Innovative Technologies That Contribute to Society Annual Report 2013 For the year ended March 31, 2013
Profile The main activities of Hitachi Koki Co., Ltd. are manufacturing and selling power tools. The Company also manufactures and sells life-science instruments. As a result of continuous R&D and human resource development, we have acquired core technology leadership in ultra-high-speed motors, ultra-high precision machining and electronic control technology. Above all, Hitachi Koki seeks to reinforce the competitiveness of its present business fields and probe into new, but related fields to ensure its position as a major player of the industry.
An Abundant Product Lineup Untiring Pursuit of Energy Savings and Customer Convenience
Eco-Eriendly Outdoor Power Equipment* Business Development
Power tools made by Hitachi Koki are popular in more than 50 countries worldwide. Amid growing demand for energy-efficient motors, Hitachi Koki is enhancing its lineup of tools equipped with brushless motors. Products with these high-efficiency, energy-saving long-life motors help to reduce CO2 emissions. In addition to its commitment to the creation of higher-capacity lithium-ion batteries and battery safety and interchangeability, Hitachi Koki is actively working to improve customer convenience, including promoting expansion of its lineup of products that meet international standards for dust and water resistance.
The market for gardening and engine-operated tools is large and not very susceptible to changes in economic conditions. In this market, Hitachi Koki makes the most of its strengths as a comprehensive manufacturer of electrical, cordless and engine-operated outdoor power equipment. Efforts to augment Hitachi Koki’s lineup of eco-friendly products include the development of the New PureFire engine that meets stringent secondary exhaust emission regulations in Japan, the United States and Europe in engine-operated tools and the introduction of a series of powerful 36V gardening tools in cordless tools. * Outdoor equipment used for agriculture, gardening, etc.
Hitachi Koki ANNUAL REPORT 2013
CONTENTS To Our Shareholders and Customers ........................... 2 Review of Operations by Geographic Area .................. 4 Notable Products............................................................. 5 Technologies of Hitachi Koki ......................................... 6 Corporate Governance ................................................... 8 Financial Section Management’s Discussion and Analysis of Operations .............................................. 10 Consolidated Balance Sheet ..................................... 14 Consolidated Statement of Income and Consolidated Statement of Comprehensive Income (Loss) ................................. 16 Consolidated Statement of Changes in Net Assets .............................................. 17 Consolidated Statement of Cash Flows .................. 18 Notes to Consolidated Financial Statements ......... 19 Independent Auditor’s Report .................................. 33 Global Network ............................................................. 34 Corporate Data .............................................................. 36 Investor Information ..................................................... 37
Original Ideas and Assured Technical Capabilities
Sales Expansion Focused on Emerging Nations
With its highly original technical capabilities and timely development that flexibly responds to an accurate grasp of customer needs, represented by an impact driver drill equipped with an AC100V brushless motor, a cordless grasstrimmer/brushcutter that achieves low vibration and long operating time and a high-pressure compressor that offers high capacity in a handy size, Hitachi Koki will continue to promptly offer new products other companies cannot match.
In its view of global markets, Hitachi Koki aims to take advantage of the scale of developed nations and the growth of emerging nations. Accordingly, it is working to expand its scale in Japan, the United States and Europe while strengthening its sales capabilities in the growing markets of emerging nations, including setting up bases in ASEAN in stages to follow the BRICs countries. Hitachi Koki is emphasizing development of new trading partners and sales promotion activities.
Hitachi Koki ANNUAL REPORT 2013 1
To Our Shareholders and Customers
Business Results
with the previous fiscal year to ¥6,331 million, and net income increased 40% to ¥4,691 million. We paid dividends of ¥6 per share for each quarter of the fiscal year for total dividends of ¥24 per share for fiscal 2012.
In fiscal 2012, ended March 31, 2013, sales in Europe were weak as the impact of the debt crisis in southern Europe spread throughout the continent, and sales were also weak in some resource-rich nations due to slackening investment and an economic slowdown with the impact of financial instability. However, sales in Japan were firm due to factors including an ongoing gradual recovery in housing investment in addition to restoration demand following the Great East Japan Earthquake, and sales in North America grew as business conditions in the United States, including housing investment, finally turned onto a recovery track. In Asia and other regions, sales grew in India, the Middle East, ASEAN and South America as demand remained brisk. As a result, Japan, North America and other regions compensated for the downturn in Europe and elsewhere, and net sales were essentially unchanged year on year, increasing 0.2% compared with the previous fiscal year to ¥115,645 million. As for income, foreign currency translation rates, especially the cross rates for the Euro and U.S. dollar, which have a large impact on the Hitachi Koki Group, worsened significantly compared with the previous fiscal year. However, the Group worked to secure growth in income through increased sales in Japan, where profitability is high, expanded sales of high-value-added products, creation of a global manufacturing structure in optimal locations and total cost reductions throughout the Group, among other measures. As a result, profits improved, as operating income increased 1% compared
Initiatives Going Forward The Hitachi Koki Group will promote a variety of management initiatives, including measures to strengthen sales, product development and cost competitiveness, with the aim of improving performance in order to build a resilient corporate structure that will prevail amid intensifying global competition. In light of the severe market environment at present, the Group will focus on the following measures in particular to improve profitability. (1) In the growth field of lithium-ion battery-operated products, in addition to promoting higher-capacity and higher-voltage batteries, the Group will extend the wide range of its product series centered on products with highly energy-efficient brushless motors, and will aggressively work to establish Hitachi as a global brand in lithium-ion batteryoperated products. (2) The Group will accelerate the development of the Outdoor Power Equipment* business, which makes the most of the strengths of its comprehensive lineup of electrical, cordless and engine-operated products, as a pillar of its business expansion. * Outdoor equipment used for agriculture, gardening, etc.
Net Sales
Operating Income/ Operating Margin
Net Income
Annual Dividends per Share
(Billions of yen) 150
(Billions of yen / %)
(Billions of yen)
(Yen)
12
15
45
10
30
115.6 8
100
24.0
6.3 5.5 4
50
0
0
2009 2010 2011 2012 2013
4.6
5
2009 2010 2011 2012 2013
0
0
2009 2010 2011 2012 2013
Operating Income Operating Margin (Years ended March 31)
2 Hitachi Koki ANNUAL REPORT 2013
15
2009 2010 2011 2012 2013
(3) In the field of Accessories, which has a market size comparable to power tools, the Group will upgrade its business base for dramatic growth. (4) While accurately determining region-specific economic trends and country risk, the Group will expand the scale of its business by conducting aggressive and timely measures, including opening and deepening new store sales channels, in both large-scale developed nations and growing emerging nations. (5) The Group will promote the development of strategic products that accurately target customer needs and innovative products that rivals cannot produce by strengthening marketing activities and product development efforts, and will introduce profitable new products to the market as quickly as possible. In addition, the Group will strengthen product development to improve the user’s work environment by reducing size, weight, vibration, noise and dust dispersion to enhance its lineup of products that result in a high level of customer satisfaction.
Kiyoshi Kato Chairman of the Board, Director & President
Management Policy
(8) The Group will continue to consider methods to rapidly expand the scale of its Power Tools, Outdoor Power Equipment and Accessories businesses, with M&A and alliances as an important strategy.
The Hitachi Koki Group’s basic management policy will continue to be to contribute to society by offering innovative, high-performance and highquality products and services that result in a high level of customer satisfaction. As a global enterprise, the Group will conduct its Power Tools and other businesses worldwide. In addition, as a member of society, the Group is working to strengthen compliance and steadfastly uphold corporate ethics throughout Group businesses, based on its corporate creed of “Basics and Ethics,” with the goal of being a socially trusted enterprise. In addition, while working to expand the scope of business to become a global major player, we will pursue profitability by targeting a consolidated operating margin of 10% or more and continue tirelessly striving to further raise corporate value in order to achieve continuous growth and development of our businesses. We thank you for your continued support and understanding.
(9) The Group will expand the scale of the Life-Science Instruments business by deploying high-value-added products that use its advanced technical capabilities in new fields such as the materials market, and work for further growth as a high-earning business.
Kiyoshi Kato Chairman of the Board, Director & President
(6) In order to strengthen profitability in response to intensifying price competition, the Group will strive for design and development that is strongly aware of cost reductions, and will work to thoroughly reduce costs in all areas, including production costs, direct material costs and indirect costs. (7) The Group will work to establish a stable manufacturing structure and aim to make products of identical quality worldwide to further increase their reliability by pursuing a manufacturing structure in optimal locations and revising its global supply chain in consideration of risk dispersal.
Hitachi Koki ANNUAL REPORT 2013 3
Review of Operations by Geographic Area Net Sales by Geographic Area (Year ended March 31, 2013)
Japan 37%
Recovery in housing investment continued, and the Hitachi Koki Group’s efforts included enhancing and expanding sales of its competitive product lineup including cordless tools centered on next-generation impact driver drills with high-capacity 4-ampere-hour (Ah) lithium-ion batteries, which it launched ahead of competitors, and pneumatic tools centered on a highperformance, high-quality and highly durable high-pressure air compressor that is made in Japan, typified by the “Sawa Model.” As a result, sales in Japan increased 6% compared with the previous fiscal year to ¥43,084 million.
North America The Hitachi Koki Group worked proactively for sales in the home center channel under Christmas and Father’s Day product strategies, backed by the turn to recovery in housing investment, and worked to strengthen the general retailer sales channel, centered on pneumatic tools, for which the Group has the advantage of the number-two share of the U.S. market. With additional factors including the shift in the foreign currency exchange rate to depreciation of the yen against the dollar in the second half of the fiscal year, sales in North America increased 7% compared with the previous fiscal year to ¥21,336 million.
18%
Europe
31%
Although performance remained strong in Russia and the United Kingdom, sales were weak, mainly in the Eurozone, with the impact of financial instability caused by the debt crisis, as well as the appreciation of the yen against the Euro. As a result, sales in Europe decreased 9% compared with the previous fiscal year to ¥35,262 million.
Asia and Other Regions 14%
4 Hitachi Koki ANNUAL REPORT 2013
Although sales were weak in China, where the economy slowed, and Australia, where resource-related investment slackened, factors including the marked growth shown in India, the Middle East, ASEAN and South America resulted in sales in Asia and other regions of ¥15,963 million, limiting the decrease to 3% compared with the previous fiscal year.
Notable Products
Improved Work Efficiency with Fastest-in-Class* Performance Cordless Impact Driver Drills (WH 14DDL/WH 18DDL)
Products with
4.0Ah Lithium-lon Battery
These new products meet requirements for reduced work time and increased runtime per charge. Featuring the Hitachi Koki Group’s original Active Control System (ACS), they automatically control rotation speed and timing of impact according to working conditions to achieve the fastest screwtightening speed in their class.* In addition to being equipped with a high-capacity 4.0Ah lithium-ion battery for increased runtime per charge, these flagship models offer the smallest bodies in their class* and numerous functions including a new mode with adjustable impact for a wider range of applications. * According to a Hitachi Koki Group survey as of January 2013
Fastest Drilling Speed in Its Class1 Compact Hammer Drill Series (DH 28PCY and Others) This new series, which comprises five models in Japan and six overseas, is used in applications such as drilling holes in concrete for construction and equipment installation. It achieves a drilling speed that is the fastest in its class1 and high durability approximately twice2 that of the previous model. In addition, the series incorporates original technologies and creative measures 3 to respond to user needs and make the products easier to operate, including user vibration protection (UVP) that reduces vibrations transmitted to the operator, a mode shift lever for better operability and an easy-grip two-layer molded side handle. Hitachi Koki will conduct global sales activities to roll out this series, which is one of the most important core products supporting its business. 1. According to a Hitachi Koki survey of 2kg-class hammer drills as of May 2013 (excludes some models) 2. Compared with Hitachi Koki’s previous model DH 24PC3 (excludes some models) 3. Use varies by model.
Development of Outdoor Power Equipment Business 36V Lithium-Ion Battery-Operated Gardening Tools Series This new series of 36V lithium-ion battery-operated gardening tools can be used with a newly developed high-capacity backpack power supply. This series offers output* and performance that satisfies professional users, and its global rollout will be centered on Europe. * Length of time using the high-capacity backpack power supply
Engine-Operated Chain Saw (CS 33EDTP) This product received the internationally renowned iF Product Design Award in 2013. To date, the Hitachi Koki Group has won six such awards, which are given based on a comprehensive evaluation of the product that includes function and quality as well as design.
Eco-Friendly Centrifuge for Increased Throughput High-Speed Refrigerated Centrifuge (CR 22N) This centrifuge is used for research and development in a wide range of fields including biotechnology, medicine, pharmaceuticals, food, vaccines, paint and cosmetics. While achieving a smaller footprint than previous models, it offers the largest throughput in its class* (separation of 6 liters per operation). A highresolution color LED touch panel significantly improves visibility and operability. In addition, this new product is expected to meet current needs as an eco-friendly model with features including stable temperature control with the first inverter refrigerator in its class, an electric power regeneration function for reuse of up to 40% of power used and a substantial reduction in standby power. In the future, the Hitachi Koki Group plans to enhance its product lineup for aggressive expansion into the global market. * According to a Hitachi Koki Group survey as of June 2012
Hitachi Koki ANNUAL REPORT 2013 5
Technologies of Hitachi Koki
Research and Development The Hitachi Koki Group’s research and development activities for fiscal 2012 were spearheaded by the Research and Development Division and the design department of the Life-Science Instruments Division. The Group obtained 386 patents and design registrations in Japan and overseas during the year, for a total of 3,514 patents and design registrations
held worldwide as of March 31, 2013. The Group also maintains a cooperative relationship in its research and development activities with its parent company, Hitachi, Ltd. Research and development costs for the Hitachi Koki Group during fiscal 2012 were ¥3,386 million, as it worked to develop new products and technologies.
