(The following is an unofficial English translation of the Report for the 68th Fiscal Year of Advantest Corporation (the “Company”). The Company provides this translation for your reference and convenience only and without any warranty as to its accuracy or otherwise.)
Report for the 68th Fiscal Year
(April 1, 2009 through March 31, 2010)
Advantest Corporation
Contents
Message to Shareholders 3
(Attachments to the Convocation Notice of the 68th Ordinary General Meeting of Shareholders)
Business Report 4
Consolidated Balance Sheets 19
Consolidated Statements of Operations 20
Consolidated Statements of Stockholders’ Equity 21
Notes to Consolidated Financial Statements 22
Balance Sheets 26
Statements of Operations 27
Statements of Changes in Stockholders’ Equity 28
Notes to Non-Consolidated Financial Statements 30
Copy of Independent Auditor’s Audit Report (Consolidated) 34
Copy of Independent Auditor’s Audit Report 35
Copy of Board of Corporate Auditors’ Audit Report 36
(Reference) Memorandum to Shareholders 38
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Message to Shareholders
To Our Shareholders
We are pleased to send you our “Report for the 68th Fiscal Year (from April 1, 2009 to March 31, 2010).”
In the semiconductor industry, chip-makers were impacted by the global downturn, and restricted capital expenditures sharply at the beginning of the period. They gradually resumed capital expenditures as chip prices rose and equipment utilization rates climbed, driven by increasing demand for PCs, flat-screen TVs, and cellular phones.
Advantest benefited from these positive market factors. Additionally, throughout the period, Advantest strove to improve profitability by cutting costs and reducing fixed expenses through integration of manufacturing subsidiaries, while expanding its sources of revenue by reorganizing its sales structure and launching new products that adapt to customer needs. These measures enabled Advantest to return to profitability in the fourth quarter of FY2009.
Although sales for the period totaled only ¥53.2 billion (a 30.6% decrease in comparison to FY2008), due to the drop in orders seen in late FY2008, orders and earnings improved significantly year on year. Orders input received was ¥67.7 billion (a 35.2% increase in comparison to FY2008). Operating loss was ¥11.6 billion (¥37.8 billion improvement in comparison to FY2008). Loss before income taxes and equity in loss of affiliated company was ¥9.9 billion (¥42.8 billion improvement in comparison to FY2008). Net loss was ¥11.5 billion (¥63.4 billion improvement in comparison to FY2008).
With respect to the management environment for the upcoming fiscal year, amid the developing consensus that the global economy has bottomed out, the semiconductor industry appears to be set for a period of renewed expansion. Chip-makers are proactively ramping up capital expenditures to support increased production volumes and enhance productivity, gradually improving the management environment surrounding Advantest. However, it remains difficult to predict whether the momentum of such capital expenditures will be sustained. In this environment, Advantest is unable to provide a detailed forecast at this time.
In this environment, Advantest will aim to expand its market share in the semiconductor test systems market and make efforts to improve design quality, shorten product development cycles, improve production efficiency, and optimize its procurement. Advantest plans to merge two manufacturing and service subsidiaries in July 2010, review a series of business processes of R&D, manufacturing, sales and maintenance service from customers’ viewpoint, and realize more speedy and efficient management. Advantest also intends to cultivate new businesses such as 3D imaging analysis system, and will focus on further reinforcing its management structure.
With respect to the dividend distribution to the shareholders, Advantest resolved at the meeting of the Board of Directors held on May 25, 2010 to distribute a year end dividend of 5 yen per share, with a payment date of June 2, 2010. Since Advantest has paid an interim dividend of 5 yen, the total dividend per share for the fiscal year will be 10 yen per share.
We hope that we may rely on you for your continued support and guidance in the future.
June 2010
Haruo Matsuno
Representative Director,
President and CEO
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(Attachments to the Convocation Notice of the 68th Ordinary General Meeting of Shareholders)
Business Report
(April 1, 2009 through March 31, 2010)
1. Current Conditions of the Advantest Group
(1) | Business conditions during the fiscal year |
(i) | Operations and Results of Business |
Overall
Advantest’s FY2009 (April 1, 2009 through March 31, 2010) dawned with the global economy in recession triggered by the financial crisis of late 2008. However, a mild upswing has now taken hold worldwide, led by economic growth in China, India, and other emerging nations, and underpinned by the stimulus measures adopted by many national governments.
In the semiconductor industry, chip-makers were also impacted by the global downturn, and restricted capital expenditures sharply at the beginning of the period. They gradually resumed capital expenditures as chip prices rose and equipment utilization rates climbed, driven by increasing demand for PCs, flat-screen TVs, and cellular phones.
Advantest benefited from these market factors. Additionally, throughout the period, Advantest strove to improve profitability by cutting costs and reducing fixed expenses through integration of manufacturing subsidiaries, while expanding its sources of revenue by reorganizing its sales structure and launching new products that adapt to customer needs. These measures enabled Advantest to return to profitability in the fourth quarter of FY2009.
As a result of the above, although sales for the period totaled only ¥53.2 billion (a 30.6% decrease in comparison to FY2008), due to the drop in orders seen in late FY2008, orders and earnings improved significantly year on year. Orders input received was ¥67.7 billion (a 35.2% increase in comparison to FY2008). Operating loss was ¥11.6 billion (¥37.8 billion improvement in comparison to FY2008). Loss before income taxes and equity in loss of affiliated company was ¥9.9 billion (¥42.8 billion improvement in comparison to FY2008). Net loss was ¥11.5 billion (¥63.4 billion improvement in comparison to FY2008). The percentage of net sales to overseas customers was 77.5%, compared to 67.7% in FY2008.
Business conditions by Business Segment
Semiconductor and Component Test System Segment
In the Semiconductor and Component Test System segment, orders input received improved significantly. Sales remained weak, due to the impact of weakened orders carried over from the second half of FY2008.
In the memory sector, the Company was mired in an extremely challenging environment at the beginning of the period, as memory makers continued to take a cautious stance on capital expenditures. However, the upturn in PC shipments left manufacturers struggling to keep up with demand, sparking fears of DRAM shortages. Prices for DDR3-DRAM and other DRAM devices rose, encouraging memory makers to resume capital expenditures, which led to a jump in orders for memory test systems towards the end of the period.
In non-memory, orders for MPU test systems continued to be robust. Demand for LCD driver IC test systems and consumer SoC test systems also expanded from the second half of the period, as the global recovery stimulated demand for consumer electronics including LCD TVs, cellular phones, and notebook computers.
As a result of the above, orders input received was ¥42.5 billion (a 62.7% increase in comparison to FY2008), net sales were ¥32.6 billion (a 33.8% decrease in comparison to FY2008) and operating loss was ¥7.0 billion (¥21.9 billion improvement in comparison to FY2008).
Mechatronics System Segment
Demand for Advantest’s test handlers also improved sharply during the second half of FY2009, supported by increased activity in the DDR3-DRAM and analog IC markets. However, the steep drop in orders in the second half of FY2008 kept sales at a low level for the full year.
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As a result of the above, orders input received was ¥14.8 billion (a 62.7% increase in comparison to FY2008), net sales were ¥11.2 billion (a 21.9% decrease in comparison to FY2008) and operating loss was ¥1.9 billion (¥10.0 billion improvement in comparison to FY2008).
Services, Support and Others Segment
The Services, Support and Others Segment did not perform strongly in the period; volumes declined in customer utilization rates of testing equipment.
As a result, orders input received was ¥13.0 billion (a 17.1% decrease in comparison to FY2008), net sales were ¥11.8 billion (a 25.1% decrease in comparison to FY2008) and operating income was ¥2.2 billion (¥3.3 billion improvement in comparison to FY2008).
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Sales Breakdown by Business Segment (consolidated)
Fiscal Year Segment | FY2008 (the 67th) | FY2009 (the 68th) | Change from the previous period | |||
Amount (in: million yen) | Percentage (%) | Amount (in: million yen) | Percentage (%) | Amount (in: million yen) | Percentage increase (decrease) (%) | |
Semiconductor and Component Test System | 49,216 | 64.2 | 32,572 | 61.2 | (16,644) | (33.8) |
Mechatronics System | 14,388 | 18.8 | 11,237 | 21.1 | (3,151) | (21.9) |
Services, Support and Others | 15,815 | 20.6 | 11,838 | 22.2 | (3,977) | (25.1) |
Intercompany transaction elimination | (2,767) | (3.6) | (2,422) | (4.5) | 345 | - |
Total | 76,652 | 100.0 | 53,225 | 100.0 | (23,427) | (30.6) |
Overseas | 51,918 | 67.7 | 41,249 | 77.5 | (10,669) | (20.5) |
(ii) | Capital Expenditures |
The Advantest Group invested a total of ¥3.4 billion in capital expenditures in fiscal year 2009. Most of the investments were used to fund new product development and lease of assets to customers.
(iii) | Financing |
No significant financing activities took place in fiscal year 2009.
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(2) | Conditions of Assets, Profit and Loss |
Conditions of Assets, Profit and Loss of the Advantest Group (consolidated)
FY2006 (the 65th) | FY2007 (the 66th) | FY2008 (the 67th) | FY2009 (the 68th) | ||
Net sales (in: million yen) | 235,012 | 182,767 | 76,652 | 53,225 | |
Net income (in: million yen) | 35,556 | 16,550 | (74,902) | (11,454) | |
Basic net income per share (in: yen) | 190.01 | 90.72 | (419.09) | (64.09) | |
Net assets (in: million yen) | 294,797 | 254,184 | 163,616 | 150,242 | |
Total assets (in: million yen) | 366,374 | 298,684 | 202,059 | 188,663 |
(Notes) 1: | The Company prepared its consolidated financial statements in accordance with generally accepted accounting principles (GAAP) in the United States. |
2: | The calculation of “Basic net income per share” was based on the average number of shares issued during the relevant fiscal year reduced by the average number of treasury shares held during the fiscal year. |
[Charts illustrating the information presented in the above table.]
