FORM 6-K
U.S.SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
Commission File Number: 1-15238
Supplement For the month of April 2008.
Total number of pages: 59
The exhibit index is located on page 1
NIDEC CORPORATION
(Translation of registrant’s name into English)
338 KuzeTonoshiro-Cho,
Minami-Ku,Kyoto 601-8205 Japan
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F:
Form 20-F X Form 40-F __
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): _
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): _
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes __ No X
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-_____
Information furnished on this form:
EXHIBITS
Exhibit Number
1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: April 23, 2008 | ||||
NIDEC CORPORATION | ||||
By: /S/ Masahiro Nagayasu | ||||
General Manager, Investor Relations |
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NEWS RELEASE
NIDEC CORPORATION
New York Stock Exchange symbol: NJ
Stock exchange code (Tokyo, Osaka): 6594
FOR IMMEDIATE RELEASE
Contact: | |
Masahiro Nagayasu | |
General Manager | |
Investor Relations | |
+81-75-935-6140 | |
ir@jp.nidec.com |
FINANCIAL STATEMENTS (U.S. GAAP)
RESULTS FOR THE YEAR ENDED MARCH 31, 2008
FROM APRIL 1, 2007 TO MARCH 31, 2008
CONSOLIDATED
Released on April 23, 2008
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NIDEC CORPORATION
Date of Directors’ meeting for financial results: April 23, 2008
Stock Listings:Tokyo Stock Exchange, Osaka Securities Exchange and the New York Stock Exchange
Head Office: Kyoto, Japan
1. Selected Consolidated Financial Performance (U.S. GAAP)(from April 1, 2007 to March 31, 2008)
(1) Consolidated Results of Operations
Yen in millions (except for per share amounts) | ||
Year ended March 31 | ||
2008 | 2007 | |
Net sales | ¥742,126 | ¥629,667 |
Ratio of change from the previous period | 17.9% | 17.3% |
Operating income | 76,833 | 64,009 |
Ratio of change from the previous period | 20.0% | 19.8% |
Income before income taxes | 62,683 | 65,595 |
Ratio of change from the previous period | (4.4)% | 1.9% |
Net income | 41,156 | 39,932 |
Ratio of change from the previous period | 3.1% | (2.5)% |
Net income per share- basic | ¥284.00 | ¥276.03 |
Net income per share- diluted | ¥276.29 | ¥268.25 |
Ratio of net income to shareholders’ equity | 13.2% | 14.0% |
Ratio of income before income taxes to gross asset | 9.4% | 10.7% |
Ratio of operating income to net sales | 10.4% | 10.2% |
Note:
Equity in net income (loss) of affiliated companies:
¥39 million for the year ended March 31, 2008
¥(73) million for the year ended March 31, 2007
(2) Consolidated Financial Position
Yen in millions (except for per share amounts) | ||
March 31 | ||
2008 | 2007 | |
Total assets | ¥671,714 | ¥662,623 |
Shareholders’ equity | 319,584 | 305,016 |
Shareholders’ equity to total assets | 47.6% | 46.0% |
Shareholders’ equity per share | ¥2,204.94 | ¥2,107.40 |
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(3) Consolidated Results of Cash Flows
Yen in millions | ||
Year ended March 31 | ||
2008 | 2007 | |
Net cash provided by operating activities | ¥94,816 | ¥64,723 |
Net cash used in investing activities | (43,724) | (78,935) |
Net cash provided by (used in) financing activities | (27,280) | 8,943 |
Cash and cash equivalents at the end of year | ¥100,809 | ¥88,784 |
2. Dividend condition
Yen | |||
Year ending | Year ended | ||
March 31, 2009 (estimate) | March 31, 2008 | March 31, 2007 | |
Interim dividend per share | ¥30.00 | ¥25.00 | ¥20.00 |
Year-end dividend per share | 30.00 | 30.00 | 25.00 |
Annual dividend per share | 60.00 | 55.00 | 45.00 |
Dividend declared | ¥7,972 million | ¥6,511 million | |
Dividend payout ratio | 15.0% | 19.4% | 16.3% |
Dividend to shareholders’ equity | 2.6% | 2.3% |
3. Forecast of Consolidated Financial Performance (for the year ending March 31, 2009)
Yen in millions (except for per share amounts) | ||
Six months ending September 30, 2008 | Year ending March 31, 2009 | |
Net sales | ¥375,000 | ¥800,000 |
Operating income | 40,000 | 90,000 |
Income before income taxes | 40,000 | 90,000 |
Net income | 26,000 | 58,000 |
Net income per share- basic | ¥179.38 | ¥400.17 |
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4. Others
(1) Change in number of material subsidiaries during the fiscal year
(due to change in the scope of consolidation):
Not applicable
(2) Change of the accounting principles, procedures and presentation in the preparation ofconsolidated financial statements
1. Changed by new accounting standard: Yes
2. Changed by others: Not applicable
Note: See “Change of Important Items Regarding the Basis of Preparation of Consolidated Financial Statements” mentioned above for detail.
(3) Number of shares issued (Common stock)
1. Number of shares issued and outstanding at the end of the respective period:(including treasury stock)
144,987,492 shares at March 31, 2008
144,780,492 shares at March 31, 2007
2. Number of treasury stock at the end of the respective period:
47,495 shares at March 31, 2008
44,966 shares at March 31, 2007
3. Weighted-average number of shares issued and outstanding at the beginning and end of the period:
144,914,321 shares for the year ended March 31, 2008
144,665,478 shares for the year ended March 31, 2007
Note: See “Earnings per share” regarding the number of shares used to compute net income per share (on the consolidated basis).
(4) Scope of Consolidation and Application of Equity Method
Number of consolidated subsidiaries: | 128 |
Number of affiliated companies accounted for under the equity method: | 5 |
(5) Change in Scope of Consolidation and Application of Equity Method
Number of companies newly consolidated: | 11 |
Number of companies excluded from consolidation: | - |
Number of companies newly accounted for under the equity method: | 1 |
Number of companies excluded from accounting under the equity method: | - |
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NON-CONSOLIDATED FINANCIAL STATEMENTS
Selected Non-Consolidated Financial Performance (from April 1, 2007 to March 31, 2008)
(1) Non-Consolidated Results of Operations
Yen in millions (Except for per share amounts) | ||
Year ended March 31 | ||
2008 | 2007 | |
Net sales | ¥189,253 | ¥180,596 |
Ratio of change from the previous period | 4.8% | 7.4% |
Operating income | 13,980 | 11,241 |
Ratio of t change from the previous period | 24.4% | 27.0% |
Recurring profit | 21,307 | 25,206 |
Ratio of change from the previous period | (15.5)% | 2.7% |
Net income
| 21,519 | 15,170 |
Ratio of change from the previous period | 41.9% | (23.6)% |
Net income per share- basic | ¥148.50 | ¥104.86 |
Net income per share- diluted | ¥144.46 | ¥101.91 |
(2) Non-Consolidated Financial Position
Yen in millions (Except for per share amounts) | ||
Year ended March 31 | ||
2008 | 2007 | |
Total assets | ¥365,713 | ¥357,785 |
Shareholders’ equity | 223,357 | 209,005 |
Shareholders’ equity to total assets | 61.1% | 58.4% |
Shareholders’ equity per share | ¥1,541.03 | ¥1,444.05 |
Shareholders’ equity:
¥ 223,357 million for the year ended March 31, 2008
¥ 209,005 million for the year ended March 31, 2007
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1. OPERATING AND FINANTIAL REVIEW AND PROSPECTS
(1) Analysis of Business Results
1. Overview of Business Conditions in Fiscal 2007
The disruptive effects of the sub-prime crisis on global financial and capital markets accelerated in the second half of fiscal 2007, exerting a major negative effect even on the real economy. Excess funds in the market along with the expansion of demand for natural resources in fast-growing emerging economies have driven resource prices further up, particularly the price of crude oil. This has triggered a decline in US consumer markets, which in turn has resulted in the contraction of manufacturing activity in various counties. These market changes will have significant effects on business going forward, but the impetus of the substantial growth seen during the first half, which was driven by increased demand in emerging economies, allowed growth to be maintained on the whole for fiscal 2007.
The IT market, which encompasses such equipment as personal computers, LCD televisions, mobile telephones, mobile terminals, and game consoles, is the primary market for the Nidec Group’s products. In the financial environment described above, the performance of IT-related products bottomed out and began to rise in the first quarter, and they performed strongly through the third quarter. Motors for home appliances and for industrial use, and machinery, showed very similar performance.
Following the three M&A moves during the previous fiscal year, Nidec brought Japan Servo Co., Ltd., into the group in April 2007 to further intensive management reform and make a contribution to the improvement of consolidated performance. Nidec also worked to increase the profitability of strongly performing small precision motors, while at the same time giving renewed impetus to growth through a focus on improving the performance of group companies, which had slumped in the last fiscal year. As a result, and led by the small precision motors business, the group achieved year-on-year growth in both revenues and profits, with some companies posting record-high profits. Total consolidated net sales and operating income also both set record highs, exceeding performance forecasts made at the beginning of the fiscal year. However, valuation losses on foreign-currency-denominated receivables emerged at the end of the term as a result of the precipitous fall of the dollar and corresponding rise of the yen. As a result, income before provision for income taxes and consolidated net income did not reach forecast levels, although consolidated net income did reach a new record high.
2. Consolidated Business Results
Consolidated net sales rose by approximately ¥112,500 million, or 17.9%, in comparison with the preceding fiscal year, to ¥742,126 million. Operating income grew by approximately ¥12,800 million, or 20.0%, to ¥76,833 million. Although foreign exchange valuation losses of ¥14,100 million resulted in a decline of approximately ¥2,900 million, or 4.4%, in income before income taxes, which fell to ¥62,683 million, the resulting decline in the applicable income tax rate and minority interests in consolidated subsidiaries allowed net income to increase by approximately ¥1,200 million, or 3.1%, to ¥41,156 million.
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Of the ¥112,500 million growth in net sales, ¥67,100 million was attributable to the effect of newly consolidated subsidiaries (Nidec Motors & Actuators, Nidec Brilliant Co., Ltd. and Japan Servo Co., Ltd.). If this were excluded, 7.3% growth of ¥45,300 million would remain. Operating income grew by ¥12,800 million to approximately ¥76,800 million, primarily as a result of growth in the operating income of the small precision motors business (increased by approximately ¥8,900 million), the mid-size motors business (increased by approximately ¥2,100 million and the improvement in the profitability of the electronic and optical components business (increased by approximately ¥5,000 million). Of the four newly consolidated subsidiaries, only Japan Servo Co., Ltd. contributed to growth in operating income. The remaining three firms could not yet contribute to profits this fiscal year due to the heavy burden of management structure reforms.