Power Tools-Related Rollout of a series of cordless products with high-capacity 4.0Ah lithiumion batteries that use the Hitachi Koki Group’s original new technologies
4.0Ah lithium-ion battery series
• Cordless impact driver drill that achieves the smallest size in its class, a substantial reduction in work time due to its high-speed operation, and high power as a result of the Hitachi Koki Group’s original new technologies, with an IP56 performance rating from the International Electrotechnical Commission (IEC) for dust protection and water resistance • 4.0Ah lithium-ion battery that achieves higher capacity with the same weight and shape and increases runtime by approximately 50% and that offers approximately twice the runtime of previous products (brushed motor with 3.0Ah battery) when used with a high-efficiency brushless motor Rollout of outdoor power equipment products centered on a series of 36V rechargeable cordless gardening tools
Engine chain saw CS40EA
36V cordless grass trimmer CG 36DL
• A series of 36V rechargeable cordless gardening tools, featuring a new, highcapacity backpack power supply that provides a longer runtime and low-noise, powerful and environment-friendly zero-emission chain saws, hedgetrimmers, grasstrimmer/brushcutters and blowers • Engine-operated gardening tools, including a chain saw, grasstrimmer/brushcutter and hedgetrimmer, which feature a New PureFire high-performance engine that complies with secondary exhaust emission regulations in Japan and overseas
Development of highly competitive products • Pen-type impact driver drill that is compact yet achieves the highest performance and longest runtime in its class, with the Hitachi Koki Group’s original easy-to-operate switch • High-performance, high-quality and highly durable high-pressure air compressor for nailers that are made in Japan, typified by the Sawa Model • An impact driver drill that is high power and the lightest and smallest in its class and features a brushless motor that won an Electrical Science and Engineering Promotion Award in recognition of its energy-saving, miniaturization technology and improved operability resulting from the application of the Hitachi Koki Group’s original electronic control technology
High-power impact driver drill
Design • Internationally renowned iF Product Design Award from Europe for an engineoperated chain saw, the sixth iF award to date for a Hitachi Koki Group product
Life-Science Instruments-Related • High-speed refrigerated centrifuge with the first inverter refrigerator in its class for highly precise temperature control in an energy-saving model that enables a significant reduction in electrical consumption
6 Hitachi Koki ANNUAL REPORT 2013
Quality Assurance Quality assurance entails ensuring customer satisfaction by manufacturing superior quality products that are created in response to changes in the operating environment and fulfill a company’s responsibility to society. As a part of this process, product development involves continuous improvements in quality assurance through evaluations and assessments, as well as verification that all products and accessories, whether manufactured in Japan or overseas, have the quality that leads to customer satisfaction. Hitachi Koki strictly evaluates quality at each of the development, design and manufacturing stages and conducts a final check of products from the customer’s perspective. Quality evaluation tests a broad range of checklist items starting with a confirmation of basic product performance. Other tests include checking that each product functions properly as the environment
changes over time, including high and low temperatures, and that it is durable enough to perform continuously over thousands of uses. In addition, the accurate measurement of component dimensions is crucial to the product development process. For this purpose, Hitachi Koki adopted the use of three-dimensional digitizers in 2001. Utilizing three-dimensional data prepared during the design phase, each product’s complicated external dimensions can be measured with a high degree of precision in a short time. This helps to maintain quality and reduce development time. In the future, Hitachi Koki will continue to pursue further improvements in quality, which is the source of customer satisfaction, as it creates highly reliable and durable products.
Product dimensions are measured using a digitizer.
Quality evaluation
Production Technologies Hitachi Koki has high-level production technologies for faster commercialization of high-performance, high-quality products. These include technologies for sophisticated electronic motor control that supports high-speed rotation technology, high-precision processing and facility automation using intelligent robots. With in-house development facilities that use these technologies and a highly skilled workforce, we have achieved a highly efficient and flexible production system. We deploy these powerful production technologies at all our manufacturing bases around the world to support our highly efficient production activities. In addition, we tirelessly seek out new production technologies for next-generation products to continue to develop world-class products.
Robot with visual sensor for parts assembly
Humanoid robot for assembly
Hitachi Koki ANNUAL REPORT 2013 7
Corporate Governance
Basic Policy on Corporate Governance
Management Committee
Aiming to establish a framework for rapid and accurate management decision making and for operational performance, as well as to enhance the management oversight function, Hitachi Koki is working to strengthen the important management area of corporate governance and upgrade its internal controls. In addition, the Company has established the Compliance Division for thoroughgoing observance of laws and regulations. Under the deep recognition that a company is a member of society, the Company has set the Hitachi Koki Standards for Corporate Conduct as a basis for all operations and has made clear the basic philosophy and operating guidelines of the Hitachi Koki Group. The Company has also established the Hitachi Koki Group Code of Conduct as a specific code of conduct applicable throughout the Group, and top management has been leading efforts for thorough adherence. In addition, the Company has set forth its Policy Regarding Improper Business Dealings and Practices, which elucidates its policy with regard to improper business dealings and practices and compliance violations, and has established and operates an effective compliance reporting system. Through these measures, the Company and the Hitachi Koki Group conduct business activities that are firmly rooted in corporate ethics and legal compliance. Based on a comprehensive consideration of factors including the scale of the Company’s operations and its officer system, Hitachi Koki has adopted the format of a company with an Audit & Supervisory Board as the system for governing the Company and has established a general meeting of shareholders, directors and Board of Directors’ meetings, Audit & Supervisory Board Members and Audit & Supervisory Board meetings, and accounting auditors in order to fully deploy its corporate governance functions and to maintain superior operating efficiency.
The Management Committee is under the Board of Directors. It comprises directors and executive officers and meets twice a month in principle. The Committee makes substantive decisions on key management issues for the Company and the Group based on the basic guidelines decided on by the Board. Standing Audit & Supervisory Board Members also attend for auditing purposes.
Budget Budget items are deliberated by the Management Committee, the Budget Deliberation Committee and the Main Budget Committee. In addition, a Management Deliberation Committee composed of Management Committee members also meets when necessary. The Management Deliberation Committee listens to reports on key management issues in all business areas, deliberates on them and provides advice.
Regulatory Compliance Hitachi Koki has determined guidelines for conduct and other measures based on regulatory compliance in operational performance and a policy of specific penalties for violations of laws and regulations; established a department in charge of regulatory compliance; established operational performance rules and guidelines; conducted education and training; and created and distributed manuals. At the same time, the Company provides a framework for auditing operational performance with the Internal Auditing Division. The Company has also put in place and utilizes an effective compliance reporting system.
General Meeting of Shareholders
Initiatives to Strengthen Corporate Governance
Audit & Supervisory Board • Audit & Supervisory Board Members • External Audit & Supervisory Board Members
g rti n Re
Management Supervision
Co n
tro
l
Guidance Consultation
Corporate Lawyer
Control
Auditing Office
nt
ro l
Re
po
rti n
g
Reporting
Co
Auditing
8 Hitachi Koki ANNUAL REPORT 2013
Reporting
The Audit & Supervisory Board meets once a month in principle to report on the status of audits. Audit & Supervisory Board Members also attend Board of Directors’ meetings and other key meetings to listen to directors about the status of their performance, in compliance with the corporate auditing standards set by the Audit & Supervisory Board and in line with auditing guidelines and schedules. Further, members exchange ideas in close cooperation with the accounting auditors and receive from them accounting schedules and reports on corporate and auditing results.
Auditing
Audit & Supervisory Board
Accounting Auditors
The Board of Directors meets once a month in principle. It makes decisions regarding key Company and Group operational performance issues and supervises the performance of representative directors and directors.
po
Board of Directors
Board of Directors • Directors • External Directors
Auditing
Compliance Division Export Management Office, etc.
Au
Management Committee Management Deliberation Committee Control Supervision
dit
ing
Guidance
Headquarters, divisions, offices, departments Control supervision
Affiliated companies, etc.
Guidance Consultation
Management Team
(As of June 25, 2013)
Chairman of the Board, Director & President
Board Director
Masato Yoshinari
Kiyoshi Kato
Board Director
Kazuyoshi Kimura
Senior Vice-President & Director
Osami Maehara
Audit & Supervisory Board Member Tsuneyuki Hida
Vice-President & Director
Fumio Tashimo
Audit & Supervisory Board Member Takaharu Miyata
Board Director
Chikai Yoshimizu
Audit & Supervisory Board Member Takashi Miyoshi
Board Director
Yoichiro Tanaka
Audit & Supervisory Board Member Nobuya Yamada
Board Director
Akira Yoshida
Environmental Protection and Social Contribution Environmental Protection Approach The Hitachi Koki Group has long recognized the importance of the environment and has been proactively promoting environmental protection activities. In recent years, we have stepped up efforts to provide eco-friendly products. To that end, we have introduced the Design for Environment (DfE) assessment system to quantitatively evaluate the environmental impact of a product’s lifecycle from the development stage. We give particular consideration to factors such as Reduce (less weight, less use of energy, and longer life), Reuse, Recycle (recycled resources), and Environmental conservation (anti-toxicity, etc.) to develop products with minimal environmental impact. Products that meet DfE criteria are designated as Eco-products by the Hitachi Group. In fiscal 2012, Eco-products accounted for 67% of Hitachi Koki’s consolidated net sales and 96% of all new products.
Cordless impact driver drill with energy-efficiency realized by Hitachi Koki’s original technical capabilities
Social Contribution Hitachi Koki’s social contribution activities include collaborative efforts with local communities linked to its environmental activities, such as promotion of greening at company premises and support for environmental education for schoolchildren. We welcome elementary and middle-school students from Hitachinaka City, Ibaraki Prefecture, for factory tours and hands-on learning programs to introduce them to how products are made, and provide support for practical training in manufacturing. The entire Hitachi Koki Group will continue to promote environmental protection and social contribution activities. Welcoming elementary school students from Hitachinaka City on a factory tour
Hitachi Koki ANNUAL REPORT 2013 9
Management’s Discussion and Analysis of Operations (Years in graphs ended March 31)
Operating Results Net Sales/Overseas Sales Ratio (Billions of yen) 200
(%) 80
62.7 60
150
115.6 100
40
50
20
0
2009 2010 2011 2012 2013
0
Net Sales (left scale) Overseas Sales Ratio (right scale)
Annual Dividends per Share (Yen) 50
40
30
24.0 20
10
0
2009 2010 2011 2012 2013
10 Hitachi Koki ANNUAL REPORT 2013
In fiscal 2012 ended March 31, 2013, sales in Europe were weak as the impact of the debt crisis in southern Europe spread throughout the continent, and sales were also weak in some resource-rich nations due to slackening investment and an economic slowdown with the impact of financial instability. However, sales in Japan were firm due to factors including an ongoing gradual recovery in housing investment in addition to restoration demand following the Great East Japan Earthquake, and sales in North America grew as business conditions in the United States, including housing investment, finally turned onto a recovery track. In Asia and other regions, sales grew in India, the Middle East, ASEAN and South America as demand remained brisk. As a result, Japan, North America and other regions compensated for the downturn in Europe and elsewhere, and net sales were essentially unchanged year on year, increasing 0.2% compared with the previous fiscal year to ¥115,645 million. As for income, foreign currency translation rates, especially the cross rates for the Euro and U.S. dollar, which have a large impact on the Hitachi Koki Group, worsened significantly compared with the previous fiscal year. However, the Group worked to secure growth in income through increased sales in Japan, where profitability is high, expanded sales of high-value-added products, creation of a global manufacturing structure in optimal locations and total cost reductions throughout the Group, among other measures. As a result, profits improved, as operating income increased 1% compared with the previous fiscal year to ¥6,331 million, and net income increased 40% to ¥4,691 million. In the Power Tools segment, the Hitachi Koki Group secured segment sales totaling ¥109,650 million and operating income of ¥4,423 million, both essentially unchanged compared with the previous fiscal year. In Japan, sales increased 5% compared with the previous fiscal year. In addition to the ongoing recovery in housing investment, factors in the increase included the Hitachi Koki Group’s efforts to enhance and expand sales of its competitive product lineup including cordless tools centered on next-generation impact driver drills with high-capacity 4.0Ah lithium-ion batteries, which it launched ahead of competitors, and pneumatic tools centered on a high-performance, high-quality and highly durable high-pressure air compressor that is made in Japan, typified by the Sawa Model. In North America, sales increased 10% compared with the previous fiscal year. The Hitachi Koki Group worked proactively for sales in the home center channel under Christmas and Father’s Day product strategies, backed by the turn to recovery in housing investment, and worked to strengthen the general retailer sales channel, centered on pneumatic tools, for which the Group has the advantage of the number-two share of the U.S. market. In addition, other factors in the increase included the shift in the foreign currency exchange rate to depreciation of the yen against the dollar in the second half of the fiscal year. In Europe, sales decreased 8% compared with the previous fiscal year. Although performance remained strong in Russia and the United Kingdom, sales were weak, mainly in the Eurozone, with the impact of financial instability caused by the debt crisis, as well as the appreciation of the yen against the Euro. In Asia and other regions, although sales were weak in China, where the economy slowed, and Australia, where resource-related investment slackened, factors including the marked growth shown in India, the Middle East, ASEAN and South America limited the decrease to 3% compared with the previous fiscal year. In the Life-Science Instruments segment, sales decreased 1% compared with the previous fiscal year to ¥5,995 million, and operating income increased 3% to ¥1,908 million. In Japan, although there were delays in implementing budgets at university and
government research facilities, which are major purchasers, a large-scale order for continuous flow ultracentrifuges for vaccine production related to a government project contributed strongly to both sales and income. Overseas sales were weak, despite the Hitachi Koki Group’s efforts including revision of sales channels and product advertising, due to a lull in capital investment by vaccine manufacturers and reduced price competitiveness because the exchange rate for the yen remained at a high level, among other factors.
