATE GOVERNANCE
As part of concrete measures undertaken in fiscal 1999,
OMRON Corporation changed the nature of its corporate
ideals in May 1998. Aiming at setting its corporate gover-
nance in place for the years ahead, OMRON will optimize its
ended March 31, 1999, OMRON initiated a share buyback pro-
gram and retired five million shares and introduced a stock
option plan for its directors to encourage them to keep growth
management philosophies to respond to the challenges occurring
in investors’ value as their chief management goal.
in the social and business environments now and in the future.
The six management philosophies we are focusing on to
BUSINESS PERFORMANCE IN FISCAL 1999
make our corporate motto of “At work for a better life, a better
world for all” a reality are as follows:
• Offer maximum satisfaction to customers
• Consistently accept challenges
• Focus on gaining shareholders’ trust
• Respect individuals
• Become a responsible corporate citizen
• Maintain corporate ethics while promoting
corporate activities
OMRON recorded an unfavorable performance in fiscal
1999, as did many other Japanese companies. Con-
solidated net sales decreased 9.2%, to ¥555,280 million. This
slump is mainly because domestic sales by the Control Com-
ponents and Systems Division, our core business division,
drastically dropped 21.5% from the previous fiscal year due to
a cooling down of the economic environment for domestic
investment in equipment. The division’s domestic sales ac-
counted for nearly half of total sales. Overseas, stalled Asian
To obtain shareholders’ trust and respond to shareholders’
economies, a deceleration of European economies from the
expectations, we must
• improve corporate values,
second half of the term due to depressed exports, and a drop
in customers’ capital investment in the United States affected
• appropriately distribute corporate profits to share-
the division’s sales achievement.
holders’, and
Operating income plummeted 74.3% from the previous fiscal
• disclose management data and achieve transparency
year, to ¥11,849 million, primarily as a result of the sales decrease
(accountability).
in the Control Components and Systems Division, which is tra-
ditionally the most profitable business unit in OMRON.
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RESULTS OF STRUCTURAL REFORMS
A ccording to its Seventh Medium-Term Management
Plan, from April 1996 to March 1999, OMRON promoted
structural reforms to create a growth-oriented structure, estab-
lish an innovative cost structure, and revitalize corporate
resources.
In fiscal 1999, the final year of the Seventh Medium-Term
Management Plan, we had set our overall management goal
as 7% return on equity (ROE) and intended to prepare a plan
for achieving a two-digit ROE in the Eighth Medium-Term
Management Plan. However, OMRON was unable to achieve
OPERATING INCOME
(Million ¥)
FY
’96
’97
’98
’99
6.9
7.5
7.5
39,239
40,905
46,032
2.1
11,849
Operating income
Ratio of operating income to net sales
this target, recording a 0.7% ROE in the fiscal year under
In fiscal 1999, within our initial budget, we created a growth-
review. Moreover, OMRON has postponed the start of its
oriented structure and strengthened our sales force. We also
Eighth Medium-Term Management Plan, which had been set to
placed high priority on sharpening our management focus on
begin in April 1999, because drawing up a new management
securing profits and reviewing major projects that affect profits.
plan was difficult amid the uncertain prospects of the Japanese
To be more growth oriented, we revised business projects
economy. Therefore, we will start fiscal 2000 with a short-term
and worked on improving our business infrastructure (by such
management plan, which covers the current fiscal year.
means as suspending the OMRON Total Fair, reviewing office
Regarding the creation of a growth-oriented structure,
integration, and cutting personnel costs and general expenses).
through
the Seventh Medium-Term Management Plan,
Furthermore, we restructured our business based on the con-
although
the business environment appeared daunting,
cepts of prioritization and focus, selling off three businesses:
OMRON executed its corporate growth strategies—a set of
OMRON Microcomputer Systems Co., Ltd. (OMS), a company
visionary concepts comprising the areas of intelligent transport
that sells personal computers and peripherals; a semiconduc-
systems (ITSs); multimedia-oriented factory automation (FA);
tor sales business in Japan; and an electronic cash register
and cyber-community-related, total healthcare, and informa-
business in Europe.
tion sensing businesses.
In line with the current business trend of prioritization and
PERSPECTIVES
focus, OMRON reviewed each operation from the viewpoints
of future growth and profit potential, identifying its strengths
and working to tighten its focus on the most important issues.
B y designating fiscal 2000 as “Year One of OMRON’s
Corporate Transformation,” the Company will further
progress with reforms in management, business, and fixed
As for establishing an innovative cost structure, we have
cost structures, leading to improved corporate value.
integrated various administrative systems to create a new
infrastructure. OMRON will continue to streamline the func-
REFORMING THE MANAGEMENT STRUCTURE
tions of its Head Office by simplifying its organizational roles,
relocating personnel for strengthening line functions, stream-
lining business offices, and constantly reviewing its balance
A s described on pages 5 to 8, the transformation of our
management structure is a prerequisite for both employ-
ees and divisional units to become self-reliant, eliminating an
sheets. Regarding revitalizing corporate resources, we will
excessive codependence among management, divisional
continue the structural reform of fixed costs but with more
units, and staff members. To not only survive but to beat the
emphasis in certain areas, as described in detail later in this
competition in the global market, we urgently need to set up
report.
corporate governance systems and execute them through
In addition, we have reorganized our sales system by re-
customer-oriented business strategies.
structuring sales channels, reinforcing direct sales promotion,
To realize this, while aiming at achieving a simple manage-
and concentrating corporate resources on the sensing business.
ment style that emphasizes speed and flexibility, we will reform
the roles of individual directors and the Board of Directors as a
whole by adding the new position of executive director, whose
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role is to concentrate on OMRON Group management and
Groupwide policies and strategies, initiate meaningful discus-
sion on corporate 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 introduced an internal
company management system that allows the independent
operation of businesses to provide the optimal level of cus-
tomer satisfaction. It is our ultimate vision to turn OMRON into
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
(INCLUDING R&D EXPENSES) TRENDS
(Million ¥)
FY
’96
27.3
’97
’98
’99
27.8
29.1
32.3
143,550
165,351
178,318
179,117
Selling, general and administrative expenses, including R&D expenses
Ratio of selling, general and adminstrative expenses, including
R&D expenses, to net sales
a powerful enterprise group consisting of several different
Utilizing human resources effectively includes:
business units, each with their own highly competitive techno-
• Reducing the domestic full-time workforce by 1,000 employees,
logical strengths.
• Reducing the number of domestic contract workers (part-
time and temporary workers) by 1,000, and
REFORMING THE BUSINESS STRUCTURE
• Shifting a greater share of personnel to frontline positions.
In reforming our business structure, we will further apply the
principles of prioritization and focus to each business unit as
well as each product type, concentrating our corporate
Although we are implementing measures, including Head
Office reform, aimed at utilizing human resources more effec-
tively within two years, we will try to complete the program as
resources on them. By concentrating corporate resources on
early as possible.
selected businesses and forming relationships with outside
Although the business environment in fiscal 2000 appears
organizations, each internal company will reinforce its own
daunting, we will endeavor to avoid a second consecutive year
competitive power and improve its value, transforming the
of a decline in profits and will solidify our footing on the rev-
entire OMRON Group into a highly profitable corporation.
enue recovery path under our profit-oriented management. To
Furthermore, we will shift a considerable number of admin-
these ends, the Company will combine the power of the entire
istrative staff to frontline sales. This will help OMRON more
OMRON Group to strive to reach targets while gathering the
accurately assess the steadily changing needs of its cus-
momentum that will allow it to take the offensive in fiscal 2000.
tomers and offer them greater satisfaction.
To reach our goal of becoming a competitive, high-quality
growth company in the 21st century, we will continue to
REFORMING THE FIXED COST STRUCTURE
progress with our structural reforms.
In fiscal 1999, the ratio of selling, general and administrative
expenses, including R&D expenses, to net sales increased
to a record high of 32.3%. This rise is because sales plunged
drastically due to the deteriorated economic environment dur-
ing the
final year of OMRON’s Seventh Medium-Term
Management Plan for which the initial, aggressive expense
budget was earmarked. Therefore, OMRON has designated
the improvement of overall fixed costs, including selling, gen-
eral and administrative expenses, as its most important issue.
To improve the ratio of selling, general and administrative
expenses, including R&D expenses, to net sales to the same
level as in the past, we will continue to not only efficiently con-
trol expenses but also improve sales efficiency and reduce
personnel costs by utilizing human resources effectively.
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Management
Topics: Reform of
Management
Structure
OMRON will implement
its own sophisticated management
structure reforms so that the
creation of corporate governance
and customer-oriented business
operations can be
thoroughly accomplished.
AIMS OF REFORMING
The functions of Groupwide corporate decision
THE MANAGEMENT STRUCTURE
making and the management of individual business
OMRON is carrying out the necessary management
operations will be clearly distinguished from each
structure reforms for both employees and divisional
other. This will enable decisions to be made more
units to become self-reliant and eliminate an exces-
quickly and flexibly.
sive codependence among management and divi-
sional units and among the divisional units themselves.
5
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AIMS OF REFORMING THE ROLES
OF DIRECTORS AND THE BOARD
OF DIRECTORS
1) Strengthen OMRON’s corporate
governance and Groupwide
management
2) Enhance the competitive strength
of the Company in the global market
3) Increase the speed of decision mak-
ing at the management level
Directors will be able to concentrate more
on OMRON Group management by over-
seeing the Company’s business opera-
tions from a more global perspective.
Reforming the directors’ roles
We intend to clearly separate decision
making at the management level from
business implementation. Directors will
devote themselves to making OMRON’s
Group strategies and corporate policies.
The number of directors has been
reduced to 7 from 30 to better facilitate
essential discussion on Group direction
and strategies and quick decision mak-
ing at the management level.
In addition, the position of Managing
Officer has been created for directors
who will be responsible for daily busi-
ness operations.
Reinforcement of management
audit function
The functions and authority of auditors
will be strengthened so that they can
monitor and evaluate OMRON’s Board
of Directors more strictly and thor-
oughly in respect to compliance with
laws, regulations, and ethics.
ADVISORY BODIES TO THE BOARD
OF DIRECTORS
Nominating Advisory Committee
• Recommends nominees for the Board
of Directors and as managing officers
Corporate Ethics Advisory Committee
to the Board of Directors
• Expresses opinions regarding high
ethical standards in management
Corporate Management Advisory
Committee to the Board of Directors
• Consults outside experts to get manage-
ment advice from a broad perspective
AIMS OF INTRODUCING
THE INTERNAL COMPANY
MANAGEMENT SYSTEM
1) Reinforce OMRON’s ability to create
market and customer value and prac-
tice customer-oriented business
operations
2) Speed up decision making in
business operations, dispersing the
authority necessary for self-reliant
business management and business
strategy execution Companywide
OMRON is responsible for fulfilling
commitments to goals provided by its
top management before creating mar-
ket and customer value by utilizing the
advantages of each company’s exper-
tise to honor such commitments.
By introducing and establishing an
internal company management system,
the self-reliance of OMRON’s opera-
tions will be enhanced and the resultant
increase in decision-making speed and
market flexibility will be realized.
OUTLINE OF THE COMPANIES
OMRON has been reorganized into five
companies and one business develop-
ment group.
Companies
Industrial Automation Company
Electronic Components Company
Social Systems Business Company
Healthcare Company
Creative Service Company
Business Development Group
To develop areas of business that are
not regulated to operate individually, a
new supervisory 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 compo-
nents and systems used in automatic
systems in industries. Sales by the
Control Components and Systems
Division in fiscal 1999 accounted for a
6
Soichi Koshio
Company President,
Industrial Automation Company
little more than 40% of OMRON’s con-
solidated net sales, and the overseas
sales ratio is approximately 50%, as
overseas sales have grown steadily.
With a 40% share of the market in
Japan, the company is a leader in con-
tributing to the development of manu-
facturing technologies. Although the
business environment appears daunting
in domestic corporate capital investment,
many business opportunities remain
overseas.
In the global market, the company
offers many services, such as those
involving laborsaving automation, envi-
ronmental protection, safety improve-
ment, and inspection-automization
solutions for highly developed produc-
tion systems. Focusing on such growth
areas, the company will reinforce mea-
sures toward systemizing and network-
ing. The company will continue to supply
customers with high-technology control
systems and promote its abundant
lineup of control components. Further-
more, OMRON is expanding its lineup
of environment-friendly and measure-
of-safety products and next-generation
programmable logic controllers (PLCs)
that will be the core of next-generation
control components and systems.
Finally, the company will be implement-
ing measures to boost its marketing
efforts by strengthening solution pro-
posal capabilities.
6
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Tsutomu Narita
Company President,
Electronic Components Company
Tadao Tateisi
Company President,
Social Systems Business Company
Tsunehiko Tokumasu
Company President,
Healthcare Company
Electronic Components Company
The Electronic Components Company
manufactures and sells electric and
electronic components found in such
consumer goods as home appliances
and automobiles as well as such business
equipment as telephone systems, vend-
ing machines, and office equipment.
More than 50% of the company’s
consolidated net sales are overseas.
The products of the company are indis-
pensable for companies in the Japanese
electronics industry and sales are ex-
pected to grow further.
The mission of the company is to
establish a system that can support the
development and supply of advanta-
geous electronic components globally.
The company will develop and expand
high-technology products, such as
microsensors that use semiconductor
processes, microconnectors, and multi-
function power window switches for
vehicles in the global market, aimed
at expanding businesses in the future.
Social Systems Business
Company
The Social Systems Business Company
supplies automatic equipment and sys-
tems to railway and subway companies,
banks and financial institutions, retail
companies, as well as government and
municipal offices, thereby contributing
to providing society with convenience,
amenity, and safety. Typical products
of the company are automated teller
machines (ATMs), ticket vending ma-
chines at train stations, automated
passenger gates, and traffic control
systems. In these domains, the com-
pany is a pioneer, anticipating trends
and developing new models, thus
winning customer confidence. The
company also understands such social
changes as Big Bang deregulation in
the banking industry and the advance-
ment of information technology (IT),
digitization, and networking business
opportunities. Following this, the com-
pany will provide multiple terminal
equipment that features purchasing,
ticket reservation, and issuing capabili-
ties; information retrieval functions;
conventional ATM functions; as well as
new IT-related and public transportation
system related products. At the same
time, the company will strive to
enhance profitability.
Healthcare Company
The Healthcare Company sells health-
care equipment, such as blood pres-
sure monitors, digital thermometers,
body-fat monitors, and ultrasonic elec-
tronic pulse massagers. Such products
draw on OMRON’s highly advanced
sensing technologies. Healthcare is a
growing business, as people today are
increasingly concerned with living an
active life and maintaining good health.
Amid such favorable circumstances,
the company has drawn up the follow-
ing three policies to expand business:
7
(1) Strengthen the power of technologi-
cal development: Through core vital
sensing technologies, the company will
provide customers with added value.
(2) Globalize: The company aims at
becoming the number one provider in
this area in the world.