(Performance in the Fourth Quarter for the three months ended March 31, 2008)
Consolidated net sales in the fourth quarter of fiscal 2007 rose approximately ¥12,600 million, or 7.4%, to ¥183,138 million in comparison to the corresponding period of the previous fiscal year. This was, however, a decline of approximately ¥13,100 million, or 6.7%, in comparison with the immediately preceding third quarter for the three months ended December 31, 2007. Operating income grew ¥4,750 million, or 31.8%, year-on-year to ¥19,683 million, while falling ¥3,390 million, or 14.7%, in comparison with the immediately preceding third quarter. This was chiefly the result of the rapid falloff in overall demand in the fourth quarter, and the effects of the falling dollar and appreciation of the yen.
(Performance by Business)
Net sales in the small precision motors business rose by approximately ¥67,700 million, or 21.3%, in comparison to the preceding fiscal year, to ¥385,682 million. Sales of spindle motors for hard disk drives increased approximately 13% in value, and approximately 15% in volume. The yen-based average sales price declined 3.0% in comparison to the previous fiscal year, however, the yen appreciated against U.S. dollar by 2.3% during the same period. Therefore, in effect, dollar-based sales prices declined almost 1.0%. The reasons for this were a decrease in the average price of 2.5-inch HDDs (approximately 1.5% on a dollar basis), in spite of an increase in the average price of 3.5-inch HDDs (approximately 1% on a dollar basis) due to the larger storage capacity of disks for the consumer market. Sales of other DC motors (including those for DVR) increased approximately ¥17,900 million, or 24%, of which about ¥11,800 million was attributable to the effect of newly consolidated subsidiaries. The portion of sales accounted for by Nidec and its direct subsidiaries, excluding the new subsidiaries, grew approximately 7% in value and approximately 17% in volume. The smaller increase in the value of sales was due to strong demand for products with multiple applications, including motors for office equipment and for home appliances, excluding motors for optical drives. Net sales of brushless DC fans increased approximately ¥7,900 million, or 20%, of which approximately ¥7,100 million is attributable to the effect of newly consolidated subsidiaries. Sales of brushless DC fans by Nidec and its direct subsidiaries, excluding the new subsidiaries, rose by approximately 2%.
Operating income in the small precision motors business grew approximately ¥8,900 million, or approximately 21%, to ¥50,931 million in comparison to the previous fiscal year. The temporary burden of the losses and low profit ratios at newly consolidated subsidiaries are factored into this. The profit increase is primarily due to Nidec’s efforts to improve profitability by expanding the percentage of components produced in-house, encouraged by the increased sales volume of spindle motors for hard disk drives. The group also achieved an improvement in the profitability of DC motors and brushless DC fans by promoting sales of high-value-added products and reducing costs through improvements in productivity, which offset the impact of price fall.
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Net sales in the mid-size motors business jumped approximately ¥39,000 million, or 67.9%, to ¥96,377 million. Nidec Motors & Actuators accounted for approximately ¥27,300 million of the increase, and motors for power steering grew by 59%, accounting for another ¥4,300 million, approximately. Net sales for the other mid-size motors rose more than 18%, most of which was attributable to higher sales of motors for home appliances. Operating income in this business grew approximately ¥2,100 million, a five-fold increase to ¥2,638 million. Nidec Motors & Actuators finished the year in the red, as a result of reorganization losses and amortization of goodwill, but the business was able to absorb this loss. The increase was due to the improved profitability of motors for home appliances and growth in sales of power steering motors.
The machinery business posted net sales of ¥73,253 million, a decline of approximately ¥9,700 million, or approximately 12%. This drop was chiefly due to weak demand for Nidec Sankyo’s LCD panel handling robots during this fiscal year. Operating income fell approximately ¥3,900 million, or 25%, to ¥11,688 million. In the previous fiscal year, Nidec Sankyo’s robot business performed well, and secured a high level of profits. In the fiscal year under review, though, liquid crystal manufacturers experienced a significant drop in demand, which was the largest factor in lower profits.
Net sales in the electronic and optical components business expanded by approximately ¥14,600 million, or about 10%, to ¥159,266 million. This increase in revenues was primarily due to growth of approximately ¥6,800 million, or 10%, in sales of Nidec Copal’s camera shutters and plastic lens units for digital cameras and mobile telephones, and other electronic and optical components. In addition, net sales of Nidec Copal Electronics’ electronic components, the effect of the consolidation of Fujisoku Corporation, and healthy sales of parts for amusement machines brought an increase of approximately ¥7,500 million, or 30%. Nidec Sankyo’s electronic components were held to a slight increase over last fiscal year’s figure. While sales of units for home appliances and amusement machines were healthy, sales of optical pick-up units contracted. Operating income in the electronic and optical components business surged approximately ¥5,000 million, or 62%, to ¥13,032 million, a significant increase in comparison with the preceding fiscal year. This is a new high figure for operating income, breaking the previous record set in fiscal 2004. The increase in income was due to strong sales of Nidec Copal Electronics’ parts for amusement machines, sales growth from new products including Nidec Copal’s camera shutters, and improved profitability resulting from an improved yield rate. At the same time, Nidec Sankyo’s shift away from a sales expansion strategy for its optical pick-up units contributed to the improvement of revenue and expenditures.
Net sales in other business grew approximately ¥850 million, or 3%, to ¥27,548 million. Sales of Nidec Tosok’s automobile parts increased by approximately 10%, but revenues from sales of pivot assemblies declined. Operating income for this business declined by almost ¥600 million to ¥2,044 million, primarily as a result of reduced sales of pivot assemblies.
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(2) Financial position
Our total assets as of March 31, 2008 increased by approximately ¥9,100 million compared to the previous fiscal year as of March 31, 2007. Our total shareholders’ equity as of March 31, 2008 increased by approximately ¥14,600 million compared to the previous fiscal year as of March 31, 2007. This increase was mainly due to an increase in retained earnings of ¥32,900 million, which was offset by a decrease in accumulated other comprehensive income of ¥19,100 million.
Our total liabilities as of March 31, 2008 decreased approximately ¥7,200 million compared to the previous fiscal year as of March 31, 2007. This decrease was mainly due to a decrease in borrowings of ¥16,400 million. As a result, the shareholders’ equity ratio increased to 47.6% as of March 31, 2008, from 46.0% as of March 31, 2007.
(Overview of cash flows)
Our cash and cash equivalents increased by ¥12,025 million, to ¥100,809 million as of March 31, 2008 compared to the previous fiscal year.
Net cash provided by operating activities increased by ¥30,093 million to ¥94,816 million for the fiscal year ended March 31, 2008, compared to the previous fiscal year. The increase of ¥30,093 million was mainly due to an increase in notes and accounts payable of ¥10,172 million, and an increase in foreign currency adjustments of ¥7,937 million. Other reasons were an increase in net income of ¥1,224 million, an increase in depreciation and amortization of ¥7,285 million and a decrease in operating assets, net , such as notes and accounts receivable and inventories, of ¥3,060 million.
Net cash used in investing activities decreased by ¥35,211 million to ¥43,724 million for this fiscal year ended March 31, 2008, compared to the previous fiscal year. The decrease of ¥35,211 million was mainly due to a decrease in acquisitions of consolidated subsidiaries, net of cash acquire of ¥22,703 million, and a decrease in payments for additional investments in subsidiaries of ¥8,545 million.
Net cash used in financing activities was ¥27,280 million. This was mainly due to repayments of short-term borrowings and long-term debt of ¥16,400 million and dividends paid of ¥7,200 million.
(Non consolidated results)
Non-consolidated net sales increased by ¥8,700 million, or 4.8%, to ¥189,253 million for the fiscal year ended March 31, 2008, compared to previous fiscal year. Net sales of small precision motors increased by ¥4,700 million, or 2.8%, to ¥175,580 million. Net sales of mid-size motors also increased by ¥3,800 million, or 55%, to ¥10,733 million.
Operating income increased by ¥2,700 million to ¥13,980 million. This was mainly due to an increase in sales of small precision motors and royalty income resulting from increased overseas subsidiary sales. However, recurring profit decreased by¥3,900 million to ¥21,307 million. This decrease was mainly due to an increase in foreign exchange losses of ¥8,500 million resulting from sharp appreciation of the yen against the U.S. dollars.
Net income increased by ¥6,300 million to ¥21,519 million, in spite of the decrease in recurring profit. This increase was due to a large decrease in income taxes mainly resulting from an additional imposition of transfer price tax for the previous fiscal year.
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(3) Dividend Policy
From the viewpoint that “Shareholders own the company”, Nidec intends to demonstrate a type of ideal company for shareholders by maximizing shareholder value with its ability to respond to a more challenging business environment and its high levels of performance to generate high share prices. Nidec is poised to increase its dividend payment subject to improvements in consolidated net earnings, while securing stable dividend levels. Currently we plan to allot approximately 15% of our consolidated net income for the dividend payment.
Reserves are continually used to strengthen management structure and expand business in view of profitability enhancement.
<Notification of an increase in dividends>
We decided the year-end dividend was ¥30.0 per share, increased by ¥5.00 per share from the forecast of ¥25.0 per share at the beginning of this fiscal year ended March 31, 2008. This resulted in full-year dividend of ¥55.0 per share and the dividend was increased by ¥10.0 per share compared to the full-year dividend for the previous fiscal year ended March 31, 2007. The dividend payout ratio was 19.4%.
(4) Risk factor
The risk factors that we are recognizing as of March 31, 2008 are as follows.
(1)Our customer base is highly concentrated, and our sales would suffer if one or more of our significant customers substantially reduce or cancel orders for our products.
(2)We depend on the computer industry and digital consumer electronics industry for sales of our products, and our business may be adversely affected by a decline in the computer market and digital consumer electronics market.
(3)We are facing downward pricing pressure in our main product markets, and price declines could reduce our revenues and gross margins.
(4)If our third party suppliers experience capacity constraints or production failures, our production could be significantly harmed.
(5)We face aggressive competition both in the spindle motor market and in the markets into which we are attempting to expand our business, which could have a material adverse effect on our business and results of operations.
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(6)We may be unable to commercialize customized products that satisfy customers’ needs in a timely manner and in sufficient quantities, which could damage our reputation and reduce sales.
(7)We could experience losses or damage to our reputation if any of the end-products in which our motors or other products are incorporated malfunction, causing damage to persons, property or data.
(8)Our operating results may fluctuate significantly because of a number of factors, many of which are beyond our control.
(9)Our recent growth has been based in part on acquisitions, and our future growth could be adversely affected if we make acquisitions that turn out to be incompatible with our existing business or unsuccessful, or if we are unable to find suitable acquisition targets.
(10)Our growth places strains on our managerial, operational and financial resources.
(11)We could be harmed by litigation involving patents and other intellectual property rights.
(12)Because our sales to overseas customers are denominated predominantly in U.S. dollars, we are exposed to exchange rate risks that could harm our results of operations.