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(3) | Significant Subsidiaries |
Name of Subsidiary | Common Stock | Percentage of Voting Rights (Note 1) | Principal Activities |
Advantest Laboratories Ltd. | ¥50 million | 100% | Research and development of measuring and testing technologies |
Advantest Customer Support Corporation (Note 2) | ¥300 million | 100% | Maintenance service for the Company’s products |
Advantest Manufacturing, Inc. (Note 2) | ¥80 million | 100% | Manufacturing of the Company’s products |
Japan Engineering Co., Ltd. | ¥305 million | 100% | Development, manufacturing and sales of the Company’s products |
Advantest Finance Inc. | ¥1,000 million | 100% | Leasing of the Company’s products |
Advantest America, Inc. | 42,000 thousand USD | 100% | Sales of the Company’s products |
Advantest Europe GmbH | 10,793 thousand Euros | 100% | Sales of the Company’s products |
Advantest Taiwan Inc. | 560,000 thousand New Taiwan Dollars | 100% | Sales of the Company’s products |
Advantest (Singapore) Pte. Ltd. | 15,300 thousand Singapore Dollars | 100% | Sales of the Company’s products |
Advantest Korea Co., Ltd. | 5,484 million Won | 100% | Support for sales of the Company’s products |
Advantest (Suzhou) Co., Ltd. | 2,700 thousand USD | 100% | Support for sales of the Company’s products |
(Notes)1: | Percentage of voting rights includes indirectly held shares. |
2: | Advantest Customer Support Corporation and Advantest Manufacturing, Inc. are scheduled to be merged into Advantest Corporation on July 1, 2010. |
(4) | Challenges Ahead |
While maintaining “Measurements” as our core competence in mid-and-long term, Advantest intends to improve its corporate value by establishing a management and financial structure that responds timely to changes in the global market, and by aiming to increase market share by introducing fine products that will inspire the market demands of the next generation. To achieve these objectives, Advantest promotes to further strengthen its product development operations and improve production efficiency while strengthening its overseas operations and support system in the U.S., Europe and Asia.
As semiconductor manufacturers relax their restrictions on capital expenditures, Advantest is responding to signs of improvement in its business environment by speeding up the implementation of its management strategy and seeking greater business efficiencies. In the upcoming fiscal year, Advantest will merge with one of its manufacturing subsidiaries and one of its service subsidiaries, and will review its R&D, manufacturing, sales, and maintenance service processes to further align them with customer requirements, enhancing the Company’s ability to respond actively to market shifts.
Through “1000 Days,” a corporate initiative launched in July 2009, Advantest will continue to strive to reduce lead times, provide timely new solutions optimized for market needs, explore new markets outside the semiconductor industry, and pursue overall cost savings, as part of a concerted strategy to improve profitability and swiftly return to financial health.
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(5) | Primary Areas of Business |
The Advantest Group manufactures and markets semiconductor and component test systems and products related to mechatronics systems (test handlers, device interface, etc.). In addition to manufacturing, the Advantest Group also carries out research and development activities and provides maintenance services and related services in the business category of “Services, Support and Others.”
(6) | Significant Sales Offices and Factories |
(i) | Japan |
Category | Name of Office | Location |
Head Office, Sales Office and Service Office | Head Office | Chiyoda-ku, Tokyo |
Western Japan Office | Suita-shi, Osaka | |
R&D Centers, Laboratories | Gunma R&D Center | Meiwa-machi, Ora-gun, Gunma |
Saitama R&D Center (Note) | Kazo-shi, Saitama (former: Otone-machi, Kitasaitama-gun, Saitama) | |
Kitakyushu R&D Center | Kitakyushu-shi, Fukuoka | |
Advantest Laboratories | Sendai-shi, Miyagi | |
Factories | Gunma Factory | Ora-machi, Ora-gun, Gunma |
Gunma Factory 2 | Ora-machi, Ora-gun, Gunma | |
Sendai Factory | Sendai-shi, Miyagi |
(Note) Effective March 23, 2010, Otone R&D Center changed its name to Saitama R&D Center.
(ii) | Overseas |
Category | Name of Office | Location |
Sales Office and Service Office | Advantest America, Inc. | U.S.A. |
Advantest Europe GmbH | Germany | |
Advantest Taiwan Inc. | Taiwan | |
Advantest (Singapore) Pte. Ltd. | Singapore | |
Advantest Korea Co., Ltd. | Korea | |
Advantest (Suzhou) Co., Ltd. | China |
(7) | Employees |
Employees of the Advantest Group (as of March 31, 2010)
Number of Employees | Change from end of previous fiscal year |
3,151 (217) | 36 (406) decrease |
(Note) | The numbers set forth above indicate the numbers of employees excluding part-time and non-regular employees. The numbers in brackets indicate the annual average number of such part-time and non-regular employees. |
(8) | Major Lenders |
Not applicable.
(9) | Other significant matters with respect to the current status of the Advantest Group |
None.
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2. | Company Information |
(1) | Equity Stock (as of March 31, 2010) |
(i) | Total number of issuable shares | 440,000,000 shares |
(ii) | Total number of issued shares | 199,566,770 shares |
(Note) Total number of issued shares includes treasury stock (20,845,178 shares).
(iii) | Number of shareholders | 48,489 |
(iv) | Major Shareholders (Top 10 shareholders) |
Name of Shareholder | Number of Shares (in: thousand shares) | Percentage of Ownership (%) |
Mizuho Trust & Banking Co., Ltd. (retirement benefit trust (Fujitsu account), re-trust trustees, Trust & Custody Services Bank, Ltd.) | 20,143 | 11.27 |
The Master Trust Bank of Japan, Ltd. (trust account) | 19,791 | 11.07 |
Japan Trustee Services Bank, Ltd. (trust account) | 10,526 | 5.89 |
JPMorgan Securities Japan Co., Ltd. | 6,462 | 3.62 |
Mellon Bank Treaty Clients Omnibus | 6,357 | 3.56 |
Trust & Custody Services Bank, Ltd. (investment trust account) | 4,480 | 2.51 |
Japan Trustee Services Bank, Ltd. (trust account 4) | 3,370 | 1.89 |
Mitsubishi UFJ Securities Co., Ltd. | 3,112 | 1.74 |
Societe Generale Securities (North Pacific) Ltd. | 2,939 | 1.64 |
Morgan Whitefriars Equity Derivatives | 2,662 | 1.49 |
(Notes) | 1: | Percentage of Ownership is calculated without treasury stock (20,845,178 shares). |
2: | Mizuho Trust & Banking Co., Ltd. (retirement benefit trust (Fujitsu account), re-trust trustees, Trust & Custody Services Bank, Ltd.) holds the 20,143 thousand shares of common stock listed above as the trustee of a retirement benefit plan of Fujitsu Limited, and exercises its voting rights pursuant to instructions given by Fujitsu Limited. |
3: | The Company has acknowledged that in respect of the substantial shareholding reports filed pursuant to the “Disclosure of Substantial Shareholding” system, J.P.Morgan Securities Ltd. and its two affiliates jointly held 11,654 thousand shares of the Company as of March 31, 2010 according to the substantial shareholding reports filed on April 7, 2010. The Bank of Tokyo-Mitsubishi UFJ, Ltd. and its five affiliates jointly held 14,569 thousand shares of the Company as of July 27, 2009 according to the substantial shareholding reports filed on August 3, 2009. However, the Company has not included the number of shares for which beneficial owners cannot be identified in the table above. |
(Reference) [INSERT PIE CHART HERE]
Financial Institutions and Securities Company | 144 holders, 92,050 thousand shares (46.1%) |
Non-Japanese Holders | 460 holders, 52,946 thousand shares (26.5%) |
Individuals and Others | 47,455 holders, 29,119 thousand shares (14.6%) |
Other Entities and Treasury Shares | 430 holders, 25,452 thousand shares (12.8%) |
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(2) | Stock Acquisition Rights |
(i) | Stock acquisition rights held by directors and corporate auditors (as of March 31, 2010) |
The resolution at the Board of Directors held on June 27, 2006 | The resolution at the Board of Directors held on June 27, 2007 | The resolution at the Board of Directors held on June 25, 2008 | The resolution at the Board of Directors held on June 25, 2009 | ||
Date of issuance | July 12, 2006 | July 12, 2007 | July 10, 2008 | July 10, 2009 | |
Issuance Price | ¥ 0 or ¥295,014 per unit | ¥ 0 or ¥111,500 per unit | ¥ 0 or ¥36,900 per unit | ¥41,700 per unit | |
Holding status of stock acquisition rights by directors and corporate auditors | 1,550 units (12 persons) | 1,550 units (13 persons) | 1,580 units (13 persons) | 1,820 units (13 persons) | |
Directors (Excluding outside directors) | 1,080 units (7 persons) | 1,160 units (7 persons) | 1,280 units (7 persons) | 1,520 units (7 persons) | |
Outside directors | 100 units (2 persons) | 100 units (2 persons) | 100 units (2 persons) | 100 units (2 persons) | |
Corporate auditors | 370 units (3 persons) | 290 units (4 persons) | 200 units (4 persons) | 200 units (4 persons) | |
Class and aggregate number of shares to be issued or delivered upon exercise | 310,000 shares of common stock (each stock acquisition right is exercisable for 200 shares) | 155,000 shares of common stock (each stock acquisition right is exercisable for 100 shares) | 158,000 shares of common stock (each stock acquisition right is exercisable for 100 shares) | 182,000 shares of common stock (each stock acquisition right is exercisable for 100 shares) | |
Exercise price to be paid upon exercise | ¥5,880 per share | ¥5,563 per share | ¥2,653 per share | ¥1,844 per share | |
Exercise period | April 1, 2007 to March 31, 2011 | April 1, 2008 to March 31, 2012 | April 1, 2009 to March 31, 2013 | April 1, 2010 to March 31, 2014 | |
Terms of exercise | The stock acquisition rights may not be inherited. | ||||
Reasons for the Company’s acquisition of the stock acquisition rights | The Company shall automatically acquire the stock acquisition rights, for no consideration, if: (a) the general meeting of shareholders resolves to approve (if approval by the shareholders’ meeting is not legally required, then the Board of Directors may approve) (i) any merger agreement pursuant to which the Company shall dissolve, (ii) any agreement or a plan pursuant to which the Company shall split all or part of its business or (iii) any stock-for-stock exchange agreement or stock-transfer plan pursuant to which the Company shall become a wholly-owned subsidiary of another company; (b) the rights holder becomes a person who does not hold any position as a director, corporate auditor, executive officer, employee, advisor or non-regular employee of the Company or its subsidiaries before the expiration of the exercise period, unless the Company otherwise deems it appropriate to allow him/her to exercise his/her stock acquisition rights and notifies him/her to that effect; (c) the rights holder dies. | ||||