(3) Establish a service business: The
company will develop software that
helps customers monitor and analyze
their health conditions in pursuit of
healthier lives. Through this healthcare
consultation service, the Company aims
to establish an integrated healthcare
business, thus maximizing customer
satisfaction.
Creative Service Company
OMRON began its outsourcing busi-
ness 10 years ago and established the
Creative Service Company subsidiary
in 1995. Since then, this subsidiary has
been providing the OMRON Group with
such outsourcing services as distribu-
tion, advertising and public relations,
personnel, information systems, admin-
istration, employee benefit schemes,
and accounting. Now, the company is
expanding its business to provide ser-
vices to companies outside of OMRON
as well. In this expansion, it will use
the technologies and know-how it has
acquired from providing in-house ser-
vices for OMRON. The outsourcing
service industry is expected to grow
significantly in the future. Through the
establishment of its outsourcing business,
7
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potential. The Office Automation (OA)
Major Accounts Division and the Card
Business Promotion Division implement
mechatronic original-equipment manu-
facturing (OEM) operations. The OA
Major Accounts Division provides the
peripheral equipment loaded in OA
equipment, such as sorters and bank
note recognition units. The Card Busi-
ness Promotion Division provides vari-
ous card systems, such as card readers
and ID tags, which are indispensable in
today’s card-reliant society. The Periph-
eral Equipment Division and OMRON
subsidiaries OMRON Alfa Tech (OAT)
and Sanno Consulting (SCC) carry out
PC-related business and system inte-
gration service business. The Peripheral
Equipment Division supplies modems,
terminal adapters, image scanners, and
uninterrupted power supplies. OAT and
SCC provide computer systems that
satisfy customers through software
and system construction.
Yoshifumi Kajiya
Company President,
Creative Service Company
the company aims to support OMRON’s
further growth and development.
Business Development Group
The Business Development Group con-
sists of businesses with high growth
Masato Mori
Senior General Manager,
Business Development Group
The markets and customers of each
division are changing rapidly. In response,
the group will focus on speed and
develop and strengthen the business
quickly in all divisions of the Group.
OMRON Corporate Organization Chart
Shareholders’
Meeting
Board of
Directors
Corporate Strategy Planning Div.
Corporate Auditing HQ
Industrial Automation Company
Executive Secretarial Dept.
Electronic Components Company
Representative Director
and Chief Executive Officer
Corporate Communications HQ
Board of
Corporate
Auditors
Auditors
Personnel and General Affairs HQ
Corporate Financial and Accounting HQ
Law and Intellectual Property HQ
Healthcare Company
Corporate Auditor
Staff Group
Information Management Promotion HQ
Manufacturing Administration HQ
Creative Service Company
Social Systems Business Company
Quality & Environment HQ
Corporate Research and Development HQ
Business Development Group
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BOARD OF DIRECTORS
aSeated (left to right): Nobuo Tateisi, Yoshio Tateisi
Standing (left to right): Akio Imaizumi, Tatsuro Ichihara, Norio Hirai, Hideki Masuda, Soichi Koshio
Senior Managing Officers
Tsunehiko Tokumasu
Tsutomu Narita
Tadao Tateisi
Masato Mori
Yoshifumi Kajiya
BOARD OF DIRECTORS
CORPORATE AUDITORS
Tomoaki Nishimura
Motoki Tamura
Takayuki Yamashita
Yoshio Nakano
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
Managing Officers
Masaaki Sadatomo
Shingo Akechi
Hisao Sakuta
Minoru Tamura
Tsukasa Yamashita
Fujio Tokita
Yutaka Takigawa
Keiichiro Akahoshi
Fumio Tateisi
Shinya Tozawa
Kazuo Nomura
Yasuhira Minagawa
Akihiko Otani
Kuniyasu Kihira
Tsutomu Ozako
Toshio Ochiai
Masaki Kobayashi
Soichi Yukawa
Hiroki Toyama
Kojiro Tobita
(As of June 25, 1999)
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REVIEW OF OPERATIONS
Control
Components
and Systems
SALES
(Billion ¥)
314
291
275
268
248
As Component
of Net Sales
In fiscal 1999, the economic downturn accelerated in the domestic market.
In addition to stagnated consumption and structural overcapacity, the decline
in capital investment due to the worsening of corporate earnings continued in
48.2%
all industries.
Sales by the Control Components and Systems Division, which depend
mainly on the demand for production machines accompanying corporate
capital investments in the manufacturing industry, were greatly affected by
the decline in the domestic market. Overseas, North America saw a downturn in semiconductor
production and measurement control businesses, and sales there decreased from the previous
fiscal year, mainly due to stagnated Asian economies. In the term under review, total sales for
the division fell 14.7% from the previous fiscal year.
Due to the deterioration of the business environment, our customers are tending to refrain
from purchasing new equipment and are instead working on improving the productivity of their
existing facilities. In other market trends, demand is shifting toward safety and environmental
protection markets.
We will promote further proposal-type sales activities by solving problems for our customers
from the management level to the production level, providing both products and services in the
areas of computerization, standardization, and globalization to realize improvements in productivity.
’95 ’96 ’97 ’98 ’99
CS1 Programmable controllers and programming software for Windows®
FA SYSTEMS
By applying communication functions linking different kinds of networks and improving design
efficiency, CS1 realizes the function of a large-size PLC in a medium size. With the concepts of
“Windows Support Software” supporting rapid software design and development and “Flexible
Networking” flexibly responding to standard networks in OA/FA fields, we have accelerated
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 (DRT1-
232C2) for open networks, we not only enhance our product lines for DeviceNet but dedicate
ourselves to the spread of DeviceNet in Japan through promoting ODVA (Open DeviceNet
Vender Association) activities.
Next-generation programmable
controller SYSMAC-CS1
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SENSING DEVICES AND COMPONENTS
Reinforcing the lineup of universal sensors and advanced sensors products
We have newly introduced the inspection sensor, VISION SENSOR (F400), which recognizes
complex colors, and 3D DIGITAL FINE SCOPE (VC-1000), which boasts high cost performance
for high-quality, low-defect production. We developed the OPTICAL THERMOMETER (Z5R) and
PLASMA MONITOR (Z5pm) for improving semiconductor production. We also released the
DIGITAL FIBER AMPLIFIER (E3X-DA), whose product concepts are easy handling due to clear
display and simple select switches as well as high cost performance with selectable functions.
We are continuously promoting our lineup of new fiber photoelectric sensors and are research-
ing the market for using the UV POWER MONITORS in the food and PCB industries. In addi-
tion, we plan to introduce sensors for safety and environment control in the near future.
INDUSTRIAL DEVICES AND COMPONENTS
In Japan, the Energy Conservation Law was amended in April 1999. Due to the stricter controls
on energy consumption in factories and offices and the increased number of ISO 14000 certifi-
cation 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 efforts to conserve energy increase.
New temperature controller NEO
With a housed power supply using the newest control integrated circuits (ICs), the NEO
has achieved 42% lower power consumption with a 22% smaller body. Furthermore, it has a
life expectancy three times longer than our conventional types.
CONSUMER AND COMMERCE (C&C) COMPONENTS
Sales of relays, switches, and connectors were stagnant during the term in review. In the field
of C&C components, the competitive edge provided through strategic manufacturing location,
product procurement, and pricing on a global scale has become increasingly important in
regard to supply-chain management issues. Products in development are microlens arrays for
liquid crystal projectors and micromachined sensors (MMSs) developed for housing liquefied
petroleum gas and city gas meters. The high-precision MMS sensor has been mass produced
for the first time by employing mounted semiconductor sensors.
Digital fiber amp E3X-DA
Temperature controller
NEO
The ultracompact and high-quality
XF2H connector and the B3B tactile
switch are used in portable IT (multi-
media) equipment.
11
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Social Business
As Component
of Net Sales
ELECTRONIC FUND TRANSFER SYSTEMS (EFTS) AND PUBLIC
INFORMATION AND TRANSFER SYSTEMS (PITS)
SALES
(Billion ¥)
145
138 136
127 126
24.5%
In the public transportation systems market in fiscal 1999, sales slipped due
to the decline in the number of large-scale projects that had contributed to
the division’s sales growth in the previous fiscal year.
Although sales of related equipment for specified customers increased
and sales of a new U-type automatic passenger gate rose favorably, overall
divisional sales decreased.
As a new market for PITS, a boarding pass reader for the airline industry and automatic fare
collection systems for overseas markets were developed by utilizing the know-how gained in
developing OMRON’s public transportation systems. These products contributed slightly to sales.
In the traffic control systems market, sales remained approximately the same as in the previ-
ous fiscal year, despite some deliveries of large traffic control systems to locations in Kyushu
being held over to fiscal 2000. One such system has already been delivered there.
In the financial services market, sales stagnated because of capital investment restraint by
domestic banks and the unwillingness of consumer-loan businesses to open 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
’95 ’96 ’97 ’98 ’99
maintenance services by domestic subsidiaries increased.
As a result of the preceding factors, total sales by the Social Business Division declined 1.7%
from the previous fiscal year.
Sales of multimedia ATMs, including the Cyber Gate VQ4511, an open system version of our
IX-ATM, and foreign currency exchange machines for the finance market, are expected grow.
Meanwhile, Big Bang deregulation in the banking industry has allowed for automated finance
machines, such as cash dispensers and ATMs, to be installed in such retail outlets as convenience
stores and service stations. Competition to sell and install these machines has become fierce.
In the financial OEM market, demand for lower costs and shorter delivery times has intensified
through market diversification and fierce competition. Among the options we are considering in
order to meet this demand is forming alliances with competitors.
A boarding pass reader
Traffic control systems
12
Cyber Gate VQ4511
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Specialty
Products
SALES
(Billion ¥)
51
47 47
42
39
This new fingerprint recognition system is
set to revolutionize the security market.
As Component
of Net Sales
Despite a drop in production by copy machine manufacturers, a downturn in
the price of personal computer peripheral devices, and a decline in sales of
scanners for overseas markets, sales of automotive electronic components
9.2%
were brisk in North America, while sales of compact car related products
manufactured under the new standard were favorable. These factors con-
tributed to an 8.6% growth in sales by the Specialty Products Division in
comparison with the previous fiscal year.
AUTOMOTIVE ELECTRONIC COMPONENTS
In North America, mainstay relays occupied the top share of the market, while in the domestic
market they maintained the same share as the previous fiscal year. Electric window switch
sales increased from the previous term, thanks to OMRON’s technological advantages. Keyless
entry systems maintained the top share of the market by having the advantage of being a pio-
neer in the domestic market and expanding into the North American, European, and South
Korean markets.
OFFICE AUTOMATION (OA) MAJOR ACCOUNTS
As the trend toward digitization and networking in the field of copy machines is rapidly expanding,
we are strengthening our performance in proposing solutions to customers regarding sensing
’95 ’96 ’97 ’98 ’99
components, paper-handling equipment, and image-processing units.
PERIPHERAL EQUIPMENT
Sales of our core external modems are expected to fall because of the growing popularity of
internal modems. For this reason, we will increase our marketing efforts with regard to internal
modems and mobile communications related products and focus on the sales of terminal
adapters, which are expected to continue to grow.
Due 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.
This power window switch has an
antipinching function to prevent the
window from closing on arms or
other obstacles. When an obstacle
is encountered, the switch causes
the window to stop and reverse
automatically.
13
Keyless entry systems allow for remote lock-
ing and unlocking of vehicle doors and
trunks.
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The Healthcare Division achieved steadily rising sales in the domestic market,
thanks primarily to its offering a wide range of products that meet the needs
of consumers’ growing interest in maintaining and improving personal health.
7.9%
Sales of HBF-302 body-fat monitors, massagers, and fitness equipment
targeted at consumers’ interest in staying slim and improving overall personal
health were favorable. In the core business of blood pressure monitors and
digital thermometers, sales of the newly introduced HEM-751 digital handy
blood pressure monitor and MC-505 ear-type digital thermometers soared. Overseas, blood
pressure monitor sales, which fluctuated in every selling area, were favorable despite fierce price
competition, resulting in total sales for the division growing 7.2% from the previous fiscal year.
In the healthcare service business area, we promoted a newly created service supporting
people’s health improvement. In the midst of selective spending under sluggish consumer
consumption, we will continue to create valuable products and introduce them to the market
in hopes of raising demand. Furthermore, we will work to develop and offer new retail options in
response to changes in consumer buying patterns.
Healthcare
As Component
of Net Sales
SALES
(Billion ¥)
44
41
36
32
29
’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, the
HEM-751 (Upper arm automatic
inflation type)
Ear-type digital thermometers take body
temperature in seconds using advanced
infrared sensor technology.
14
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Open Systems
As Component
of Net Sales
The movement toward computer investment to sharpen the competitive
edge of businesses is still strong. Increasing focus is being placed on inno-
SALES
(Billion ¥)
vation and improving efficiency of in-house activities, improving customer
service, and strengthening tie-ups with business partners through the use
of IT systems. The Open Systems Division provides services, from systems
5.7%
consultation, design, and implementation to the introduction, installation,
operation, and maintainance of the systems, together with various kinds
50 50
of IT infrastructures.
39
35
32
Demand for PC server-centered client server (C/S) system services, such as providing sys-
tems infrastructures, introducing and installing the systems, and supplying system operation
and maintenance services, is growing.
In the systems consulting, designing, and constructing services, we established a business
group specializing in enterprise resources planning and computer telephony integration systems
in the second half of fiscal 1999 and acquired a large-scale project extending through fiscal 2000.
The Open Systems Division’s alliances with the Control Components and Systems Division
and the Social Systems Division are expanding steadily.
We sold OMRON Microcomputer Systems Co., Ltd. (OMS), of the Open Systems Division, to
Soft Bank Corporation. Consequently, OMS was excluded from OMRON’s consolidated finan-
’95 ’96 ’97 ’98 ’99
cial accounts after August 1998. OMS’s main areas of business involve the wholesale of PC-
related hardware, various peripheral devices, and software.
OMRON offers clients added value in IT systems by
combining the latest technology with comprehensive
services.
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OMRON’S ENVIRONMENTAL CONSERVATION ACTIVITIES
Europe
TELFORD
(Feb. ’98)
NUFRINGEN
(Apr. ’99)
DEN BOSCH
(Nov. ’96)
China
DALIAN
(Dec. ’98)
SHANGHAI (3 sites)
(Nov., Dec. ’98 and Feb. 99)
Japan
(16 sites)
(Nov., ’96 to Jan. 99)
SEOUL
(Mar. ’99)
TAIPEI
(Feb. ’99)
KUALA LUMPUR
(Dec. ’98)
JAKARTA
(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 a manifestation of its environmental
management attitude toward promoting continuous reductions in environmental burden.
• Domestically, OMRON established its promotion system in 1995 and acquired ISO 14001
certification in November 1996 and December 1996 for its Ayabe Factory and OMRON
Ichinomiya, respectively, while overseas, OMRON Manufacturing of the Netherlands B.V.
(OMN), a Dutch manufacturing company, achieved ISO 14001 certification around the same
time. In addition, to date, ISO 14001 certification has been achieved at all of OMRON’s 30
sites worldwide: 16 sites in Japan and 14 sites overseas.