(13)We rely on monthly financial data from operating segments that are not prepared on a U.S. GAAP basis and are not comparable between segments, which potentially reduces the usefulness of this data to us in making management decisions.
(14)We rely on production in developing countries which may become politically or economically unstable and face risks affecting international operations.
(15)We may become subject to more stringent environmental regulations in the future.
(16)We rely on our founder, President and CEO, Mr. Shigenobu Nagamori, the loss of whom could have a material adverse effect on our business.
(17)For our business to continue effectively, we will need to attract and retain qualified personnel.
We have not revised nor changed any parts of the risk factors listed above which we had reported in Form 20-F on July 27, 2007.
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(5 ) Business forecasts for the year ending March 31, 2009
A forecast of the global economy as a whole is difficult to make. The US economic trend, appearing unstable, could change drastically due to political, financial, or economic measures, and such changes will inevitably affect developed and developing economies worldwide. In addition, the upheaval in the financial capital market and the surging resource demand worldwide could cause the already soared oil as well as material and raw material prices to maintain the current level, or to even increase further, posing risks for such products to possibly become difficult to obtain.
Our company’s main markets, i.e. the IT information device, the information home appliance, and the electronic component industries, are increasingly in an adjustment mood in light of this economic circumstance, and the political instability in Asia (our business group’s main production site), the currency rate fluctuation risk, and the changes in the labor market ongoing this fiscal year do not allow any room of optimistic hope for business growth. These changes make accurate demand forecasting and provision of accurate business performance information extremely difficult. Please see below for our current forecast of each business segment:
1. The small high-precision motor business is expected to grow slightly over 10% in sales fiscal year ending March 31, 2009 (“current fiscal year”) again. The general forecast of the motors for hard disc drives (HDDs), our main product, expects a 14 – 15% growth in its annual production volume current fiscal year again. In addition, the market needs for energy-saving products are believed to maintain the momentum of the demand expansion of DC (direct-current brushless) motors in a wide range of markets.
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2. The mid-size motors business, constantly profitable, will very likely achieve further improvement in profitability. This business segment is experiencing a steady demand increase upon the introduction of brushless motors, especially in the area of motors for home appliances. Also, with the demand for motors for the automobile power steering system continuing to rise, we will accommodate the expanding demand of various motors for automobile use by collaborating with Nidec Motors & Actuators.
3. In the machinery business, the shipping volume of LCD board transportation robots is expected to increase, but the overall demand for facility and equipment investments is on decline after reaching its peak. The sales in this business, therefore, is forecast to decrease in the first half of this fiscal year, and then recover in the second half.
4. The electronic and optical components business are seeing positive results of the profitability improvement effort that lasted until last fiscal year to accommodate new technologies and products and price reduction. Even though the market itself will likely weaken for the first half of the fiscal year, with a good chance of a relatively quick recovery of demand, we will use this situation as a chance to enhance productivity at our production sites and reduce cost.
5. In other businesses, the demand for pivot assemblies is likely to increase steadily in conjunction with the movements in the HDD market. Despite the limited range of our company’s automobile components, a sustainable growth is expected for the products’ demand, which is weak in the United States and other related countries, but strong in developing economies.
Our company, based on the aforementioned factors, will engage in our business in current fiscal year presuming to experience a recession and a weak dollar and strong yen. We propose the following business forecast assuming a strong adjustment trend in the first half of this fiscal year followed by a recovery in the second half. Though such a forecast is difficult to make, we still do so, while focusing on our mid-term business targets.
Forecast of consolidated results for the full year ending March 31, 2009
Net sales | ¥800,000 million | (Up 7.8% over the previous fiscal year) |
Operating income | ¥90,000 million | (Up 17.1% over the previous fiscal year) |
Income before provision for income taxes | ¥90,000 million | (Up 43.6% over the previous fiscal year) |
Net income | ¥58,000 million | (Up 40.9% over the previous fiscal year) |
(Forecast of the consolidated results for the interim fiscal period ending September 30, 2008)
Net sales | ¥375,000 million | (Up 3.4% over the previous fiscal year) |
Operating income | ¥40,000 million | (Up 17.4% over the previous fiscal year) |
Income before provision for income taxes | ¥40,000 million | (Up 27.0% over the previous fiscal year) |
Net income | ¥26,000 million | (Up 27.7% over the previous fiscal year) |
Notes:
About Forecast of Business Results
1) Consolidated accounting figures were prepared based on US GAAP.
2) Exchange rate was set at 1 US$ = ¥100 for the fiscal year. Exchange rates of Asian currencies were also set in conjunction with this.
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Disclaimer Regarding Forward-Looking Statements This press release contains forward-looking statements (within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934) about Nidec and its group companies (the Nidec Group). These forward-looking statements are based on the current expectations, assumptions, estimates and projections of the Nidec Group in light of the information currently available to them. These forward-looking statements are subject to various risks and uncertainties. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “estimate,” “plan” or similar words. These statements discuss future expectations, identify strategies, contain projections of results of operations or of the Nidec Group's financial condition, or state other forward-looking information. Known and unknown risks, uncertainties and other factors could cause the actual results to differ materially from those contained in any forward-looking statement. We cannot promise that our expectations expressed in these forward-looking statements will turn out to be correct. Our actual results could be materially different from and worse than our expectations as a result of certain factors, including, but not limited to (i) the Nidec Group's ability to design, develop, mass produce and win acceptance of their products, (ii) general economic conditions in the computer, information technology and related product markets, particularly levels of consumer spending, (iii) exchange rate fluctuations, particularly between the Japanese yen and the U.S. dollar and other currencies in which we make significant sales or in which the Nidec Group's assets and liabilities are denominated, (iv) the Nidec Group's ability to acquire and successfully integrate companies with complementary technologies and product lines, and (v) adverse changes in laws, regulations or economic policies in any of the countries where the Nidec Group has manufacturing operations, especially China. |
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2. THE NIDEC GROUP
The Nidec Group is comprised of Nidec Corporation (“Nidec”), 128 consolidated subsidiaries and 5 affiliated companies. The Nidec group continues to expand its operations based on a special management style that focuses on the production of core rotational products centered on revolutionary drive technology with operations in the following segments:Small precision motors, Mid-size motors, Machinery, Electronic and Optical components andAutomobiles components. The principal business activities in each of these segments are carried out in the areas of product development, manufacturing and sales, and distribution networks as well as other services have been established for each business both in Japan and overseas.
The business activities of Nidec and the Nidec Group’s principal consolidated subsidiaries are as follows:
Business segment | Production or Sales | Principal Companies | |
Spindle motors for HDDs | Production | Nidec Corporation, Nidec Electronics (Thailand) Co., Ltd., Nidec Philippines Corporation, Nidec Subic Philippines Corporation, Nidec (Zhejiang) Corporation, Nidec Singapore Pte. Ltd. | |
Small precision DC motors | Production | Nidec (Dalian) Limited, Nidec (Dong Guan) Limited., Nidec Sankyo Corporation, Nidec Sankyo Singapore Pte. Ltd., Nidec Sankyo (H.K.) Co., Ltd., Japan Servo Co., Ltd. | |
Small precision fans | Production | Nidec (Dalian) Limited, Nidec (Dong Guan) Limited., Nidec Vietnam Corporation, Japan Servo Co., Ltd. | |
Parts and materials | Production | Nidec Electronics (Thailand) Co., Ltd., Nidec Philippines Corporation, Nidec Subic Philippines Corporation, Nidec (Zhejiang) Corporation, Nidec Precision (Thailand) Co., Ltd., Nidec Precision Philippines Corporation, P.T. Nidec Indonesia, Nidec Brilliant Co., Ltd. (Note), Nidec Brilliant Precision (Thailand) Co., Ltd. (Note) | |
Small precision motors | Sales | Nidec Corporation, Nidec Singapore Pte. Ltd., Nidec (H.K.) Co., Ltd., Nidec Taiwan Corporation, Nidec (Shanghai) International Trading Co., Ltd., Nidec Electronics (Thailand) Co., Ltd., Nidec Philippines Corporation, Nidec (Dalian) Limited, Nidec (Dong Guan) Limited., Nidec Copal Corporation, Nidec Sankyo Corporation, Nidec Sankyo Singapore Pte. Ltd., Nidec Sankyo (H.K.) Co., Ltd., Nidec Brilliant Co., Ltd. (Note), Japan Servo Co., Ltd., Japan Servo Co., Ltd. Singapore Branch |
17
For office automation equipment and home electric appliances OA | Production | Nidec Shibaura Corporation, Nidec Power Motor Corporation, Nidec Shibaura (Zhejiang) Corporation, Nidec Shibaura Electronics (Thailand) Co., Ltd., Nidec Power Motor (Zhejiang) Co., Ltd. | |
For automobiles | Production | Nidec Corporation, Nidec Automotive Motor (Zhejiang) Corporation, Nidec Motors & Actuators (Germany), Nidec Motors & Actuators (Mexico) | |
Mid-size Motors | Sales | Nidec Corporation, Nidec Electronics GmbH, Nidec Shibaura Corporation, Nidec Power Motor Corporation, Nidec Shibaura (Zhejiang) Corporation, Nidec Shibaura Electronics (Thailand) Co., Ltd., Nidec Power Motor (Zhejiang) Co., Ltd., Nidec Motors & Actuators (Germany), Nidec Motors & Actuators (Mexico) | |
Power transmission drives | Production | Nidec-Shimpo Corporation, Nidec-Shimpo (Zhejiang) Corporation | |
Factory automation related equipment FA | Production | Nidec Sankyo Corporation, Nidec Copal Corporation, Nidec-Shimpo Corporation, Nidec Tosok Corporation, Nidec-Kyori Corporation, Nidec-Read Corporation, Nidec Machinery Corporation, Nidec-Shimpo (Zhejiang) Corporation, Nidec System Engineering (Zhejiang) Corporation |
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Machinery | Sales | Nidec Sankyo Corporation, Nidec Copal Corporation, Nidec-Shimpo Corporation, Nidec Tosok Corporation, Nidec-Kyori Corporation, Nidec-Read Corporation, Nidec Sankyo (H.K.) Co., Ltd. | |
Electronic components | Production | Nidec Copal Corporation, Nidec Copal Electronics Corporation, Nidec Copal (Zhejiang) Corporation, Fujisoku Corporation | |
Optical components | Production | Nidec Copal Corporation, Nidec Sankyo Corporation, Nidec Nissin Corporation, Nidec Copal Precision Parts Corporation, Nidec Copal (Thailand) Co., Ltd., Nidec Copal (Zhejiang) Corporation, Nidec Sankyo (Fuzhou) Corporation | |
Electronic and Optical components | Sales | Nidec Copal Corporation, Nidec Sankyo Corporation, Nidec Copal Electronics Corporation, Nidec Nissin Corporation, Nidec Copal (Thailand) Co., Ltd., Nidec Copal (Zhejiang) Corporation, Nidec Copal Hong Kong Co., Ltd., Copal Optical & Electronic Machinery (Shanghai) Co., Ltd., Fujisoku Corporation | |
Pivot assemblies | Production and Sales | Nidec Singapore Pte. Ltd., P.T. Nidec Indonesia | |
Musical Movements | Production and Sales | Nidec Sankyo Shoji Corporation | |
Automobile parts | Production | Nidec Tosok Corporation, Nidec Tosok (Vietnam) Co., Ltd. | |
Sales | Nidec Tosok Corporation | ||
Services etc | Nidec Total Service Corporation, Nidec Logistics Corporation |
Note:
As of April 1, 2008, Brilliant Manufacturing Ltd. and its primary subsidiaries were renamed “Nidec” at the beginning of their names to clearly express that they are Nidec Group companies.