Restriction on the transfer of the stock acquisition rights | Approval by the Board of Directors is required to transfer the stock acquisition rights, except where the Company is the transferee with respect to such transfer. | Acquisition of the stock acquisition rights by transfer shall require an approval by the Board of Directors. Provided, however, if it is the Company acquiring the stock acquisition rights by transfer, such transfer shall be deemed to be approved by the Board of Directors. |
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(ii) | Stock acquisition rights granted to employees of the Company during fiscal year 2009 |
The resolution at the Board of Directors held on June 25, 2009 | |
Date of issuance | July 10, 2009 |
Issuance price | ¥41,700 per unit |
Grantee of stock acquisition rights | Employees of the Company |
Conditions of granting | 1,560 units (12 persons) |
Class and aggregate number of shares to be issued or delivered upon exercise | 156,000 shares of common stock (each stock acquisition right is exercisable for 100 shares) |
Exercise price to be paid upon exercise | ¥1,844 per share |
Exercise period | April 1, 2010 to March 31, 2014 |
Terms of exercise | The stock acquisition rights may not be inherited. |
Reasons for the Company’s acquisition of the stock acquisition rights | The Company shall automatically acquire the stock acquisition rights, for no consideration, if: (a) the general meeting of shareholders resolves to approve (if approval by the shareholders’ meeting is not legally required, then the Board of Directors may approve) (i) any merger agreement pursuant to which the Company shall dissolve, (ii) any agreement or a plan pursuant to which the Company shall split all or part of its business or (iii) any stock-for-stock exchange agreement or stock-transfer plan pursuant to which the Company shall become a wholly-owned subsidiary of another company; (b) the rights holder becomes a person who does not hold any position as a director, corporate auditor, executive officer, employee, advisor or non-regular employee of the Company or its subsidiaries before the expiration of the exercise period, unless the Company otherwise deems it appropriate to allow him/her to exercise his/her stock acquisition rights and notifies him/her to that effect; (c) the rights holder dies. |
Restriction on the transfer of the stock acquisition rights | Acquisition of the stock acquisition rights by transfer shall require an approval by the Board of Directors. Provided, however, if it is the Company acquiring the stock acquisition rights by transfer, such transfer shall be deemed to be approved by the Board of Directors. |
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(3) | Directors and Corporate Auditors |
(i) | Directors and Corporate Auditors (as of March 31, 2009) |
Title | Name | Assignment in the Company and significant concurrent positions |
Chairman of the Board and Representative Director | Toshio Maruyama | |
Representative Director | Haruo Matsuno* | |
Director | Naoyuki Akikusa | Director and Senior Executive Advisor of Fujitsu Limited Outside Corporate Auditor of FANUC LTD |
Director | Yasushige Hagio | Attorney-at-Law, Senior Partner, Seiwa Patent & Law |
Director | Takashi Tokuno* | |
Director | Hiroshi Tsukahara* | |
Director | Yuichi Kurita* | |
Director | Hiroyasu Sawai* | |
Director | Shinichiro Kuroe* | |
Standing Corporate Auditor | Hitoshi Owada | |
Standing Corporate Auditor | Yuri Morita | |
Corporate Auditor | Megumi Yamamuro | Attorney-at-Law, SOGA URYU & ITOGA Professor, The University of Tokyo Graduate School of Law and Politics Outside Corporate Auditor of Fujitsu Limited Outside Corporate Auditor of NIFTY Corporation |
Corporate Auditor | Jiro Haneda |
(Notes) | 1: | Messrs. Naoyuki Akikusa and Yasushige Hagio are outside directors. |
2: | Messrs. Megumi Yamamuro and Jiro Haneda are outside corporate auditors. |
3: | Mr. Hitoshi Owada, standing corporate auditor, has substantial accounting experience at the Company and considerable knowledge of financial and accounting matters. |
4: | There has been no significant change in assignment in the Company and in significant concurrent positions held by directors and corporate auditors after March 31, 2010. |
5: | The Company has in place an Executive Officers System and * indicates a director who also serves as an Executive Officer. |
6: | The positions of Executive Officers are currently held as follows: |
Title | Name | Assignment in the Company and significant concurrent positions |
President and CEO | Haruo Matsuno | |
Senior Executive Officer | Takashi Tokuno | Business Groups Senior Vice President, New Concept Product Initiative |
Managing Executive Officer | Hiroshi Tsukahara | Technology Promotion |
Managing Executive Officer | Yuichi Kurita | Corporate Planning and Administration Senior Vice President, Corporate Administration Group |
Managing Executive Officer | Hiroyasu Sawai | Sales and Marketing Senior Vice President, Sales and Marketing Group |
Managing Executive Officer | Shinichiro Kuroe | Technology Development Group and Test System Business Group Senior Vice President, Test System Business Group |
Managing Executive Officer | Yoshiro Yagi | Vice President, Sales and Marketing Group |
Managing Executive Officer | Hiroshi Nakamura | Vice President, Corporate Administration Group |
Managing Executive Officer | Yoshiaki Yoshida | Senior Vice President, Corporate Planning Group |
Executive Officer | Masao Shimizu | Senior Vice President, System Solution Business Group Director of Fujitsu Interconnect Technologies Limited |
Executive Officer | Hideaki Imada | Senior Vice President, Production Group |
Executive Officer | Yasuhiro Kawata | Senior Vice President, Quality Assurance Group |
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Executive Officer | Takashi Sugiura | Vice President, Corporate Administration Group |
Executive Officer | Takashi Sekino | Senior Vice President, Technology Development Group |
Executive Officer | Sae Bum Myung | Representative Director and President, Advantest Korea Co., Ltd. |
Executive Officer | Soichi Tsukakoshi | Vice President, Sales and Marketing Group |
Executive Officer | Josef Schraetzenstaller | Managing Director, Advantest Europe GmbH |
Executive Officer | R. Keith Lee | Director, President and CEO, Advantest America Corporation (Holding Co.) |
7: | There has been no significant change in assignment in the Company and in significant concurrent positions held by the Executive Officers after March 31, 2010. |
(ii) | The amount of compensation for directors and corporate auditors |
Category | Number | Amount of compensation |
Directors | 11 | ¥341 million |
Corporate Auditors | 4 | ¥55 million |
Total | 15 | ¥396 million |
(Notes) | 1: | The amounts of compensation set forth above include compensation paid in relation to stock option rights and fixed compensation paid to two directors who retired from their respective positions as of the closing of the 67th ordinary general meeting of shareholders, which was held on June 25, 2009. |
2: | Of the amount of compensation set forth above, the aggregate amount of compensation for two outside directors and two outside corporate auditors is ¥34 million. |
(iii) | Matters pertaining to outside directors and outside corporate auditors |
(a) | Significant concurrent positions held and relationship to the Company |
Name | Concurrent position(s) | Relationship to the Company |
Naoyuki Akikusa (Outside director) | Outside corporate auditor, FANUC LTD | There is no special relationship between FANUC LTD and the Company. |
Yasushige Hagio (Outside director) | Senior Partner, Seiwa Patent & Law | There is no special relationship between Seiwa Patent & Law and the Company. |
Megumi Yamamuro (Outside corporate auditor) | Outside corporate auditor, Fujitsu Limited | Fujitsu Limited holds the right to instruct the voting of the shares of the Company (11.27%) held by Mizuho Trust & Banking Co., Ltd. (retirement benefit trust (Fujitsu account), re-trust trustees, Trust & Custody Services Bank, Ltd.). The Company sells products to and purchases parts from Fujitsu Limited. |
Outside corporate auditor, NIFTY Corporation | There is no special relationship between NIFTY Corporation and the Company. |
(b) | Principal activities |
Name | Attendance | Participation at meetings |
Naoyuki Akikusa (Outside director) | Meetings of Board of Directors: 11 out of 13 times | Mr. Akikusa expresses his opinions based mainly on his experience in company management and his knowledge of the industry at meetings of the Board of Directors. |
Yasushige Hagio (Outside director) | Meetings of Board of Directors: 13 out of 13 times | Mr. Hagio expresses his opinions based mainly on his expertise as an attorney-at-law at meetings of the Board of Directors. |
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Megumi Yamamuro (Outside corporate auditor) | Meetings of Board of Directors: 11 out of 13 times Meetings of Board of Corporate Auditors: 13 out of 15 times | Mr. Yamamuro expresses his opinions based mainly on his expertise as an attorney-at-law at meetings of the Board of Directors and Board of Corporate Auditors. |
Jiro Haneda (Outside corporate auditor) | Meetings of Board of Directors: 13 out of 13 times Meetings of Board of Corporate Auditors: 15 out of 15 times | Mr. Haneda expresses his opinions based mainly on his experience in company management at meetings of the Board of Directors and Board of Corporate Auditors. |
(c) | Overview of the liability limitation agreement |
The Company entered into an agreement limiting liabilities as defined in Article 423, Paragraph 1 of the Company Law, with each of Messrs. Naoyuki Akikusa and Yasushige Hagio, outside directors, and Messrs. Megumi Yamamuro and Jiro Haneda, outside corporate auditors. The upper limit of liability based on each agreement is the minimum liability as provided in the relevant laws and ordinances.