Policy on Returns to Shareholders and Dividends Decisions to distribute profits to shareholders and retain earnings are made after taking full account of future business plans, performance, financial conditions and other factors. In addition, Hitachi Koki strives for the efficient allocation of retained earnings by concentrating investments on core products and technologies and on rationalizing facilities as well as on M&A transactions expected to produce synergistic benefits and promote growth in the scale of business operations. Regarding cash dividends, Hitachi Koki pays quarterly dividends in an effort to be swift and proactive in returning profits to shareholders. Hitachi Koki takes a comprehensive view of factors including changes in the operating environment, future business plans, business results and financial condition in considering dividend payments as it works to continue paying annual dividends that are as stable as possible. Hitachi Koki has paid dividends of ¥6 per share for each of the first quarter, second quarter, third quarter and year end. As a result, dividends for the full fiscal year totaled ¥24 per share. Aiming to continue proactively returning profits to shareholders, for fiscal 2013 Hitachi Koki will implement stable quarterly dividends, with dividends of ¥6 per share for each of the first quarter, second quarter, third quarter and year end. Consequently, dividends for the full fiscal year will total ¥24 per share.
Analysis of Financial Position Cash Flow • Net Cash Provided by Operating Activities Net cash provided by operating activities was ¥164 million, due to factors including the recording of income before income taxes and minority interests.
Cash Flow Summary (Millions of yen)
2011
• Net Cash Used in Investing Activities Net cash used in investing activities was ¥2,687 million, due to factors including purchase of property, plant and equipment.
• Net Cash Used in Financing Activities Net cash used in financing activities was ¥4,317 million, due to factors including cash dividends paid.
Net cash provided by operating activities
2012
6,406 10,333
2013 164
Net cash used in investing activities
(646) (2,170) (2,687)
Net cash used in financing activities
(2,917) (1,804) (4,317)
Cash and cash equivalents at end of year
27,424 33,809 29,026
As a result of the above, cash and cash equivalents at end of year totaled ¥29,026 million, a decrease of ¥4,783 million from the end of the previous fiscal year.
Hitachi Koki ANNUAL REPORT 2013 11
Assets, Liabilities and Net Assets • Assets
Total Assets/ROA (Billions of yen) 150
144.9
(%) 6
4
100
Total assets as of March 31, 2013 were ¥144,933 million, an increase of ¥5,340 million compared with the end of the previous fiscal year. Current assets were ¥115,252 million of the total, an increase of ¥5,049 million from a year earlier. This was mainly the result of increases in inventories and trade notes and accounts receivable due in part to the impact of currency translation, although deposits decreased.
3.2 2
50
• Liabilities Total liabilities were ¥34,413 million, a decrease of ¥2,467 million from a year earlier. This was mainly due to a decrease in trade notes and accounts payable.
0
2009 2010 2011 2012 2013
0
• Net Assets
Total Assets (left scale) ROA (right scale)
Total net assets were ¥110,520 million, an increase of ¥7,807 million from a year earlier. This was mainly due to increases in foreign currency translation adjustments and retained earnings.
Net Assets/ROE (Billions of yen) 120
110.5
(%) 6
4.4 80
4
40
2
0
2009 2010 2011 2012 2013
0
Net Assets (left scale) ROE (right scale)
Capital Expenditures During fiscal 2012, the Hitachi Koki Group made total capital expenditures of ¥3,105 million to carry out projects, which were carefully selected based on their necessity. Major investments included rationalizing production facilities in Japan and overseas, and strengthening and enhancing production management system functions.
Risk Information Factors that could affect the operating results, share price and financial condition of the Hitachi Koki Group are listed below. Forward-looking statements below reflect the judgment of management as of March 31, 2013. (1) Economic Conditions The Hitachi Koki Group sells products in Japan, North America, Europe, Asia and other regions. To counter regional economic fluctuations, the Group plans measures including increasing manufacturing efficiency through cost-reduction activities and establishing production bases in multiple regions. However, a reduction in demand in each region stemming from a worse-than-expected economic slowdown could negatively affect the Group’s businesses.
Capital Expenditures (Billions of yen) 5
4
3.1 3
2
1
0
2009 2010 2011 2012 2013
12 Hitachi Koki ANNUAL REPORT 2013
(2) Exchange Rate Fluctuations Although the Hitachi Koki Group is working to establish a business model that is not susceptible to exchange rate fluctuations, greater-than-expected exchange rate fluctuations could affect the Group’s businesses because overseas sales make up a high proportion of the Group’s total consolidated net sales. Usually, a strong yen exerts a negative effect on the Group’s businesses and a weak yen has a positive effect.
Management’s Discussion and Analysis of Operations
(3) Price Competition and Raw Material Price Increases The Hitachi Koki Group’s products experience market price competition. Although the Group is taking measures to be successful in this competition such as continually introducing strategic products based on its accurate perception of user needs and cost-reduction activities, situations including a dramatic increase in price competition and higher-than-expected raw material price increases could negatively affect the Group’s businesses. (4) Potential Risk from International Activities The Hitachi Koki Group conducts manufacturing and sales activities in North America, Europe, Asia and other regions. As a result, factors in such regions including regulatory, taxation and economic changes, political changes including the occurrence of terrorism and conflicts, and social changes including labor shortages and disputes, power supply shortages, and the spread of infectious diseases could negatively affect the Group’s businesses. (5) Limits on Intellectual Property Rights Protection In order to differentiate its products from those of its competitors, the Hitachi Koki Group has accumulated various technologies and know-how and created several measures to protect its intellectual property rights. However, it may not be possible to prevent other companies from using Group technologies to produce similar products, and claims may surface that the Group unknowingly infringed on another company’s intellectual property rights. These and other factors could negatively affect the Group’s businesses. (6) Product Defects The Hitachi Koki Group has taken sufficient measures in this area, including product designs that consider safety, thorough quality management and product liability insurance subscription. However, situations such as being responsible for an unexpectedly high amount of compensation and large-scale product liability litigation could exert a substantial negative effect on public perception of the Group’s products and require substantial costs to remedy, and thus could negatively affect the Group’s businesses. (7) Changes in Shareholder Composition, Business Alliances, Etc. Factors including changes in the Hitachi Koki Group’s shareholder composition, and changes in or dissolution of business alliances, could negatively affect the Group’s businesses. (8) Earthquakes and Other Natural Disasters A large-scale earthquake or other natural disaster that causes serious damage to the Hitachi Group’s business sites, as well as cuts off transportation infrastructure and creates problems with the supply of electricity, fuel or materials, may interfere with the business activities of the Group. This interference may include the Group’s production and sales activities as well as require substantial costs to recover from. As a result, such an event could negatively affect the Group’s businesses.
Hitachi Koki ANNUAL REPORT 2013 13
Consolidated Balance Sheet
Hitachi Koki Co., Ltd. and consolidated subsidiaries March 31, 2013 and 2012 Thousands of U.S. dollars (Note 1)
Millions of yen
ASSETS
2013
2012
2013
Cash on hand and in banks (Note 2) .............................................
¥ 15,861
¥ 11,738
$ 168,644
Deposits (Notes 2 and 18) ............................................................
13,165
22,071
139,979
Trade notes and accounts receivable ...........................................
34,860
31,781
370,654
Inventories (Note 4) ......................................................................
47,837
40,434
508,634
Deferred tax assets (Note 9) ........................................................
1,920
2,376
20,415
Others ..........................................................................................
2,508
2,409
26,667
Current assets:
Allowance for doubtful accounts .................................................. Total current assets .................................................................
(899)
(606)
(9,559)
115,252
110,203
1,225,433
Land (Note 15) ..............................................................................
2,633
2,616
27,996
Buildings and structures (Notes 1 and 15) ...................................
31,756
31,031
337,650
Machinery and equipment (Note 1) ..............................................
36,626
36,423
389,431
Others ..........................................................................................
10,966
10,360
116,598
Less accumulated depreciation ....................................................
(62,852)
(61,385)
(668,283)
19,129
19,045
203,392
Goodwill .......................................................................................
4,459
4,325
47,411
Others ..........................................................................................
1,442
1,405
15,332
Total intangible assets (Note 15) ...............................................
5,901
5,730
62,743
Investment securities (Note 3) .....................................................
1,116
928
11,866
Deferred tax assets (Note 9) ........................................................
1,085
1,287
11,536
Prepaid pension costs (Note 11) ...................................................
1,573
1,423
16,725
Others ..........................................................................................
877
977
9,325
Total investments and other assets ..........................................
4,651
4,615
49,452
Total assets .....................................................................................
¥144,933
¥139,593
$1,541,021
Property, plant and equipment:
Net property, plant and equipment (Note 17) ...........................
Intangible assets:
Investments and other assets:
See accompanying notes.
14 Hitachi Koki ANNUAL REPORT 2013
Thousands of U.S. dollars (Note 1)
Millions of yen
LIABILITIES AND NET ASSETS
2013
2012
2013
Short-term loans (Notes 8 and 18) ...............................................
¥ 12,328
¥ 13,127
$ 131,079
Trade notes and accounts payable (Note 18) ...............................
7,590
9,326
80,702
Accrued expenses ........................................................................
6,973
6,655
74,141
Income taxes payable (Note 9) .....................................................
521
1,107
5,540
Accrued bonuses for directors and corporate auditors ................
51
50
542
Asset retirement obligations (Note 12) .........................................
58
27
617
Others (Note 8) ............................................................................
3,181
2,853
33,822
Total current liabilities ...............................................................
30,702
33,145
326,443
Employees’ severance and retirement benefits (Note 11) ...........
2,976
2,969
31,643
Accrued retirement benefits for directors and corporate auditors ...
397
369
4,221
Asset retirement obligations (Note 12) ........................................
231
253
2,456
Others (Note 8) ............................................................................
107
144
1,138
Total long-term liabilities ...........................................................
3,711
3,735
39,458
Total liabilities ........................................................................
34,413
36,880
365,901
—123,072,776 shares ............................................
17,813
17,813
189,399
Capital surplus ..............................................................................
21,558
21,558
229,219
Retained earnings ........................................................................
90,222
88,022
959,298
Treasury stock, at cost .................................................................
(13,635)
(13,634)
(144,976)
LIABILITIES Current liabilities:
Long-term liabilities:
NET ASSETS Shareholders’ equity (Note 14): Common stock Authorized —270,000,000 shares Issued
Accumulated other comprehensive income: Net unrealized holding gains (losses) on securities ...................... Foreign currency translation adjustments ....................................
26 (6,278)
(138) (11,871)
276 (66,752)
Minority interests ............................................................................
814
963
8,655
Total net assets ........................................................................
110,520
102,713
1,175,120
Total liabilities and net assets ..........................................................
¥144,933
¥139,593
$1,541,021
Hitachi Koki ANNUAL REPORT 2013 15
Consolidated Statement of Income and Consolidated Statement of Comprehensive Income (Loss) Hitachi Koki Co., Ltd. and consolidated subsidiaries Years ended March 31, 2013 and 2012
Consolidated Statement of Income
Net sales (Note 17) .......................................................................... Cost of sales .................................................................................... Gross profit ...................................................................................... Selling, general and administrative expenses .................................. Operating income (Note 17) ............................................................ Other income (expenses): Interest income ............................................................................. Dividend income ........................................................................... Income from rental property (Note 15) ......................................... Reversal of allowance for doubtful accounts ................................ Interest expense ........................................................................... Foreign exchange gains (losses), net ............................................ Loss on disposal of property, plant and equipment ...................... Expenses for rental of real estate (Note 15) ................................. Gain on sale of property, plant and equipment ............................. Compensation income .................................................................. Business restructuring expenses .................................................. Loss on disaster (Note 1) .............................................................. Loss on sale of affiliates’ stock ..................................................... Loss on sale of property, plant and equipment ............................. Loss on liquidation of subsidiaries ................................................ Special retirement payment .......................................................... Legal settlement payment ............................................................ Others, net .................................................................................... Income before income taxes and minority interests ....................... Income taxes: (Note 9) — Current ..................................................................................... — Deferred .................................................................................. Income before minority interests .................................................... Minority interests ............................................................................ Net income ......................................................................................
2013
2012
¥115,645 71,240 44,405 38,074 6,331
¥115,463 71,161 44,302 38,014 6,288
$1,229,612 757,469 472,142 404,827 67,315
204 18 413
233 18 424 15 (269) (584) (64) (179) 751
2,169 191 4,391
—
(170) (203) (67) (250) 19 142
¥
2013
—
(1,808) (2,158) (712) (2,658) 202 1,510
—
(187) (105) (98) (23) (16)
— — — —
— — — —
(29) (80) (55) 11 6,284
57 6,261
(308) (851) (585) 117 66,816
918 657 4,709 18 4,691
1,728 1,115 3,418 (59) 3,359
9,761 6,986 50,069 191 49,878
Net income per share: — Basic ........................................................................................ — Diluted ..................................................................................... Cash dividends applicable to the year .............................................
Thousands of U.S. dollars (Note 1)
Millions of yen
— —
¥ Yen
U.S. dollars (Note 1)
¥46.26
¥33.13
—
—
¥24.00
$
¥24.00
$0.49 —
$0.26
See accompanying notes.
Hitachi Koki Co., Ltd. and consolidated subsidiaries Years ended March 31, 2013 and 2012
Consolidated Statement of Comprehensive Income (Loss)
Thousands of U.S. dollars (Note 1)
Millions of yen
2013
2012
2013
Income before minority interests .................................................... Other comprehensive income (loss) Net unrealized holding gains (losses) on securities ......................... Foreign currency translation adjustments ........................................ Total other comprehensive income (loss) (Note 16) .......................... Comprehensive income (loss) .........................................................
¥ 4,709
¥3,418
$ 50,069
164 5,682 5,846 ¥10,555
28 (518) (490) ¥2,928
1,744 60,415 62,158 $112,228
Attributable to: Shareholders of Hitachi Koki Co., Ltd............................................ Minority interests ..........................................................................