Brilliant Manufacturing Ltd. was renamed Nidec Brilliant Co., Ltd..
Brilliant Precision (Thailand) Co., Ltd. was renamed Nidec Brilliant Precision (Thailand) Co., Ltd..
Nidec prepared consolidated financial reporting conforming to U.S. GAAP from the fiscal year ended March 31, 2005. Scope of consolidation is also based on U.S. GAAP. Business segments comprises a total of 16 segments conforming to Statement of Financial Accounting Standards No. 131, “Disclosures about Segments of an Enterprise and Related Information”. Operating Segments are the classifications, which the chief operating decision-maker utilizes for business decision-making and performance evaluation. Reportable segments consist of one or more operating segments aggregated on the basis of economic similarity and materiality.
The business segments are as follows.
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TheNCJsegment comprises Nidec Corporation in Japan, which primarily produces and sells hard disk drive motors, DC motors, fans and mid-size motors.
TheNETsegment comprises Nidec Electronics (Thailand) Co., Ltd. and Nidec Precision (Thailand) Co., Ltd., subsidiaries in Thailand, which primarily produce and sell hard disk drive motors.
The NCCsegment comprises Nidec (Zhejiang) Corporation, a subsidiary in China, which primarily produces and sells hard disk drive motors.
TheNCD segment comprises Nidec (Dalian) Limited, a subsidiary in China, which primarily produces and sells DC motors and fans.
TheNCS segment comprises Nidec Singapore Pte. Ltd., a subsidiary in Singapore, which primarily produces and sells hard disk drive motors and pivot assemblies, and primarily sells DC motors and fans.
TheNCHsegment comprises Nidec (H.K.) Co., Ltd., a subsidiary in Hong Kong, which primarily sells hard disk drive motors, DC motors and fans.
TheNCF segment comprises Nidec Philippines Corporation and Nidec Precision Philippines Corporation, subsidiaries in the Philippines, which primarily produce and sell hard disk drive motors.
TheNSNK segment comprises Nidec Sankyo Corporation., a subsidiary in Japan, which primarily produces and sells DC motors, machinery, and electronic and optical components.
The NCPL segment comprises Nidec Copal Corporation, a subsidiary in Japan, which primarily produces and sells electronic and optical components, and machinery.
TheNTSC segment comprises Nidec Tosok Corporation, a subsidiary in Japan, which primarily produces and sells automobile parts and machinery.
The NCEL segment comprises Nidec Copal Electronics Corporation, a subsidiary in Japan, which primarily produces and sells electronic components.
TheJSRV segment comprises Japan Servo Co., Ltd., a subsidiary in Japan, which primarily produces and
sells DC motors, fans and other small precision motors.
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TheNSBC segment comprises Nidec Shibaura Corporation, a subsidiary in Japan, which primarily produces and sells mid-size motors.
TheNSCJsegment comprises Nidec-Shimpo Corporation, a subsidiary in Japan, which primarily produces and sells power transmission drives, measuring machines and electric potter’s wheels.
TheNMA segment comprises Nidec Motors & Actuators (Germany) and other subsidiaries of Europe and
North America, which primarily produce and sell motors for automobiles.
TheNNSN segment comprises Nidec Nissin Corporation, a subsidiary in Japan, which primarily produces and sells optical components.
The All Others segment comprises subsidiaries that are operating segments but not designated as reportable segments due to materiality.
21
3. MANAGEMENT POLICIES
1) Fundamental policies
Nidec Corporation and its group companies continue to expand their operations closely focused on the manufacturing and sale of products that “spin and move”, centering on the field of drive technology.
We are determined to achieve high growth, high share prices, and high profit over the long-term to maximize shareholder value and meet the expectations of shareholders.
Nidec Corporation and its subsidiary companies uphold the following three management creeds:
1. Stable employment based on healthy business growth.
2. Exploitation of universally desired, indispensable products for the common good.
3. Pursuit of the No.1 position in each of our chosen paths.
2) Target
Nidec has the firm belief that growth must generate high profitability, and is now working to achieve a 15% return on equity. To accomplish such objective on a consolidated basis, Nidec realizes that its core business must attain a higher profitability. An expansion into new business and the development of new products are another key factors to the future growth.
3) Mid-to-long-term management strategy
A. Nidec will continue to focus its efforts on its core motor business, leveraging its cutting edge technology to create new markets and new products, while expanding its existing product lineup ranged from micro motors to mid-size motors for home appliances, industrial use and automobiles. Especially motors for automobiles, what we believe one of our future core businesses, we will expand the operation worldwide through M&A activities and any other efforts.
B. Regarding HDD motors, by increasing its ability to mass-produce fluid dynamic bearing (“FDB”) motors and propelling technical innovation in response to expansion in HDD applications, Nidec will further sharpen its competitive edge in the market of next generation products.
C. While maintaining a leading share of the markets for electronic and optical parts, production equipment for semiconductors and electronic parts, and for measuring machines, Nidec and its group companies are determined to achieve the world’s top technological standards in each of these areas. Through the integration of technologies in wide-ranging areas, Nidec intends to create new markets and continue to develop high growth businesses.
D. Nidec assesses possible country risk attributable to overconcentration of production capabilities in particular regions or countries and diversifies investment in multiple countries to ensure an appropriate balance in its international production activities. Nidec's present focus in this context is on securing a Group's future overseas manufacturing base in Vietnam as a means to lessen the Company's increased dependence on China.
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4) Challenges and issues
A. We will enhance our M&A strategy. We will, by utilizing Corporate Strategy Office, our company’s M&A operation team, actively promote M&As, including ones overseas. Four M&A cases have already been implemented since October 2006. But our company’s dedicated team will continue the activities in order to enrich business resources, mainly the technological capabilities of the businesses that can grow in the future.
B. We will introduce an executive officer (vice president) system, which is planned to be in place after the June 2008 General Meeting of Shareholders. We will improve and restructure our Board of Directors and introduce this new system to accommodate our company’s global business expansion and the rapidly changing business environment.
C. We will strengthen our profitability improvement measures. We have established and executed clear strategies on the expansion of overseas production capabilities and in-house production of small precision motors and other products. Also, following the production expansion of automobile components, the manufacturing scale of small precision motors and electronic and components is enlarging as well. We will ensure to lead the effect of these investments to an increased consolidated profit.
D. We, unified as a group, will promote to enhance our technological development system to accommodate the rapidly changing market needs and to actively provide new technologies and products. This effort involves Nidec’s Central Technical Center and Motor Engineering Research Laboratory, our company’s main facilities, as well as the construction of new buildings at Nagano Technical Center (to be completed in March 2009) and Shiga Technical Center (to be completed in August 2009) for capacity expansion and function enhancement. Also, the construction of technical center was completed at Nidec Copal Electronic Corporation in February 2007.
E. Nidec Corporation, as a global company, will further improve its entire group’s accounting management system, accounting standard, financial performance, and business information disclosure systems. Our company’s Internal Audit & Management Advisory Department, established in 2004, supervises the entire Nidec Group’s business management system with an adequate number of members and based on the know-how and experiences accumulated through efforts to observe the US Sarbanes-Oxley Act. Collaboration between an information disclosure-related committee and individual departments dedicated to information disclosure will improve our information disclosure system.
In addition to the aforementioned efforts, we have established CSR Promotion Office in April 2008. This Office will engage in various activities as a dedicated group just like the existing Compliance Office, Risk Management Office and IR Dept. Thus, Nidec Corporation, while engaging in business activities as a public organ, will contribute to the society through creating employment and launching new social contribution activities.