(4) | Accounting Auditor |
(i) | Name of accounting auditor |
Ernst & Young ShinNihon LLC
(ii) | Remuneration |
Amount | |
Remuneration to the accounting auditor for this fiscal year | ¥229 million |
Total amount of cash and other financial benefits payable by the Company and its subsidiaries to the accounting auditor | ¥231 million |
(Notes) | 1: | Under the agreement between the Company and the accounting auditor, as the Company has not drawn any distinction between the remuneration for the audit services pursuant to the Company Law and the Financial Instruments and Exchange Act of Japan and the remuneration for the audit services pursuant to the U.S. Securities and Exchange Act, the amount set forth above represents the aggregate amount of these audit services. |
2: | The Company’s significant overseas subsidiaries have been audited by auditors of the Ernst & Young Group. |
(iii) | Policies on dismissal or non-reappointment of the accounting auditor |
In case the accounting auditor falls under any one of the items of Article 340, Paragraph 1 of the Company Law, the Board of Corporate Auditors shall dismiss the accounting auditor upon consent of all corporate auditors. In such case, a corporate auditor who is appointed by the Board of Corporate Auditors shall report the dismissal and its reasons at the first general meeting of shareholders convened after such dismissal.
In addition, other than the above, if it is deemed to be difficult for the accounting auditor to conduct an appropriate auditing due to the occurrence of events that impair its qualification or independence, the Board of Directors shall, upon consent of the Board of Corporate Auditors or based on a request by the Board of Corporate Auditors, propose the dismissal or non-reappointment of the accounting auditor as an agenda at a general meeting of shareholders.
15
(5) | System to ensure the appropriateness of business |
The Board of Directors resolved a system that ensures the appropriateness of its business as follows:
Basic Policy for the System to Ensure the Appropriateness of Business
Holding “Technology Support on the Leading Edge” as our corporate mission, the Advantest Group established the “The ADVANTEST Way & The Code of Conduct” (“Advantest Code of Conduct”), increased the transparency of its management, and worked to promote the enhancement of corporate value. To further promote these efforts, the Company will prepare a framework as described in each paragraph below, implement the establishment, development and management of the internal control system, and ensure the sound operations of the Company.
1. | Framework to the effective performance of duties by directors |
(i) | The Company promotes management efficiency by separating the management decision making function and supervisory function from the function of the execution of operations. The Board of Directors shall make management decisions and supervise management. As for execution of operations, executive officers (including the Representative Director) and employees shall execute operations based on the Board of Directors’ clarification of the function and authority of the body executing operations. |
(ii) | The Board of Directors, as the management decision making body, shall make decisions on significant matters with respect to the management policies and management strategies for the Advantest Group, and in its capacity to supervise management, the Board of Directors, including outside directors shall monitor and supervise the status of exercise of duties by executive officers while delegating necessary authorities to ensure the prompt and efficient performance of duties. |
(iii) | The Board of Directors shall approve the Advantest Group’s management plans, receive reports on business results based on monthly closing account, financial situation, status of the performance of duties by each department, and review the appropriateness of such plans. |
(iv) | The Internal Control Committee shall report the development and management of the internal control system, as deemed necessary, to the Board of Directors. |
2. | Framework to ensure the compliance with applicable laws and ordinances as well as the articles of incorporation by directors, executive officers, and employees in performing their duties |
(i) | To ensure compliance with laws and ordinances as well as the articles of incorporation, and to ensure that actions are taken faithfully and ethically, the Company shall establish the Advantest Code of Conduct for all directors, executive officers and employees of the Advantest Group, and notify such directors, executive officers and employees of these codes. Furthermore, the Company shall establish the “Code of Ethics for Executives” for directors and executive officers. |
(ii) | As a framework to realize full compliance with laws and ordinances, the Company shall establish the Corporate Ethics Committee that monitors the implementation of the Advantest Code of Conduct. In addition, to handle reports and consultation regarding questionable matters in light of the Advantest Code of Conduct, the Company shall establish the “Corporate Ethics Helpline”, a system in which a person who reports shall not be treated disadvantageously. |
(iii) | The Company shall establish subcommittees such as the Disclosure Committee, the Internal Control Committee, and the Human Rights Protection Committee in order to fulfill its corporate social responsibilities. |
3. | Rules relating to the management of risk of loss and other frameworks |
(i) | With respect to potential risks behind management environment, business activities and corporate assets, the Company shall identify and classify risk factors for each important business process, analyze the scale of risks, possibility of actual occurrence and frequency of such occurrence, etc., and create written policies and procedures regarding the appropriate response to and avoidance/ reduction of the risks, as one of the internal control activities. |
16
(ii) | With respect to emergency situations such as disasters, the Company shall establish the Risk Management Group, create written emergency action guidelines and prepare by implementing education and training programs on a regular base. |
(iii) | The Internal Control Committee shall thoroughly manage risks and report material risks to the Board of Directors. |
4. | Framework regarding the retention and management of information with respect to the performance of duties by directors |
(i) | The Company shall properly retain and manage the following information regarding the exercise of duties by directors, pursuant to the internal rules that stipulate details such as the period of retention, person in charge of retention and method of retention. |
o | Minutes of general meetings of shareholders and reference materials |
o | Minutes of meetings of the Board of Directors and reference materials |
o | Other important documents regarding the exercise of duties by directors |
(ii) | The Company shall establish the Information Security Committee that is responsible for protecting personal information and preventing confidential information from leaking. |
5. | Framework to ensure the appropriateness of operations of the Company, and the group as a whole, including its subsidiaries |
(i) | The Advantest Group shall establish and operate the same quality of internal control system for the Company and its group companies in order to conduct the consolidated group management placing an emphasis on business evaluation based on consolidated accounting. |
(ii) | The internal control system of the Advantest Group is supported by each department of the Company that is responsible for each group company, and is established and operated as a unified system based on the policies of the group created by the Internal Control Committee. Significant matters concerning the status of each group company that is controlled by the Internal Control Committee shall be reported to the Board of Directors. |
(iii) | Auditing Group of the Company supervises an internal audit to each group company. |
6. | Matters relating to employees that assist the Board of Corporate Auditors in the event that a request to retain such employees is made by the Board of Corporate Auditors |
(i) | In the event that the Board of Corporate Auditors requests the placement of employees to assist with its duties, employees shall be placed as necessary. |
(ii) | In the event that the Board of Corporate Auditors decides that it is capable of conducting an audit effectively without employees’ assistance, such employees shall not be placed. |
7. | Matters relating to the independence of employees from directors in the preceding article |
(i) | In placing employees to assist the Board of Corporate Auditors, the prior consent of the Board of Corporate Auditors acknowledging the independence of the employees from directors shall be obtained. |
8. | Framework for reporting by directors, executive officers and employees to corporate auditors, and for other reports to the corporate auditors |
(i) | The Company shall adopt a system that allows Corporate Auditors to attend important meetings such as the meeting of the Board of Managing Executive Officers and to keep abreast important matters regarding the execution of operations. |
(ii) | In the event that a report or consultation is made to the Corporate Ethics Helpline with respect to corporate accounting, internal control or auditing, such report or consultation shall be directly reported to or consulted with corporate auditors. |
9. | Other frameworks to ensure the effective implementation of audit by corporate auditors |
(i) | The Company shall ensure that corporate auditors share information held by the Auditing Group (an internal audit section of the Company) and that there are opportunities to exchange opinions with the Auditing Group as deemed necessary. |
17
(6) | Policies on the distribution of surplus |
Based on the premise that long-term and continued growth in corporate value is fundamental to the creation of shareholder value, the Company deems the consistent distribution of profits to be the most important management priority. Accordingly, the Company engages in active distribution of profits based on business performance.
With respect to the distribution of the surplus, the Company makes payout decisions after taking into consideration business performance, financial conditions, as well as the need for strategic investment for mid-to-long-term business development. While aiming to make consistent distributions, because of the fluctuation of the market in which it operates, the Company makes dividend payouts following a target payout ratio of 20% or more.
Retained earnings are devoted to research and development, streamlining efforts, overseas expansion, investments in new businesses and resources for M&A activities, with an aim to strengthen the Company’s business position and enhance its corporate value.
In order to maintain capital strategies responsive to changes in the operating environment, the Company plans to decide obtaining more treasury shares by taking into account factors such as trends in stock price, capital efficiency and cash flow.