¥10,448 107
¥2,889 39
$111,090 1,138
See accompanying notes.
16 Hitachi Koki ANNUAL REPORT 2013
Consolidated Statement of Changes in Net Assets
Hitachi Koki Co., Ltd. and consolidated subsidiaries Years ended March 31, 2013 and 2012 Thousands of U.S. dollars (Note 1)
Millions of yen
2013
2012
Capital surplus: Balance at beginning of the year.. Changes during the year: Disposal of treasury stock .... Net change during the year... Balance at end of the year ... Retained earnings: Balance at beginning of the year.. Effect of subsidiaries’ fiscal terms change ............ Changes during the year: Cash dividends paid ........... Net income ........................ Net change during the year... Balance at end of the year ... Treasury stock: Balance at beginning of the year .. Changes during the year: Acquisition of treasury stock .. Disposal of treasury stock .. Net change during the year... Balance at end of the year ... Total shareholders’ equity: Balance at beginning of the year .. Effect of subsidiaries’ fiscal terms change ............ Changes during the year: Cash dividends paid ........... Net income......................... Acquisition of treasury stock .. Disposal of treasury stock .. Net change during the year... Balance at end of the year ...
See accompanying notes.
Millions of yen
2013
Shareholders’ equity Common stock: Balance at beginning of the year .. ¥ 17,813 ¥ 17,813 $ 189,399 Changes during the year: Net change during the year... — — — Balance at end of the year ... 17,813 17,813 189,399
21,558
21,558
229,219
— — 21,558
0 0 21,558
— — 229,219
88,022
87,097
935,906
(57)
—
(606)
(2,434) 4,691 2,257 90,222
(2,433) 3,359 925 88,022
(25,880) 49,878 23,998 959,298
(13,634)
(13,633)
(144,965)
(1) — (1) (13,635)
(0) 0 (0) (13,634)
(11) — (11) (144,976)
113,759
112,835
1,209,559
(57)
—
(606)
(2,433) (2,434) (25,880) 3,359 4,691 49,878 (0) (1) (11) 0 — — 924 2,256 23,987 115,958 113,759 1,232,940
Thousands of U.S. dollars (Note 1)
2013
Accumulated other comprehensive income Net unrealized holding gains (losses) on securities: Balance at beginning of the year .. ¥ Changes during the year: Net change in items other than shareholders’ equity ....... Net change during the year... Balance at end of the year ... Foreign currency translation adjustments: Balance at beginning of the year Changes during the year: Net change in items other than shareholders’ equity ............... Net change during the year... Balance at end of the year ... Total accumulated other comprehensive income: Balance at beginning of the year Changes during the year: Net change in items other than shareholders’ equity ............... Net change during the year... Balance at end of the year ... Minority interests: Balance at beginning of the year Changes during the year: Net change in items other than shareholders’ equity ............... Net change during the year... Balance at end of the year ...
2012
2013
(138) ¥
(166) $
(1,467)
164 164 26
28 28 (138)
1,744 1,744 276
(11,871)
(11,373)
(126,220)
5,593 5,593 (6,278)
(498) (498) (11,871)
59,468 59,468 (66,752)
(12,009)
(11,539)
(127,687)
5,757 5,757 (6,252)
(470) (470) (12,009)
61,212 61,212 (66,475)
963
945
10,239
(149) (149) 814
18 18 963
(1,584) (1,584) 8,655
Total net assets: Balance at beginning of the year.. 102,713 102,241 1,092,111 Effect of subsidiaries’ (606) (57) — fiscal terms change ............ Changes during the year: (25,880) (2,434) (2,433) Cash dividends paid ........... 49,878 4,691 3,359 Net income......................... (11) (1) (0) Acquisition of treasury stock .. 0 Disposal of treasury stock..... — — Net change in items other than (452) shareholders’ equity ............... 5,608 59,628 472 7,864 83,615 Net change during the year... Balance at end of the year ... 110,520 102,713 1,175,120 Total net assets ....................... ¥110,520 ¥102,713 $1,175,120
Hitachi Koki ANNUAL REPORT 2013 17
Consolidated Statement of Cash Flows
Hitachi Koki Co., Ltd. and consolidated subsidiaries Years ended March 31, 2013 and 2012 Thousands of U.S. dollars (Note 1)
Millions of yen
Cash flows from operating activities: Income before income taxes and minority interests..................... Depreciation .................................................................................. Increase (Decrease) in employees’ severance and retirement benefits ..................................................................... Interest and dividend income ........................................................ Interest expense ........................................................................... Gain on sale of property, plant and equipment ............................. Decrease (Increase) in notes and accounts receivable, trade ....... Decrease (Increase) in inventories ................................................ Increase (Decrease) in notes and accounts payable, trade ........... Increase (Decrease) in accounts payable others ........................... Increase (Decrease) in accrued expenses..................................... Others, net ....................................................................................
2013
2012
¥ 6,284 2,919
¥ 6,261 3,069
2013
$ 66,816 31,037
(159) (222) 170 (22) (802) (2,948) (2,371) (17) (271) (677) 1,884
(280) (251) 271 (724) 1,638 (735) 813 38 230 1,323 11,653
(1,691) (2,360) 1,808 (234) (8,527) (31,345) (25,210) (181) (2,881) (7,198) 20,032
Interest and dividend received ..................................................... Interest paid ................................................................................. Income taxes refunded ................................................................. Income taxes paid ......................................................................... Net cash provided by (used in) operating activities ...................
225 (171) 218 (1,992) 164
249 (278) 270 (1,561) 10,333
2,392 (1,818) 2,318 (21,180) 1,744
Cash flows from investing activities: Proceeds from sale of investment securities ............................... Purchase of property, plant and equipment .................................. Proceeds from sale of property, plant and equipment .................. Purchase of intangible assets ....................................................... Payments for acquisition of stock of subsidiaries ......................... Payments for business transfer..................................................... Others, net .................................................................................... Net cash provided by (used in) investing activities ....................
73 (2,321) 316 (335) (411) (130) 121 (2,687)
91 (2,967) 920 (299) — — 85 (2,170)
776 (24,678) 3,360 (3,562) (4,370) (1,382) 1,287 (28,570)
Cash flows from financing activities: Net increase (decrease) in short-term loans ................................. Repayment of long-term loans ...................................................... Cash dividends paid ..................................................................... Others, net .................................................................................... Net cash provided by (used in) financing activities ....................
(1,824) — (2,428) (65) (4,317)
1,268 (551) (2,429) (92) (1,804)
(19,394) — (25,816) (691) (45,901)
2,120 (4,720) 33,809
26 6,385 27,424
22,541 (50,186) 359,479
(63) ¥29,026
— ¥33,809
(670) $308,623
Effect of changes in exchange rate on cash and cash equivalents ... Net increase (decrease) in cash and cash equivalents ..................... Cash and cash equivalents at beginning of the year ........................ Decrease in cash and cash equivalents resulting from change of fiscal terms of subsidiaries ................................... Cash and cash equivalents at end of the year (Note 2) .................... See accompanying notes.
18 Hitachi Koki ANNUAL REPORT 2013
Notes to Consolidated Financial Statements
Hitachi Koki Co., Ltd. and consolidated subsidiaries
period from January 1 to March 31. However, effective the fiscal year ended
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2013, the consolidated financial statements incorporate the
March 31, 2013 and 2012
accounts of these companies based on a provisional settlement of accounts conducted as of March 31 in order to present financial position more
1. Basis of presentation and summary of significant accounting policies
appropriately.
(a) Basis of presenting consolidated financial statements
the 15 months ended March 31, 2013. However, the consolidated statement of
The accompanying consolidated financial statements have been
As a result, the accounts of these three consolidated subsidiaries covered income only include the 12 months ended March 31, 2013, with the any
restructured and translated into English (with some expanded descriptions)
change in retained earnings during the remaining three months included in
from the consolidated financial statements of Hitachi Koki Co., Ltd. (the
“Effect of subsidiaries’ fiscal term change” on the Consolidated Statement of
“Company”) prepared in accordance with accounting principles generally
Changes in Net Assets.
accepted in Japan and filed with the appropriate Local Finance Bureau of the Ministry of Finance as required by the Financial Instruments and Exchange Law. Certain supplementary information included in the statutory Japanese language consolidated financial statements is not presented in the accompanying consolidated financial statements. Accounting principles generally accepted in Japan are different in certain respects as to application and disclosure requirements from International Financial Reporting Standards. The translations of the Japanese yen amounts into U.S. dollars are included solely for the convenience of readers outside Japan, using the prevailing exchange rate at March 31, 2013, which was ¥94.05 to U.S. $1. The convenience translations should not be construed as representations that the Japanese yen amounts have been, could have been, or could in the future be, converted into U.S. dollars at this or any other rate of exchange. (b) Principles of consolidation The consolidated financial statements include the accounts of the Company and its significant subsidiaries (48 subsidiaries in 2013 and 47 subsidiaries in 2012) (together, “the Group”). All significant inter-company accounts, transactions and unrealized profits are eliminated in consolidation. Goodwill is amortized using the straight-line method over a reasonable period not exceeding 20 years. Investments in unconsolidated subsidiaries (1 subsidiary in both 2013 and
(c) Foreign currency translation All monetary assets and liabilities denominated in foreign currencies are translated into Japanese yen at the exchange rates at the balance sheet date. Resulting exchange gains or losses are credited or charged to income as incurred. The assets and liabilities of overseas subsidiaries and affiliates are translated into Japanese yen at current rates of exchange at the balance sheet date. Common stock, capital surplus and retained earnings are translated at the historical exchange rates. Income and expenses are translated at average rates of exchange in effect during the year. Translation adjustments are debited or credited to the foreign currency translation adjustments account and minority interests, which are reported in net assets in the accompanying consolidated balance sheet. (d) Cash and cash equivalents For the purpose of the consolidated statement of cash flows, the Company and its consolidated subsidiaries classify cash on hand, readily available bank deposits and short-term highly liquid investments with low risk of value fluctuation with maturities not exceeding three months at the time of purchase as cash and cash equivalents. (e) Marketable securities and investment securities Under the Japanese accounting standards, companies are required to
2012) and affiliated companies (not applicable in 2013 and 2012) over which
examine the intent of holding each security and classify those securities
the Group has the ability to exercise significant influence (mainly 20% to 50%
as (a) securities held for trading purposes (hereafter, “trading securities”),
ownership) are accounted for using the equity method.
(b) debt securities intended to be held to maturity (hereafter, “held-to-
Guang Dong Hitachi Koki Co., Ltd., Fujian Hitachi Koki Co., Ltd., Guangzhou
maturity debt securities”), (c) equity securities issued by nonconsolidated
Hitachi Koki Co., Ltd., Hitachi Koki (China) Co., Ltd., Hitachi Koki do Brasil Ltda.,
subsidiaries and affiliated companies, and (d) for all other securities that
Hitachi Power Tools de Mexico S.A. de C.V., Hitachi Power Tools Panama S.A.,
are not classified in any of the above categories (hereafter, “available-for-
L.L.C. Hitachi Power Tools RUS and Carat International B.V. are consolidated
sale securities”).
subsidiaries with fiscal years ending December 31. The consolidated financial
Equity securities issued by subsidiaries and affiliated companies which
statements incorporate the accounts of these companies based on the
are neither consolidated nor accounted for by the equity method are stated
provisional settlement of accounts conducted as of March 31.
at moving-average cost. Available-for-sale securities with fair market value
The fiscal year-end of Hitachi Koki do Brasil Ltda., Hitachi Power Tools de
are stated at fair market value. Unrealized gains and unrealized losses on
Mexico S.A. de C.V. and Hitachi Power Tools Panama S.A. is December 31.
these securities are reported, net of applicable income taxes, as a separate
Formerly, the consolidated financial statements accommodated this three-
component of the net assets. Realized gain on sale of such securities is
month difference by incorporating the accounts of these companies as of their
computed using the moving-average cost. Securities with no fair market
fiscal year-end with adjustments for significant transactions arising during the
values are stated principally at the moving-average cost. Hitachi Koki ANNUAL REPORT 2013 19
The Company and its consolidated subsidiaries had no trading securities or held-to-maturity debt securities. If the market value of equity securities issued by subsidiaries and affiliated companies neither consolidated nor accounted for using the equity method, and available-for-sale securities, declines significantly, such securities are stated at fair market value and the difference between fair market value and the carrying amount is recognized as a loss in the period of the decline. (f) Derivative transactions and hedge accounting The Company and its consolidated subsidiaries utilize forward foreign exchange contracts and interest rate and currency swap agreements as derivative transactions, in order to hedge foreign currency risks and interest rate risks arising from normal business transactions. Derivative instruments are stated at fair value. Changes in the fair values are recognized as gains or losses unless derivative transactions are used for hedging purposes. If foreign currency derivative transactions are used as hedges and meet certain hedging criteria, the Company and its consolidated subsidiaries defer recognition of gains or losses resulting from changes in fair value of derivative transactions until the related losses or gains on the hedged items are recognized. Evaluation of hedge effectiveness is not considered necessary as the terms and notional amounts of these hedging instruments are the same as those of the related hedged transactions, assets and liabilities, and therefore they are assumed to be highly effective in offsetting movements in the exchange rates at their inception as well as during their term. (g) Inventories Merchandise, finished goods and raw materials of the Company and its
Accrued retirement benefits for directors and corporate auditors of the Company are provided at the amounts which would be required if all directors and corporate auditors retired at the balance sheet date. Payment of such benefits is subject to the approval at the shareholders’ meeting. (i) Property, plant and equipment Property, plant and equipment are stated at cost. Depreciation is computed primarily using the straight-line method at rates based on the estimated useful lives. The significant useful lives are summarized as follows: Buildings and structures ............ 3-50 years Machinery and equipment ......... 3-12 years (j) Change in accounting policies The Company and its domestic consolidated subsidiaries have changed their method of depreciation for property, plant and equipment to the straight-line method effective the fiscal year ended March 31, 2013 from the declining balance method mainly used in the past. The exception to the past use of the declining balance method was the use of the straight-line method for buildings acquired on or after April 1, 1998, excluding equipment attached to these buildings. The Company formulated a medium-to-long-term management strategy during the fiscal year ended March 31, 2012. Based on this strategy, the Company is restructuring its manufacturing organization under a policy of centralizing production at domestic plants while promoting the optimal production base configuration on a global basis. During the fiscal year ended March 31, 2012, the Company shifted nailer production overseas and initiated full-scale production at its plant in the Nansha area of China. Consequently, for the fiscal year ended March 31, 2013 the overseas production ratio exceeded 50 percent. The Company implemented systemic
consolidated subsidiaries are mainly stated at cost determined using
adjustments under which it maintained stable domestic production of highly
primarily the moving-average method. Work in process is mainly determined
functional value-added products requiring advanced technological
by the specific identification method. Balance sheet amounts are written
capabilities primarily for supply to the domestic market, and shifted to the
down to net selling value if profitability of inventories decreased.