• By further strengthening its efforts Groupwide, the OMRON Group is striving to introduce
many innovative ecological products, while working globally to achieve truly environment-
friendly offices and factories.
• The OMRON Group’s major environmental activities include the reduction of factory waste,
the restricted use of harmful substances, and the establishment of a product assessment
system. Such efforts have benefited the Company in a number of ways, including greater
production efficiency and an improved image among our customers.
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North America
TORONTO
(Apr. ’99)
ILLINOIS (2 sites)
(Mar. and May ’99)
DEVELOPMENT OF ENVIRONMENTALLY FRIENDLY PRODUCTS
OMRON is earnestly coping with environmental conservation utilizing the four Rs: Reject,
Reduce, Reuse, and Recycle, as keywords. (Reject the use of harmful substances, Reduce
impact on the environment, and Recycle and Reuse resources)
It is our responsibility as a member of the global community to always conserve the earth’s
limited resources.
In order to continue such environmental activities, 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 Environmental Assertion by Self-Declaration, which is set to
become the global standard. OMRON’s Eco-Products Certification System is intended to pro-
mote the incorporation of environment-friendly features and functions into OMRON products
to enhance their appeal and public recognition. At the same time, this system will help promote
OMRON as a truly environmentally sound company to both its customers and the general public.
OMRON will create the standards for producing the Company’s unique eco-products and
certify those products that satisfy its in-house standards. In catalogs, pamphlets, and on the
products themselves, an eco-label designed by OMRON will be printed or affixed to identify
these eco-products.
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FIVE-YEAR SUMMARY
OMRON Corporation and Subsidiaries
Years ended March 31
Millions of yen (except per share data)
1999
1998
1997
1996
1995
Net Sales:
Control Components and Systems ........................................... ¥267,503
135,872
Social Business .........................................................................
51,338
Specialty Products ....................................................................
43,729
Healthcare .................................................................................
31,908
Open Systems ...........................................................................
24,930
Others ........................................................................................
¥313,642
138,203
47,263
40,793
50,131
21,763
¥291,277
145,172
46,533
36,388
50,187
24,704
¥275,149
125,623
38,687
31,618
38,621
15,591
¥248,023
127,382
42,465
28,790
34,672
8,368
.......................................................................................................
555,280
611,795
594,261
525,289
489,700
Costs and Expenses:
Cost of sales..............................................................................
Selling, general and administrative expenses ...........................
Research and development expenses ......................................
Interest expenses, net ...............................................................
Other, net...................................................................................
364,314
136,734
42,383
862
2,738
387,445
138,404
39,914
682
3,107
388,005
130,163
35,188
1,591
66
342,500
109,117
34,433
2,044
4,943
324,666
100,333
31,223
5,102
3,428
.......................................................................................................
547,031
569,552
555,013
493,037
464,752
Income before Income Taxes and Minority Interests ..............
Income Taxes...............................................................................
Minority Interests.........................................................................
Net Income ...................................................................................
Net Income per Share (yen, Note 1):
8,249
6,044
31
2,174
42,243
23,371
168
18,704
39,248
22,952
557
15,739
32,252
17,039
626
14,587
24,948
12,358
438
12,152
¥ 8.3
Basic .........................................................................................
8.3
Diluted ......................................................................................
Cash Dividends per Share (yen, Note 2) .....................................
13.0
Capital Expenditures (cash basis) ............................................... ¥ 36,696
580,586
Total Assets .................................................................................
321,258
Total Shareholders’ Equity .........................................................
¥71.4
69.8
13.0
¥ 35,896
593,129
343,066
¥60.1
58.8
13.0
¥ 29,956
610,930
333,102
¥55.7
54.5
13.0
¥ 34,079
612,929
318,194
¥50.8
49.4
13.0
¥ 30,954
587,414
297,035
Notes: 1. Net income per share amounts are computed based on the Statement of Financial Accounting Standards (SFAS) No. 128, “Earnings per Share,” which is effective
from the fiscal year ended March 31, 1998. All prior years’ data presented has been restated to conform with the provisions of SFAS 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.
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MANAGEMENT’S DISCUSSION & ANALYSIS
SALES
During fiscal 1999, ended March 31, 1999, the third and final year of the Seventh Medium-Term Manage-
ment Plan, OMRON focused on achieving three structural reforms, namely, creating a growth-oriented
structure, establishing an innovative cost structure, and revitalizing corporate resources. To these ends,
we strove to improve business performance by developing new products, strengthening our sales
force, and restructuring our various businesses.
In the course of restructuring, we sold a personal computer and peripherals sales subsidiary, our
semiconductor sales business in Japan, and our electronic cash register business in Europe.
However, during the fiscal year under review, a drastic drop in private-sector capital investment,
such as that in the domestic semiconductor industry, and sluggish capital investment overseas led to a
significant decrease in sales by the Control Components and Systems Division. Consequently, OMRON’s
consolidated net sales fell 9.2%, to ¥555,280 million ($4,589 million), from the previous fiscal year.
Increases or decreases in sales by each product group or division are as follows:
1999
(14.7)%
Control Components and Systems ........................................
(1.7)
Social Business ......................................................................
8.6
Specialty Products .................................................................
7.2
Healthcare ..............................................................................
Open Systems ........................................................................
(36.4)
Others ..................................................................................... 14.6
The composition of net sales is as follows:
1999
Control Components and Systems .......................................... 48.2%
Social Business ........................................................................ 24.5
9.2
Specialty Products ...................................................................
7.9
Healthcare ................................................................................
5.7
Open Systems ..........................................................................
4.5
Others .......................................................................................
1998
7.7%
(4.8)
1.6
12.1
(0.1)
(11.9)
1998
51.3%
22.6
7.7
6.7
8.2
3.5
1997
5.9%
15.6
20.3
15.1
29.9
58.5
1997
49.0%
24.5
7.8
6.1
8.4
4.2
CONTROL COMPONENTS AND SYSTEMS:
Divisional performance was mixed in fiscal 1999. OMRON’s major product group, the Control Compo-
nents and Systems Division, saw a 14.7% drop in net sales compared with the previous fiscal year, due to
the unfavorable business environment created by the stagnant investment conditions in Japan and down-
turns in semiconductor 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
(EFTS) Division and the Public Information and Transfer Systems (PITS) Division into a single division.
Despite an increase in sales by the maintenance and service business of a domestic subsidiary, fiscal
1999 sales by the Social Business Division decreased 1.7% from the previous fiscal year, due mainly to
the decrease in the number of big projects involving public transportation infrastructure, the stagnation
in demand for electronic fund transfer systems in the Japanese market, and the selling off of some
overseas sales subsidiaries.
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SPECIALTY PRODUCTS:
In fiscal 1999, sales by the Specialty Products Division were up a solid 8.6% from the previous fiscal
year. Despite inventory adjustments by copy machine makers, downturns in the prices of peripheral
devices for personal computers and a decline in sales of scanners for overseas markets, 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:
The Healthcare Division achieved 7.2% sales growth in fiscal 1999 compared with the previous fiscal
year thanks to consumers’ growing interest in self-maintenance and the improvement of health as well
as steady expansion in sales achieved by offering a wide range of products that meet consumer needs.
Overseas, sales of our mainstay digital thermometers were brisk.
OPEN SYSTEMS:
Sales by the Open Systems Division in fiscal 1999 plunged 36.4% from the previous fiscal year. The
Open Systems Division focused on supplying, introducing, and installing systems infrastructure center-
ing on personal computer servers as well as expanding the operation and maintenance services it
provides to customers. On the other hand, OMRON Microcomputer Systems Co., Ltd. (OMS), was
sold to streamline the business.
Sales by foreign subsidiaries in fiscal 1999 generated 30.2% of net sales due to sluggish domestic
sales, compared with 28.0% of net sales in fiscal 1998 and 25.6% in fiscal 1997.
COSTS, EXPENSES, AND INCOME
The ratios of costs, expenses, and income to net sales are as follows:
1999
Net sales ............................................................................. 100.0%
Cost of sales .......................................................................
Gross profit .........................................................................
Selling, general and administrative expenses ....................
Research and development expenses ...............................
Interest expenses, net ........................................................
Income before income taxes and minority interests ............
Income taxes ......................................................................
Net income .........................................................................
65.6
34.4
24.6
7.6
0.1
1.5
1.1
0.4
1998
100.0%
63.3
36.7
22.6
6.5
0.1
6.9
3.8
3.1
1997
100.0%
65.3
34.7
21.9
5.9
0.3
6.6
3.9
2.6
The cost of sales declined marginally, to ¥364,314 million ($3,011 million), during the period under
review. Despite this decline, the ratio of gross profit to net sales deteriorated to 34.4% in fiscal 1999,
down from 36.7% in fiscal 1998, due to the fall in net sales.
However, selling, general and administrative expenses dropped slightly, to ¥136,734 million ($1,130
million), from the previous fiscal year, while research and development expenses increased 6.2%, to
¥42,383 million ($350 million).
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In addition, interest expenses, net, increased to ¥862 million ($7 million) mainly because of higher
debt. Foreign exchange loss—net, totaled ¥2,766 million ($23 million). Income before income taxes and
minority interests plunged 80.5%, to ¥8,249 million ($68 million) from the previous fiscal year, leading
to a decrease in income taxes. Minority interests fell to ¥31 million ($0.3 million).
Net income plummeted 88.4%, to ¥2,174 million ($18 million), from the previous fiscal year, resulting
in a reduction in basic net income per share amounts, from ¥71.4 in fiscal 1998 to ¥8.3 ($0.07) in the
fiscal year under review, and a fall in diluted net income per share, from ¥69.8 to ¥8.3 ($0.07). Neverthe-
less, cash dividends per share applicable to the period were maintained at ¥13.0 ($0.11). ROA and
ROE in fiscal 1999 were 1.4% and 0.7%, respectively, compared with 7.0% and 5.5% in the previous
fiscal year.
FINANCIAL POSITION
Total current assets in fiscal 1999 decreased 2.0%, to ¥322,263 million ($2,663 million), from the previ-
ous fiscal year-end, largely because of declines in inventories and short-term investments. The inventory
turnover rate decreased to 4.2 from 4.3. Total current liabilities, dropped 10.9%, to ¥157,653 million
($1,303 million), due mainly to decreases in notes and accounts payable —trade, accrued liabilities,
income taxes payable, and the current portion of long-term debt. As a result, working capital increased
¥12,811 million, to ¥164,610 million ($1,360 million). The current ratio was 2.04, compared with 1.86 at
the previous fiscal year-end.
Cash and cash equivalents at the beginning of the year were ¥68,365 million ($565 million). Net cash
provided by operating activities declined to ¥29,583 million ($244 million). Depreciation and amortiza-
tion, the main component of cash flows from operating activities, edged up 0.9%, to ¥31,396 million
($259 million), from the previous fiscal year. Net cash used in investing activities climbed to ¥29,011
million ($240 million) and included capital expenditures of ¥36,696 million ($303 million), a rise of 2.2%.
Net cash provided by financing activities was ¥21,629 million ($179 million), mainly reflecting proceeds
from issuance of long-term debt of ¥25,413 million ($210 million). Repayments of long-term debt were
down, at ¥8,956 million ($74 million).
Reflecting the above cash outflows and inflows, cash and cash equivalents at the end of the year
were ¥88,900 million ($735 million). Total indebtedness—bank loans, current portion of long-term debt,
and long-term debt—increased 59.0% to ¥86,723 million ($717 million). Long-term debt increased to
¥56,610 million ($468 million).
Total shareholders’ equity decreased 6.4%, to ¥321,258 million ($2,655 million), from the previous
fiscal year due mainly to climbs in certain elements of accumulated other comprehensive income (loss),
such as cumulative translation adjustments and minimum pension liability adjustments. Total sharehold-
ers’ equity as a percentage of total assets fell to 55.3%, compared with 57.8% at the previous fiscal
year-end. ROE was 0.7%, compared with 5.5% at the 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 net sales and are expected to be greatly impacted by the intro-
duction of the euro in settling their transactions. We are aware that the impact could be fierce price
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competition caused by price equilibrium or leveling as well as the extinction of foreign exchange risks
among old local currencies in the countries using the euro when currency unification is achieved.
However, we feel it difficult to evaluate fairly and adequately how much profits will be affected by the
commercial transactions of these Group subsidiaries.
We expect that fiscal 1999 expenses related to euro currency introduction measures and other such
necessary expenses after fiscal 1999 will not be large. Up to now, and since the introduction of the
euro in January 1999, no crises have occured.
YEAR 2000 COMPLIANCE MEASURES
1. Outline
Recognizing the importance of responding to the year 2000 problem, with respect to internal computer
systems, OMRON has been implementing Companywide countermeasures since November 1996, with
each division participating in finding its own most effective solution. In addition, OMRON has launched
year 2000 countermeasures for its infrastructure and facilities.
In November 1998, OMRON established the Year 2000 Readiness Project Team (headed by
OMRON’s head of Corporate Research and Development Headquarters) to further integrate the
Company’s efforts with regard to both the products it markets and OMRON’s in-house information
infrastructure. The main responsibilities of the Year 2000 Readiness Project Team are to make sure the
necessary actions are carried out properly and in a well-balanced manner from a global perspective.
These actions are: (1) checking and inspecting concerned systems and equipment; (2) compiling and
storing the records of completed tasks; (3) communicating the necessary information to OMRON cus-
tomers and associates; and (4) handling customer and associate inquiries.
In February 1999, OMRON’s Year 2000 Readiness Project Team released to all domestic and over-
seas Group companies the Year 2000 Guidebook. This guidebook outlines plans for identifying, reno-
vating, testing, and implementing year 2000 countermeasures. The guidebook itself is divided into two
sections, one that outlines the basic rules to follow in dealing with year 2000 problems and one that
gives guidelines for preparing OMRON’s infrastructure, products, and supply chain 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
not meet these OMRON deadlines, however, they will be in place before such a time as they could
cause serious problems.
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System Type
Target
Counter-
measures
Completion
Deadlines
Status
Management
information
systems
Divisional
systems
Production
facilities
Office
environment
R&D
environment
Companywide sales, production, End of
and accounting applications
December 1998 accepting dates past the year 2000
Completed. These systems have been
Divisional applications
and systems
Production line facilities
and equipment
Personal use PCs and
associated networks
CAD tools, design and
development equipment
End of
March 1999
End of
March 1999
since February 15, 1999.
Mostly completed. Will be completed
before problems occur.
Some countermeasures have been
delayed due to holdups at the vendor side.
End of
September 1999 dates reset after December 31, 1999.
Some items will need to have their
End of
June 1999
Location
infrastructure
Building facilities and common
equipment at business locations
End of
June 1999
Logistics center
facilities
Equipment located at
logistics centers
Vendor/
distributor
facilities
Confirming the readiness
of parts vendors and
OMRON distributors, etc.
Includes confirmation of
computer systems used
by vendors for electronic
data interchange
End of
June 1999
End of
June 1999
With respect to electronic data
interchange:
• Ensure data exchange formats conform
to industry standards
• No changes planned for nonindustry
standard data exchange formats (will use
“Windowing” for two-digit year dates)
Information regarding the current readiness of OMRON products can be found at www.omron.com/y2k/.