18
Consolidated Balance Sheets
(As of March 31, 2010)
(unit: million yen) | |||||
FY2009 | FY2008 (reference) | FY2009 | FY2008 (reference) | ||
Assets | Liabilities | ||||
Current assets | 143,749 | 157,307 | Current liabilities | 21,919 | 21,537 |
Cash and cash equivalents | 96,439 | 105,455 | Trade accounts payable | 11,430 | 4,767 |
Short-term investments | 10,498 | 25,114 | Other accounts payable | 981 | 6,409 |
Trade receivable, net | 15,930 | 10,415 | Accrued expenses | 4,894 | 6,043 |
Inventories | 16,590 | 9,737 | Accrued warranty expenses | 2,802 | 2,811 |
Other current assets | 4,292 | 6,586 | Other current liabilities | 1,812 | 1,507 |
Investment securities | 8,077 | 6,679 | Accrued pension and severance | 13,765 | 13,996 |
Property, plant and | 32,881 | 33,974 | cost | ||
equipment, net | Other liabilities | 2,737 | 2,910 | ||
Intangible assets, net | 1,445 | 1,470 | Total liabilities | 38,421 | 38,443 |
Other assets | 2,511 | 2,629 | Commitments and contingent | ||
liabilities | |||||
Stockholders’ equity | |||||
Common stock | 32,363 | 32,363 | |||
Capital surplus | 40,463 | 40,320 | |||
Retained earnings | 181,606 | 194,848 | |||
Accumulated other comprehensive income (loss) | (14,859) | (14,587) | |||
Treasury stock | (89,331) | (89,328) | |||
Total stockholders’ equity | 150,242 | 163,616 | |||
Total assets | 188,663 | 202,059 | Total liabilities and stockholders’ equity | 188,663 | 202,059 |
19
Consolidated Statements of Operations
(From April 1, 2009 to March 31, 2010)
(unit: million yen) | ||
FY2009 | FY2008 (reference) | |
Net sales | 53,225 | 76,652 |
Cost of sales | 27,297 | 56,837 |
Gross profit | 25,928 | 19,815 |
Research and development expenses | 17,896 | 23,713 |
Selling, general and administrative expenses | 19,671 | 31,771 |
Restructuring and impairment charges | - | 13,788 |
Operating income (loss) | (11,639) | (49,457) |
Other income (expense): | ||
Interest and dividend income | 579 | 2,157 |
Interest expense | (4) | (11) |
Impairment losses on investment securities | (316) | (3,510) |
Other, net | 1,454 | (1,940) |
Income (loss) before income taxes and equity in earnings (loss) of affiliated company | (9,926) | (52,761) |
Income taxes | 1,457 | 21,994 |
Equity in earnings (loss) of affiliated company | (71) | (147) |
Net income (loss) | (11,454) | (74,902) |
20
Consolidated Statements of Stockholders’ Equity
(From April 1, 2009 to March 31, 2010)
(unit: million yen) |
FY2009 | FY2008 (reference) | |
Common stock | ||
Balance at beginning of year | 32,363 | 32,363 |
Changes in the year | ||
Total changes in the year | - | - |
Balance at end of year | 32,363 | 32,363 |
Capital surplus | ||
Balance at beginning of year | 40,320 | 40,072 |
Changes in the year | ||
Stock option compensation expense | 143 | 248 |
Total changes in the year | 143 | 248 |
Balance at end of year | 40,463 | 40,320 |
Retained earnings | ||
Balance at beginning of year | 194,848 | 278,689 |
Changes in the year | ||
Net income (loss) | (11,454) | (74,902) |
Cash dividends | (1,787) | (8,936) |
Sale of treasury stock | (1) | (3) |
Total changes in the year | (13,242) | (83,841) |
Balance at end of year | 181,606 | 194,848 |
Accumulated other comprehensive income (loss) | ||
Balance at beginning of year | (14,587) | (7,615) |
Changes in the year | ||
Other comprehensive income (loss), net of tax | (272) | (6,972) |
Total changes in the year | (272) | (6,972) |
Balance at end of year | (14,859) | (14,587) |
Treasury stock | ||
Balance at beginning of year | (89,328) | (89,325) |
Changes in the year | ||
Repurchase of treasury stock | (4) | (7) |
Sale of treasury stock | 1 | 4 |
Total changes in the year | (3) | (3) |
Balance at end of year | (89,331) | (89,328) |
Total stockholders’ equity | ||
Balance at beginning of year | 163,616 | 254,184 |
Changes in the year | ||
Net income (loss) | (11,454) | (74,902) |
Other comprehensive income (loss), net of tax | (272) | (6,972) |
Cash dividends | (1,787) | (8,936) |
Stock option compensation expense | 143 | 248 |
Repurchase of treasury stock | (4) | (7) |
Sale of treasury stock | 0 | 1 |
Total changes in the year | (13,374) | (90,568) |
Balance at end of year | 150,242 | 163,616 |
Comprehensive income (loss) | ||
Net income (loss) | (11,454) | (74,902) |
Other comprehensive income (loss), net of tax | ||
Foreign currency translation adjustments | (2,614) | (1,793) |
Net unrealized gains (losses) on investment securities | 776 | (244) |
Pension related adjustments | 1,566 | (4,935) |
Total other comprehensive income (loss) | (272) | (6,972) |
Comprehensive income (loss) in the year | (11,726) | (81,874) |
21
Notes to the Consolidated Financial Statements
1. | Notes to significant matters based on which the consolidated financial statements were prepared |
(1) | Basis of presentation |
The consolidated financial statements including the consolidated balance sheets and the consolidated statements of operations have been prepared on the basis of accounting principles generally accepted in the United States of America (“U.S. GAAP”), pursuant to paragraph 1 of Article 3 of the Supplemental Provisions of the Company Accounting Regulation (kaisha keisan kisoku fusoku), ordinance number 46 of the Ministry of Justice, 2009. Pursuant to the provisions of the article, however, certain disclosures required on the basis of U.S. GAAP are omitted.
(2) | Scope of consolidation |
Consolidated subsidiaries
(a) | The number of consolidated subsidiaries | 30 |
(b) | Names of major consolidated subsidiaries are omitted, as they are described in “1. Current Conditions of the Advantest Group, (3) Significant Subsidiaries” of the Business Report. |
(3) | Application of the equity method |
The number and name of the equity method affiliate: one, e-Shuttle, Inc.
(4) | Significant accounting policies |
(i) | Cash equivalents |
Cash equivalents consist of deposits and negotiable certificates of deposit due to mature within 3 months.
(ii) | Inventories |
Inventories are stated at the lower of cost or market. Cost is determined using the average cost method.
(iii) | Securities |
Available-for-sale securities are recorded at fair value. Unrealized gains and losses are accounted for as a separate component of stockholders’ equity. Cost of other securities sold is determined using the moving average method.
Other securities are accounted for using the acquisition cost method.
(iv) | Depreciation of property, plant, and equipment |
For the Company and its domestic subsidiaries, depreciation is computed principally using the declining-balance method, except for buildings which is depreciated using the straight-line method. For foreign subsidiaries, depreciation is computed using the straight-line method.
(v) | Goodwill and other intangible assets |
Goodwill and other intangible assets with indefinite useful lives are not amortized, but instead are tested for impairment at least annually. Intangible assets with definite useful lives are amortized over their respective estimated useful lives using the straight-line method.
(vi) | Impairment of long-lived assets |
Long-lived assets and certain identifiable intangibles with definite useful lives are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When the carrying amount exceeds the future recoverable amount, the Company recognizes the difference between the fair value and the carrying amount as an impairment loss.
22
(vii) | Allowances |
Allowances for doubtful accounts
The Company recognizes allowance for doubtful accounts to ensure that trade accounts receivable are not overstated due to uncollectibility, in an amount which represents the Company’s best estimate of the amount of probable credits losses in the Company’s existing trade accounts receivable.
Accrued warranty expenses
To provide for future repairs during warranty periods, estimated repair expenses over the warranty period are accrued based on the historical ratio of actual repair expenses to corresponding sales.
Accrued pension and severance cost
The Company provides for employees’ retirement, severance and pension costs in accrued amounts based on the projected benefit obligations and the fair value of plan assets as of the end of this consolidated fiscal year. Prior service benefit and cost, and actuarial gain and loss recognized in accumulated other comprehensive income (loss) are amortized using the straight-line method over the average remaining service period of active employees.
(viii) | Translation of foreign financial statements |
In financial statements of foreign subsidiaries utilizing local currencies as a functional currency, assets and liabilities are translated at rates of exchange prevailing at the end of the fiscal year, profits and expenses are translated at average rates of exchange in effect during the year, and foreign currency translation adjustments resulting from the above translation of items are included as other accumulated comprehensive income (loss). In financial statements for foreign subsidiaries utilizing Japanese Yen as the functional currency, the items are remeasured into Japanese Yen, and any currency translation adjustments resulting from the above translation of items are included as “Other profits (expenses)” realized during the period in which the items were remeasured.
2. | Notes to Consolidated Balance Sheets |
(1) | Allowance for doubtful accounts: ¥246 million |
(2) | Accumulated depreciation on property, plant and equipment: ¥40,390 million |
3. | Notes to Consolidated Statements of Stockholders’ Equity |
(1) | Total number of issued shares as of March 31, 2010 |
Common stock | 199,566,770 shares |
(2) | Distribution of surplus |
(i) | Amount of distribution |
Resolution | Class of shares | Aggregate amount of distribution | Amount of distribution per share | Record date | Effective date |
The resolution at the meeting of the Board of Directors held on May 26, 2009 | Common stock | ¥894 million | ¥5 | March 31, 2009 | June 2, 2009 |
The resolution at the meeting of the Board of Directors held on October 28, 2009 | Common stock | ¥894 million | ¥5 | September 30, 2009 | December 1, 2009 |
23
(ii) | Distribution with a record date in fiscal year 2009 and an effective date in fiscal year 2010 |
Resolution | Class of shares | Source of distribution | Aggregate amount of distribution | Amount of distribution per share | Record date | Effective date |
The resolution at the meeting of the Board of Directors held on May 25, 2010 | Common stock | Retained earnings | ¥894 million | ¥5 | March 31, 2010 | June 2, 2010 |
(3) | Stock acquisition rights outstanding as of March 31, 2010 |
(Excluding stock acquisition rights for which the exercise period has not begun)
Pursuant to the resolution adopted at the Ordinary General Meeting of Shareholders of June 27, 2006
Pursuant to the resolution adopted at the Ordinary General Meeting of Shareholders of June 27, 2006
Common stock | 1,010,000 shares |
Pursuant to the resolution adopted at the meeting of the Board of Directors of June 27, 2006
Common stock | 342,000 shares |
Pursuant to the resolution adopted at the Ordinary General Meeting of Shareholders of June 27, 2007
Common stock | 512,000 shares |
Pursuant to the resolution adopted at the meeting of the Board of Directors of June 27, 2007
Common stock | 179,000 shares |
Pursuant to the resolution adopted at the Ordinary General Meeting of Shareholders of June 25, 2008
Common stock | 497,000 shares |
Pursuant to the resolution adopted at the meeting of the Board of Directors of June 25, 2008
Common stock | 182,000 shares |
4. | Notes to Financial Products |
(1) | Financial Products |
The Advantest group limits its fund management to short-term instruments including deposits at financial institutions with high credit ratings. Credit risk of trade notes receivable and accounts receivable pertaining to customers are minimized through credit administration standards.