23
4. CONSOLIDATED FINANCIAL STATEMENTS (U.S. GAAP)
(1) Consolidated Balance Sheets
Assets
Yen in millions | ||||||
March 31 | Increase or | |||||
2008 | 2007 | decrease | ||||
Amount | % | Amount | % | Amount | ||
Current assets: | ||||||
Cash and cash equivalents | ¥100,809 | ¥88,784 | ¥12,025 | |||
Trade notes receivable | 17,205 | 17,318 | (113) | |||
Trade accounts receivable | 148,928 | 147,014 | 1,914 | |||
Inventories: | ||||||
Finished goods | 32,735 | 26,960 | 5,775 | |||
Raw materials | 17,849 | 17,324 | 525 | |||
Work in process | 16,164 | 16,405 | (241) | |||
Project in progress | 816 | 1,212 | (396) | |||
Supplies and other | 2,254 | 2,407 | (153) | |||
Other current assets | 20,238 | 21,238 | (1,000) | |||
Total current assets | 356,998 | 53.1 | 338,662 | 51.1 | 18,336 | |
Investments and loan receivable: | ||||||
Marketable securities and other securities investments | 15,273 | 21,805 | (6,532) | |||
Investments in and advances to affiliated companies | 2,102 | 2,194 | (92) | |||
Total investments and loan receivable | 17,375 | 2.6 | 23,999 | 3.6 | (6,624) | |
Property, plant and equipment: | ||||||
Land | 39,389 | 38,289 | 1,100 | |||
Buildings | 110,258 | 103,325 | 6,933 | |||
Machinery and equipment | 264,019 | 258,970 | 5,049 | |||
Construction in progress | 11,309 | 13,717 | (2,408) | |||
Sub-total | 424,975 | 63.3 | 414,301 | 62.5 | 10,674 | |
Less - Accumulated depreciation | (226,146) | (33.7) | (207,059) | (31.2) | (19,087) | |
Total property, plant and equipment | 198,829 | 29.6 | 207,242 | 31.3 | (8,413) | |
Goodwill | 71,223 | 10.6 | 67,780 | 10.2 | 3,443 | |
Other non-current assets | 27,289 | 4.1 | 24,940 | 3.8 | 2,349 | |
Total assets | ¥671,714 | 100.0 | ¥662,623 | 100.0 | ¥9,091 |
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Liabilities and Shareholders’ Equity
Yen in millions | ||||||
March 31 | Increase or | |||||
2008 | 2007 | decrease | ||||
Amount | % | Amount | % | Amount | ||
Current liabilities: | ||||||
Short-term borrowings | ¥68,854 | ¥78,848 | ¥(9,994) | |||
Current portion of long-term debt | 29,196 | 3,216 | 25,980 | |||
Trade notes and accounts payable | 121,698 | 117,665 | 4,033 | |||
Other current liabilities | 33,351 | 35,640 | (2,289) | |||
Total current liabilities | 253,099 | 37.7 | 235,369 | 35.6 | 17,730 | |
Long-term liabilities: | ||||||
Long-term debt | 3,430 | 31,560 | (28,130) | |||
Accrued pension and severance costs | 14,953 | 13,013 | 1,940 | |||
Other long-term liabilities | 12,462 | 11,212 | 1,250 | |||
Total long-term liabilities | 30,845 | 4.6 | 55,785 | 8.4 | (24,940) | |
Total liabilities | 283,944 | 42.3 | 291,154 | 44.0 | (7,210) | |
Minority interest in consolidated subsidiaries | 68,186 | 10.1 | 66,453 | 10.0 | 1,733 | |
Shareholders’ equity: | ||||||
Common stock | 66,248 | 9.9 | 65,868 | 9.9 | 380 | |
Additional paid-in capital | 68,859 | 10.3 | 68,469 | 10.3 | 390 | |
Retained earnings | 193,407 | 28.8 | 160,480 | 24.2 | 32,927 | |
Accumulated other comprehensive income (loss): | ||||||
Foreign currency translation adjustments | (10,233) | 6,874 | (17,107) | |||
Unrealized gains (losses) from securities, net of reclassification adjustments | 1,016 | 3,324 | (2,308) | |||
Pension liability adjustments | 568 | 263 | 305 | |||
Total accumulated other comprehensive income (loss) | (8,649) | (1.4) | 10,461 | 1.6 | (19,110) | |
Treasury stock, at cost | (281) | (0.0) | (262) | (0.0) | (19) | |
Total shareholders’ equity | 319,584 | 47.6 | 305,016 | 46.0 | 14,568 | |
Total liabilities, minority interest and shareholders’ equity | ¥671,714 | 100.0 | ¥662,623 | 100.0 | ¥9,091 |
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(2) Consolidated Statements of Income
Yen in millions | ||||||
Year ended March 31 | Increase or | |||||
2008 | 2007 | decrease | ||||
Amount | % | Amount | % | Amount | % | |
Net sales | ¥742,126 | 100.0 | ¥629,667 | 100.0 | ¥112,459 | 17.9 |
Cost of products sold | 583,910 | 78.7 | 486,627 | 77.3 | 97,283 | 20.0 |
Selling, general and administrative expenses | 51,283 | 6.9 | 46,276 | 7.3 | 5,007 | 10.8 |
Research and development expenses | 30,100 | 4.0 | 32,755 | 5.2 | (2,655) | (8.1) |
Operating expenses | 665,293 | 89.6 | 565,658 | 89.8 | 99,635 | 17.6 |
Operating income | 76,833 | 10.4 | 64,009 | 10.2 | 12,824 | 20.0 |
Other income (expense): | ||||||
Interest and dividend income | 2,930 | 2,565 | 365 | |||
Interest expenses | (2,421) | (2,022) | (399) | |||
Foreign exchange gain (loss), net | (14,110) | 1,757 | (15,867) | |||
Gain (loss) from marketable securities, net | 454 | 943 | (489) | |||
Other, net | (1,003) | (1,657) | 654 | |||
Total | (14,150) | (2.0) | 1,586 | 0.2 | (15,736) | (992.2) |
Income before income taxes | 62,683 | 8.4 | 65,595 | 10.4 | (2,912) | (4.4) |
Income taxes | (15,484) | (2.0) | (17,460) | (2.8) | 1,976 | (11.3) |
Income before minority interest and equity in earnings of affiliated companies | 47,199 | 6.4 | 48,135 | 7.6 | (936) | (1.9) |
Minority interest in income (loss) of consolidated subsidiaries | 6,082 | 0.9 | 8,130 | 1.3 | (2,048) | (25.2) |
Equity in net (income) loss of affiliated companies | (39) | (0.0) | 73 | 0.0 | (112) | (153.4) |
Net income | ¥41,156 | 5.5 | ¥39,932 | 6.3 | ¥1,224 | 3.1 |
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(3) Consolidated Statements of Shareholders’ Equity and Comprehensive Income (Loss)
Yen in millions (except for number of shares of common stock) | |||||||||||||
Year ended March 31, 2008 | Common stock | Additional | Retained | Accumulated | Treasury at cost | ||||||||
Shares | Amount | Total | |||||||||||
Balance at March 31, 2007 | 144,780,492 | ¥65,868 | ¥68,469 | ¥160,480 | ¥10,461 | ¥(262) | ¥305,016 | ||||||
Cumulative effect resulting from the adoption of FIN No. 48 * | (987) | (987) | |||||||||||
Comprehensive income: | |||||||||||||
Net income | 41,156 | 41,156 | |||||||||||
Other comprehensive income (loss): | |||||||||||||
Foreign currency translation adjustments | (17,107) | (17,107) | |||||||||||
Unrealized gains (losses) from securities, | (2,308) | (2,308) | |||||||||||
Pension liability adjustments | 305 | 305 | |||||||||||
Total comprehensive income | 22,046 | ||||||||||||
Dividends paid | (7,242) | (7,242) | |||||||||||
Exercise of stock option | 207,000 | 380 | 390 | 770 | |||||||||
Purchase of treasury stock | (19) | (19) | |||||||||||
Balance at March 31, 2008 | 144,987,492 | ¥66,248 | ¥68,859 | ¥193,407 | ¥(8,649) | ¥(281) | ¥319,584 |
Note: * Due to the adoption of FIN No.48 “Accounting for Uncertainty in Income Taxes” during this period, our retained earnings as of March 31, 2007 decreased by ¥987 million.
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Yen in millions (except for number of shares of common stock) | ||||||||||||||
Year ended March 31, 2007 | Common stock | Additional | Retained | Accumulated | Treasury at cost | |||||||||
Shares | Amount | Total | ||||||||||||
Balance at March 31, 2006 | 144,661,292 | ¥65,649 | ¥68,240 | ¥126,334 | ¥3,673 | ¥(237) | ¥263,659 | |||||||
Comprehensive income: | ||||||||||||||
Net income | 39,932 | 39,932 | ||||||||||||
Other comprehensive income (loss): | ||||||||||||||
Foreign currency translation adjustments | 6,949 | 6,949 | ||||||||||||
Unrealized gains (losses) from securities, | (539) | (539) | ||||||||||||
Minimum pension liability adjustments | (25) | (25) | ||||||||||||
Total comprehensive income | 403 | 46,317 | ||||||||||||
Adjustment to initially apply SFAS No. 158, net of tax | 403 | |||||||||||||
Total | 46,720 | |||||||||||||
Dividends paid | (5,786) | (5,786) | ||||||||||||
Exercise of stock option | 119,200 | 219 | 234 | 453 | ||||||||||
Issuance cost of new stock | (5) | (5) | ||||||||||||
Purchase of treasury stock | (25) | (25) | ||||||||||||
Balance at March 31, 2007 | 144,780,492 | ¥65,868 | ¥68,469 | ¥160,480 | ¥10,461 | ¥(262) | ¥305,016 |
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(4) Consolidated Statements of Cash Flows
Yen in millions | |||||||||||||
Year ended March 31 | |||||||||||||
2008 | 2007 | Increase | |||||||||||
Cash flows from operating activities: | |||||||||||||
Net income | ¥41,156 | ¥39,932 | ¥1,224 | ||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||
Depreciation | 36,334 | 29,997 | 6,337 | ||||||||||
Amortization | 1,638 | 690 | 948 | ||||||||||
Gain from marketable securities, net | (454) | (943) | 489 | ||||||||||
Loss on sales, disposal or impairment of property, plant and equipment | 1,636 | 1,737 | (101) | ||||||||||
Deferred income taxes | 2,065 | (995) | 3,060 | ||||||||||
Minority interest in income of consolidated subsidiaries | 6,082 | 8,130 | (2,048) | ||||||||||
Equity in net losses of affiliated companies | (39) | 73 | (112) | ||||||||||
(Gain) loss from derivative instruments, net | (16) | 11 | (27) | ||||||||||
Gain from sale of investments in affiliated companies | - | (54) | 54 | ||||||||||
Foreign currency adjustments | 8,305 | 368 | 7,937 | ||||||||||
Accrual for pension and severance costs, net payments | (1,551) | (1,908) | 357 | ||||||||||
Changes in operating assets and liabilities: | |||||||||||||
Decrease (increase) in notes and accounts receivable | 26 | (10,414) | 10,440 | ||||||||||
(Increase) decrease in inventories | (5,575) | 1,805 | (7,380) | ||||||||||
Increase (decrease) in notes and accounts payable | 5,949 | (4,223) | 10,172 | ||||||||||
(Decrease) increase in accrued income taxes | (3,601) | 2,491 | (6,092) | ||||||||||
Other | 2,861 | (1,974) | 4,835 | ||||||||||
Net cash provided by operating activities | ¥94,816 | ¥64,723 | ¥30,093 |
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Yen in millions | ||||||
Year ended March 31 | Increase or | |||||
2008 | 2007 | decrease | ||||
Cash flows from investing activities: | ||||||
Additions to property, plant and equipment | ¥(35,660) | ¥(39,144) | ¥3,484 | |||
Proceeds from sales of property, plant and equipment | 2,010 | 1,089 | 921 | |||
Purchases of marketable securities | (231) | (4) | (227) | |||
Proceeds from sales of marketable securities | 2,761 | 1,071 | 1,690 | |||
Proceeds from sales of investments in affiliated companies | - | 774 | (774) | |||
Acquisitions of consolidated subsidiaries, net of cash acquired | (2,619) | (25,322) | 22,703 | |||
Payments for additional investments in subsidiaries | (8,043) | (16,588) | 8,545 | |||
Proceeds from sale of investment in subsidiaries | - | 135 | (135) | |||
Other | (1,942) | (946) | (996) | |||
Net cash used in investing activities | (43,724) | (78,935) | 35,211 | |||
Cash flows from financing activities: | ||||||
(Decrease) increase in short-term borrowings | (15,123) | 22,649 | (37,772) | |||
Proceeds from issuance of long-term debt | 137 | - | 137 | |||
Repayments of long-term debt | (3,966) | (6,696) | 2,730 | |||
Proceeds from issuance of new shares | 761 | 438 | 323 | |||
Dividends paid | (7,242) | (5,786) | (1,456) | |||
Other | (1,847) | (1,662) | (185) | |||
Net cash (used in) provided by financing activities | (27,280) | 8,943 | (36,223) | |||
Effect of exchange rate changes on cash and cash equivalents | (11,787) | 1,974 | (13,761) | |||
Net increase (decrease) in cash and cash equivalents | 12,025 | (3,295) | 15,320 | |||
Cash and cash equivalents at beginning of year | 88,784 | 92,079 | (3,295) | |||
Cash and cash equivalents at end of year | ¥100,809 | ¥88,784 | ¥12,025 |
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Scope of consolidation and application of the equity method
1. Scope of consolidation
As of | |
March 31, 2008 | |
Number of consolidated subsidiaries | 128 |
2. Application of equity method
As of | |
March 31, 2008 | |
Number of affiliated companies accounted for by the equity method | 5 |
3. Change in the scope of consolidation from March 31, 2007
Increase of consolidated subsidiaries | 11 |
Decrease of consolidated subsidiaries | - |
4. Change in the application of equity method from March 31, 2007
Increase of affiliated companies accounted for by the equity method | 1 |
Decrease of consolidated subsidiaries | - |
Critical Accounting Policies
The Company and its subsidiaries in Japan maintain their records and prepare their accounts and records in accordance with accounting principles generally accepted in Japan, and its foreign subsidiaries in conformity with those of their countries of domicile. Certain adjustments and reclassifications have been incorporated in the accompanying consolidated financial statements to conform with accounting principles of the United States (“U.S. GAAP”).