3. Testing
In order to confirm the efficacy of year 2000 countermeasures, in addition to the isolated testing of each
system type, we are planning and carrying out dual testing of interconnected systems. Such dual test-
ing is also being carried out with respect to important vendor systems connected to OMRON systems.
4. Countermeasure Costs
We estimate that OMRON Corporation and OMRON Group companies will spend a total of ¥2.6 billion
implementing year 2000 countermeasures with relation to products, internal information systems, and
equipment and facilities (this figure includes human resources costs and payments to outside vendors).
We had used ¥2.0 billion of this figure by March 1999.
We do not expect that the cost of implementing year 2000 countermeasures will have a large influence
on OMRON Corporation or OMRON Group profits or cash flows.
5. Risk Management
In preparation for the unlikely event that system failures do occur, through forecasting problem scenar-
ios OMRON is working on a risk management plan (scheduled to have been completed by the end of
June 1999) which will enable it to contain and respond to problems as quickly as possible. This plan,
concentrating on mission critical systems, will also enable us to ensure that if problems do occur, there
will be no stoppages and that the situation will quickly be resolved. The plan also outlines communica-
tion procedures and chain-of-command details.
This document is intended to show OMRON’s efforts in ensuring that problems arising due to the changeover in
date to the year 2000 are kept to an absolute minimum. It is not a legally binding document nor a guarantee.
23
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CONSOLIDATED BALANCE SHEETS
OMRON Corporation and Subsidiaries
March 31, 1999 and 1998
ASSETS
Current Assets:
Millions of yen
Thousands of
U.S. dollars (Note 2)
1999
1998*
1999
Cash and cash equivalents ................................................................................... ¥ 88,900
1,054
Short-term investments (Note 4) ...........................................................................
134,183
Notes and accounts receivable—trade .................................................................
(2,450)
Allowance for doubtful receivables .......................................................................
79,535
Inventories (Note 3) ...............................................................................................
11,336
Deferred income taxes (Note 9).............................................................................
9,705
Other current assets ..............................................................................................
¥ 68,365
6,142
138,149
(3,301)
94,981
11,798
12,613
$ 734,711
8,711
1,108,950
(20,248)
657,314
93,686
80,206
Total Current Assets .......................................................................................
322,263
328,747
2,663,330
Property, Plant and Equipment:
Land.......................................................................................................................
Buildings................................................................................................................
Machinery and equipment.....................................................................................
Construction in progress .......................................................................................
50,598
111,263
135,197
4,326
50,166
107,974
143,809
4,124
Total ..................................................................................................................
301,384
306,073
418,165
919,529
1,117,331
35,752
2,490,777
Accumulated depreciation ....................................................................................
(138,489)
(135,591)
(1,144,537)
Net Property, Plant and Equipment ...............................................................
162,895
170,482
1,346,240
Investments and Other Assets:
Investments in and advances to associates .........................................................
Investment securities (Note 4) ...............................................................................
Leasehold deposits ...............................................................................................
Deferred income taxes (Note 9).............................................................................
Other......................................................................................................................
1,770
54,114
12,035
8,834
18,675
Total Investments and Other Assets .............................................................
95,428
1,843
55,336
11,730
7,507
17,484
93,900
14,628
447,223
99,463
73,008
154,339
788,661
Total .......................................................................................................................... ¥580,586
¥593,129
$4,798,231
See notes to consolidated financial statements.
* As restated, see Notes 1 and 15
24
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m
(W) 610pt x (H) 794pt—215 x 280mm
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Millions of yen
Thousands of
U.S. dollars (Note 2)
1999
1998*
1999
Bank loans (Note 5) ............................................................................................... ¥ 27,946
70,971
Notes and accounts payable—trade.....................................................................
20,924
Accrued expenses.................................................................................................
Income taxes payable ...........................................................................................
9,020
26,625
Other current liabilities...........................................................................................
2,167
Current portion of long-term debt (Note 5) ...........................................................
¥ 12,578
88,756
23,117
15,011
29,020
8,466
$ 230,959
586,537
172,926
74,545
220,041
17,909
Total Current Liabilities...................................................................................
157,653
176,948
1,302,917
Long-Term Debt (Note 5).........................................................................................
56,610
33,500
467,851
Deferred Income Taxes (Note 9) .............................................................................
908
11,335
7,504
Termination and Retirement Benefits (Note 7) ......................................................
40,076
24,913
331,207
Other Long-Term Liabilities....................................................................................
1,525
367
12,603
Minority Interests in Subsidiaries ..........................................................................
2,556
3,000
21,124
Shareholders’ Equity (Note 8):
Common stock, ¥50 par value—
Authorized: 495,000,000 shares in 1999 and
500,000,000 shares in 1998
Issued: 257,107,214 shares in 1999 and
262,107,214 shares in 1998..................................................................
Additional paid-in capital.......................................................................................
Legal reserve .........................................................................................................
Retained earnings..................................................................................................
Accumulated other comprehensive income (loss) (Note 13).................................
Treasury stock .......................................................................................................
64,079
98,702
6,811
166,020
(14,012)
(342)
64,079
98,702
6,314
174,686
(715)
—
529,579
815,719
56,289
1,372,066
(115,802)
(2,826)
Total Shareholders’ Equity .............................................................................
321,258
343,066
2,655,025
Total ......................................................................................................................... ¥580,586
¥593,129
$4,798,231
See notes to consolidated financial statements.
* As restated, see Notes 1 and 15
25
25
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CONSOLIDATED STATEMENTS OF INCOME
OMRON Corporation and Subsidiaries
Years ended March 31, 1999, 1998 and 1997
Millions of yen
Thousands of
U.S. dollars (Note 2)
1999
1998*
1997
1999
Net Sales .............................................................................................. ¥555,280
Costs and Expenses:
¥611,795
¥594,261
$4,589,091
Cost of sales .....................................................................................
Selling, general and administrative expenses ..................................
Research and development expenses .............................................
Interest expenses, net (Note 5) .........................................................
Foreign exchange loss—net .............................................................
Other income, net .............................................................................
364,314
136,734
42,383
862
2,766
(28)
387,445
138,404
39,914
682
4,419
(1,312)
388,005
130,163
35,188
1,591
860
(794)
3,010,859
1,130,033
350,273
7,124
22,859
(231)
Total .............................................................................................
547,031
569,552
555,013
4,520,917
Income before Income Taxes and Minority Interests .......................
Income Taxes (Note 9) .........................................................................
Income before Minority Interests.......................................................
Minority Interests.................................................................................
8,249
6,044
2,205
31
42,243
23,371
18,872
168
39,248
22,952
16,296
557
68,174
49,951
18,223
256
Net Income .......................................................................................... ¥ 2,174
¥ 18,704
¥ 15,739
$
17,967
Net Income per Share (Note 11):
Basic .................................................................................................
Diluted ..............................................................................................
Cash Dividends per Share (Note 11)...................................................
¥ 8.3
8.3
13.0
¥71.4
69.8
13.0
¥60.1
58.8
13.0
$0.07
0.07
0.11
Yen
U.S. dollars (Note 2)
See notes to consolidated financial statements.
* As restated, see Notes 1 and 15
26
26
m
(W) 610pt x (H) 794pt—215 x 280mm
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
OMRON Corporation and Subsidiaries
Years ended March 31, 1999, 1998 and 1997
Millions of yen
Thousands of
U.S. dollars (Note 2)
1999
1998
1997
1999
Net Income ........................................................................................... ¥ 2,174
¥18,704
¥15,739
$ 17,967
Other Comprehensive Income (Loss), Net of Tax (Note 13):
Foreign currency translation adjustments:
Amount arising during the year on investments
in foreign entities held at year-end ..............................................
(6,082)
(2,592)
5,737
(50,264)
Reclassification adjustments for the portion realized upon
sale or liquidation of investments in foreign entities ...................
40
—
—
330
Net change in foreign currency translation adjustments
during the year.............................................................................
(6,042)
(2,592)
Minimum pension liability adjustments .............................................
(5,737)
745
5,737
2,493
(49,934)
(47,413)
Unrealized gains on available-for-sale securities:
Unrealized holding gains arising during period .............................
Less: reclassification adjustment for
(2,416)
(3,489)
(6,424)
(19,967)
gains realized in net income ........................................................
898
Net unrealized gains ......................................................................
(1,518)
Other Comprehensive Income (Loss) ................................................
(13,297)
4
(3,485)
(5,332)
771
(5,653)
2,577
7,421
(12,546)
(109,893)
Comprehensive Income (Loss)........................................................... ¥(11,123)
¥13,372
¥18,316
$ (91,926)
See notes to consolidated financial statements.
27
27
(W) 610pt x (H) 794pt—215 x 280mm
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
OMRON Corporation and Subsidiaries
Years ended March 31, 1999, 1998 and 1997
Millions of yen
Number of
common shares
issued
Common
stock
Additional
paid-in
capital
Accumulated
other
Legal
reserve
Retained
earnings
comprehensive Treasury
income (loss)*
stock
Balance, April 1, 1996 ....................... 262,107,214
¥64,079
¥98,702
¥5,473
Net income .....................................
Cash dividends, ¥13.0 per share ....
Transfer to legal reserve .................
Other comprehensive income ........
490
Balance, March 31, 1997 .................. 262,107,214
64,079
98,702
5,963
Net income .....................................
Cash dividends, ¥13.0 per share ....
Transfer to legal reserve .................
Other comprehensive loss..............
351
Balance, March 31, 1998 .................. 262,107,214
64,079
98,702
6,314
Net income .....................................
Cash dividends, ¥13.0 per share ....
Transfer to legal reserve .................
Other comprehensive loss..............
Treasury stock ................................
Share buyback and retirement .......
(5,000,000)
497
¥147,900
15,739
(3,408)
(490)
159,741
18,704
(3,408)
(351)
174,686
2,174
(3,372)
(497)
(6,971)
¥ 2,040
¥ —
2,577
4,617
(5,332)
(715)
—
—
(13,297)
(342)
Balance, March 31, 1999 .................. 257,107,214
¥64,079
¥98,702
¥6,811
¥166,020
¥(14,012) ¥ (342)
Thousands of U.S. dollars (Note 2)
Common
stock
Additional
paid-in
capital
Legal
reserve
Retained
earnings
Balance, March 31, 1998 ........................................... $529,579
$815,719
$52,182
Net income .............................................................
Cash dividends, $0.11 per share.............................
Transfer to legal reserve ..........................................
Other comprehensive loss.......................................
Treasury stock .........................................................
Share buyback and retirement ................................
4,107
$1,443,686
17,967
(27,868)
(4,107)
(57,612)
Accumulated
other
comprehensive
income (loss)
Treasury
stock
$ (5,909) $ —
(109,893)
(2,826)
Balance, March 31, 1999 ........................................... $529,579
$815,719
$56,289
$1,372,066
$(115,802) $(2,826)
See notes to consolidated financial statements.
* As restated, see Notes 1 and 15
28
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CONSOLIDATED STATEMENTS OF CASH FLOWS
OMRON Corporation and Subsidiaries
Years ended March 31, 1999, 1998 and 1997
Millions of yen
Thousands of
U.S. dollars (Note 2)
1999
1998
1997
1999
¥18,704
¥15,739
$ 17,967
Operating Activities:
Net income .............................................................................................. ¥ 2,174
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization ............................................................
Loss on sales of property, plant and equipment.................................
Valuation loss on property held for sale ..............................................
Net gain on sale of short-term investments
and investment securities..................................................................
Termination and retirement benefits ...................................................
Deferred income taxes ........................................................................
Minority interests .................................................................................
Loss on sale of business entities.........................................................
Changes in assets and liabilities, net of effects of
31,396
458
—
(1,725)
4,178
(6,358)
31
286
business entities sold:
Notes and accounts receivable—trade, net ....................................
Inventories .......................................................................................
Other assets ....................................................................................
Notes and accounts payable—trade...............................................
Income taxes payable .....................................................................
Accrued expenses and other ..........................................................
Other, net.............................................................................................
2,025
10,529
5,306
(11,969)
(5,967)
(970)
189
31,129
268
—
31,234
771
2,040
(1)
2,004
(634)
168
—
(3,537)
(8,412)
(7,004)
(4,315)
(1,998)
4,425
1,289
(2,828)
4,574
(62)
557
—
(7,927)
(4,163)
(2,080)
12,000
4,711
3,232
(629)
Total adjustments ............................................................................
27,409
13,382
41,430
Net cash provided by operating activities ...................................
29,583
32,086
57,169
Investing Activities:
Proceeds from sales or maturities of short-term investments
and investment securities......................................................................
Purchase of short-term investments and investment securities ..............
Capital expenditures ...............................................................................
(Increase) decrease in leasehold deposits ..............................................
Proceeds from sales of property, plant and equipment..........................
Acquisition of minority interests ..............................................................
Proceeds from sale of business entities..................................................
26,780
(22,275)
(36,696)
(527)
1,895
(186)
1,998
21,285
(1,427)
(35,896)
5
1,335
(2,933)
—
43,671
(45,904)
(29,956)
285
2,818
(312)
—
Net cash used in investing activities ...........................................
(29,011)
(17,631)
(29,398)
Financing Activities:
Net borrowings (repayments) of short-term bank loans..........................
Proceeds from issuance of long-term debt ............................................
Repayments of long-term debt ...............................................................
Dividends paid.........................................................................................
Share buyback ........................................................................................
15,515
25,413
(8,956)
(3,372)
(6,971)
(2,864)
648
(18,013)
(3,408)
—
3,738
5,446
(43,634)
(3,407)
—
Net cash provided by (used in) financing activities .....................
21,629
(23,637)
(37,857)
259,471
3,785
—
(14,256)
34,529
(52,545)
256
2,364
16,736
87,016
43,851
(98,917)
(49,314)
(8,017)
1,562
226,521
244,488
221,322
(184,091)
(303,273)
(4,355)
15,661
(1,537)
16,513
(239,760)
128,223
210,025
(74,016)
(27,868)
(57,612)
178,752
Effect of Exchange Rate Changes on Cash
and Cash Equivalents..............................................................................
(1,666)
(1,741)
1,510
(13,769)
Net Increase (Decrease) in Cash and Cash Equivalents........................
20,535
(10,923)
(8,576)
Cash and Cash Equivalents at Beginning of the Year ...........................
68,365
79,288
87,864
169,711
565,000
Cash and Cash Equivalents at End of the Year ...................................... ¥88,900
¥68,365
¥79,288
$734,711
See notes to consolidated financial statements.