Advantest’s investment securities mainly consist of stock. Advantest keeps track of fair market value of its listed stock on a quarterly basis, and reviews its non-listed stock regularly to determine whether such stock needs to be impaired. In addition, Advantest annually reviews its securities, including the stock it owns, to determine whether Advantest should continuously hold such securities. Advantest has no borrowings from financial institutions, such as banks. Furthermore, Advantest will not make any speculative derivative transactions other than to conduct derivative exchange rate transactions in order to cope with actual demand risks, pursuant to its fund management guidelines with high credit rating financial institutions.
(2) | Market Value of Financial Products |
The following table shows Advantest’s consolidated balance sheet amounts, market value and the difference between such balance sheet amount and market value. Market values of cash and cash equivalents, short-term investments, trade receivables-net, other current assets, trade accounts payable and accrued expenses are excluded as such are similar to the consolidated balance sheet amounts.
(unit: million yen) | ||||
Consolidated balance sheet amount (*) | Market value (*) | Deference | ||
(1) | Investment securities | |||
Available-for-sale securities | 4,643 | 4,643 | — | |
(2) | Exchange forward contracts, etc. | (29) | (29) | — |
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(*) | “( )” means such amount is recorded as a liability. |
(Note 1) | Matters with respect to calculation method of market value of financial products and transactions of securities and derivatives |
(1) | With respect to investment securities, those with fair value are presented with estimation, those that are listed on the stock exchanges are at market value. |
(2) | Amount of exchange forward contracts is based on the amount calculated by the executing financial institution, and is included in “Other current assets” in the consolidated balance sheet. |
(Note 2) | Non-listed stock (¥3,434 million of consolidated balance sheet amount) is not included in “(1) Investment securities” above, as such stock has no market value and estimation of fair value is not practical. |
5. | Notes to per share information |
Net assets per share: | ¥840.65 |
Basic net loss per share: | ¥64.09 |
6. | Notes to significant subsequent events |
Not applicable.
7. | Other notes |
Amounts less than one million yen are rounded.
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Balance Sheets (Non-Consolidated)
(As of March 31, 2010)
(Unit: million yen)
FY2009 | FY2008 (reference) | FY2009 | FY2008 (reference) | ||
Assets | Liabilities | ||||
Current assets | 102,524 | 101,062 | Current liabilities | 22,100 | 20,216 |
Cash and deposits | 52,542 | 63,857 | Trade accounts payable | 11,067 | 5,852 |
Trade notes receivables | 414 | 40 | Other accounts payable | 572 | 3,007 |
Accounts receivable | 15,901 | 7,714 | Accrued expenses | 3,616 | 5,094 |
Short-term investments | 16,900 | 17,300 | Income tax payable | 1 | 1 |
Merchandise and finished goods | 3,993 | 2,763 | Allowance for product warranty | 2,727 | 2,642 |
Work in progress | 6,910 | 3,573 | Other | 4,117 | 3,620 |
Raw materials and supplies | 2,104 | 608 | Noncurrent liabilities | 6,892 | 5,646 |
Refundable income taxes | 66 | 2,022 | Allowance for retirement benefits | 5,520 | 4,382 |
Other | 3,744 | 3,909 | Deferred tax liabilities | 587 | 81 |
Allowance for doubtful accounts | (50) | (724) | Other | 785 | 1,183 |
Noncurrent assets | 55,115 | 56,822 | |||
Property, plant and equipment | 28,553 | 29,777 | Total liabilities | 28,992 | 25,862 |
Buildings | 10,663 | 11,970 | Net assets | ||
Structures | 518 | 615 | Stockholders’ equity | 124,632 | 128,825 |
Machinery and equipment | 937 | 869 | Common stock | 32,363 | 32,363 |
Vehicles and delivery equipment | 17 | 11 | Capital surplus | 32,973 | 32,973 |
Tools and furniture | 560 | 404 | Capital reserve | 32,973 | 32,973 |
Land | 15,852 | 15,907 | Retained earnings | 148,627 | 152,817 |
Construction in progress | 6 | 1 | Legal reserve | 3,083 | 3,083 |
Intangible fixed assets | 595 | 579 | Other retained earnings | 145,544 | 149,734 |
Software | 344 | 298 | [Reserve for losses in foreign | [27,062] | [27,062] |
Other | 251 | 281 | investments] | ||
Investments and other assets | 25,967 | 26,466 | [General reserve] | [146,880] | [146,880] |
Investment securities | 7,656 | 6,669 | [Retained earnings (accumulated | [(28,398)] | [(24,208)] |
Investments in affiliated companies | 16,980 | 17,425 | loss)] | ||
Long-term loans receivable | 261 | 1,144 | Treasury stock | (89,331) | (89,328) |
Other | 1,070 | 1,267 | Difference of appreciation and conversion | 862 | 120 |
Allowance for doubtful accounts | - | (39) | Net unrealized gains on securities | 862 | 120 |
Stock acquisition rights | 3,153 | 3,077 | |||
Total net assets | 128,647 | 132,022 | |||
Total assets | 157,639 | 157,884 | Total liabilities and net assets | 157,639 | 157,884 |
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Statements of Income (Non-Consolidated)
(April 1, 2009 through
March 31, 2010)
March 31, 2010)
(unit: million yen) | ||
FY2009 | FY2008 (reference) | |
Net sales | 41,907 | 53,124 |
Cost of sales | 24,961 | 42,741 |
Gross profit | 16,946 | 10,383 |
Selling, general and administrative expenses | 34,253 | 46,410 |
Operating income (loss) | (17,307) | (36,027) |
Non-operating income | ||
Interest and dividend income | 13,873 | 1,770 |
Other | 3,219 | 3,394 |
Non-operating expenses | ||
Interest expenses | 11 | 33 |
Other | 2,158 | 8,911 |
Ordinary income (loss) | (2,384) | (39,807) |
Extraordinary income | ||
Gain on extinguishment of tie-in shares | - | 61 |
Extraordinary loss | ||
Impairment losses | - | 11,789 |
Additional termination benefit | - | 1,631 |
Other | - | 83 |
Income (loss) before income taxes | (2,384) | (53,249) |
Income taxes – current | 18 | (937) |
Income taxes – deferred | - | 15,754 |
Net income (loss) | (2,402) | (68,066) |
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Statements of Changes in Stockholders’ Equity
(From April 1, 2009 to March 31, 2010)
(unit: million yen)
FY2009 | FY2008 (reference) | |||||||
Stockholders’ Equity | ||||||||
Common stock | ||||||||
Balance at beginning of year | 32,363 | 32,363 | ||||||
Changes in the year | ||||||||
Total changes in the year | - | - | ||||||
Balance at end of year | 32,363 | 32,363 | ||||||
Capital surplus | ||||||||
Capital reserve | ||||||||
Balance at beginning of year | 32,973 | 32,973 | ||||||
Changes in the year | ||||||||
Total changes in the year | - | - | ||||||
Balance at end of year | 32,973 | 32,973 | ||||||
Retained earnings | ||||||||
Legal reserve | ||||||||
Balance at beginning of year | 3,083 | 3,083 | ||||||
Changes in the year | ||||||||
Total changes in the year | - | - | ||||||
Balance at end of year | 3,083 | 3,083 | ||||||
Other retained earnings | ||||||||
Reserve for losses in foreign investments | ||||||||
Balance at beginning of year | 27,062 | 27,062 | ||||||
Changes in the year | ||||||||
Total changes in the year | - | - | ||||||
Balance at end of year | 27,062 | 27,062 | ||||||
General reserve | ||||||||
Balance at beginning of year | 146,880 | 146,880 | ||||||
Changes in the year | ||||||||
Total changes in the year | - | - | ||||||
Balance at end of year | 146,880 | 146,880 | ||||||
Retained earnings (accumulated loss) | ||||||||
Balance at beginning of year | (24,208 | ) | 52,797 | |||||
Changes in the year | ||||||||
Dividends from retained earnings | (1,787 | ) | (8,936 | ) | ||||
Net income (loss) | (2,402 | ) | (68,066 | ) | ||||
Sale of treasury stock | (1 | ) | (3 | ) | ||||
Total changes in the year | (4,190 | ) | (77,005 | ) | ||||
Balance at end of year | (28,398 | ) | (24,208 | ) | ||||
Treasury stock | ||||||||
Balance at beginning of year | (89,328 | ) | (89,325 | ) | ||||
Changes in the year | ||||||||
Repurchase of treasury stock | (4 | ) | (7 | ) | ||||
Sale of treasury stock | 1 | 4 | ||||||
Total changes in the year | (3 | ) | (3 | ) | ||||
Balance at end of year | (89,331 | ) | (89,328 | ) | ||||
Total stockholders’ equity | ||||||||
Balance at beginning of year | 128,825 | 205,833 | ||||||
Changes in the year | ||||||||
Dividends from retained earnings | (1,787 | ) | (8,936 | ) | ||||
Net income (loss) | (2,402 | ) | (68,066 | ) | ||||
Repurchase of treasury stock | (4 | ) | (7 | ) | ||||
Sale of treasury stock | 0 | 1 | ||||||
Total changes in the year | (4,193 | ) | (77,008 | ) | ||||
Balance at end of year | 124,632 | 128,825 |
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FY2009 | FY2008 (reference) | |||||||
Difference of appreciation and conversion | ||||||||
Net unrealized gains on securities | ||||||||
Balance at beginning of year | 120 | 309 | ||||||