1) Property, plant and equipment
Property, plant and equipment are stated at cost. Major renewals and improvements are capitalized; minor replacements, maintenance and repairs are charged to current operations. Depreciation of property, plant and equipment is mainly computed on the declining-balance method by Nidec Corporation, its Japanese subsidiaries and its Thai manufacturing subsidiary, which mainly produce high-end spindle motors for hard disk drives.
(Additional information)
For Nidec Corporation and its subsidiaries located in Japan, Nidec changed its calculation method for salvage value of machineries and equipments, from 5% of acquisition costs of the assets to memorandum prices. NIDEC assess that the assets, they currently own, are worth less than 5% of the acquisition cost at the point of the disposition. The change of the calculation method did not have any material impact on their operating results for the year ended March 31, 2008.
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2) Income tax
In July, 2006, the Financial Accounting Standards Board (the “FASB”) released FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes—an Interpretation of FASB Statement 109 (“FIN 48”). The Interpretation clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We adopted FIN 48 in the year ended March 31, 2008.
We have not changed significant accounting policies reported in our annual report to Chief of the Kanto Local Finance Bureau on June 25, 2007 except the tangible fixed assets and income tax.
Change of Important Items Regarding the Basis of Preparation of Consolidated Financial Statements
In July, 2006, the Financial Accounting Standards Board (the “FASB”) released FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes—an Interpretation of FASB Statement 109 (“FIN 48”). The Interpretation clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.
Resulting from the adoption of FIN No.48 “Accounting for Uncertainty in Income Taxes” in this period, our retained earnings as of March 31, 2007 decreased by ¥987 million and our net income for this fiscal year also decreased ¥1,731 million.
32
Operating Segment Information
Yen in millions | ||||||
Year ended March 31, 2008 | Year ended March 31, 2007 | Increase or decrease | ||||
Net sales: | ||||||
Nidec Corporation | ¥189,253 | 15.3% | ¥180,596 | 16.9% | ¥8,657 | 4.8% |
Nidec Electronics (Thailand) Co., Ltd. | 128,193 | 10.3 | 89,240 | 8.3 | 38,953 | 43.6 |
Nidec (Zhejiang) Corporation | 24,937 | 2.0 | 20,173 | 1.9 | 4,764 | 23.6 |
Nidec (Dalian) Limited | 48,039 | 3.9 | 50,465 | 4.7 | (2,426) | (4.8) |
Nidec Singapore Pte. Ltd. | 45,699 | 3.7 | 50,224 | 4.7 | (4,525) | (9.0) |
Nidec (H.K.) Co., Ltd. | 43,657 | 3.5 | 39,082 | 3.7 | 4,575 | 11.7 |
Nidec Philippines Corporation | 46,482 | 3.7 | 48,227 | 4.5 | (1,745) | (3.6) |
Nidec Sankyo Corporation | 72,064 | 5.8 | 78,016 | 7.3 | (5,952) | (7.6) |
Nidec Copal Corporation | 70,373 | 5.7 | 71,468 | 6.7 | (1,095) | (1.5) |
Nidec Tosok Corporation | 26,062 | 2.1 | 22,667 | 2.1 | 3,395 | 15.0 |
Nidec Copal Electronics Corporation | 26,569 | 2.1 | 22,982 | 2.1 | 3,587 | 15.6 |
Japan Servo Co., Ltd. | 28,927 | 2.3 | - | - | 28,927 | - |
Nidec Shibaura Corporation | 20,919 | 1.7 | 19,585 | 1.8 | 1,334 | 6.8 |
Nidec-Shimpo Corporation | 13,618 | 1.1 | 13,196 | 1.2 | 422 | 3.2 |
Nidec Motors & Actuators | 36,636 | 3.0 | 9,079 | 0.8 | 27,557 | 303.5 |
Nidec Nissin Corporation | 11,673 | 0.9 | 11,657 | 1.1 | 16 | 0.1 |
All others | 407,049 | 32.9 | 343,023 | 32.2 | 64,026 | 18.7 |
Sub-total | 1,240,150 | 100.0% | 1,069,680 | 100.0% | 170,470 | 15.9 |
Adjustments and eliminations | (498,024) | - | (440,013) | - | (58,011) | - |
Consolidated total | ¥742,126 | - | ¥629,667 | - | ¥112,459 | 17.9% |
33
Yen in millions | ||||||
Year ended March 31, 2008 | Year ended March 31, 2007 | Increase or decrease | ||||
Operating income: | ||||||
Nidec Corporation | ¥13,980 | 18.2% | ¥11,241 | 17.9% | ¥2,739 | 24.4% |
Nidec Electronics (Thailand) Co., Ltd. | 12,606 | 16.4 | 10,822 | 17.2 | 1,784 | 16.5 |
Nidec (Zhejiang) Corporation | 1,040 | 1.4 | 275 | 0.4 | 765 | 278.2 |
Nidec (Dalian) Limited | 4,720 | 6.2 | 4,560 | 7.2 | 160 | 3.5 |
Nidec Singapore Pte. Ltd. | 1,231 | 1.6 | 1,545 | 2.5 | (314) | (20.3) |
Nidec (H.K.) Co., Ltd. | 576 | 0.8 | 386 | 0.6 | 190 | 49.2 |
Nidec Philippines Corporation | 4,129 | 5.4 | 4,407 | 7.0 | (278) | (6.3) |
Nidec Sankyo Corporation | 5,053 | 6.6 | 7,109 | 11.3 | (2,056) | (28.9) |
Nidec Copal Corporation | 3,415 | 4.5 | 4,056 | 6.4 | (641) | (15.8) |
Nidec Tosok Corporation | 1,643 | 2.1 | 1,430 | 2.3 | 213 | 14.9 |
Nidec Copal Electronics Corporation | 3,631 | 4.7 | 2,688 | 4.3 | 943 | 35.1 |
Japan Servo Co., Ltd. | 372 | 0.5 | - | - | 372 | - |
Nidec Shibaura Corporation | (97) | (0.1) | 136 | 0.2 | (233) | (171.3) |
Nidec-Shimpo Corporation | 1,182 | 1.5 | 1,412 | 2.2 | (230) | (16.3) |
Nidec Motors & Actuators | 555 | 0.7 | 59 | 0.1 | 496 | 840.7 |
Nidec Nissin Corporation | 610 | 0.8 | 545 | 0.9 | 65 | 11.9 |
All others | 21,997 | 28.7 | 12,251 | 19.5 | 9,746 | 79.6 |
Sub-total | 76,643 | 100.0 | 62,922 | 100.0 | 13,721 | 21.8 |
Adjustments and eliminations | 190 | - | 1,087 | - | (897) | - |
Consolidated total | ¥76,833 | - | ¥64,009 | - | ¥12,824 | 20.0% |
Notes :
1. The operating segments are the segments of Nidec for which separate financial information is available and for which operating profit or loss amounts are evaluated regularly by executive management in deciding how to allocate resources and in assessing performance.
2. Segmental profit or loss is determined using the accounting principles in the segment’s country of domicile.
3. Nidec acquired all of the voting rights of the Motors & Actuators business of Valeo S.A., France (“NMA”) in December 2006, and acquired majority of the voting rights of Japan Servo Co., Ltd. (“JSRV”) in April 2007.
34
Marketable securities and other securities investments
Marketable securities and other securities investments include debt and equity securities of which the aggregate fair value, gross unrealized gains and losses and cost are as follows:
Yen in millions | ||||
March 31, 2008 | ||||
Cost | Gross unrealized gains | Gross unrealized losses | Fair value | |
Available-for-sale | ||||
Equity securities | ¥6,239 | ¥7,663 | ¥291 | ¥13,611 |
Debt securities | - | - | - | - |
Held-to-maturity | 100 | - | - | 100 |
Total | ¥6,339 | ¥7,663 | ¥291 | ¥13,711 |
Securities not practicable to fair value | ||||
Equity securities | ¥1,562 |
Yen in millions | ||||
March 31, 2007 | ||||
Cost | Gross unrealized gains | Gross unrealized losses | Fair value | |
Available-for-sale | ||||
Equity securities | ¥7,361 | ¥12,794 | ¥37 | ¥20,118 |
Debt securities | - | - | - | - |
Total | ¥7,361 | ¥12,794 | ¥37 | ¥20,118 |
Securities not practicable to fair value | ||||
Equity securities | ¥1,687 |
35
BUSINESS COMBINATIONS
For the year ended March 31, 2008
The corporate name of which Nidec acquired the entity:
Japan Servo Co., Ltd. (“JSRV”)
The business of JSRV:
Productions and sales of small precision motors and the motor applied products
The purpose of the acquisition:
We intended to achieve an optimal blend of the technological expertise and production scale that the two companies have developed to date, particularly in the field of small precision motors.
The acquisition date:
April 27, 2007
Legal form of the business combination:
Stock acquisition by cash payment
The voting share which Nidec acquired:
As of April 27, 2007: 51.7%
As of March 31, 2008: 61.1%
The purchase price, the purchase shares and goodwill:
As of April 27, 2007:
The purchase price for the acquisition: ¥4,810 million (The direct cost ¥4,733 million, Indirect cost ¥77 million)
The shares which Nidec acquired: 18,204,466 shares.*
Goodwill: ¥572 million.
As of March 31, 2008:
The purchase price for the acquisition: ¥6,611 million (The direct cost ¥6,534 million, Indirect cost ¥77 million)
The shares which Nidec acquired: 21,492,466 shares.*
Goodwill: ¥1,610 million.