29
29
1. Summary of
Significant
Accounting
Policies
(W) 610pt x (H) 794pt—215 x 280mm
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
OMRON Corporation and Subsidiaries
Basis of Financial Statements
The accompanying consolidated financial statements, stated in Japanese yen, include certain adjustments, not
recorded on the books of account, to present these statements in accordance with accounting principles
as generally accepted in the United States, except for the omission of segment information as required by the
Statement of Financial Accounting Standards (“SFAS”) No. 131, “Disclosures about Segments of an Enterprise
and Related Information.” The recognition and measurement provisions of SFAS No. 115, “Accounting for
Certain Investments in Debt and Equity Securities,” were applied in the current year, retroactively to April 1,
1994, and all prior years’ financial statements have been restated. The principal adjustments include accrual of
certain expenses, accounting for 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 mar-
ket value.
Certain reclassifications have been made to amounts previously reported in order to conform to 1999 classifi-
cations.
Principles of Consolidation
The consolidated financial statements include the accounts of OMRON Corporation (the “Company”) and its
subsidiaries (together the “Companies”). All significant intercompany accounts and transactions have been
eliminated. Costs in excess of the fair value of net assets acquired are amortized on a straight-line basis over
five years.
The Companies’ investments in companies in which ownership is from 20% to 50% (associates) are stated
at cost plus equity in undistributed net income or loss.
Use of Estimates
The preparation of consolidated financial statements in conformity with generally accepted accounting prin-
ciples requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial
statements and the reported amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Cash Equivalents
Cash equivalents consist of highly liquid investments with original maturities of three months or less, including
time deposits, securities purchased with resale agreements and money market instruments.
Short-Term Investments and Investment Securities
In 1999, the Companies adopted SFAS No. 115. Under this statement, the Companies classify all their mar-
ketable debt and equity securities as available-for-sale and carry them at market value with a corresponding
recognition of the net unrealized holding gains or losses as a separate component of other comprehensive
income, net of tax, until recognized. Prior to the adoption of SFAS No. 115, marketable debt and equity securi-
ties were carried at the lower of aggregate cost or market. The Companies have restated the prior years’ con-
solidated financial statements to reflect the effects of the retroactive adoption of SFAS No. 115. A summary of
the effects of the restatement is presented in Note 15. Other investments are stated at the lower of cost or
estimated net realizable value. The cost of securities sold is determined on the average cost basis.
Inventories
Inventories are stated at the lower of cost, determined by the first-in, first-out method, or market.
Property, Plant and Equipment
Property, plant and equipment is stated at cost. Depreciation of property, plant and equipment has been com-
puted principally on a declining-balance method based upon the estimated useful lives of the assets.
Advertising Costs
Advertising costs are charged to earnings as incurred. Advertising expense was ¥9,822 million ($81,174 thou-
sand), ¥10,329 million and ¥8,473 million for the years ended March 31, 1999, 1998 and 1997, respectively.
Termination and Retirement Benefits
Termination and retirement benefits are accounted for in accordance with SFAS No. 87, “Employers’
Accounting for Pensions.” The Companies adopted SFAS No. 132, “Employers’ Disclosures about Pensions
and Other Postretirement Benefits,” in the year ended March 31, 1999. SFAS No. 132 revises employers’ dis-
closures about pensions and other postretirement benefit plans. SFAS No. 132 does not change the recogni-
tion and measurement of the plans, and does not affect the Companies’ consolidated financial position and
results of operations. All prior years’ disclosures have been restated to conform with the provisions of SFAS
30
30
m
(W) 610pt x (H) 794pt—215 x 280mm
No. 132. Provision for termination and retirement benefits includes those for directors and corporate auditors
of the Company.
Stock Purchase Plan
In June 1998, the Company introduced stock-based compensation plans under which stock options are
granted to directors to purchase shares of common stock at a price not less than market price at the date of
grant. Pursuant to SFAS No. 123, “Accounting for Stock-Based Compensation,” the Company has elected to
account for its stock option plan under APB Opinion No. 25, “Accounting for Stock Issued to Employees.”
Accordingly, no compensation cost has been recognized for this plan. Compensation cost for the plan deter-
mined based on the fair value of the options at the grant date consistent with SFAS No. 123 was immaterial.
Income Taxes
Deferred income taxes reflect the tax consequences on future years of differences between the tax bases
of assets and liabilities and their financial reporting amounts. Future tax benefits, such as net operating loss
carryforwards, are recognized to the extent that such benefits are more likely than not to be realized. The
effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date.
Derivatives
Currency derivatives (foreign exchange forward contracts and currency option contracts) are used to manage
currency risk. Gains and losses on hedges of existing assets or liabilities denominated in foreign currencies are
recognized in income currently, as are the offsetting foreign exchange losses and gains on the items hedged.
Gains and losses related to qualifying hedges of firm commitments denominated in foreign currencies are
deferred and are recognized as adjustments to the hedged transaction when such transaction occurs.
Derivative contracts that do not qualify as hedges are marked to market with the related gains and losses
included in Foreign exchange loss—net in the consolidated statements of income.
Interest rate swaps are used to manage exposure to fluctuations in interest rates arising from the
Companies’ existing debt. The amounts receivable or payable under interest rate swap agreements are recog-
nized as adjustments to interest expenses.
Cash Dividends
Cash dividends are reflected in the consolidated financial statements at proposed amounts in the years to
which they are applicable, even though payment is not approved by shareholders until the annual general
meeting of shareholders held early in the following fiscal year. Resulting dividends payable are included in
Other current liabilities in the consolidated balance sheets.
Comprehensive Income
The Companies adopted SFAS No. 130, “Reporting Comprehensive Income,” from the year beginning April 1,
1998. Comprehensive income consists of net income, foreign currency translation adjustments, minimum pen-
sion liability adjustments and unrealized gains and losses on available-for-sale securities, and is presented in
the consolidated statements of comprehensive income. SFAS No. 130 requires only additional disclosures in
the consolidated financial statements and does not affect the Companies’ financial position and results of
operations. All prior years’ consolidated financial statements have been reclassified to conform with the provi-
sions of SFAS No. 130.
Nature of Operations
The Company is a multinational manufacturer of automation components, equipment and systems with
advanced computer, communications and control technologies. The Company conducts business in over 30
countries around the world and strategically manages its worldwide operations through five regional manage-
ment centers: Japan, North America, Europe, Asia-Pacific and China. Products, classified by type and market,
are 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 and high-technology equipment with certain products aimed at the consumer
and industrial markets.
Social Business encompasses the production and sale of automated teller machines, card authorization
terminals, point-of-sale systems and card readers for both domestic and overseas markets. Passing gates and
automated ticket machines as well as electronic panels and terminal displays for traffic information and moni-
toring purposes are also produced for the domestic market.
31
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Specialty Products include the production of automotive electronic components for 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 and personal computer systems to institutional and individual consumers.
New Accounting Standards
In June 1998, the FASB issued SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.”
SFAS No. 133 establishes accounting and reporting standards for derivative instruments and hedging activities.
SFAS No. 133 requires that an entity recognizes all derivatives as either assets or liabilities in the balance
sheet and measures these instruments at fair market value. Changes in the fair market value of derivatives are
recorded each period. The Companies will adopt SFAS No. 133 for the year beginning April 1, 2000. The effect
on the Companies’ consolidated financial statements of adopting SFAS No. 133 has not been determined. In
March 1998, the American Institute of Certified Public Accountants issued Statement of Position (SOP) 98-1,
“Accounting for the Costs of Computer Software Developed or Obtained for Internal Use.” This SOP 98-1
which is effective for financial statements for fiscal years beginning after December 15, 1998 provides guid-
ance on accounting for the costs of computer software developed or obtained to solely meet the entities’ inter-
nal use. The Companies are in the process of evaluating the effect of SOP 98-1.
2. Translation into
United States
Dollars
The consolidated financial statements are stated in Japanese yen, the currency of the country in which the
Company is incorporated and operates. The translations of Japanese yen amounts into U.S. dollar amounts
are included solely for convenience of the readers and have been made at the rate of ¥121 to $1, the approxi-
mate free rate of exchange at March 31, 1999. Such translations should not be construed as representations
that the Japanese yen amounts could be converted into U.S. dollars at the above or any other rate.
3. Inventories
Inventories at March 31, 1999 and 1998 consisted of:
Finished products ......................................................................................... ¥47,653
14,107
Work-in-process ...........................................................................................
17,775
Materials and supplies ..................................................................................
¥56,665
17,707
20,609
$393,826
116,587
146,901
Total ...................................................................................................... ¥79,535
¥94,981
$657,314
Millions of yen
Thousands of
U.S. dollars
1999
1998
1999
4. Short-Term
Investments and
Investment
Securities
Cost, gross unrealized holding gains and losses and fair value of securities, excluding equity securities with no
public market value, by major security type at March 31 were as follows:
Millions of yen
1999
1998
Gross
unrealized
gains
Gross
unrealized
losses
Fair
value
Cost
Gross
unrealized
gains
Gross
unrealized
losses
Fair
value
Cost
Short-term investments:
Debt securities .................. ¥
Equity securities ................
20
722
Total short-term
investments .........................
742
Marketable investment
securities:
399
399
¥
— ¥ — ¥
20
1,034
¥ 3,913 ¥ — ¥ — ¥ 3,913
2,229
1,442
854
(67)
(87)
(87)
1,054
4,767
1,442
(67)
6,142
Debt securities ..................
Equity securities ................
11
39,070
—
16,562
—
(6,328)
11
49,304
25
39,447
—
17,675
—
(5,584)
25
51,538
Total marketable investment
securities ............................
39,081
16,562
(6,328)
49,315
39,472
17,675
(5,584)
51,563
Total .............................. ¥39,823
¥16,961
¥(6,415) ¥50,369
¥44,239 ¥19,117 ¥(5,651) ¥57,705
32
32
m
(W) 610pt x (H) 794pt—215 x 280mm
Thousands of U.S. dollars
1999
Gross
unrealized
gains
Gross
unrealized
losses
Fair
value
Cost
165 $
— $
— $
5,967
6,132
3,298
3,298
(719)
(719)
165
8,546
8,711
Short-term investments:
Debt securities.................. $
Equity securities ...............
Total short-term investments..
Marketable investment
securities:
Debt securities..................
91
Equity securities ............... 322,893
—
136,876
—
91
(52,298) 407,471
Total marketable
investment securities ......... 322,984
136,876
(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 taxes, decreased by ¥1,518 mil-
lion ($12,545 thousand) and ¥3,485 million for the years ended March 31, 1999 and 1998, respectively. Debt
securities classified as available-for-sale investment securities mature in various amounts through 2001.
Proceeds from sales of available-for-sale securities were ¥26,478 million ($218,826 thousand), ¥21,160 mil-
lion and ¥43,671 million for the years ended March 31, 1999, 1998 and 1997, respectively.
Gross realized gains on those sales were ¥3,001 million ($24,802 thousand) and ¥2,828 million for the years
ended March 31, 1999 and 1997, respectively, and were not material for the year ended March 31, 1998.
Gross realized losses were ¥1,275 million ($10,537 thousand) and ¥1,255 million for the years ended March
31, 1999 and 1997, respectively, and were not material for the year ended March 31, 1998.
5. Bank Loans and
Long-Term Debt
The weighted average annual interest rates of short-term bank loans at March 31, 1999 and 1998 were 2.5%
and 5.2%, respectively.
Long-term debt at March 31, 1999 and 1998 consisted of the following:
Millions of yen
Thousands of
U.S. dollars
1999
1998
1999
Unsecured debt:
Convertible bonds at 1.7%, due 2004 ...................................................... ¥29,741
¥29,741
$245,793
Notes:
Loans from banks and other financial institutions,
generally at 0.6% to 6.0%, due serially through 2004............................
Other .............................................................................................................
28,794
242
11,615
610
Total ......................................................................................................
58,777
41,966
Less portion due within one year ..................................................................
2,167
8,466
237,967
2,000
485,760
17,909
Long-term debt, less current portion ............................................................ ¥56,610
¥33,500
$467,851
The annual maturities of long-term debt outstanding at March 31, 1999 were as follows:
Years ending March 31,
Millions of yen
2000 ............................................................................................................................
2001 ............................................................................................................................
2002 ............................................................................................................................
2003 ............................................................................................................................
2004 ............................................................................................................................
2005 and thereafter.....................................................................................................
¥ 2,167
694
25,551
181
13
30,171
Total ........................................................................................................................
¥58,777
Thousands of
U.S. dollars
$ 17,909
5,736
211,165
1,496
107
249,347
$485,760
33
33
(W) 610pt x (H) 794pt—215 x 280mm
The convertible bonds may be purchased at any time by the Company or its subsidiaries principally at 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 to the convertible bonds as of March
31, 1999 was 10,028,661 shares.
The conversion price per share at March 31, 1999 was ¥2,965 ($24.51), subject to antidilutive provisions.
As is customary in Japan, additional security must be given if requested by a lending bank, and banks have
the right to offset cash deposited with them against any debt or obligation that becomes due and, in case of
default and certain other specified events, against all debt payable to the banks. The Companies have never
received any such requests.
As is customary in Japan, the Company and domestic subsidiaries maintain deposit balances with banks with
which they have short- or long-term borrowings. Such deposit balances are not legally or contractually
restricted as to withdrawal.
Total interest cost incurred and charged to expense for the years ended March 31, 1999, 1998 and 1997
amounted to ¥2,518 million ($20,810 thousand), ¥2,412 million and ¥3,557 million, respectively.
The Companies have operating lease agreements primarily involving offices and equipment for varying periods.
Leases that expire generally are expected to be renewed or replaced by other leases. At March 31, 1999, future
minimum rental payments applicable to noncancelable leases having initial or remaining noncancelable lease
terms in excess of one year were as follows:
Years ending March 31,
Millions of yen
Thousands of
U.S. dollars
2000 ............................................................................................................................
2001 ............................................................................................................................
2002 ............................................................................................................................
2003 ............................................................................................................................
2004 ............................................................................................................................
2005 and thereafter.....................................................................................................
¥1,909
1,703
804
738
606
2,426
Total ........................................................................................................................
¥8,186
$15,777
14,074
6,645
6,099
5,008
20,050
$67,653
Rental expense amounted to ¥15,193 million ($125,562 thousand), ¥13,917 million and ¥11,105 million for the
years ended March 31, 1999, 1998 and 1997, respectively.
Since December 1997, the Company has entered into an agreement with an outside service organization for
outsourcing computer services. The contract requires an annual service fee of ¥4,460 million ($36,860 thou-
sand) for the year ending March 31, 1999. The annual service fee will gradually decrease each year during the
initial contract term of 10 years to ¥3,769 million for 2008. The contract is cancelable subject to a penalty of 15%
of aggregate service fees payable for the remaining term of the contract.
The Company and its domestic subsidiaries sponsor termination and retirement benefit plans which cover
substantially all domestic employees. Benefits are based on the employee’s years of service, with some plans
considering compensation and certain other factors. If the termination is involuntary, the employee is usually
entitled to greater payments than in the case of voluntary termination.
The Company and its domestic subsidiaries fund a portion of the obligations under these plans. The general
funding policy is to contribute amounts computed in accordance with actuarial methods acceptable under
Japanese tax law. The Company and substantially all domestic subsidiaries have a contributory termination
and retirement plan which is interrelated with the Japanese government social welfare program and consists of
a basic portion requiring employee and employer contributions plus an additional portion established by the
employers.