Changes in the year | ||||||||
Changes of items other than stockholders’ equity, net | 742 | (189 | ) | |||||
Total changes in the year | 742 | (189 | ) | |||||
Balance at end of year | 862 | 120 | ||||||
Stock acquisition rights | ||||||||
Balance at beginning of year | 3,077 | 3,122 | ||||||
Changes in the year | ||||||||
Changes of items other than stockholders’ equity, net | 76 | (45 | ) | |||||
Total changes in the year | 76 | (45 | ) | |||||
Balance at end of year | 3,153 | 3,077 | ||||||
Total net assets | ||||||||
Balance at beginning of year | 132,022 | 209,264 | ||||||
Changes in the year | ||||||||
Dividends from retained earnings | (1,787 | ) | (8,936 | ) | ||||
Net income (loss) | (2,402 | ) | (68,066 | ) | ||||
Repurchase of treasury stock | (4 | ) | (7 | ) | ||||
Sale of treasury stock | 0 | 1 | ||||||
Changes of items other than stockholders’ equity, net | 818 | (234 | ) | |||||
Total changes in the year | (3,375 | ) | (77,242 | ) | ||||
Balance at end of year | 128,647 | 132,022 |
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Notes to the Non-Consolidated Financial Statements
1. | Notes to significant accounting policies |
(1) | Valuation of securities |
(i) | Investments in subsidiaries and equity method affiliates: Stated at cost using the moving average method |
(ii) | Other securities |
(a) | Securities with quoted value |
Stated at fair value based on market prices at the end of the relevant period (unrealized holding gains and losses are accounted for as a component of stockholders’ equity; cost of other securities sold is determined using the moving average method). |
(b) | Securities not practicable to estimate fair value |
Stated at cost using the moving average method |
(2) | Valuation of inventories |
Stated principally at cost using the gross average method (balance sheet value of assets are calculated using a method in which book values are written down in accordance with decreased profitability). |
(3) | Depreciation and amortization of noncurrent assets |
(i) | Depreciation of plant and equipment (excluding lease assets) |
Based on the declining balance method |
However, buildings (except attached improvements) acquired on or after April 1, 1998 are depreciated using the straight-line method. |
(ii) | Amortization of intangible fixed assets (excluding lease assets) |
Based on the straight-line method |
However, software for internal use is amortized using the straight-line method over its estimated useful life of 5 years. |
(4) | Allowances |
(i) | Allowance for doubtful accounts |
To prepare for credit losses on accounts receivable and loans, etc., an allowance equal to the estimated amount of uncollectible receivables is provided for general receivables based on a historical write-off ratio and for bad receivables based on a case-by-case determination of collectibility. |
(ii) | Allowance for product warranty |
To reasonably account for repair costs covered under product warranty in the respective periods in which they arise, the allowance for a given year is provided in an amount determined based on the ratio of repair costs in that year to net sales in the preceding year. |
(iii) | Bonus accrual for directors |
In preparation for the payment of bonuses to directors and corporate auditors, of the total amount expected to be paid, an estimated amount for fiscal year 2009 is reported. |
(iv) | Allowance for retirement benefits |
To provide for employee retirement benefits, an allowance is provided in an amount determined based on the estimated retirement benefit obligations and pension assets at the end of the fiscal year. |
Past service liabilities are amortized on a straight-line basis over a fixed number of years (17 years) within the average remaining years of service of employees. |
Any actuarial gains and losses are amortized on a straight-line basis over a fixed number of years (17 years) within the average remaining years of service of employees, and the amount is recorded in the fiscal year subsequent to its occurrence. |
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(5) | Accounting for consumption taxes |
Consumption taxes are accounted using the net-of-tax method.
2. | Notes to balance sheets |
(1) | Accumulated depreciation on property, plant and equipment (including accumulated impairment losses): | ¥64,193 million |
(2) | Short-term receivables from affiliates: | ¥12,671 million |
Long-term receivables from affiliates: | ¥250 million | |
Short-term payables to affiliates: | ¥6,744 million |
3. | Notes to statements of operations |
Transactions with affiliated companies
Sales: | ¥26,358 million |
Purchases: | ¥23,645 million |
Non-operating transactions: | ¥15,496 million |
4. | Notes to Statements of Changes in Stockholders’ Equity |
Total number of treasury shares as of March 31, 2010
Common stock | 20,845,178 shares |
5. | Notes to tax effect accounting |
Breakdown by major causes of deferred tax assets and deferred tax liabilities
Deferred tax assets | (Unit: million yen) | |||
Appraised value of inventories | 4,838 | |||
Research and development expenses | 3,362 | |||
Accrued warranty expenses | 1,105 | |||
Accrued bonus | 234 | |||
Allowance for retirement benefits | 2,236 | |||
Long-term accounts payable | 235 | |||
Valuation difference in other securities | 34 | |||
Excess depreciation | 468 | |||
Impairment loss | 3,768 | |||
Loss carried forward | 25,455 | |||
Other | 4,377 | |||
Subtotal of deferred tax assets | 46,112 | |||
Valuation allowance | (46,078 | ) | ||
Net deferred tax assets | 34 | |||
Deferred tax liabilities | ||||
Valuation difference in other securities | (621 | ) | ||
Net deferred tax liabilities | (587 | ) |
6. | Notes to transactions with related parties |
(1) | Parent company and major corporate shareholders |
Not applicable.
(2) | Officers and major individual investors |
Not applicable.
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(3) | Subsidiaries |
Company name | Address | Common stock | Principal Activities | Percentage of Voting Rights | Description of relationships | Details of transactions | Amount of transactions | Items | Balance at fiscal year end | |
Officer of subsidiaries temporarily transferred from the Company | Business relationship | |||||||||
Advantest Manufacturing, Inc. | Ora-machi, Ora-gun, Gunma | ¥80 million | Manufacturing of test systems, etc. | 100.0% | Yes | Manufacturing of the Company’s products | Purchases | ¥8,769 million | Trade accounts payable | ¥836 million |
Amounts in escrow | - | Escrow deposits | ¥1,667 million | |||||||
Advantest Finance Inc. | Chiyoda-ku, Tokyo | ¥1,000 million | Leasing of test systems, etc. | 100.0% | Yes | Leasing of the Company’s products | Sales | ¥2,422 million | Accounts receivable | ¥1,344 million |
Loans | - | Short-term loans receivable | ¥2,034 million | |||||||
Advantest America, Inc. | California, U.S.A. | 42,000 thousand USD | Sale of test systems, etc. | 100.0% | Yes | Sale of the Company’s products | Sales | ¥11,047 million | Accounts receivable | ¥1,938 million |
Advantest Taiwan Inc. | Chu-Pei, Hsin-Chu Hsien, Taiwan | 560,000 thousand New Taiwan Dollars | Sale of test systems, etc. | 100.0% | Yes | Sale of the Company’s products | Sales | ¥10,995 million | Accounts receivable | ¥6,175 million |
Terms and conditions of transactions and determination of policies thereof
1. | With respect to sales and purchases, the price is determined by referring to the market price, among others. |
2. | With respect to loans and deposits, the rate is determined by taking the market interest rate into consideration. |
7. | Notes to per share information |
Net assets per share: | ¥702.18 |
Net loss per share: | ¥13.44 |
8. | Notes to significant subsequent events |
The Merger of Subsidiaries |
The Company resolved at the meeting of its Board of Directors on April 27, 2010 to merge its consolidated subsidiaries.
(1) | Purpose of the Merger |
The subsidiaries to be merged, Advantest Manufacturing, Inc. and Advantest Customer Support Corporation, are wholly-owned consolidated subsidiaries of the Company, which engage in manufacture and/or maintenance service of the Company’s products. The Company will merge the subsidiaries, and review their R&D, manufacturing, sales, and maintenance service processes to further align them with the Company’s customer requirements, speeding up the implementation of its management strategy and seeking greater business efficiency.
(2) | Overview of the Merger |
(i) | Merger method |
Each subsidiary will be merged into the Company through a short-form merger (kan-i/ryakushiki gappei) and each subsidiary will be dissolved.
(ii) | Details of the allotment upon the Merger |
As the Company owns all shares of each subsidiary, there will be no issuance of new shares, increase of share capital or cash payment upon the merger for either subsidiary.