overseas manufacture of products such as those for which production
(h) Retirement benefits The Company, its consolidated domestic subsidiaries and certain consolidated overseas subsidiaries provide two post-employment benefit plans, an unfunded lump-sum payment plan and a funded pension plan, under which all eligible employees are entitled to benefits based on the level of wages and salaries at the time of retirement or termination, length of service and certain other factors. The Company, its consolidated domestic subsidiaries and certain consolidated overseas subsidiaries provided allowance for employees’ severance and retirement benefits at the balance sheet dates based on the estimated amounts of projected benefit obligation and the fair value of the plan assets at those dates. Actuarial gains/losses are amortized on a straight-line basis over the following 15 years. Past service costs are amortized on a straight-line basis over 15 years. 20 Hitachi Koki ANNUAL REPORT 2013
volume changes frequently. As a result, production at the Company and domestic subsidiaries will be stable and PP&E will be consistent. The Company therefore decided to the change to the straight-line depreciation method because it reflects PP&E consumption patterns more appropriately and enables more appropriate cost allocation. The impact of this change on results for the fiscal year ended March 31, 2013 is not material. (k) Reclassification (Consolidated Balance Sheet) Prepaid pension costs is presented separately for the fiscal year ended March 31, 2013 because of its increased materiality. It was formerly included in Others under Investments and other assets. The consolidated
Notes to Consolidated Financial Statements
financial statements for the fiscal year ended March 31, 2012 have been
(r) Appropriation of retained earnings Payments of dividends are accounted for as appropriation of retained
reclassified accordingly. Consequently, the reclassified consolidated balance sheet as of March 31, 2012 include Prepaid pension costs of ¥1,423 million and Others of ¥977 million in Investments and other assets. Prior to reclassification, Others
earnings or other capital surplus, as applicable, in the period when approved at the shareholders’ meeting or at the Board of Directors meeting. (s) Earnings per share
totaled ¥2,400 million.
Net income per share of common stock is computed based upon the
(l) Intangible assets
weighted-average number of shares outstanding during each year.
Intangible assets are amortized by the straight-line method.
(t) Standards issued not yet effective
(m) Leased assets
On May 17, 2012, the ASBJ issued “Accounting Standards for
Finance leases are capitalized and depreciated over the useful lives of the assets or lease terms. However, the Company and its consolidated
Retirement benefits” (ASBJ Statement No. 26) and “Guidance on Accounting Standard for Retirement Benefits” (ASBJ Guidance No. 25).
domestic subsidiaries account for finance leases that commenced prior to (1) Overview
April 1, 2008 which do not transfer the ownership of the leased assets to
From the viewpoint of improving financial reporting and international
the lessee as operating leases.
convergence, this accounting standard was revised with a focus on the
(n) Allowance for doubtful accounts Allowance for doubtful accounts is provided in an amount sufficient to cover possible losses on the collection of receivables. The amount of the allowance is mainly determined on the basis of past experience of bad debts and an estimate of the collectibility of individual receivables based on the financial position of the debtors.
treatment of unrecognized actuarial gain or loss and unrecognized prior service cost; the determination of projected benefit obligations and current service cost; and enhancement of disclosure. (2) Expected application date The Company plans to apply this accounting standard from the start of
(o) Accrued bonuses for directors and corporate auditors
the fiscal year beginning April 1, 2013.
Accrued bonuses for directors and corporate auditors are provided for (3) Effect of applying the accounting standard
the expected payments at the amount attributable to the fiscal year.
The application of the accounting standard at the start of the fiscal year (p) Loss on disaster
beginning April 1, 2013 is expected to reduce accumulated other
The Company recognized loss associated with the Great East Japan
comprehensive income by ¥2,959 million ($31,462 thousand) and retained
Earthquake that occurred on March 11, 2011, for the years ended March 31,
earnings by ¥738 million ($7,847 thousand). In addition, the Company is
2013 and 2012, as follows:
currently assessing the effect of applying the accounting standard on the Millions of yen
2013
Impairment loss of fixed asset..................... Cost of repairing/restoring facilities............ Fixed costs incurred during business activity stoppages ...................................... Other............................................................. Total .............................................................
2012
Thousands of U.S. dollars
income statements for the fiscal year ending March 31, 2014.
2013
— —
¥ 17 56
— —
— — —
29 1 ¥105
— — —
2. Cash and cash equivalents Cash and cash equivalents at March 31, 2013 and 2012 for the consolidated statement of cash flows consisted of the following: Millions of yen
2013
(q) Income taxes Provision for income taxes is computed based on the pretax income included in the consolidated statement of income. The asset and liability
Cash on hand and in banks .......................... ¥15,861 Deposits ....................................................... 13,165 Cash and cash equivalents .......................... ¥29,026
2012
Thousands of U.S. dollars
2013
¥11,738 $ 168,644 22,071 139,979 ¥33,809 $308,623
approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
Hitachi Koki ANNUAL REPORT 2013 21
3. Fair value information for securities
5. Derivative transactions
At March 31, 2013, acquisition cost and fair value of available-for-sale
(a) Derivative transactions not accounted for
securities with fair value were as follows:
by hedge accounting
Available-for-sale securities
The aggregate amounts contracted to be paid or received and the fair value of derivative transactions at March 31, 2013 and 2012 were as follows:
Millions of yen Acquisition cost
Fair value
Difference
Currency-related derivatives: Millions of yen
Securities with fair value exceeding acquisition costs: Equity securities ............................................ Total................................................................ Other securities: Equity securities ............................................. Total................................................................
2013
¥385 ¥385
¥451 ¥451
¥ 66 ¥ 66
¥613 ¥613
¥596 ¥596
¥(16) ¥(16)
Thousands of U.S. dollars Acquisition cost
Securities with fair value exceeding acquisition costs: Equity securities ............................................ Total................................................................ Other securities: Equity securities ............................................. Total................................................................
Fair value
Difference
$4,094 $4,094
$4,795 $4,795
$ 702 $ 702
$6,518 $6,518
$6,337 $6,337
$(170) $(170)
At March 31, 2012, acquisition cost and fair value of available-for-sale securities with fair value were as follows: Available-for-sale securities
Contract amount Total
Forward contracts: To sell: U.S. dollars ............................ Euro........................................ U.K. pound sterling ................ Australian dollars .................. Singapore dollars .................. Czech koruna ......................... Romanian ron ........................ Polish zloty............................. Thai baht................................ Mexican pesos ...................... Indian rupee........................... Brazilian real.......................... To buy: U.S. dollars ............................ Total....................................
Due after one year
Fair value
Unrealized gains (losses)
¥ 8,967 5,644 341 724 28 15 11 43 257 34 92 250
— — — — — — — — — — — —
¥(108) (54) 0 (18) 0 0 (0) 0 (18) (3) (1) (27)
¥(108) (54) 0 (18) 0 0 (0) 0 (18) (3) (1) (27)
3,402 ¥19,813
— —
11 ¥(221)
11 ¥(221)
Millions of yen Acquisition cost
Securities with fair value exceeding acquisition costs: Equity securities ............................................ Total................................................................ Other securities: Equity securities ............................................. Total................................................................
Fair value
Millions of yen Difference
¥ ¥
56 56
¥ 70 ¥ 70
¥ 13 ¥ 13
¥1,006 ¥1,006
¥788 ¥788
¥(217) ¥(217)
4. Inventories Inventories at March 31, 2013 and 2012 consisted of the following: Millions of yen
Merchandise and finished goods...................... Work in process ................................................ Raw materials ................................................... Total................................................................
2012 Contract amount
Thousands of U.S. dollars
2013
2012
2013
¥39,049 2,226 6,562 ¥47,837
¥31,578 2,484 6,372 ¥40,434
$415,194 23,668 69,771 $508,634
22 Hitachi Koki ANNUAL REPORT 2013
Total
Forward contracts: To sell: U.S. dollars ............................ Euro........................................ U.K. pound sterling ................ Australian dollars .................. Singapore dollars .................. Czech koruna ......................... Romanian ron ........................ Polish zloty............................. Taiwan dollars ....................... Thai baht................................ Mexican pesos ...................... To buy: U.S. dollars ............................ Japanese yen ........................ Total....................................
Due after one year
Fair value
Unrealized gains (losses)
¥ 2,064 6,984 201 703 20 41 16 56 163 129 60
— — — — — — — — —
¥ (30) (169) (4) (1) (0) (1) (0) (0) (0) 2 (1)
¥ (30) (169) (4) (1) (0) (1) (0) (0) (0) 2 (1)
261 57 ¥10,761
— — —
(1) (0) ¥(206)
(1) (0) ¥(206)
Notes to Consolidated Financial Statements
Thousands of U.S. dollars
Millions of yen
2013
2012
Contract amount Total
Forward contracts: To sell: U.S. dollars ............................ Euro........................................ U.K. pound sterling ................ Australian dollars .................. Singapore dollars .................. Czech koruna ......................... Romanian ron ........................ Polish zloty............................. Thai baht................................ Mexican pesos ...................... Indian rupee........................... Brazilian real.......................... To buy: U.S. dollars ............................ Total....................................
Contract amount
Due after one year
Fair value
Unrealized gains (losses)
$ 95,343 60,011 3,626 7,698 298 159 117 457 2,733 362 978 2,658
— — — — — — — —
— —
$(1,148) $(1,148) (574) (574) 0 0 (191) (191) 0 0 0 0 (0) (0) 0 0 (191) (191) (32) (32) (11) (11) (287) (287)
36,172 $210,665
— —
117 117 $(2,350) $(2,350)
Due after one year
Fair value
Unrealized gains (losses)
82
—
¥ 0
¥ 0
5,419
—
37
37
629
—
6
6
347
—
4
4
89 ¥6,569
— —
0 ¥49
0 ¥49
Total
Interest rate and currency swap agreements: Pay U.S. dollars, receive yen Receive variable, pay variable... Pay Euro, receive yen Receive variable, pay variable... Pay Polish zloty, receive yen Receive variable, pay variable... Pay Mexican pesos, receive yen Receive variable, pay variable... Pay Czech koruna, receive yen Receive variable, pay variable... Total ...........................................
¥
Thousands of U.S. dollars
Note: Fair value is calculated using the forward exchange rate.
Total
Interest related derivatives: Millions of yen
2013 Contract amount Total
Interest rate and currency swap agreements: Pay Euro, receive yen Receive variable, pay variable... ¥ 9,280 Pay Polish zloty, receive yen Receive variable, pay variable... 666 Pay Mexican pesos, receive yen Receive variable, pay variable... 597 Pay Czech koruna, receive yen 94 Receive variable, pay variable... Total ........................................... ¥10,639
Due after one year
2013 Contract amount
Fair value
Unrealized gains (losses)
—
¥ 4
¥ 4
—
9
9
—
(1)
(1)
— —
1 ¥13
1 ¥13
Due after one year
Fair value
Unrealized gains (losses)
—
$ 43
$ 43
—
96
96
—
(11)
(11)
— —
11 $138
11 $138
Interest rate and currency swap agreements: Pay Euro, receive yen Receive variable, pay variable... $ 98,671 Pay Polish zloty, receive yen Receive variable, pay variable... 7,081 Pay Mexican pesos, receive yen Receive variable, pay variable... 6,348 Pay Czech koruna, receive yen 999 Receive variable, pay variable... Total ........................................... $113,121
Note: Fair value is calculated using the forward exchange rate.
(b) Derivative transactions accounted for by hedge accounting Currency transactions: Not applicable. Interest-related transactions: Not applicable.
Hitachi Koki ANNUAL REPORT 2013 23
6. Lease information
forward exchange contracts for, in principle, the net positions after
As discussed in Note 1 (m), finance leases commenced prior to April 1,
offsetting trade receivables denominated in foreign currency with trade payables denominated in foreign currencies.
2008 which do not transfer ownership of leased assets to lessees are
Investment securities mainly consist of marketable securities of the
accounted for as operating leases. Assumed amounts of acquisition cost and accumulated depreciation at
companies with which the Company has business relationships. As such marketable securities are exposed to market volatility risk, the Company
March 31, 2013 and 2012 are as follows: (a) A summary of assumed amounts of acquisition cost, accumulated depreciation and net book value at March 31, 2013 and 2012 was as follows: None applicable
keeps track of their fair value on a quarterly basis. Trade payables are mostly due within one year. Trade payables denominated in foreign currencies are exposed to foreign exchange fluctuation risk, which are principally hedged by using forward exchange
(b) Future minimum lease payments at March 31, 2013 and 2012 were as follows: None applicable.
contracts.