Periodic pension benefits required under the basic portions, prescribed by the Japanese Ministry of Health
and Welfare, commence at age 60 and continue until the death of the surviving spouse. Benefits under the
additional portion are usually paid in a lump sum at the earlier of termination or retirement, although periodic
payments are available under certain conditions.
6. Leases
7. Termination and
Retirement
Benefits
34
34
m
(W) 610pt x (H) 794pt—215 x 280mm
The following table is the reconciliation of beginning and ending balances of the benefit obligations and the
fair value of the plan assets at March 31:
Millions of yen
Thousands of
U.S. dollars
1999
1998
1999
Change in benefit obligations:
Benefit obligations at beginning of year............................................... ¥154,614
10,227
Service cost .........................................................................................
5,411
Interest cost .........................................................................................
1,030
Plan amendments ................................................................................
10,653
Actuarial gains and losses ...................................................................
(1,468)
Benefits paid ........................................................................................
¥143,941
8,670
5,758
0
(2,496)
(1,259)
$1,277,802
84,521
44,719
8,512
88,041
(12,132)
Benefit obligation at end of year ...................................................... ¥180,467
¥154,614
$1,491,463
Change in plan assets:
Fair value of plan assets at beginning of year......................................
Actual return on plan assets ................................................................
Employers’ contributions .....................................................................
Employees’ contributions.....................................................................
Benefits paid ........................................................................................
92,927
(1,035)
6,448
1,012
(1,468)
85,316
1,556
6,324
990
(1,259)
767,992
(8,554)
53,289
8,364
(12,132)
Fair value of plan assets at end of year ........................................... ¥ 97,884
¥ 92,927
$ 808,959
Funded status ..........................................................................................
Unrecognized net actuarial loss...............................................................
Unrecognized transition obligation ..........................................................
(82,583)
58,095
1,348
(61,687)
41,122
1,618
(682,504)
480,124
11,140
Net amount recognized.................................................................... ¥ (23,140)
¥ (18,947)
$ (191,240)
Amounts recognized in the statement of
cash flows consist of:
Accrued liability .................................................................................... ¥ (38,379)
1,348
Intangible assets ..................................................................................
13,891
Accumulated other comprehensive income (gross of tax)...................
¥ (23,422)
1,618
2,857
$ (317,182)
11,140
114,802
Net amount recognized.................................................................... ¥ (23,140)
¥ (18,947)
$ (191,240)
Accumulated benefit obligation at end of year ........................................ ¥136,263
¥116,349
$1,126,141
The provisions of SFAS No. 87, “Employers’ Accounting for Pensions,” require the recognition of an addi-
tional minimum pension liability for each defined benefit plan to the extent that a plan’s accumulated benefit
obligation exceeds the fair value of plan assets and accrued pension liabilities. The net change in the minimum
pension liability is reflected as other comprehensive income, net of related deferred tax benefits. The unrecog-
nized transition obligation and the unrecognized net actuarial loss are being amortized over 15 years.
Key assumptions utilized in calculating the actuarial present value of benefit obligations are as follows:
Discount rate................................................................................................................ 3.5%
Compensation increase rate ........................................................................................ 3.6
Expected long-term rate of return on plan assets ....................................................... 3.5
4.0%
3.8
3.5
4.0%
3.8
3.5
1999
1998
1997
35
35
(W) 610pt x (H) 794pt—215 x 280mm
The expense recorded for the contributory termination and retirement plan included the following compo-
nents for the years ended March 31, 1999 and 1998:
Millions of yen
Thousands of
U.S. dollars
1999
1998
1999
Service cost, less employees’ contributions................................................. ¥10,227
5,411
Interest cost on projected benefit obligation ................................................
(3,252)
Expected return on plan assets ....................................................................
1,982
Net amortization and deferral .......................................................................
(1,012)
Employees’ contributions .............................................................................
¥ 8,670
5,758
(2,938)
2,168
(990)
$ 84,521
44,719
(26,876)
16,380
(8,364)
Net expense .......................................................................................... ¥13,356
¥12,668
$110,380
The Companies also have unfunded noncontributory termination plans administered by the Companies.
These plans provide lump-sum termination benefits and are paid at the earlier of the employee’s termination or
mandatory retirement age, except for payments to directors and corporate auditors, which require approval by
the shareholders before payment. The Companies record provisions for termination benefits sufficient to state
the liability equal to the plans’ vested benefits, which exceed the plans’ accumulated benefit obligations.
The consolidated liabilities for the noncontributory termination plans as of March 31, 1999 and 1998
were ¥1,697 million ($14,025 thousand) and ¥1,488 million, respectively. The consolidated expenses for
the noncontributory termination and retirement plans for the years ended March 31, 1999, 1998 and 1997 were
¥84 million ($694 thousand), ¥146 million and ¥420 million, respectively.
The Japanese Commercial Code (the “Code”) requires at least 50% 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 des-
ignated as common stock have been credited to additional paid-in capital.
Under the Code, the Company is required to record an amount at least equal to 10% of the amounts paid
as an appropriation of retained earnings, including dividends and other distributions, to be appropriated and
set aside as a legal reserve until such reserve equals 25% of the common stock. This reserve is not available
for dividends but may be used to eliminate or reduce a deficit by resolution of the shareholders or may be
transferred to common stock by resolution of the Board of Directors.
The Company may transfer portions of additional paid-in capital and legal reserve to common stock by res-
olution of the Board of Directors. The Company may also transfer portions of unappropriated retained earn-
ings, available for dividends, to common stock by resolution of the shareholders.
Under the Code, the amount legally available for dividends is based on retained earnings as recorded in the
books of the Company for Japanese financial reporting purposes. At March 31, 1999, retained earnings amounting
to ¥100,120 million ($827,438 thousand) were available for future dividends, subject to the legal reserve
requirements.
8. Shareholders’
Equity
9. Income Taxes
The provision for income taxes for the years ended March 31, 1999, 1998 and 1997 consisted of the following:
Millions of yen
Thousands of
U.S. dollars
1999
1998
1997
1999
Current income tax expense ...................................................... ¥12,426
Deferred income tax expense (benefit),
¥24,579
¥22,915
$102,694
exclusive of the following .........................................................
(8,591)
(1,305)
342
(71,000)
Change in the beginning of the year balance of
the valuation allowance for deferred tax assets .......................
(142)
(176)
(305)
(1,174)
Adjustments of deferred tax assets and liabilities
for enacted change in tax rates ................................................
2,351
273
—
19,430
Total.................................................................................... ¥ 6,044
¥23,371
¥22,952
$ 49,950
36
36
m
(W) 610pt x (H) 794pt—215 x 280mm
The effective income tax rates of the Companies differ from the normal Japanese statutory rates as follows
for the years ended March 31, 1999, 1998 and 1997:
1999
1998
1997
Normal Japanese statutory rates .......................................................................... 48.0%
Increase (decrease) in taxes resulting from:
51.0%
51.0%
Permanently nondeductible items..................................................................... 30.2
Losses of subsidiaries for which no tax benefit was provided ......................... 10.1
Difference in subsidiaries’ tax rates ..................................................................
(18.1)
Change in the beginning of the year balance of
the valuation allowance for deferred tax assets..............................................
(1.7)
Effects of enacted change in tax rates.............................................................. 28.5
Recognition of tax credit carryforward of an overseas subsidiary.................... (28.5)
4.8
Other, net ..........................................................................................................
6.0
1.0
(6.0)
(0.4)
0.6
—
3.1
9.1
0.2
(3.7)
(0.8)
—
—
2.7
Effective tax rates.......................................................................................... 73.3%
55.3%
58.5%
The Company and its domestic subsidiaries are subject to a number of taxes based on income, which in the
aggregate resulted in a normal tax rate of approximately 48.0% in 1999 and 51.0% in 1998 and 1997.
Amendments to Japanese tax regulations were enacted into law on March 31, 1998 and 1999. As a result of
these amendments, the normal income tax rates were reduced from 51.0% to 48.0% effective April 1, 1998
and from 48.0% to 42.0% effective April 1, 1999, respectively. Deferred income tax assets and liabilities as of
March 31, 1999 and 1998 were measured at the respective newly enacted tax rates.
The approximate effects of temporary differences and tax credit and loss carryforwards that gave rise to
deferred tax balances at March 31, 1999 and 1998 were as follows:
Millions of yen
1999
1998
Thousands of
U.S. dollars
1999
Deferred
tax
assets
Deferred
tax
liabilities
Deferred
tax
assets
Deferred
tax
liabilities
Deferred
tax
assets
Deferred
tax
liabilities
¥
Inventory valuation.......................................... ¥ 1,676
2,152
Accrued bonuses and vacations ....................
6,266
Termination and retirement benefits...............
568
Enterprise taxes ..............................................
2,522
Intercompany profits.......................................
—
Marketable securities......................................
407
Allowance for doubtful receivables.................
—
Gain on sale of land ........................................
5,834
Minimum pension liability adjustment ............
4,709
Other temporary differences...........................
5,954
Tax credit carryforwards.................................
4,311
Subsidiaries’ operating loss carryforwards ....
¥
— ¥ 1,476
2,188
—
5,085
—
1,129
—
3,218
—
—
4,429
462
209
—
1,076
1,372
—
3,514
5,169
—
—
3,256
—
$
—
—
—
—
—
— 36,603
1,727
8,893
—
42,719
— $ 13,851
17,785
—
51,785
—
4,694
—
—
20,843
6,464
467
1,229
—
5,004
—
—
3,364
—
48,215
38,917
49,207
35,628
—
Subtotal ..........................................................
Valuation allowance ........................................
34,399
(4,804)
10,883
—
21,700
(2,642)
13,164
—
284,289
(39,702)
89,942
—
Total ........................................................ ¥29,595
¥10,883
¥19,058
¥13,164
$244,587
$89,942
The total valuation allowance increased by ¥2,162 million ($17,868 thousand) in 1999 and decreased by
¥1,689 million and ¥715 million in 1998 and 1997, respectively.
As of March 31, 1999, certain subsidiaries had operating loss carryforwards approximating ¥10,822 million
($89,438 thousand) available for reduction of future taxable income, most of which expire in various amounts
through 2010.
The Company has not provided for Japanese income taxes on unremitted earnings of subsidiaries to the
extent that they are believed to be indefinitely reinvested. The unremitted earnings of the foreign subsidiaries
that are considered to be indefinitely reinvested and for which Japanese income taxes have not been provided
were ¥37,175 million ($307,231 thousand) and ¥35,315 million at March 31, 1999 and 1998, respectively. It is
not practicable to estimate the amount of unrecognized deferred Japanese income taxes on these unremitted
earnings. Dividends received from domestic subsidiaries are expected to be substantially free of tax.
37
37
(W) 610pt x (H) 794pt—215 x 280mm
10. Foreign
Operations
Net sales and total assets of foreign subsidiaries for the years ended March 31, 1999, 1998 and 1997 were as
follows:
Net sales .............................................................................. ¥167,546
122,039
Total assets .........................................................................
¥171,181
143,247
¥151,992
132,714
$1,384,678
1,008,587
Millions of yen
Thousands of
U.S. dollars
1999
1998
1997
1999
11. Amounts per
Share
The Company adopted SFAS No. 128, “Earnings per Share,” in the year ended March 31, 1998. SFAS
No. 128 establishes standards for computing and presenting net income per share and simplifies the stan-
dards for computing net income per share previously found in APB Opinion No. 15, “Earnings per Share.”
SFAS No. 128 replaces the presentation of primary net income per share with a presentation of basic net
income per share. SFAS No. 128 also requires dual presentation of basic and diluted net income per share on
the face of the statements of income for all entities with complex capital structures and requires a reconcilia-
tion of the numerator and denominator of the basic and diluted net income per share computation.
All prior years’ net income per share data presented were restated to conform with the provisions of SFAS
No. 128.
Basic net income per share has been computed by dividing net income available to common shareholders
by the weighted average number of common shares outstanding during each year. Diluted net income per
share reflects the potential dilution of all convertible bonds and has been computed on the basis that all con-
vertible bonds were converted at the beginning of the year.
A reconciliation of the numerators and denominators of the basic and diluted net income per share compu-
tation is as follows:
Millions of yen
Thousands of
U.S. dollars
1999
1998
1997
1999
Net income .................................................................................. ¥2,174
¥18,704
¥15,739
$17,967
Effect of dilutive securities:
Convertible bonds, due 2004 ..................................................
—
292
275
—
Diluted net income....................................................................... ¥2,174
¥18,996
¥16,014
$17,967
Number of shares
1999
1998
1997
Weighted average common shares outstanding ...................... 260,649,752
262,107,214
262,107,214
Dilutive effect of:
Convertible bonds, due 2004 ...............................................
—
10,028,661
10,028,661
Diluted common shares outstanding........................................ 260,649,752
272,135,875
272,135,875
For the year ended March 31, 1999, the assumed conversion of convertible bonds, giving effect to the incre-
mental shares and the adjustment to reduce interest expenses, was anti-dilutive and has, therefore, been
excluded from the computation.
For the year ended March 31, 1999, the assumed exercise of stock options, giving effect to the incremental
shares, was anti-dilutive and has been excluded from the computation.
Cash dividends per share are the amounts applicable to the respective year, including dividends to be paid
after the end of the year.
38
38
m
(W) 610pt x (H) 794pt—215 x 280mm
12. Supplemental
Information for
Cash Flows
13. Other
Comprehensive
Income (Loss)
Supplemental cash flow information for the years ended March 31, 1999, 1998 and 1997 was as follows:
Millions of yen
Thousands of
U.S. dollars
1999
1998
1997
1999
Interest paid................................................................................ ¥ 2,450
Income taxes paid ......................................................................
18,417
Noncash investing and financing activities:
¥ 2,347
25,804
¥ 3,718
18,151
$ 20,248
152,207
Liabilities assumed in connection with capital expenditures...
Exchange of investment securities:
5,559
4,547
5,602
45,942
Investment securities surrendered .....................................
Investment securities received ...........................................
—
—
—
—
(1,989)
3,197
—
—
Change in accumulated other comprehensive income (loss) by each component for the years ended March 31,
1999, 1998 and 1997 was as follows:
Millions of yen
Thousands of
U.S. dollars
1999
1998
1997
1999
Foreign currency translation adjustments:
Beginning balances ................................................................ ¥ (5,912)
(6,042)
Change for the year ................................................................
¥ (3,320)
(2,592)
¥ (9,057)
5,737
$ (48,859)
(49,934)
Ending balances .............................................................
(11,954)
(5,912)
(3,320)
(98,793)
Minimum pension liability adjustments:
Beginning balances ................................................................
Change for the year ................................................................
(1,401)
(5,737)
(2,146)
745
(4,639)
2,493
Ending balances .............................................................
(7,138)
(1,401)
(2,146)
Unrealized gains on available-for-sale securities:
Beginning balances ................................................................
Change for the year ................................................................
6,598
(1,518)
10,083
(3,485)
15,736
(5,653)
Ending balances .............................................................