Note*: The shares were included 1,466 shares, what Nidec hold before the tender offer, respectively. The acquisition cost of the 1,466 shares was ¥0 million.
We have adopted SFAS No. 142, “Goodwill and Other Intangible Assets”. Goodwill represents the excess of purchase price and related costs over the fair value of net assets of acquired businesses. Under SFAS No.142, goodwill acquired in business combinations is not amortized but tested annually for impairment. If, between annual tests, an event, which would reduce the fair value below its carrying amount, occurs, we would recognize impairment.
36
Earnings per share
The Earnings per share information are as follows:
For the year ended March 31, 2008
Yen in millions | Thousands of shares | Yen | |
Net income | Weighted- average shares | Net income per share | |
Basic net income per share | ¥41,156 | 144,914 | ¥284.00 |
Effective of dilutive securities | - | 4,048 | |
Diluted net income per share | ¥41,156 | 148,962 | ¥276.29 |
For the year ended March 31, 2007
Yen in millions | Thousands of shares | Yen | |
Net income | Weighted- average shares | Net income per share | |
Basic net income per share | ¥39,932 | 144,665 | ¥276.03 |
Effective of dilutive securities | - | 4,196 | |
Diluted net income per share | ¥39,932 | 148,861 | ¥268.25 |
Subsequent events
Not applicable
37
Supplemental Information
(1) Quarterly Consolidated statements of income
Yen in millions
From January 1 to March 31 | Increase or | |||||
2008 | 2007 | decrease | ||||
Amount | % | Amount | % | Amount | % | |
Net sales | ¥183,138 | 100.0 | ¥170,526 | 100.0 | ¥12,612 | 7.4 |
Cost of products sold | 143,803 | 78.5 | 134,320 | 78.8 | 9,483 | 7.1 |
Selling, general and administrative expenses | 12,191 | 6.7 | 12,153 | 7.1 | 38 | 0.3 |
Research and development expenses | 7,461 | 4.1 | 9,121 | 5.3 | (1,660) | (18.2) |
Operating expenses | 163,455 | 89.3 | 155,594 | 91.2 | 7,861 | 5.1 |
Operating income | 19,683 | 10.7 | 14,932 | 8.8 | 4,751 | 31.8 |
Other income (expenses): | ||||||
Interest and dividend income | 817 | 757 | 60 | |||
Interest expenses | (520) | (671) | 151 | |||
Foreign exchange gain (loss), net | (11,342) | (69) | (11,273) | |||
Gain (loss) from marketable securities, net | 337 | 703 | (366) | |||
Other, net | 56 | (775) | 831 | |||
Total | (10,652) | (5.8) | (55) | (0.1) | (10,597) | - |
Income before income taxes | 9,031 | 4.9 | 14,877 | 8.7 | (5,846) | (39.3) |
Income taxes | (1,374) | (0.7) | (3,440) | (2.0) | 2,066 | (60.1) |
Income before minority interest and equity in earnings of affiliated companies | 7,657 | 4.2 | 11,437 | 6.7 | (3,780) | (33.1) |
Minority interest in income (loss) of consolidated subsidiaries | 850 | 0.5 | 1,543 | 0.9 | (693) | (44.9) |
Equity in net (income) loss of affiliated companies | (46) | (0.0) | 37 | 0.0 | (83) | (224.3) |
Net income | ¥6,853 | 3.7 | ¥9,857 | 5.8 | ¥(3,004) | (30.5) |
Yen in millions
Three months ended | ||||||
June 30, 2007 | September 30, 2007 | December 31, 2007 | ||||
Amount | % | Amount | % | Amount | % | |
Net sales | ¥172,174 | 100.0 | ¥190,527 | 100.0 | ¥196,287 | 100.0 |
Operating income | 15,106 | 8.8 | 18,970 | 10.0 | 23,074 | 11.8 |
Income before income taxes | 16,831 | 9.8 | 14,675 | 7.7 | 22,146 | 11.3 |
Net income | ¥11,116 | 6.5 | ¥9,241 | 4.9 | ¥13,946 | 7.1 |
38
(2) Business Segment Information
Yen in millions | |||||||||||||||
Year ended March 31, 2008 | |||||||||||||||
Small precision motors | Mid-size motors | Machinery | Electronic and Optical components | Other | Total | Eliminations/ Corporate | Consolidated | ||||||||
Net sales: | |||||||||||||||
Customers | ¥385,682 | ¥96,377 | ¥73,253 | ¥159,266 | ¥27,548 | ¥742,126 | ¥- | ¥742,126 | |||||||
Intersegment | 1,260 | 435 | 9,836 | 493 | 4,563 | 16,587 | (16,587) | - | |||||||
Total | 386,942 | 96,812 | 83,089 | 159,759 | 32,111 | 758,713 | (16,587) | 742,126 | |||||||
Operating expenses | 336,011 | 94,174 | 71,401 | 146,727 | 30,067 | 678,380 | (13,087) | 665,293 | |||||||
Operating income | ¥50,931 | ¥2,638 | ¥11,688 | ¥13,032 | ¥2,044 | ¥80,333 | ¥(3,500) | ¥76,833 |
Yen in millions | |||||||||||||||
Year ended March 31, 2007 | |||||||||||||||
Small precision motors | Mid-size motors | Machinery | Electronic and Optical components | Other | Total | Eliminations/ Corporate | Consolidated | ||||||||
Net sales: | |||||||||||||||
Customers | ¥317,981 | ¥57,389 | ¥82,944 | ¥144,651 | ¥26,702 | ¥629,667 | ¥- | ¥629,667 | |||||||
Intersegment | 316 | 149 | 11,661 | 443 | 4,117 | 16,686 | (16,686) | - | |||||||
Total | 318,297 | 57,538 | 94,605 | 145,094 | 30,819 | 646,353 | (16,686) | 629,667 | |||||||
Operating expenses | 276,290 | 56,976 | 79,022 | 137,034 | 28,143 | 577,465 | (11,807) | 565,658 | |||||||
Operating income | ¥42,007 | ¥562 | ¥15,583 | ¥8,060 | ¥2,676 | ¥68,888 | ¥(4,879) | ¥64,009 |
Notes:
1. Segments are classified based on similarities in product type, product attributes, and production and sales methods.
2. Major products of each business segment:
(1) Small precision motors: Small precision DC motors (including spindle motors for HDDs), small precision fans, brush motors, vibration motors
(2) Mid-size motors: Motors for home electric appliances, automobiles and industrial use
(3) Machinery: Power transmission drivers, semiconductor production equipment, precision equipment, FA equipment
(4) Electronic and Optical components: Electronic components, optical components
(5) Other: Automobile components, pivot assemblies, other components, service etc
39
(3) Sales by Geographic Segment
Yen in millions | ||||||
Year ended March 31, 2008 | Year ended March 31, 2007 | Increase or decrease | ||||
Amount | % | Amount | % | Amount | % | |
Japan | ¥371,705 | 50.1 | ¥341,642 | 54.3 | ¥30,063 | 8.8 |
America | 19,513 | 2.6 | 10,747 | 1.7 | 8,766 | 81.6 |
Singapore | 57,635 | 7.8 | 59,488 | 9.4 | (1,853) | (3.1) |
Thailand | 109,994 | 14.8 | 80,579 | 12.8 | 29,415 | 36.5 |
Philippines | 13,374 | 1.8 | 12,929 | 2.1 | 445 | 3.4 |
China | 45,398 | 6.1 | 36,884 | 5.9 | 8,514 | 23.1 |
Other | 124,507 | 16.8 | 87,398 | 13.8 | 37,109 | 42.5 |
Total | ¥742,126 | 100.0 | ¥629,667 | 100.0 | ¥112,459 | 17.9 |
Note: The sales are classified by geographic areas of the seller and the figures exclude intra-segment transactions.
(4) Sales by Region
Yen in millions | ||||||
Year ended March 31, 2008 | Year ended March 31, 2007 | Increase or decrease | ||||
Amount | % | Amount | % | Amount | % | |
North America | ¥31,086 | 4.2 | ¥21,110 | 3.3 | ¥9,976 | 47.3 |
Asia | 442,576 | 59.7 | 385,766 | 61.3 | 56,810 | 14.7 |
Other | 53,635 | 7.2 | 28,399 | 4.5 | 25,236 | 88.9 |
Overseas sales total | 527,297 | 71.1 | 435,275 | 69.1 | 92,022 | 21.1 |
Japan | 214,829 | 28.9 | 194,392 | 30.9 | 20,437 | 10.5 |
Consolidated total | ¥742,126 | 100.0 | ¥629,667 | 100.0 | ¥112,459 | 17.9 |
Note: The sales by region are classified by geographic areas of the buyer and the figures exclude intra-segment transactions.