(c) Lease payments, assumed depreciation charges and assumed interest charges for the years ended March 31, 2013 and 2012 were as follows:
minimize foreign exchange fluctuation risk associated with receivables
Thousands of U.S. dollars
Millions of yen
2013
Lease payments ............................................ Assumed depreciation charges..................... Assumed interest charges ............................
— — —
2012
¥0 0 0
2013
— — —
(d) Assumed depreciation charges are computed using the straight-line method over the lease terms assuming no residual value.
Short-term loans are mainly for operating capital. Forward exchange contracts and interest currency swaps are used to and payables in foreign currencies, and to minimize interest rate risk from the possibility of changes in interest rates associated with financing debts. Foreign exchange fluctuation risk and interest rate risk are inherent in forward exchange contracts and interest currency swaps, respectively. To mitigate such risks, the Accounting Division of the Company executes and controls derivative transactions in conformity with the internal rules specifying authorization and the maximum limit of transactions. The results of transactions are reported monthly to the director in charge.
(e) Assumed interest charges are computed using the effective-interest method.
Trade payables and short-term loans are exposed to liquidity risk. The Company and its consolidated subsidiaries develop and update their cash
7. Financial instruments (a) Outline of financial instruments (1) Management policies The Company and its consolidated subsidiaries invest mainly in shortterm instruments such as deposits in banks and raise funds by borrowing from outside financial institutions. The Company and certain consolidated subsidiaries enter into derivatives transactions only for the purpose of mitigating risk as described below and do not engage in such transactions for speculative purposes. (2) Nature of financial instruments, related risk and risk management system Deposits are deposits held in the Hitachi Group Pooling System (a system among Hitachi, Ltd. and its Group companies for lending and borrowing surplus funds on a daily basis). Trade notes and accounts receivable are exposed to credit risk of customers and counterparties. The Company and its consolidated subsidiaries’ credit risk monitoring activities include review of overdue and balance amounts of each customer as well as review of creditworthiness of major customers on a regular basis. Trade receivables in foreign currencies generated by worldwide operations are exposed to foreign exchange fluctuation risk. This risk is hedged by using
24 Hitachi Koki ANNUAL REPORT 2013
flow forecasts on a monthly basis to manage their liquidity risk.
Notes to Consolidated Financial Statements
(b) Fair value of financial instruments
i. Fair value measurement of financial instruments and information for
The carrying amounts on the consolidated balance sheet, fair values and differences between them as of March 31, 2013 and 2012 of
investment securities and derivative transactions Cash on hand and in banks, deposits and trade notes and accounts receivable:
financial instruments are set out as below: Financial instruments of which fair values are not generally available and are deemed to be extremely difficult to measure are excluded from
Book values of these accounts are deemed fair values as they are settled in a short-term period. Investment securities:
the following table.
Fair values of investment securities are measured at quoted market
For the year ended March 31, 2013
prices of stock exchanges.
Millions of yen Carrying amount (*1)
Fair value (*1)
Difference
See “Note 3. Fair value information for securities” for additional
Cash on hand and in banks ........................... ¥ 15,861 ¥ 15,861 Deposits ........................................................ 13,165 13,165 Trade notes and accounts receivable (*2) .... 33,961 33,961
— — —
information on investment securities.
Investment securities: Other investment securities .......................... Trade notes and accounts payable ................... Short-term loans ............................................. Derivatives (*3) ...............................................
— — — —
settled in a short-term period.
1,047 (7,590) (12,328) (208)
1,047 (7,590) (12,328) (208)
Thousands of U.S. dollars Carrying amount (*1)
Fair value (*1)
— — —
Investment securities: Other investment securities .......................... Trade notes and accounts payable ................... Short-term loans ............................................. Derivatives (*3) ...............................................
— — — —
For the year ended March 31, 2012 Millions of yen
Cash on hand and in banks ........................... ¥ 11,738 Deposits ........................................................ 22,071 Trade notes and accounts receivable (*2) .... 31,175 Investment securities: Other investment securities .......................... Trade notes and accounts payable ................... Short-term loans ............................................. Derivatives (*3) ...............................................
859 (9,326) (13,127) (157)
Fair value (*1)
¥ 11,738 22,071 31,175 859 (9,326) (13,127) (157)
Derivatives: See “Note 5. Derivative transactions” for the relevant information.
March 31, 2013, are excluded from other investment securities above as quoted market prices are not available and their future cash flows cannot be estimated. Redemption schedule for monetary claims and securities with maturity
Notes: 1. The amounts of liabilities are represented in parentheses. 2. The amounts of trade notes and accounts receivable are presented after allowance for doubtful accounts amounting to ¥899 million ($9,559 thousand) are deducted. 3. Net debts and credits arising from derivative transactions are presented in net value.
Carrying amount (*1)
Book values of these accounts are deemed fair values as they are
ii. Unlisted equity shares, amounting to ¥69 million ($734 thousand) at
Difference
Cash on hand and in banks ........................... $ 168,644 $ 168,644 Deposits ........................................................ 139,979 139,979 Trade notes and accounts receivable (*2) .... 361,095 361,095 11,132 11,132 (80,702) (80,702) (131,079) (131,079) (2,212) (2,212)
Trade notes and accounts payable and short-term loans:
after the year-end at March 31, 2013 and 2012 are set out below. For the year ended March 31, 2013
Cash on hand and in banks ......................... Deposits ...................................................... Trade notes and accounts receivable ......... Investment securities Other investment securities with maturity ... Total..........................................................
Millions of yen
Thousands of U.S. dollars
Within 1 year
Within 1 year
¥15,861 13,165 33,961
$168,644 139,979 361,095
— ¥62,987
— $669,718
Difference
— — — — — — —
Notes: 1. The amounts of liabilities are represented in parentheses. 2. The amounts of trade notes and accounts receivable are presented after allowance for doubtful accounts amounting to ¥606 million are deducted. 3. Net debts and credits arising from derivative transactions are presented in net value.
For the year ended March 31, 2012 Millions of yen Within 1 year
Cash on hand and in banks ......................... Deposits ...................................................... Trade notes and accounts receivable ......... Investment securities Other investment securities with maturity ... Total..........................................................
¥11,738 22,071 31,175 — ¥64,984
Hitachi Koki ANNUAL REPORT 2013 25
8. Short-term and long-term debt
Significant components of deferred tax assets and liabilities as of March 31,
Short-term and long-term debt as of March 31, 2013 and 2012 are as follows: Thousands of U.S. dollars
Millions of yen 2013
Short-term bank borrowings (weighted average interest rate 1.62%) ...... Lease obligations due within one year (weighted average interest rate 1.71%) ...... Long-term borrowings from banks and other financial institutions due after one year..... Lease obligations due after one year............ Total .........................................................
2012
2013
¥12,328
¥13,121
$131,079
43
52
457
— 51 ¥12,422
— 83 ¥13,261
— 542 $132,079
Notes: 1. Weighted average interest rate on balance at end of the year 2. The annual maturities of lease transactions at March 31, 2013, excluding amount due within one year, were as follows:
Years ended March 31
2015 .......................... 2016 .......................... 2017 .......................... 2018 ..........................
Millions of yen
Thousands of U.S. dollars
¥39 8 1 1
$415 85 11 11
9. Income taxes Taxes on income consist of corporation tax, inhabitant taxes and enterprise tax. The aggregate statutory tax rate on income before income taxes and minority interests was approximately 37.8% and 40.5% for 2013 and 2012. The significant differences between the statutory tax rate and the Company’s effective tax rate for financial statement purposes for the years
26 Hitachi Koki ANNUAL REPORT 2013
Millions of yen
2013
Deferred tax assets: Retirement benefits.................................... ¥ 474 Accrued bonuses ........................................ 599 Accrued expenses ...................................... 492 Devaluation of inventories ......................... 845 Foreign tax credit carry-forward................. 468 Unrealized intercompany profit of inventories ............................................ 192 Tax loss carry-forward................................ 1,526 Others ......................................................... 1,108 Subtotal ......................................................... 5,704 Valuation allowance ..................................... (2,527) Total deferred tax assets .............................. 3,177 Deferred tax liabilities: Undistributed earnings of overseas subsidiaries............................................. (127) Others ......................................................... (47) Total deferred tax liabilities.......................... (174) Net deferred tax assets ................................ ¥ 3,003
Thousands of U.S. dollars
2012
2013
¥ 552 628 536 660 744
$ 5,040 6,369 5,231 8,985 4,976
916 1,346 1,077 6,459 (2,642) 3,817
2,041 16,225 11,781 60,649 (26,869) 33,780
(154) (11) (165) ¥ 3,652
(1,350) (500) (1,850) $31,930
Note: Unrecognized tax effects is presented separately for the fiscal year ended March 31, 2013 because its materiality increased. Information for the fiscal year ended March 31, 2012 has been restated accordingly.
10. Contingent liabilities Guarantees of employees’ loans were ¥40 million ($425 thousand) and ¥46 million at March 31, 2013 and 2012, respectively.
ended March 31, 2013 and 2012 were as follows: Statutory tax rate ......................................................... Non-deductible expenses.......................................... Change in valuation allowance ................................. Difference in statutory tax rate of foreign subsidiaries............................................. Experimental research expenses .............................. Deduction for foreign taxes paid............................... Decrease in deferred tax assets at fiscal year-end due to change in tax rate ......................... Per capita inhabitants tax ......................................... Foreign withholding taxes paid ................................. Increase/decrease in tax effects of undistributed earnings of overseas subsidiaries........................... Loss on valuation of affiliates’ stock ........................ Unrecognized tax effects........................................... Others ........................................................................ Effective tax rate ..........................................................
2013 and 2012 are as follows:
2013
2012
37.8% 1.7 (6.2)
40.5% 1.1 3.9
(1.9) 1.8 4.3
(8.0) (3.9) (1.9)
— 1.3 3.5
2.8 1.4 1.9
(0.4) (14.8) (5.4) 3.4 25.1%
(0.2) — 2.6 5.2 45.4%
11. Employees’ severance and retirement benefits Employees’ severance and retirement benefits included in the liability section of the consolidated balance sheet as of March 31, 2013 and 2012 consist of the following: Millions of yen
2013
2012
Thousands of U.S. dollars
2013
Projected benefit obligation.......................... ¥(30,572) ¥(30,879) $(325,061) Fair value of plan assets ............................... 24,509 23,098 260,595 Unfunded benefit obligations ....................... (6,063) (7,781) (64,466) Unrecognized actuarial differences .............. 5,114 6,759 54,375 Unrecognized prior service cost .................... (454) (524) (4,827) Net retirement benefit obligation ................. (1,403) (1,546) (14,918) Prepaid pension costs ................................... (1,573) (1,423) (16,725) Employees’ severance and retirement benefits................................... ¥ (2,976) ¥ (2,969) $ (31,643)
Notes to Consolidated Financial Statements
Included in the consolidated statement of income for the years ended March 31, 2013 and 2012 is a severance and retirement benefit expense
Major items and the amounts under “Selling, general and administrative
comprising the following:
expenses” are as follows: Thousands of U.S. dollars
Millions of yen
2013
Service costs-benefits earned during the year ............................................ Interest cost on projected benefit obligation ... Expected return on plan assets..................... Amortization of actuarial differences ........... Amortization of prior service costs ............... Severance and retirement benefit expense ...
13. Selling, general and administrative expenses
¥ 839 619 (594) 911 (70) ¥1,705
2012
2013
¥ 824 723 (612) 840 (70) ¥1,705
$ 8,921 6,582 (6,316) 9,686 (744) $18,129
The discount rates used by the Company and certain consolidated subsidiaries are principally 1.7% and 2.0% for the years ended March 31, 2013 and 2012, respectively. The rate of expected return on plan assets used by the Company and certain consolidated subsidiaries are principally
Thousands of U.S. dollars
Millions of yen
Direct selling expenses: Packing and distribution expenses............. Advertising expenses ................................. Sales promotion expenses ......................... Indirect selling expenses and general expenses: Provision for doubtful accounts.................. Salaries and wages .................................... Retirement benefit expenses ..................... Depreciation and amortization ................... Research and development costs .............. Others ......................................................... Total ..............................................................
2013
2012
2013
¥ 4,405 1,275 3,137
¥ 4,039 1,290 3,407
$ 46,837 13,557 33,355
193 13,457 789 662 752 13,404 ¥38,074
322 13,377 778 599 704 13,498 ¥38,014
2,052 143,083 8,389 7,039 7,996 142,520 $404,827
2.5% and 2.5% for the years ended March 31, 2013 and 2012. The Research and development costs included in cost of sales, and “selling,
estimated amount of all retirement benefits to be paid at the future retirement date is allocated equally to each service year using the estimated
general and administrative expenses” were ¥3,386 million ($36,002 thousand)
number of total service years. Actuarial gains and losses are recognized as
and ¥3,228 million for the years ended March 31, 2013 and 2012, respectively.
income or expense in equal amounts over 15 years commencing from the succeeding period. Prior service costs are recognized as income or expense in equal amounts over 15 years
14. Shareholders’ equity Certain Provisions of the Japanese Corporate Law (the “Corporate Law”) that may significantly affect financial and accounting matters are
12. Asset retirement obligations
summarized below.
The Company and certain consolidated subsidiaries recognize asset
Under Japanese laws and regulations, the entire amount paid for new
retirement obligations associated with real estate rental contracts for
shares is required to be designated as common stock. However, a company
business-use facilities requiring restoration to their original condition, and
may, by a resolution of the Board of Directors, designate an amount not
asset retirement obligations for disposal of machinery and equipment
exceeding one-half of the price of the new shares as additional paid-in
containing PCBs based on the Law Concerning Special Measures Against
capital, which is included in capital surplus.