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(iii) | Outline of parties to the merger (as of March 31, 2010) |
Registered trade name | Advantest Manufacturing, Inc. |
Business description | Manufacture of test systems, etc. |
Sales | ¥10,361 million |
Net income | ¥ 1,236 million |
Net assets | ¥ 2,327 million |
Total assets | ¥ 3,648 million |
Registered trade name | Advantest Customer Support Corporation |
Business description | Maintenance service of test systems, etc. |
Sales | ¥ 4,655 million |
Net income | ¥ 371 million |
Net assets | ¥ 2,549 million |
Total assets | ¥ 3,216 million |
(iv) | Date of Merger (the effective date) July 1, 2010 (as planned) |
9. | Other notes |
Amounts less than one million yen are rounded. |
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Copy of Independent Auditors’ Audit Report (Consolidated)
Independent Auditors’ Audit Report May 14, 2010 To the Board of Directors of Advantest Corporation: Ernst & Young ShinNihon LLC Tetsuya Naito Limited Liability Engagement Partner Certified Public Accountant Makoto Usui Limited Liability Engagement Partner Certified Public Accountant | O O |
We have audited the consolidated financial statements of Advantest Corporation (the “Company”) for its 68th fiscal year (April 1, 2009 through March 31, 2010), including the consolidated balance sheets, consolidated statements of operations, consolidated statements of stockholders’ equity, and notes to consolidated financial statements, for the purpose of reporting under the provisions of Article 444, Paragraph 4 of the “Company Law.” The management of the Company was responsible for the preparation of these consolidated financial statements, and our responsibility shall be limited to the expression of an independent opinion regarding the consolidated financial statements. We conducted our audit in accordance with auditing standards generally accepted in Japan. These auditing standards require reasonable assurance that the consolidated financial statements do not contain any untrue statements of material fact. The audit was conducted based on an audit by testing, and included a review of the consolidated financial statements as a whole and an evaluation of the accounting policies adopted by the management, the application thereof, and the estimates prepared by the management. We believe that we have obtained a reasonable basis to form our opinion as a result of the audit. In our opinion, the consolidated financial statements properly present the financial position and the results of operations during the fiscal year, in all material respects, of the company group consisting of Advantest Corporation and its consolidated subsidiaries in conformity with accounting principles generally accepted in the United States of America (Please refer to “Notes to Consolidated Financial Statements,” “1. Notes to significant matters based on which the consolidated financial statements were prepared (1)”), pursuant to the provisions of Article 3, Paragraph 1 of the Supplementary Provisions of the Company Accounting Regulation. We have no specific interest in the Company required to be stated by the provisions of the Certified Public Accountant Law. |
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Copy of Independent Auditors’ Audit Report
Independent Auditors’ Audit Report May 14, 2010 To the Board of Directors of Advantest Corporation: Ernst & Young ShinNihon LLC Tetsuya Naito Limited Liability Engagement Partner Certified Public Accountant Makoto Usui Limited Liability Engagement Partner Certified Public Accountant | O O |
We have audited the financial statements of Advantest Corporation (the “Company”) for its 68th fiscal year (April 1, 2009 through March 31, 2010), which included the balance sheets, statements of operations, statements of changes in stockholders’ equity, notes to non-consolidated financial statements, and its supporting schedules, for the purpose of reporting under the provisions of Article 436, Paragraph 2, Section 1 of the “Company Law.” The management of the Company was responsible for the preparation of these financial statements and its supporting schedules, and our responsibility shall be limited to the expression of an independent opinion regarding the financial statements and its supporting schedules. We conducted our audit in accordance with auditing standards generally accepted in Japan. The auditing standards require reasonable assurance that the financial statements and its supporting schedules do not contain any untrue statements of material fact. The audit was conducted based on an audit by testing, and included a review of the financial statements and its supporting schedules as a whole and an evaluation of the accounting policies adopted by the management, the application thereof, and the estimates prepared by the management. We believe that we have obtained a reasonable basis to form our opinion as a result of the audit. In our opinion, the above financial statements and its supporting schedules properly present the financial position and the results of operations of the Company during the fiscal year, in all material respects, in conformity with accounting principles generally accepted in Japan. Supplemental Information As described as a significant subsequent event, the Company resolved at the meeting of its Board of Directors on April 27, 2010 to merge its consolidated subsidiaries, Advantest Manufacturing, Inc. and Advantest Customer Support Corporation, effective July 1, 2010 (scheduled). We have no specific interest in the Company required to be stated by the provisions of the Certified Public Accountant Law. |
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Copy of Board of Corporate Auditors’ Audit Report
Audit Report This Audit Report was prepared by the Board of Corporate Auditors of Advantest Corporation (the “Company”) after deliberation, based on audit reports prepared by each Corporate Auditor with respect to the methods and results of audit concerning the performance of each Director of his/her respective duties during the 68th fiscal year (April 1, 2009 through March 31, 2010). We hereby report as follows. 1. Methods of Audit by Corporate Auditors and the Board of Corporate Auditors, and its contents In addition to establishing audit policies and audit plans for the fiscal year, and receiving reports from each Corporate Auditor on the implementation status and results of the audit, the Board of Corporate Auditors received reports from Directors and Independent Auditors on the performance of their duties and requested further explanations as deemed necessary. In compliance with the rules of audit of Corporate Auditors established by the Board of Corporate Auditors, pursuant to the audit policies and audit plans, each Corporate Auditor communicated with Directors, Executive Officers as well as other employees such as members of the Audit Office in order to collect information, and improve the auditing system, attended meetings of the Board of Directors and other important meetings, received reports from Directors, Executive Officers and employees on the performance of their duties, requested further explanations as deemed necessary, reviewed important approval-granting documents, and inspected the state of business operations and assets at the head office and other important branch offices. In addition, we monitored and reviewed the contents of resolutions of the meeting of the Board of Directors with respect to the development of a system as defined in Article 100, Paragraphs 1 and 3 of the Regulations for Enforcement of the Company Law, as well as the status of the system (Internal Control System) that has been developed based on such resolutions. With respect to subsidiaries, we communicated with and exchanged information with Directors and Corporate Auditors of the subsidiaries and received business reports from subsidiaries as deemed necessary. Based on the above methods, we reviewed the business report for the fiscal year and its supporting schedules. In addition, we monitored and reviewed whether the Independent Auditors maintained their independent positions and conducted the audit properly, received reports from the Independent Auditors on the performance of their duties, and requested further explanations as deemed necessary. Furthermore, we were informed by the Independent Auditor that they are establishing a “System to ensure the appropriate performance of duties” (Syokumu no Suikou ga Tekisetsu ni Okonawareru Koto o Kakuho Suru Tameno Taisei) (Matters as defined in each Section of Article 131 of the Company Accounting Regulations) pursuant to “Quality control standards of audit” (Kansa ni Kansuru Hinshitsu Kanri Kijyun) (the Business Accounting Counsel, October 28, 2005), and requested their explanations as deemed necessary. Based on the above methods, we reviewed the financial statements (the balance sheets, statements of operations, statements of changes in stockholders’ equity, notes to non-consolidated financial statements) as well as its supporting schedules and the consolidated financial statements for the 68th fiscal year (the consolidated balance sheets, consolidated statements of operations, consolidated statements of stockholders’ equity, and notes to consolidated financial statements). |
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2. Results of Audit (1) Results of audit of the business report and other documents (i) The business report and its supporting schedules of the Company accurately present the financial conditions of the Company in conformity with applicable laws and regulations and the Articles of Incorporation of the Company. (ii) No irregularity or violation of applicable laws or regulations or the Articles of Incorporation of the Company was found with respect to the activities of the Directors. (iii) The contents of the resolutions of the meeting of the Board of Directors with respect to the internal control system are appropriate. In addition, there are no matters to be pointed out regarding the performance of duties of Directors with respect to the internal control system. (2) Results of audit of the financial statements and its supporting schedules. The methods and results of audit performed by Ernst & Young ShinNihon LLC, the independent auditor of the Company, are appropriate. (3) Results of audit of the consolidated financial statements The methods and results of audit performed by Ernst & Young ShinNihon LLC, the independent auditor of the Company, are appropriate. May 20, 2010 | |||
Board of Corporate Auditors of Advantest Corporation | |||
Hitoshi Owada Standing Corporate Auditor | O | ||
Yuri Morita Standing Corporate Auditor | O | ||
Megumi Yamamuro Outside Corporate Auditor | O | ||
Jiro Haneda Outside Corporate Auditor | O | ||
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Memorandum to Shareholders
Fiscal Year: Starting from April 1 of each year and ending on March 31 of the following year
Ordinary general meeting of shareholders: June of each year
Date of decision on shareholders of record qualified to receive dividends:
March 31 of each year and September 30 when interim dividends are paid.
Method for public notice:
Public notice will be posted on the Company’s website (http://www.advantest.co.jp/investors/).
However, in the case of accidents or other inevitable circumstances that prevent the Company from posting public notices on such Company’s website, public notices are published in the Nihon Keizai Shimbun.
Share registration agent and the firm responsible for administering special account:
Tokyo Securities Transfer Agent Co., Ltd.
Nihon Bldg. 4F, 6-2 Otemachi 2-chome, Chiyoda-ku, Tokyo
Toll free number: 0120-49-7009
*In taking the necessary procedure by mail, please send to the following address.
8-4, Izumi 2-chome, Suginami-ku, Tokyo, 168-8522
Business Center, Tokyo Securities Transfer Agent Co., Ltd.
Share transfer / registration services are available at the Main Office and Branch Offices in Japan of The Chuo Mitsui Trust and Banking Company, Limited.
Number of shares comprising one unit: 100 shares
(Notice)
Please inform the securities firm at which you hold an account of changes of address, demands for sales and purchases of fractional shares or your preferred method of receiving dividends. However, for various services in connection with those shares that are recorded in the special account, please contact Tokyo Securities Transfer Agent Co., Ltd., the firm responsible for administering such special account.
Please contact Tokyo Securities Transfer Agent Co., Ltd., the share registration agent, for enquires with respect to the payment of unpaid dividends.
For those shareholders who have directed the Company to pay dividends by bank transfer (except by allocation in proportion to the number of shares held method (kabushiki hirei haibun houshiki)) or shareholders who receive dividends by cashing a “Dividend Receipt” (haitoukin ryoushusho), the “Dividend Statement” (haitoukin keisansho) that you receive from the Company serves as the “Notice of Payment” stipulated in the Special Taxation Measures Law (sozei tokubetsu sochi-hou) .. The “Notice of Payment” may be attached when filing your income tax return. Shareholders who have elected allocation in proportion to the number of shares held method, please consult your securities firm.
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