5,080
6,598
10,083
(11,579)
(47,413)
(58,992)
54,529
(12,546)
41,983
Total accumulated other comprehensive income (loss):
Beginning balances ................................................................
Change for the year ................................................................
(715)
(13,297)
4,617
(5,332)
2,040
2,577
(5,909)
(109,893)
Ending balances ............................................................. ¥(14,012)
¥ (715)
¥ 4,617
$(115,802)
Tax effects allocated to each component of other comprehensive income (loss) and reclassification adjustments for the years ended
March 31, 1999, 1998 and 1997 was as follows:
1999
Tax
Millions of yen
1998
Tax
1997
Tax
Foreign currency translation adjustments:
Amount arising during the year on investments
Before-tax
amount
(expense) Net-of-tax Before-tax (expense) Net-of-tax Before-tax (expense) Net-of-tax
or benefit amount
or benefit
or benefit
amount
amount
amount
amount
in foreign entities held at end of year ......................... ¥ (6,082) ¥ — ¥ (6,082) ¥(2,592) ¥ — ¥(2,592) ¥ 5,737 ¥ — ¥ 5,737
Reclassification adjustments 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 period ............
Less: reclassification adjustment
40
—
40
—
—
—
—
—
—
(6,042)
(11,032) 5,295
— (6,042)
(5,737)
(2,592)
1,520
— (2,592)
745
(775)
5,737
5,088
— 5,737
2,493
(2,595)
(4,646) 2,230
(2,416)
(7,118) 3,629
(3,489)
(13,110)
6,686
(6,424)
for gains realized in net income .................................
Net unrealized gains.....................................................
771
(5,653)
Other comprehensive income (loss)..................... ¥(19,994) ¥6,697 ¥(13,297) ¥(8,183) ¥2,851 ¥(5,332) ¥ (712) ¥3,289 ¥2,577
1,726
(828)
(2,920) 1,402
(3)
(7,111) 3,626
1,573
(11,537)
898
(1,518)
4
(3,485)
(802)
5,884
7
39
39
(W) 610pt x (H) 794pt—215 x 280mm
Thousands of U.S. dollars
1999
Tax
(expense)
or benefit
Net-of-tax
amount
Before-tax
amount
Foreign currency translation adjustments:
Amount arising during the year on investments
in foreign entities held at end of year ...................................................................................................... $ (50,264) $
— $ (50,264)
Reclassification adjustments for the portion realized upon
sale or liquidation of investments in foreign entities ...............................................................................
330
Net change in foreign currency translation
adjustments during the year....................................................................................................................
(49,934)
—
—
Minimum pension liability adjustments .........................................................................................................
(91,173)
43,760
330
(49,934)
(47,413)
Unrealized gains on available-for-sale securities:
Unrealized holding gains arising during period.........................................................................................
Less: reclassification adjustment
(38,397)
18,430
(19,967)
for gains realized in net income ..............................................................................................................
14,264
(6,843)
7,421
Net unrealized gains..................................................................................................................................
(24,133)
11,587
(12,546)
Other comprehensive income (loss).................................................................................................. $(165,240) $55,347
$(109,893)
14. Financial
Instruments
and Risk
Management
Financial Instruments
The following table presents the carrying amounts and estimated fair values as of March 31, 1999 and 1998 of
the Companies’ financial instruments, both on and off the balance sheets.
Millions of yen
1999
1998
Thousands of
U.S. dollars
1999
Carrying
amount
Fair
value
Carrying
amount
Fair
value
Carrying
amount
Fair
value
Nonderivatives:
Long-term debt, including
current portion ...................................... ¥(58,777) ¥(59,301)
¥(41,966) ¥(42,170)
¥(485,760) ¥(490,091)
Derivatives:
Included in other current assets
(other current liabilities):
Options purchased .............................
Forward exchange contracts..............
Interest rate swaps .............................
—
(16)
—
—
(62)
(172)
288
(267)
—
208
(307)
(59)
—
(132)
—
—
(512)
(1,421)
The following methods and assumptions were used to estimate the fair value of each class of financial
instruments for which it is practicable to estimate that value:
Nonderivatives
(1) Cash and cash equivalents, notes and accounts receivable, bank loans and notes and accounts payable:
The carrying amounts approximate fair values.
(2) Short-term investments and investment securities (see Note 4):
The fair values are estimated based on quoted market prices or dealer quotes for marketable securities or
similar instruments. Certain equity securities included in investments have no public market value, for
which it is not practicable to estimate their fair values.
(3) Long-term debt:
For convertible 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 of arrangements.
40
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Derivatives
The fair value of derivatives generally reflects the estimated amounts that the Companies would receive or pay
to terminate the contracts at the reporting date, thereby taking into account the current unrealized gains or losses
of open contracts. Dealer quotes are available for most of the Companies’ derivatives; otherwise, pricing or valua-
tion models are applied to current market information to estimate fair value. The Companies do not use deriva-
tives for trading purposes.
(1) Interest rate swap contracts:
The Companies enter into interest rate swap agreements to manage exposure to fluctuations in interest
rates. These agreements involve the exchange of interest obligations on fixed and floating interest rate debt
without exchange of the underlying principal amounts. The agreements generally mature at the time the
related debt matures. The differential paid or received on interest rate swap agreements is recognized as
an adjustment to interest expense. Notional amounts are used to express the volume of interest rate swap
agreements. The notional amounts do not represent cash flows and are not subject to risk of loss. In the
unlikely event that the counterparty fails to meet the terms of an interest rate swap agreement, the
Companies’ exposure is limited to the interest rate differential. Management considers the exposure to
credit risk to be minimal since the counterparties are major financial institutions.
At March 31, 1999 and 1998, the notional amounts on which the Companies had interest rate swap
agreements outstanding aggregated ¥12,000 million ($99,174 thousand) and ¥6,000 million, respectively.
The estimated fair values of interest rate swap contracts are based on the present values of discounted
future cash flow analysis.
(2) Foreign exchange forward contracts and foreign currency options:
The Companies enter into foreign exchange forward contracts and engage in the purchase and writing of
foreign currency option contracts to hedge foreign currency transactions (primarily the U.S. dollar, the
deutsche mark and other European currencies) on a continuing basis for periods consistent with their com-
mitted exposure. Some of the contracts involve the exchange of two foreign currencies, according to local
needs in foreign subsidiaries. The terms of the currency derivatives are rarely more than 10 months. The
credit exposure of foreign exchange contracts and currency purchase options are represented by the posi-
tive fair value of the contracts at the reporting date. Management considers the exposure to credit risk to
be minimal since the counterparties are major financial institutions.
The notional amounts of contracts to exchange foreign currency (forward contracts) and currency
options purchased and outstanding at March 31, 1999 and 1998 were as follows:
Millions of yen
Thousands of
U.S. dollars
1999
1998
1999
Related to receivables and future sales:
Forward contracts ............................................................................... ¥13,974
—
Options purchased ..............................................................................
¥24,867
8,885
$115,488
—
The notional amounts do not represent the amounts exchanged by the parties to derivatives and are not
a measure of the Companies’ exposure through its use of derivatives. The amounts exchanged are deter-
mined by reference to the notional amounts and the other terms of the derivatives.
The Companies hedge certain exposures to fluctuations in foreign currency exchange rates that occur
prior to conversion of foreign currency denominated monetary assets and liabilities into the functional cur-
rency. Prior to the conversion of the functional currency, these assets and liabilities are translated at the spot
rates in effect on the balance sheet date. The effects of changes in spot rates are reported in earnings and
included in Foreign exchange loss—net in the consolidated statements of income. The Company hedges
its exposure to changes in foreign exchange with forward contracts. Because monetary assets and liabili-
ties are marked to spot and recorded in earnings, forward contracts designated as hedges of the monetary
assets and liabilities are also marked to spot with the resulting gains and losses similarly recognized in
earnings. Gains and losses on forward contracts are included in Foreign exchange loss—net in the consoli-
dated statements of income and offset losses and gains on the net monetary assets and liabilities hedged.
The Companies hedge future sales denominated in foreign currencies with purchased and written cur-
rency options to reduce the effective cost of the purchased options. The premiums paid for currency
options purchased and premiums received for currency options written are included in other assets and
other liabilities, respectively, in the consolidated balance sheets and are amortized to Foreign exchange
loss—net in the consolidated statements of income over the terms of the agreements. Gains or losses on
41
41
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forward exchange contracts and currency options purchased and written that do not qualify for deferral for
accounting purposes are recognized in income on a current basis and recorded in Foreign exchange loss—
net in the consolidated statements of income.
Concentration of Credit Risk
Financial instruments which potentially subject the Companies to concentrations of credit risk consist
principally of short-term cash investments and trade receivables. The Companies place 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 across many industries. Bad debts have been minimal. The
Company normally requires customers to deposit with it funds to serve as security for ongoing credit sales.
Guarantees
Contingent liabilities at March 31, 1999 with respect to loans guaranteed were ¥2,681 million ($22,157 thou-
sand), of which ¥1,400 million ($11,570 thousand) are jointly and severally guaranteed with other unrelated
companies.
15. Restatement
of Financial
Statements
The Companies applied SFAS No. 115 in the current year, and the prior years’ consolidated financial state-
ments have been restated. The following table presents a summary of the effects.
Consolidated Statements of Income:
Net income (due to a change in enacted tax rates) .........................................................
Net income per share (in yen):
Millions of yen
1998
As previously
reported
As restated
¥18,300
¥18,704
Basic ............................................................................................................................
Diluted..........................................................................................................................
69.8
68.3
71.4
69.8
Consolidated Balance Sheets:
Millions of yen
1998
Short-term investments .................................................................................................. ¥ 4,767
43,245
Investment securities......................................................................................................
5,531
Deferred income taxes (liability)......................................................................................
Retained earnings...........................................................................................................
174,282
Net unrealized gains on securities included in
As previously
reported
As restated
¥
6,142
55,336
11,335
174,686
accumulated other comprehensive income .................................................................
Shareholders’ equity.......................................................................................................
—
336,064
6,598
343,066
Consolidated Statements of Shareholders’ Equity:
Millions of yen
Net unrealized gains on securities
included in accumulated other
comprehensive income
Balance, April 1, 1996.....................................................................................................
Other comprehensive loss..........................................................................................
Balance, March 31, 1997................................................................................................
Other comprehensive loss..........................................................................................
As previously
reported
¥—
—
—
—
Balance, March 31, 1998................................................................................................
¥—
As restated
¥15,736
(5,653)
¥10,083
(3,485)
¥ 6,598
42
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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, shareholders’ equity and cash
flows for each of the three years in the period ended March 31, 1999, all expressed in Japanese yen. These financial state-
ments are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reason-
able basis for our opinion.
Certain information required by Statement of Financial Accounting Standards (“SFAS”) No. 131, “Disclosures about
Segments of an Enterprise and Related Information,” (which superseded SFAS No. 14 “Financial Reporting for Segments of
a Business Enterprise” in 1999), has not been presented in the accompanying consolidated financial statements. In our opinion,
presentation concerning operating segments and other information is required for a complete presentation of the Company’s
consolidated financial statements.
In our report dated May 18, 1998, we expressed an opinion that the consolidated financial statements as of March 31,
1998, and for the years then ended contained a departure from generally accepted accounting principles because the Com-
pany had not adopted SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities.” Effective April 1,
1998, as discussed in Notes 1 and 15, the Company adopted retroactively to April 1, 1994 SFAS No. 115 and restated its
prior years’ consolidated financial statements. Accordingly, our present opinion on the prior years’ financial statements, as
presented herein, is different from that expressed in our previous report.
In our opinion, except for the omission of segment information as discussed in the third paragraph, the consolidated finan-
cial statements referred to above present fairly, in all material respects, the financial position of OMRON Corporation and
subsidiaries as of March 31, 1999 and 1998, and the results of their operations and their cash flows for each of the three
years in the period ended March 31, 1999 in conformity with accounting principles generally accepted in the United States.
Our audits also comprehended the translation of Japanese yen amounts into United States dollar amounts and, in our
opinion, such translation has been made in conformity with the basis stated in Note 2 to the consolidated financial statements.
Such United States dollar amounts are presented solely for convenience.
Osaka, Japan
May 11, 1999
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INTERNATIONAL NETWORK
A S I A - P A C I F I C
REGIONAL HEADQUARTERS
OMRON Asia Pacific Pte. Ltd.
83, Clemenceau Avenue, #11-01, UE Square,
Singapore 239920, Singapore
Phone: 65-835-3011
Fax: 65-835-2711
MARKETING AND/OR MANUFACTURING
OF CONTROL COMPONENTS
AND SYSTEMS
OMRON Asia Pacific Pte. Ltd.
83, Clemenceau Avenue, #11-01, UE Square,
Singapore 239920, Singapore
Phone: 65-835-3011
Fax: 65-835-2711
––Indonesia Representative Office
W; isma Danamon Aetna Life Tower, Suite 1602,
JI Jend. Sudirman Kav. 45-46,
Jakarta 12930, Indonesia
Phone: 62-21-5770838
Fax: 62-21-5770840
––Hanoi Representative Office
6F, Vinaconex Bldg., 2 Lang Ha,
Hanoi, Socialist Republic of Vietnam
Phone: 84-4-8313121
Fax: 84-4-8313122
––Manila Representative Office
2F, Kings Court II Bldg.,
2129 Pasong Tamo St. 1231,
Makati 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
C H I N E S E E C O N O M I C A R E A
REGIONAL HEADQUARTERS
OMRON (China) Group Co., Ltd.
601-9, Tower 2,
The Gateway No. 25, Canton Road,
Tsimshatsui, Kowloon, Hong Kong
Phone: 852-2375-3827
Fax: 852-2375-1475
OMRON (China) Co., Ltd.
21F, Beijing East Ocean Centre,
No. 24A Jian Guo Men Wai Da Jie,
Chao Yang District,
Beijing 100022, China
Phone: 86-10-6515-5788
Fax: 86-10-6515-5799
OMRON Electronics Sales
and Service (M) Sdn. Bhd.
2. 01, Level 2, Wisma Academy 4A,
Jalan 19/1 46300 Petaling Jaya,
Selangor, Malaysia
Phone: 60-3-754-7323
Fax: 60-3-754-6618
OMRON Electronics Co., Ltd.
20F, Rasa Tower, 555 Phaholyothin Road,
Ladyao, Chatuchak,
Bangkok 10900, Thailand
Phone: 66-2-937-0500
Fax: 66-2-937-0501
OMRON Electronics Pty. Ltd.
71 Epping Road, North Ryde,
NSW 2113, Australia
Phone: 61-2-9878-6377
Fax: 61-2-9878-6981
OMRON Electronics Ltd.
65 Boston Road, Mt. Eden,
Auckland, New Zealand
Phone: 64-9-358-4400
Fax: 64-9-358-4411
OMRON Korea Co., Ltd.
3F, New Seoul Bldg., #618-3 Shinsa-Dong
Kang Nam-ku, Seoul, South Korea
Phone: 82-2-549-2766
Fax: 82-2-517-9033
OMRON Malaysia Sdn. Bhd.