PCB Waste effective as of July 2001. The liability is calculated using
Under the Corporate Law, companies can pay dividends at any time
expected useful lives ranging from 15 to 24 years and discount rates ranging
during the fiscal year in addition to the year-end dividend upon resolution at
from 1.583% to 6.250%.
the shareholders’ meeting. For companies that meet certain criteria such as;
The following table summarizes changes in the aggregate carrying amount of asset retirement obligations for the years ended March 31, 2013 and 2012:
(1) having a Board of Directors, (2) having independent auditors, (3) having a Board of Corporate Auditors, and (4) the term of service of the directors is prescribed as one year rather than two years by its articles of incorporation,
Thousands of U.S. dollars
Millions of yen
Beginning of year (*1) ................................... Increase due to purchase of property, plant and equipment .................................. Changes in asset retirement obligation over time .... Decrease due to execution of asset retirement obligations ................................ End of year ....................................................
2013
2012
2013
¥279
¥277
$2,967
the Board of Directors may declare dividends (except for dividends in kind) if the company has prescribed so in its articles of incorporation. The Corporate Law also provides certain limitations on the amounts available for dividends or purchase of treasury stock. The limitation is defined
— 8
— 2
— 85
— ¥288
— ¥279
— $3,062
as the amount available for distribution to the shareholders, but the amount of net assets after dividends must be maintained at no less than ¥3 million. The maximum amount that companies can distribute as dividends is calculated based on their non-consolidated financial statements in accordance with Japanese laws and regulations.
Hitachi Koki ANNUAL REPORT 2013 27
Appropriations are not accrued in the financial statements for the period
Corporate Law, the aggregate amount of additional paid-in capital and legal
to which they relate, but are recorded in the subsequent accounting period
earnings reserve that exceeds 25% of the common stock may be made
when the Board of Directors’ approval has been obtained.
available for dividends by resolution of the shareholders. Under the
Retained earnings at March 31, 2013 include the amounts representing
Corporate Law, all additional paid-in-capital and all legal earnings reserve
the year-end cash dividends of ¥6 ($0.06) per share, aggregating ¥608
may be transferred to other capital surplus and other retained earnings,
million ($6,465 thousand) which was approved at the Board of Directors’
respectively, which are potentially available for dividends.
meeting held on April 25, 2013.
The Corporate Law also provides that common stock, legal earnings
Cash dividends charged to retained earnings during the years ended
reserve, additional paid-in capital, other capital surplus and retained
March 31, 2013 and 2012 represent dividends paid out during these periods.
earnings can be transferred among the accounts under certain conditions
The Corporate Law requires that an amount equal to 10% of dividends
upon resolution of the shareholders.
must be appropriated as a legal earnings reserve (a component of retained
The Corporate Law also provides for companies to purchase treasury stock
earnings) or as additional paid-in capital (a component of capital surplus)
and dispose of such treasury stock by resolution of the Board of Directors. The
depending on the equity account charged upon the payment of such
amount of treasury stock purchased cannot exceed the amount available for
dividends until the total of aggregate amount of legal earnings reserve and
distribution to the shareholders, which is determined by specific formula.
additional paid-in capital equals 25% of the common stock. Under the
15. Rental property The Company and its consolidated subsidiaries own rental factories (including land) in Ibaraki Prefecture and elsewhere. Net income from rental of real property for the year ended March 31, 2012 was ¥209 million. Presentation of rental property is omitted from the fiscal year ended March 31, 2013 because it is not material. Income from and expenses for rental of real property are included in other income (expenses). The carrying value, net change and fair value of rental property are as follows: Millions of yen
2012 Book value Carrying amount at March 31, 2011
Rental property ...............................................................................................
¥2,038
Net change
¥(1,103)
Carrying amount at March 31, 2012
¥935
Fair value at March 31, 2012
¥1,811
Notes: 1. Book value represents the acquisition cost less accumulated depreciation. 2. Net change consists primarily of a decrease amounting to ¥1,304 million due to cancellation of lease contract. 3. As the rental properties are immaterial, the fair value of land is calculated based on value for Fixed Property Tax and the fair value of the buildings is calculated based on the carrying value.
28 Hitachi Koki ANNUAL REPORT 2013
Notes to Consolidated Financial Statements
16. Consolidated statement of comprehensive income Reclassification adjustments and tax effect adjustments relating to other comprehensive income (loss) for the fiscal year ended March 31, 2013 and 2012 were as follows: Millions of yen
2013
Net unrealized holding gains (losses) on securities Amount recorded during the period .............................................................. Reclassification adjustments ........................................................................ Before tax effect adjustments ................................................................... Tax effect ................................................................................................... Net unrealized holding gains (losses) on securities.................................. Foreign currency translation adjustments Amount recorded during the period .............................................................. Foreign currency translation adjustments ................................................. Total other comprehensive income (loss)..................................................
Thousands of U.S. dollars
2012
2013
¥ 261 (7) 253 (89) ¥ 164
¥ 66 (2) 63 (37) ¥ 28
$ 2,775 (74) 2,690 (946) $ 1,744
¥5,682 ¥5,682 ¥5,846
¥(518) ¥(518) ¥(490)
$(60,415) $(60,415) $(62,158)
17. Segment information (a) Information by reportable segment The Company has classified its reportable segments as the discrete units from which it obtains financial information, and for which the Board of Directors periodically allocates resources and evaluate performance. The Company’s overall strategy involves providing products and services in Japan and overseas. The Company classifies its products and services into two reportable segments: Power Tools and Life-Science Instruments. The Power Tools segment manufactures and markets power tools. The Life-Science Instruments segment manufactures and markets life-science instruments including ultracentrifuges and cooled centrifuges. Sales, income, expenses, assets, liabilities and other items are presented for reportable segments as discussed in Note 1, Basis of Presentation and Summary of Significant Accounting Policies. The operations of the Company and its consolidated subsidiaries for the years ended March 31, 2013 and 2012 are summarized by reportable segment as follows: Millions of yen
2013 Power tools
Life-science instruments
Elimination or corporation
Net sales: Outside customers.......................................................................................... Intersegment .................................................................................................. Total sales ..................................................................................................
¥109,650 — 109,650
¥ 5,995 — 5,995
— — —
¥115,645 — 115,645
Segment operating income ............................................................................ Segment assets .............................................................................................
4,423 126,349
1,908 18,584
— —
6,331 144,933
Depreciation and amortization ....................................................................... Increase in property, plant and equipment and intangible assets ................
2,724 2,411
195 245
— —
2,919 2,656
Consolidated
Hitachi Koki ANNUAL REPORT 2013 29
Millions of yen
2012 Power tools
Life-science instruments
Elimination or corporation
Net sales: Outside customers.......................................................................................... Intersegment .................................................................................................. Total sales ..................................................................................................
¥109,390 — 109,390
¥ 6,073 — 6,073
— — —
¥115,463 — 115,463
Segment operating income ............................................................................ Segment assets .............................................................................................
4,432 120,784
1,856 18,809
— —
6,288 139,593
Depreciation and amortization ....................................................................... Increase in property, plant and equipment and intangible assets ................
2,846 2,977
223 289
— —
3,069 3,266
Consolidated
Thousands of U.S. dollars
2013 Power tools
Life-science instruments
Elimination or corporation
Net sales: Outside customers.......................................................................................... Intersegment .................................................................................................. Total sales ..................................................................................................
$1,165,869 — 1,165,869
$ 63,743 — 63,743
— — —
$1,229,612 — 1,229,612
Segment operating income ............................................................................ Segment assets .............................................................................................
47,028 1,343,424
20,287 197,597
— —
67,315 1,541,021
Depreciation and amortization ....................................................................... Increase in property, plant and equipment and intangible assets ................
28,963 25,635
2,073 2,605
— —
31,037 28,240
Consolidated
(b) Relevance information A summary of sales and property, plant and equipment by geographic area for the years ended March 31, 2013 and 2012 is as follows: 2013 (1) Sales
(Millions of yen) Consolidated
Japan
Asia
Europe
North America
Others
¥43,084
¥9,608
¥35,262
¥21,336
¥6,355
¥115,645
Japan
Asia
Europe
North America
Others
(Thousands of U.S. dollars) Consolidated
$458,097
$102,158
$374,928
$226,858
$67,570
$1,229,612
Notes: 1. Geographic areas are decided based on geographic proximity. 2. The principal nations or regions included in each area other than Japan are as follows: Asia ................... Singapore, China and India Europe .............. Germany, France, United Kingdom, Norway and Russia North America .. U.S.A. and Canada Others ............... Australia
(2) Property, plant and equipment
(Millions of yen) Consolidated
Japan
Asia
Europe
North America
Others
¥14,577
¥3,352
¥1,074
¥61
¥65
¥19,129
Japan
Asia
Europe
North America
Others
(Thousands of U.S. dollars) Consolidated
$154,992
$35,641
$11,419
$649
$691
$203,392
30 Hitachi Koki ANNUAL REPORT 2013
Notes to Consolidated Financial Statements
2012 (1) Sales
(Millions of yen) Consolidated
Japan
Asia
Europe
North America
Others
¥40,594
¥9,144
¥38,544
¥19,887
¥7,294
¥115,463
Notes: 1. Geographic areas are decided based on geographic proximity. 2. The principal nations or regions included in each area other than Japan are as follows: Asia ................... Singapore, China and India Europe .............. Germany, France, United Kingdom, Norway and Russia North America .. U.S.A. and Canada Others ............... Australia
(2) Property, plant and equipment Japan
Asia
Europe
North America
Others
¥15,055
¥3,087
¥799
¥42
¥62
(Millions of yen) Consolidated
¥19,045
(c) Information of goodwill by reportable segment For the year ended March 31, 2013 Current year amortization............................................................................... Balance at the end of year .............................................................................
(Millions of yen) Power tools
Life-science instruments
¥ 333 4,421
¥ 3 38
Power tools
Life-science instruments
$ 3,541 47,007
$ 32 404
Power tools
Life-science instruments
¥ 302 4,311
¥ 2 41
Consolidated
¥ 336 4,459 (Thousands of U.S. dollars)
Current year amortization............................................................................... Balance at the end of year .............................................................................
Consolidated
$ 3,573 47,411
For the year ended March 31, 2012 Current year amortization............................................................................... Balance at the end of year .............................................................................
(Millions of yen) Consolidated
¥ 304 4,352
18. Related party transactions (1) Related party transactions between the Company and its related companies Hitachi, Ltd. directly and indirectly owned 51.2% of the voting rights of the Company as of March 31, 2013. Balances between the Company and its related company, Hitachi, Ltd., and its subsidiaries as of March 31, 2013 and 2012, and related transactions for the years ended March 31, 2013 and 2012 are summarized as follows: Millions of yen
Thousands of U.S. dollars
2013
2012
Balances: Hitachi, Ltd.: Deposits .....................................................................................................
¥8,823
¥19,701
$93,812
Hitachi Capital Corporation: Notes and accounts payable, trade...........................................................
805
583
8,559
Millions of yen
2013
Thousands of U.S. dollars
2013
2012
Principal transactions: Hitachi, Ltd.: Deposits ..................................................................................................... Interest received ........................................................................................
2013
¥47,200 21
¥40,400 34
$501,861 223
Hitachi Capital Corporation: Factoring ....................................................................................................
3,040
2,077
32,323
Hitachi Koki ANNUAL REPORT 2013 31
Notes to Consolidated Financial Statements
(2) Related party transactions between the Company’s consolidated subsidiaries and its related companies Balances between the Company’s consolidated subsidiaries and its related companies, subsidiaries of Hitachi, Ltd. as of March 31, 2013 and 2012, and related transactions for the years ended March 31, 2013 and 2012 are summarized as follows: Millions of yen
2013
Thousands of U.S. dollars
2012
2013
Balances: HITACHI (CHINA) LTD. Deposits .....................................................................................................
¥2,988
¥2,284
$31,770
Hitachi International Treasury, Ltd. Deposits .....................................................................................................
1,353
85
14,386
Hitachi International (Holland) B.V. Short-term loans ........................................................................................
4,941
3,519
52,536
Hitachi America Capital, Ltd. Short-term loans ........................................................................................
879
822
9,346
Millions of yen
2013
Thousands of U.S. dollars
2012
2013
Principal transactions: HITACHI (CHINA) LTD. Deposits ..................................................................................................... Interest received ........................................................................................
¥ 875 99
¥ 326 88
$ 9,304 1,053
Hitachi International Treasury, Ltd. Deposits ..................................................................................................... Interest received ........................................................................................
1,110 1
82 0
11,802 11
Hitachi International (Holland) B.V. Short-term loans ........................................................................................ Interest paid...............................................................................................
964 21
1,454 38
10,250 223
Hitachi America Capital, Ltd. Short-term loans ........................................................................................ Interest paid...............................................................................................
776 9
410 4
8,251 96
32 Hitachi Koki ANNUAL REPORT 2013
Independent Auditor’s Report
Hitachi Koki ANNUAL REPORT 2013 33
Global Network (As of June 30, 2013) 21 33 15
28 16
30 19
31 14
17 18
26
23
20
24
22 29
27 25
10
32
5
4 3 8
2
6 9
12 7
11 1
Manufacturing Company
13
Company and Sales Office Names and Addresses
Hitachi Koki Co., Ltd. Headquarters Shinagawa Intercity Tower A, 20th Floor, 15-1, Konan 2-chome, Minato-ku, Tokyo 108-6020, Japan Tel: 81-3-5783-0601 Katsuta Plant 1060 Takeda, Hitachinaka, Ibaraki 312-8502, Japan Tel: 81-29-273-8111 Sawa Plant 1450 Tarazaki, Hitachinaka, Ibaraki 312-0003, Japan Tel: 81-29-285-1112 Shirako Plant 2373 Minamihinata, Shirakomachi, Choseigun, Chiba 299-4205, Japan Tel: 81-475-33-2523
8 ●
9 ●
10 ●
11 ●
ASIA/OCEANIA 1 Hitachi Koki (Malaysia) Sdn. Bhd. ●
PLO53, Kawasan Perindustrian Senai (II), K.B. No. 114, 81400 Senai, Johor, Malaysia Tel: 60-7-5992345 Fax: 60-7-5992355 2 Hitachi Koki India Ltd. Plot No. 9A, 1st Phase, Peenya Industrial Area, Bangalore, 560058, India Tel: 91-80-41170777 Fax: 91-80-41171222 3 Guang Dong Hitachi Koki Co., Ltd. Industry Country Wealthy Zone, Industry Road, Hua Long Town, Pan Yu District, Guangzhou City, Guang Dong, China Tel: 86-20-84754622 Fax: 86-20-84754623 4 Guangzhou Hitachi Koki Co., Ltd. Processing Zone of Guanzhou Nansha Free Trade Port Zone, Nansha District, Guangzhou City, Guang Dong, China Tel: 86-20-84951238 Fax: 86-20-84951228 5 Fujian Hitachi Koki Co., Ltd. Hutang, Fuxing Investment Zone, Fuzhou, Fujian, China Tel: 86-591-83620201 Fax: 86-591-83620518 6 Hitachi Koki Taiwan Co., Ltd. No. 140, Gongye 11th Rd., Dali Dist., Taichung City 412, Taiwan Tel: 886-4-2491-0707 Fax: 886-4-2491-8787 7 Hitachi Koki (Singapore) Pte. Ltd. 31, Jurong Port Road, #01-11M, Jurong Logistic Hub, Singapore 619115 Tel: 65-6861-0211 Fax: 65-6861-4066
● ● ●
12 ●
13 ●
EUROPE 14 ● 15 ●
●
16 ●
●
17 ●
●
18 ●
34 Hitachi Koki ANNUAL REPORT 2013
Hitachi Koki (Singapore) Gulf Branch P.O. Box 261502, Jafza Lob 19, Flat No. Lb192207 South Zone, Jebel Ali, Dubai, U.A.E. Tel: 971-4-8-865-865 Fax: 971-4-8-865-867 Hitachi Koki Asia Co., Ltd. Workshop 01-05, 10th Floor, King Palace Plaza, No.52A, Sha Tsui Road, Tsuen Wan, New Territories, Hong Kong, China Tel: 852-2437-9291 Fax: 852-2417-9432 Hitachi Koki (China) Co., Ltd. Room 19B-C, Shartex Plaza, No. 88 Zun Yi Nan Rd., Shanghai, China Tel: 86-21-6295-1736 Fax: 86-21-6278-6086 Hitachi Power Tools (Malaysia) Sdn. Bhd. Wisma Sumber, Lot 558, Jalan Subang 3, Off Persiaran Subang, Sungai Penaga Industrial Park, 47610 Subang Jaya, Selangor, Malaysia Tel: 60-3-56241833 Fax: 60-3-80816683 Hitachi Power Tools (Thailand) Co., Ltd. 88 Krungthepkreetha Road, Huamark Sub-district, Bangkapi District, Bangkok 10240, Thailand Tel: 66-2-379-4460 Fax: 66-2-379-4712 Hitachi Power Tools Australia Pty. Ltd. Unit 1, 10 Boden Road, Seven Hills, NSW 2147, Australia Tel: 61-2-8887-8100 Fax: 61-2-8887-8180
Hitachi Koki Europe Ltd. Clonshaugh Business + Technology Park, Dublin 17, Ireland Tel: 353-1-803-6222 Fax: 353-1-803-6272 Hitachi Power Tools Belgium N.V./S.A. Koningin Astridlaan 51, B-1780 Wemmel, Belgium Tel: 32-2-460-1720 Fax: 32-2-460-2542 Hitachi Power Tools Denmark A/S Lillebaeltsvej 90, 6715 Esbjerg N, Denmark Tel: 45-75-143200 Fax: 45-75-143666 Hitachi Power Tools Europe GmbH Siemensring 34, 47877 Willich, Germany Tel: 49-2154-49930 Fax: 49-2154-499350 Hitachi Power Tools France S.A.S. Parc de l’Eglantier, 22 rue des Cerisiers, Lisses C.E. 1541, 91015 EVRY CEDEX, France Tel: 33-1-69474949 Fax: 33-1-60861416
35 38 34 42
41
37
39 40
36
Manufacturing Company Sales Branch in Japan Plant of Subsidiary
19 ● 20 ● 21 ● 22 ● 23 ● 24 ● 25 ● 26 ● 27 ● 28 ● 29 ● 30 ● 31 ● 32 ●
Hitachi Power Tools Finland Oy Tupalankatu 9, 15680 Lahti, Finland Tel: 358-20-7431-530 Fax: 358-20-7431-531 Hitachi Power Tools Iberica, S.A. Puigbarral, 26-28 Pol. Ind. Can Petit, 08227 Terrassa (Barcelona), Spain Tel: 34-93-735-6722 Fax: 34-93-735-7442 Hitachi Power Tools Netherlands B.V. Brabanthaven 11, 3433 PJ Nieuwegein, The Netherlands Tel: 31-30-6084040 Fax: 31-30-6067266 Hitachi Power Tools Netherlands B.V. Moscow Branch Kashirskoye shosse 65, 4F, Moscow 115583, Russia Tel: 7-495-727-4460 Fax: 7-495-727-4461 Hitachi Power Tools Oesterreich GmbH Str. 7, Objekt 58/A6, Industriezentrum NO-Sud, 2355 Wiener Neudorf, Austria Tel: 43-2236-64673/5 Fax: 43-2236-63373 Hitachi Power Tools Polska Sp.z.o.o. ul. Gierdziejewskiego 1 (Gates 12-15) 02-495, Warszawa, Poland Tel: 48-22-863-3378 Fax: 48-22-863-3382 Hitachi Power Tools Hungary Kft. 1106 Bogancsvirag U.5-7, Budapest, Hungary Tel: 36-1-2643433 Fax: 36-1-2643429 Hitachi Power Tools Czech s.r.o. Modricka 205, 664 48 Moravany, Czech Republic Tel: 420-547-422-660 Fax: 420-547-213-588 Hitachi Power Tools Romania S.R.L. Bld. Biruintei, Nr. 101, Oras Pantelimon, 077145, Judetul Ilfov, Romania Tel: 40-31-805-2719 Fax: 40-31-805-2577 Hitachi Power Tools Norway AS Kjeller Vest 7, N-2007 Kjeller Postboks 124, N-2027 Kjeller, Norway Tel: 47-66-92-66-00 Fax: 47-66-92-66-50 L.L.C. Hitachi Power Tools RUS Kashirskoye shosse 65, 4F, Moscow 115583, Russia Tel: 7-495-727-4460 Fax: 7-495-727-4461 Hitachi Power Tools Sweden AB Rotebergsvagen 2B SE-192 78 Sollentuna, Sweden Tel: 46-8-598-999-00 Fax: 46-8-598-999-40 Hitachi Power Tools (U.K.) Ltd. Precedent Drive, Rooksley, Milton Keynes, MK 13, 8PJ, U.K. Tel: 44-1908-660663 Fax: 44-1908-606642 Hitachi Fercad Power Tools Italia S.p.A. Via Retrone 49, 36077 Altavilla Vicentina (VI), Italy Tel: 39-0444-548111 Fax: 39-0444-548110
33 ●
Carat International B.V. Nikkelstraat 18 4823 AB Breda, The Netherlands Tel: 31-765-422-422 Fax: 31-765-422-422
NORTH AMERICA 34 ●
Hitachi Koki U.S.A., Ltd. 3950 Steve Reynolds Blvd., Norcross, Georgia 30093, U.S.A. Tel: 1-770-925-1774 Fax: 1-770-279-4293 35 Hitachi Koki Canada Corp. 450 Export Blvd., Unit B, Mississauga, Ontario L5S 2A4, Canada Tel: 1-905-564-9477 Fax: 1-905-564-0902
●
LATIN AMERICA 36 ●
Hitachi Koki do Brasil Ltda. Alameda Venus, 219 Distrito Industrial American Park Cep: 13347-659-Indaiatuba-SP Brasil Tel: 55-19-3936-9730 Fax: 55-19-3936-9731 37 Hitachi Power Tools de Mexico S.A. de C.V. Francisco Petrarca 239A Colonia Chapultepec Morales Delegacion Miguel Hidalgo C.P. 11570 Mexico, D.F., Mexico Tel: 52-55-5254-6673 Fax: 52-55-5254-5201
●
DOMESTIC 38 ●
39 ● 40 ● 41 ●
42 ●
Haramachi Manufacturing Center 70 Minami-Harada, Kita-Nagano, Haramachi-ku, Minami-Soma, Fukushima 975-0072 Tel: 81-244-26-1821 Fax: 81-244-24-5818 Nikko Tanaka Engineering Co., Ltd. 3-4-29 Tsudanuma, Narashino, Chiba 275-0016 Tel: 81-47-472-1111 Fax: 81-47-479-0558 Sankyo Diamond Industrial Co., Ltd. 1770 Hongo, Ebina, Kanagawa 243-0417 Tel: 81-46-238-6161 Fax: 81-46-238-6165 Hitachi Koki Sales Co., Ltd. 5th Floor, Heiwajima Distribution Center, 5-5-36, Heiwajima, Ota-ku, Tokyo 143-0006 Tel: 81-3-5753-7700 Fax: 81-3-5753-7669 Hitachi Koki Manufacturing & Service Co., Ltd. 1060 Takeda, Hitachinaka, Ibaraki 312-8502 Tel: 81-29-276-7444 Fax: 81-29-276-7495
Hitachi Koki ANNUAL REPORT 2013 35
Corporate Data (As of March 31, 2013)
Hitachi Koki Co., Ltd. Founded December 18, 1948
Representative Chairman of the Board, Director & President Kiyoshi Kato
Headquarters Shinagawa Intercity Tower A, 20th Floor, 15-1, Konan 2-chome, Minato-ku, Tokyo 108-6020, Japan Tel: 81-3-5783-0601
Capital ¥17,813 million
Katsuta Plant 1060 Takeda, Hitachinaka, Ibaraki 312-8502, Japan Tel: 81-29-273-8111
Employees (Consolidated) 5,014
History December 1948 Founded (product lineup: power tools)
May 1949 Listed on the Tokyo Stock Exchange and Osaka Securities Exchange
November 1954 Production begun for Chemical Instruments products (currently Life-Science Instruments)
June 1963
Katsuta Plant
Production begun for printers (line printers for large-frame computers)
November 1978 Hitachi Power Tools Europe GmbH established
November 1980 Hitachi Power Tools U.S.A., Ltd. established (currently Hitachi Koki U.S.A., Ltd.)
March 1985
Hitachi Koki’s first cordless screwdriver
Joint company Mindong Hitachi Power Tools Co., Ltd. established (currently Fujian Hitachi Koki Co., Ltd.)
October 2002 Printer business transferred to Hitachi, Ltd.
January 2005 Markt & Co AS* of Norway (currently Hitachi Power Tools Norway AS) added as a subsidiary through share acquisition
March 2005 Sankyo Diamond Industrial Co., Ltd.* added as a subsidiary through share acquisition
January 2007
Hitachi Power Tools Europe GmbH
Carat International B.V. added as a subsidiary through share acquisition
April 2007 Nikko Tanaka Engineering Co., Ltd.* established (engine tools business of Tanaka Kogyo Co., Ltd. transferred in May 2007)
March 2009 Hitachi, Ltd. becomes the parent company of Hitachi Koki Co., Ltd. as a result of a tender offer that increased its ownership of the voting rights of Hitachi Koki from 38.97% to 51.07%. Hitachi intends to maintain the listing of Hitachi Koki’s stock and to preserve its independent management as a listed company. Hitachi therefore has no plans to make any substantial changes to the management policies or areas of operation of the Hitachi Koki Group.
Fujian Hitachi Koki Co., Ltd.
February 2010 Hitachi Koki do Brasil Ltda. established
November 2011 Operation started at Guangzhou Hitachi Koki Co., Ltd.
October 2012 Operation started at Hitachi Power Tools (Malaysia) Sdn. Bhd. * Accounted for as a consolidated subsidiary as of the end of the fiscal year under review
36 Hitachi Koki ANNUAL REPORT 2013
Outdoor power equipment
Investor Information (As of March 31, 2013)
Number of Shares Authorized 270,000,000 Outstanding 123,072,776
Stock Code 6581 Listed Exchange Tokyo (First section)
Number of Shareholders 16,010
Closing of Accounts March
Shareholder Composition
Treasury stock
Financial institutions
17.61%
13.55%
General Meeting of Shareholders Every June Major Shareholders
Securities companies
0.47%
Individuals and others
17.70% Other domestic corporations, etc. Overseas corporations
42.56%
8.11%
Percentage of Total Shares Issued
1. Hitachi, Ltd.
33.17%
2. Hitachi Urban Investment, Ltd.
8.99
3. The Master Trust Bank of Japan, Ltd.
2.39
4. Japan Trustee Services Bank, Ltd.
2.29
5. Trust & Custody Services Bank, Ltd.
1.02
6. The Bank of New York, Inc.
0.95
7. Hitachi Koki Employees’ Shareholding Association
0.88
8. Nippon Life Insurance Company
0.84
9. RBC ISB A/C DUB NON RESIDENT/DOMESTIC RATE
0.80
10. Bank of Tokyo-Mitsubishi UFJ
0.73
Note: In addition to the above, the Company holds 21,670,303 shares (17.60%) in treasury stock.
Stock Price Range (Tokyo Stock Exchange) (Yen) 1,200
1,000
800
600
400
200
0
April 2010
March 2011
March 2012
March 2013
For further information, please contact: Public Relations Office, Strategic Management Division, Hitachi Koki Co., Ltd. Fax: 81-3-5783-0709 E-mail:
[email protected] Web site: http://www.hitachi-koki.com
Hitachi Koki ANNUAL REPORT 2013 37
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