Lot 15, Jalan SS 8/4 Sungei Way,
Free Trade Zone, 47300 Petaling Jaya,
Selangor, Darul Ehsan, Malaysia
Phone: 60-3-776-1411
Fax: 60-3-777-4507
PT OMRON Manufacturing of Indonesia
Ejip Industrial Park Plot 5C, Lemahabang,
Bekasi 17550, West Java, Indonesia
Phone: 62-21-8970111
Fax: 62-21-8970120
MARKETING AND MANUFACTURING
OF AUTOMOTIVE COMPONENTS
OMRON Automotive Electronics
Korea Co., Ltd.
272-2 Kyerukri, Miyangmyon, Ansong-gun,
Kyonggi-Do, 456-840, South Korea
Phone: 82-334-677-4262
Fax: 82-334-677-4268
MARKETING AND MANUFACTURING
OF SOCIAL BUSINESS SYSTEMS
OMRON Business Systems Singapore
(Pte.) Ltd.
83, Clemenceau Avenue, #11-02, UE Square,
Singapore 239920, Singapore
Phone: 65-736-3900
Fax: 65-736-2736
OMRON Business Systems
Malaysia Sdn. Bhd.
501, Block D. Pusat Perdagangan Philoe
Damansara 1, No. 9, Jalan 16/11,
Off Jalan Damansara,
46350 Petaling Jaya, Selangor, Malaysia
Phone: 60-3-460-9119
Fax: 60-3-460-9559
OMRON Mechatronics of the
Philippines Corporation
Subic Techno Park Boton Area,
Subic Bay Freeport Zone,
2222, The Philippines
Phone: 63-47-252-1490
Fax: 63-47-252-1491
MARKETING OF HEALTHCARE
EQUIPMENT
OMRON Healthcare Singapore PTE Ltd.
83, Clemenceau Avenue, #11-02, UE Square,
Singapore 298135, Singapore
Phone: 65-736-2345
Fax: 65-736-2500
MARKETING AND/OR MANUFACTURING
OF CONTROL COMPONENTS
AND SYSTEMS
OMRON Electronics Asia Ltd.
601-9, Tower 2,
The Gateway No. 25, Canton Road,
Tsimshatsui, Kowloon, Hong Kong
Phone: 852-2375-3827
Fax: 852-2375-1475
OMRON Taiwan Electronics Inc.
6F, Home Young Bldg., No. 363,
Fu-Shing North Road, Taipei, Taiwan, R.O.C.
Phone: 886-22-715-3331
Fax: 886-22-712-6712
Shanghai OMRON Automation
System Co., Ltd.
No. 1600 Jinsui Road,
Jinqiao Export Processing Zone, Pudong,
Shanghai 201206, China
Phone: 86-21-5854-2080
Fax: 86-21-5854-2658
Shanghai OMRON Control
Components Co., Ltd.
1500 Jinsui Road,
Jinqiao Export Processing Zone,
Pudong, Shanghai 201026, China
Phone: 86-21-5854-0012
Fax: 86-21-5854-8413
OMRON (Shanghai) Co., Ltd.
No. 789 Jinji Road,
Jinqiao Export Processing Zone,
Pudong, Shanghai 201206, China
Phone: 86-21-5854-0055
Fax: 86-21-5854-0614
OTE ENGINEERING INC.
No. 9, Lane 201, Sec. 2, Nankan Road,
Lu-Chu Villege, Tao-Yuan, Taiwan, R.O.C.
Phone: 886-3-352-4442
Fax: 886-3-352-4239
YAMRON Co., Ltd.
5Fl.-1, No. 70, Min Chuan West Road,
Taipei, Taiwan, R.O.C.
Phone: 886-22-523-6158
Fax: 886-22-523-6642
44
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m
(W) 610pt x (H) 794pt—215 x 280mm
RESEARCH AND DEVELOPMENT
OMRON Shanghai Computer Corporation
14F, Meike Building, 1 Tianyaoqiao Road,
Shanghai 200030, China
Phone: 86-21-6468-9626
Fax: 86-21-6468-9489
LOGISTICS
OMRON Trading (Shanghai) Co., Ltd.
Rui Jin Office
Room 1212, Rui-jin Building,
205 Mao Ming Road (South),
Shanghai 200020, China
Phone: 86-21-6473-3330
Fax: 86-21-6473-3343
South America
MARKETING AND MANUFACTURING OF
CONTROL COMPONENTS AND SYSTEMS
OMRON Eletrõnica do Brasil Ltda.
Av. Santa Catarina, 935/939 04378-300,
São Paulo-SP-Brazil
Phone: 55-11-5564-6488
Fax: 55-11-5564-7751
OMRON Componentes Eletro Eletrônicos
da Amazônia Ltda.
Av. Constantino Nery, 2800 Chapada,
69050-002-Manaus-AM-Brazil
Phone: 55-92-236-5850
Fax: 55-92-236-1356
MARKETING OF RETAIL SYSTEMS
EQUIPMENT
OMRON Business Sistemas Eletrônicos
da América Latina, Ltda.
Av. Paulista 949 12-Ander, conj. 122,
CEP 01311-100, São Paulo, Brazil
Phone: 55-11-251-0073
Fax: 55-11-251-1053
MARKETING OF SOCIAL BUSINESS
SYSTEMS
MANUFACTURING OF HEALTHCARE
EQUIPMENT
Beijing GOT Business Computer
System Co., Ltd.
8F, Yujing Building, Xueqing Road,
Haidian District, Beijing 10083, China
Phone: 86-10-6231-1985
Fax: 86-10-6231-2177
OMRON (Dalian) Co., Ltd.
No. 3 Song Jiang Road,
Dalian Economic and Technical Development
Zone, Dalian 116600, China
Phone: 86-411-761-4222
Fax: 86-411-761-6602
T H E A M E R I C A S
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
Fax: 1-847-884-1866
OMRON Finance Canada, Inc.
885 Milner Avenue,
Scarborough, Ontario, M1B 5V8 Canada
Phone: 1-416-286-6465
Fax: 1-416-286-6648
MARKETING AND/OR MANUFACTURING
OF CONTROL COMPONENTS
AND SYSTEMS
OMRON Electronics Inc.
1 East Commerce Drive,
Schaumburg, IL 60173, U.S.A.
Phone: 1-847-843-7900
Fax: 1-847-843-7787
OMRON Canada Inc.
885 Milner Avenue,
Scarborough, Ontario, M1B 5V8 Canada
Phone: 1-416-286-6465
Fax: 1-416-286-6648
OMRON Manufacturing of America, Inc.
3705 Ohio Avenue,
St. Charles, IL 60174, U.S.A.
Phone: 1-630-513-0400
Fax: 1-630-513-1027
MARKETING AND/OR MANUFACTURING
OF AUTOMOTIVE COMPONENTS
OMRON Automotive Electronics Inc.
(MARKETING)
30600 Northwestern Hwy., Suite 250,
Farmington Hills, MI 48334, U.S.A.
Phone: 1-248-539-4700
Fax: 1-248-539-4710
(MANUFACTURING)
3709 Ohio Avenue,
St. Charles, IL 60174, U.S.A.
Phone: 1-630-443-6800
Fax: 1-630-443-6898
OMRON Dualtec Automotive Electronics, Inc.
2270 Bristol Circle, Oakville,
Ontario, L6H 5S3 Canada
Phone: 1-905-829-0136
Fax: 1-905-829-0432
MARKETING OF OFFICE AUTOMATION
EQUIPMENT
OMRON Office Automation Products, Inc.
3945 Freedom Circle, Suite 700,
Santa Clara, CA 95054, U.S.A.
Phone: 1-408-727-1444
Fax: 1-408-970-1149
MARKETING OF SOCIAL BUSINESS
SYSTEMS
OMRON Systems, Inc.
55 East Commerce Drive,
Schaumburg, IL 60173, U.S.A.
Phone: 1-847-843-0515
Fax: 1-847-843-7686
OMRON Transaction Systems, Inc.
55 East Commerce Drive,
Schaumburg, IL 60173, U.S.A.
Phone: 1-847-843-0515
Fax: 1-847-843-7686
MARKETING OF HEALTHCARE
EQUIPMENT
OMRON Healthcare, Inc.
300 Lakeview Parkway,
Vernon Hills, IL 60061, U.S.A.
Phone: 1-847-680-6200
Fax: 1-847-680-6269
RESEARCH AND DEVELOPMENT
OMRON Advanced Systems, Inc.
3945 Freedom Circle, Suite 700,
Santa Clara, CA 95054, U.S.A.
Phone: 1-408-727-6644
Fax: 1-408-727-5540
OMRON Management Center of America, Inc.
––Information Technology Center
3945 Freedom Circle, Suite 700,
Santa Clara, CA 95054, U.S.A.
Phone: 1-408-919-0895
Fax: 1-408-919-2829
45
45
(W) 610pt x (H) 794pt—215 x 280mm
OMRON Manufacturing of the
Netherlands B.V.
Zilvernberg 2, 5234 GM Den 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 MANUFACTURING
OF OFFICE AUTOMATION EQUIPMENT
OMRON Telford Ltd.
Hortonwood 2, Telford,
Shropshire TF1 4GW, U.K.
Phone: 44-1952-279-444
Fax: 44-1952-279-456
MARKETING OF
HEALTHCARE EQUIPMENT
OMRON Healthcare Europe B.V.
Wegalaan 57, 2132,
JD Hoofddorp, The Netherlands
Phone: 31-23-5681-200
Fax: 31-23-5681-201
OMRON Medizintechnik
Handelsgesellschaft G.m.b.H.
Windeck Strasse, 81,
68163 Mannheim, Germany
Phone: 49-0621-83348-8
Fax: 49-0621-8334820
E U R O P E
REGIONAL HEADQUARTERS
OMRON Europe B.V.
Wegalaan 67, NL-2132 JD Hoofddorp,
The Netherlands
Phone: 31-23-5681-300
Fax: 31-23-5681-391
MARKETING AND/OR MANUFACTURING
OF CONTROL COMPONENTS
AND SYSTEMS
OMRON Europe B.V.
Wegalaan 67-69, 2132 JD Hoofddorp,
The Netherlands
Phone: 31-23-5681-300
Fax: 31-23-5681-388
OMRON Electronics Ges.m.b.H.
Altmannsdorfer Strasse 142,
P.O. Box 323, A-1231,
Vienna, Austria
Phone: 43-1-80190-0
Fax: 43-1-804-48-46
OMRON Electronics N.V./S.A.
Stationsstraat 24,
B-1702 Groot-Bijgaarden, Belgium
Phone: 32-2-4662480
Fax: 32-2-4660687
OMRON Electronics A.G.
Sennweidstrasse 44,
CH-6312 Steinhausen, Switzerland
Phone: 41-41-748-1313
Fax: 41-41-748-1345
OMRON Electronics SPOL S.R.O.
Srobarova 6, Prague 10, 101 00,
Czech Republic-CZECH
Phone: 420-2-6731-1254
Fax: 420-2-7173-5613
OMRON Electronics G.m.b.H.
P.O. 10 10 20,
40710 Hilden, Germany
Phone: 49-2103-203-3
Fax: 49-2103-203-400
Schoenbuch Elektronik Hanesch
G.m.b.H. & Co., KG
Daimlerstrabe 13,
D-71083, Hervenberg, Germany
Phone: 49-7032-946810
Fax: 49-7032-946849
OMRON Electronics A/S
Odinsvej 15, DK-2600 Glostrup, Denmark
Phone: 45-43-44-00-11
Fax: 45-43-44-02-11
OMRON Electronics S.A.
C/Arturo Soria 95, E-28027 Madrid, Spain
Phone: 34-1-377-7900
Fax: 34-1-377-7956
OMRON Electronics S.a.r.l.
BP33, 19, Rue du Bois-Galon 94121
Fontenay-Sous-Bois, Cedex, France
Phone: 33-1-49747000
Fax: 33-1-48760930
OMRON Electronics S.r.l.
Viale Certosa 49, 20149 Milano, Italy
Phone: 39-2-32-681
Fax: 39-2-32-5154
OMRON Electronics Sp. z.o.o.
UL Jana Sengera Cichego 1,
02-790 Warsaw, Poland
Phone: 48-22-645-7860
Fax: 48-22-645-7863
OMRON Electronics, kft
Kiss Erno u. 1-3,
H-1046 Budapest, Hungary
Phone: 36-1-399-3050
Fax: 36-1-399-3060
OMRON Electronics Norway A/S
Ole Deviks Vei 4, P.O. Box 109, Bryn,
N-0611 Oslo, Norway
Phone: 47-22-657500
Fax: 47-22-658300
OMRON Electronics B.V.
Wegalaan 61/Postbus 5822132,
JD/2130 AN Hoofddorp,
The Netherlands
Phone: 31-23-5681100
Fax: 31-23-5681188
OMRON Electronics Lda.
Edificio OMRON, Rua de Sao Tomé, Lote 131,
Prior Velho-2685 Prior Velho, Portugal
Phone: 351-1-942-9400
Fax: 351-1-941-7899
OMRON Electronics A.B.
Norgegatan 1, P.O. Box 1275,
S-164 28 Kista, Sweden
Phone: 46-8-632-3500
Fax: 46-8-632-3510
OMRON Electronics O.Y.
Metsänpojankuja 5,
Fin 02130 Espoo, Finland
Phone: 358-9-5495-800
Fax: 358-9-5495-8150
OMRON Electronics Ltd.
1 Apsley Way, Staples Corner,
London NW2 7HF, U.K.
Phone: 44-181-450-4646
Fax: 44-181-450-8087
OMRON Electronics Ltd.
Acibadem Caddesi, Palmiye Sokak 12,
TR-81020 Kadikoy, Istanbul, Turkey
Phone: 90-216-326-2980
Fax: 90-216-326-2979
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HEAD OFFICE
Karasuma Nanajo, Shimogyo-ku,
Kyoto 600-8530, Japan
Phone: 81-75-344-7000
Fax: 81-75-344-7001
TOKYO HEAD OFFICE
3-4-10, Toranomon, Minato-ku,
Tokyo 105-0001, Japan
Phone: 81-3-3436-7227
Fax: 81-3-3436-7165
OSAKA OFFICE
Osaka Center Bldg.,
4-1-3, Kyutaro-cho, Chuo-ku,
Osaka 541-0056, Japan
Phone: 81-6-6282-2511
Fax: 81-6-6282-2789
KYOTO R&D LABORATORY
20, Igadera, Shimo-kaiinji,
Nagaokakyo-shi,
Kyoto 617-8510, Japan
Phone: 81-75-951-5111
Fax: 81-75-957-2871
CORPORATE DATA
DATE OF ESTABLISHMENT
May 10, 1933
INDUSTRIAL PROPERTY RIGHTS
Number of patents:
2,514 (Japan)
1,385 (Overseas)
Number of patents pending:
6,493 (Japan)
593 (Overseas)
NUMBER OF EMPLOYEES
23,742
PAID-IN CAPITAL
¥64,079 million
COMMON STOCK
Authorized: 495,000,000 shares
Issued: 257,107,214 shares
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)
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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
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