40
5. NON-CONSOLIDATED FINANCIAL STATEMENTS
(1) Non-Consolidated Balance Sheets
Assets | ||||||
Yen in millions | ||||||
March 31 | Increase or decrease | |||||
2008 | 2007 | |||||
Amount | % | Amount | % | Amount | ||
Current assets: | ||||||
Cash and bank deposits | ¥25,348 | ¥12,567 | ¥12,781 | |||
Notes receivable | 612 | 868 | (256) | |||
Accounts receivable | 38,937 | 46,388 | (7,451) | |||
Finished products | 5,102 | 5,034 | 68 | |||
Raw materials | 71 | 130 | (59) | |||
Work in process | 551 | 206 | 345 | |||
Supplies | 135 | 122 | 13 | |||
Prepaid expenses | 508 | 456 | 52 | |||
Deferred income taxes | 1,894 | 2,115 | (221) | |||
Short-term loans to affiliated companies | 40,813 | 51,831 | (11,018) | |||
Other receivables | 5,023 | 6,914 | (1,891) | |||
Other current assets | 98 | 161 | (63) | |||
Allowance for doubtful accounts | (644) | (1,581) | 937 | |||
Total current assets | 118,448 | 32.4 | 125,211 | 35.0 | (6,763) | |
Fixed assets: | ||||||
Tangible assets | 21,795 | 6.0 | 22,055 | 6.2 | (260) | |
Buildings | 9,173 | 9,519 | (346) | |||
Structures | 208 | 235 | (27) | |||
Machinery and equipment | 999 | 1,050 | (51) | |||
Vehicles and delivery equipment | 4 | 5 | (1) | |||
Tools, furniture and fixtures | 1,413 | 1,567 | (154) | |||
Land | 9,484 | 9,484 | - | |||
Construction in progress | 514 | 195 | 319 | |||
Intangible assets | 799 | 0.2 | 145 | 0.0 | 654 | |
Patents | 3 | 1 | 2 | |||
Software | 94 | 102 | (8) | |||
Software in progress | 652 | - | 652 | |||
Other intangible assets | 50 | 42 | 8 | |||
Investments and other assets | 224,671 | 61.4 | 210,374 | 58.8 | 14,297 | |
Investment securities | 4,609 | 5,833 | (1,224) | |||
Investment securities of affiliated companies | 186,412 | 171,754 | 14,658 | |||
Investments other than securities | 3 | 3 | - | |||
Investment in affiliated companies | 30,225 | 27,953 | 2,272 | |||
Long-term loans to affiliated companies | 340 | 2,482 | (2,142) | |||
Bankruptcy and other claims | 445 | 492 | (47) | |||
Long-term prepaid expenses | 106 | 290 | (184) | |||
Deferred income taxes | 2,565 | 1,823 | 742 | |||
Other investments | 413 | 270 | 143 | |||
Allowance for doubtful accounts | (447) | (526) | 79 | |||
Total fixed assets | 247,265 | 67.6 | 232,574 | 65.0 | 14,691 | |
Total assets | ¥365,713 | 100.0 | ¥357,785 | 100.0 | ¥7,928 |
41
Liabilities and Net Assets | ||||||
Yen in millions | ||||||
March 31 | Increase or decrease | |||||
2008 | 2007 | |||||
Amount | % | Amount | % | Amount | ||
Current liabilities: | ||||||
Notes payable | ¥111 | ¥73 | ¥38 | |||
Accounts payable | 23,249 | 28,938 | (5,689) | |||
Short-term borrowings | 64,110 | 67,071 | (2,961) | |||
Current portion of long-term debt | - | 600 | (600) | |||
Current portion of bonds | 27,089 | - | 27,089 | |||
Accrued liabilities | 4,612 | 3,510 | 1,102 | |||
Accrued expenses | 650 | 672 | (22) | |||
Income taxes payable | 341 | 4,508 | (4,167) | |||
Advances received | 1 | 6 | (5) | |||
Deposits received | 17,136 | 11,478 | 5,658 | |||
Deferred credit | 773 | 636 | 137 | |||
Accrued bonuses to employees | 1,604 | 1,375 | 229 | |||
Accrued bonuses to directors | - | 180 | (180) | |||
Notes payable for construction | 4 | 43 | (39) | |||
Other current liabilities | 29 | 20 | 9 | |||
Total current liabilities | 139,709 | 38.2 | 119,110 | 33.3 | 20,599 | |
Non-current liabilities: | ||||||
Corporate bonds | - | 27,251 | (27,251) | |||
Accrued severance and benefit costs | 1,205 | 1,263 | (58) | |||
Other non-current liabilities | 1,442 | 1,156 | 286 | |||
Total non-current liabilities | 2,647 | 0.7 | 29,670 | 8.3 | (27,023) | |
Total liabilities | 142,356 | 38.9 | 148,780 | 41.6 | (6,424) | |
Shareholders’ equity: | ||||||
Common stock | 66,248 | 18.1 | 65,868 | 18.4 | 380 | |
Additional paid-in capital | 70,469 | 19.3 | 70,089 | 19.6 | 380 | |
Capital reserve | 70,469 | 70,089 | 380 | |||
Retained earnings | 86,697 | 23.7 | 72,420 | 20.3 | 14,277 | |
Legal reserve | 721 | 721 | - | |||
General reserve | 63,650 | 56,150 | 7,500 | |||
Earned surplus carried forward | 22,326 | 15,549 | 6,777 | |||
Treasury stock | (281) | (0.1) | (262) | (0.1) 58.2 | (19) | |
Total shareholders’ equity | 223,133 | 61.0 | 208,115 | 15,018 | ||
Valuation and translation adjustments: | ||||||
Net unrealized loss on securities | 863 | 0.3 | 1,529 | 0.4 | (666) | |
Land revaluation reserve | (639) | (0.2) | (639) | (0.2) | - | |
Total valuation and translation adjustments | 224 | 0.1 | 890 | 0.2 | (666) | |
Total net assets | 223,357 | 61.1 | 209,005 | 58.4 | 14,352 | |
Total liabilities and net assets | ¥365,713 | 100.0 | ¥357,785 | 100.0 | 7,928 |
42
(2) Non-Consolidated Statements of Income
Yen in millions | ||||||
Year ended March 31 | Increase or decrease | |||||
2008 | 2007 | |||||
Amount | % | Amount | % | Amount | % | |
Net sales | ¥189,253 | 100.0 | ¥180,596 | 100.0 | ¥8,657 | 4.8 |
Cost of sales | 160,356 | 84.7 | 153,973 | 85.3 | 6,383 | 4.1 |
Gross profit | 28,897 | 15.3 | 26,623 | 14.7 | 2,274 | 8.5 |
Selling, general and administrative expenses | 14,917 | 7.9 | 15,382 | 8.5 | (465) | (3.0) |
Operating income | 13,980 | 7.4 | 11,241 | 6.2 | 2,739 | 24.4 |
Other income | 18,024 | 9.6 | 16,304 | 9.1 | 1,720 | 10.5 |
Interest income | 2,414 | 1,873 | 541 | |||
Dividend income | 14,550 | 12,337 | 2,213 | |||
Foreign exchange gains, net | - | 1,062 | (1,062) | |||
Other | 1,060 | 1,032 | 28 | |||
Other expenses | 10,697 | 5.7 | 2,339 | 1.3 | 8,358 | 357.3 |
Interest expenses | 1,596 | 1,025 | 571 | |||
Sales discount | 168 | 356 | (188) | |||
Provision of allowance for doubtful accounts | - | 698 | (698) | |||
Foreign exchange loss, net | 8,453 | - | 8,453 | |||
Other | 480 | 260 | 220 | |||
Recurring profit | 21,307 | 11.3 | 25,206 | 14.0 | (3,899) | (15.5) |
Extraordinary gains | 4,716 | 2.5 | 593 | 0.3 | 4,123 | 695.3 |
Gain from sale of fixed assets | 5 | 4 | 1 | |||
Gain from sale of marketable securities | 2 | 589 | (587) | |||
Gain from reversal of allowance for doubtful accounts | 969 | - | 969 | |||
Technical income | 3,247 | - | 3,247 | |||
Gain on sale of investments in affiliated companies | 493 | - | 493 | |||
Extraordinary losses | 434 | 0.3 | 2,467 | 1.4 | (2,033) | (82.4) |
Loss on disposal of property, plant and equipment | 30 | 54 | (24) | |||
Loss on write-down of investment securities | 281 | 3 | 278 | |||
Loss on write-down of investment in affiliated companies | - | 1,118 | (1,118) | |||
Loss on support of affiliated companies | - | 947 | (947) | |||
Penalty tax (Previous years) | - | 308 | (308) | |||
Loss on sale of investments in affiliated companies | 120 | - | 120 | |||
Loss on impairment | 3 | 37 | (34) | |||
Income before income taxes | 25,589 | 13.5 | 23,332 | 12.9 | 2,257 | 9.7 |
Income taxes (Current) | 4,140 | 2.1 | 5,996 | 3.3 | (1,856) | |
Income taxes (Previous years) | - | - | 2,850 | 1.6 | (2,850) | |
Income taxes (Deferred) | (70) | (0.0) | (684) | (0.4) | 614 | |
Net income | ¥21,519 | 11.4 | ¥15,170 | 8.4 | ¥6,349 | 41.9 |
43
(3) Non-Consolidated Statements of Shareholders' Equity
For the fiscal year ended March 31, 2008
Yen in millions | ||||||||||||||
Shareholders' equity | ||||||||||||||
Common stock | Additional paid-in capital | Retained earnings | Treasury stock | Total shareholders' equity | ||||||||||
Capital reserve | Legal reserve | Other retained earnings | ||||||||||||
General reserve | Earned surplus carried forward | |||||||||||||
Balance at March 31, 2007 | ¥65,868 | ¥70,089 | ¥721 | ¥56,150 | ¥15,549 | ¥(262) | ¥208,115 | |||||||
Issuance of new shares | 380 | 380 | 760 | |||||||||||
Cash dividends | (7,242) | (7,242) | ||||||||||||
General reserve | 7,500 | (7,500) | - | |||||||||||
Net income | 21,519 | 21,519 | ||||||||||||
Purchase of treasury stock | (19) | (19) | ||||||||||||
Net increase / decrease during the term | - | |||||||||||||
Total increase / decrease | 380 | 380 | - | 7,500 | 6,777 | (19) | 15,018 | |||||||
Balance at March 31, 2008 | ¥66,248 | ¥70,469 | ¥721 | ¥63,650 | ¥22,326 | ¥(281) | ¥223,133 |
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Yen in millions | ||||||
Valuation and translation adjustments | ||||||
Net unrealized loss on securities | Land revaluation reserve | Total net assets | ||||
Balance at March 31, 2007 | ¥1,529 | ¥(639) | ¥209,005 | |||
Issuance of new shares | 760 | |||||
Cash dividends | (7,242) | |||||
General reserve | - | |||||
Net income | 21,519 | |||||
Purchase of treasury stock | (19) | |||||
Net increase / decrease during the term | (666) | (666) | ||||
Total increase / decrease | (666) | - | 14,352 | |||
Balance at March 31, 2008 | ¥863 | ¥(639) | ¥223,357 |
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For the fiscal year ended March 31, 2007
Yen in millions | ||||||||||||||
Shareholders' equity | ||||||||||||||
Common stock | Additional paid-in capital | Retained earnings | Treasury stock | Total shareholders' equity | ||||||||||
Capital reserve | Legal reserve | Other retained earnings | ||||||||||||
General reserve | Earned surplus carried forward | |||||||||||||
Balance at March 31, 2006 | ¥65,649 | ¥69,870 | ¥721 | ¥41,650 | ¥20,804 | ¥(237) | ¥198,457 | |||||||
Issuance of new shares | 219 | 219 | 438 | |||||||||||
Cash dividends (Note) | (2,892) | (2,892) | ||||||||||||
Cash dividends | (2,893) | (2,893) | ||||||||||||
Bonuses to directors (Note) | (180) | (180) | ||||||||||||
General reserve (Note) | 14,500 | (14,500) | - | |||||||||||
Net income | 15,170 | 15,170 | ||||||||||||
Purchase of treasury stock | (25) | (25) | ||||||||||||
Net increase / decrease during the term | 40 | 40 | ||||||||||||
Total increase / decrease | 219 | 219 | - | 14,500 | (5,255) | (25) | 9,658 | |||||||
Balance at March 31, 2007 | ¥65,868 | ¥70,089 | ¥721 | ¥56,150 | ¥15,549 | ¥(262) | ¥208,115 |
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Yen in millions | ||||||
Valuation and translation adjustments | ||||||
Net unrealized loss on securities | Land revaluation reserve | Total net assets | ||||
Balance at March 31, 2006 | ¥2,369 | ¥(599) | ¥200,227 | |||
Issuance of new shares | 438 | |||||
Cash dividends (Note) | (2,892) | |||||
Cash dividends | (2,893) | |||||
Bonuses to directors (Note) | (180) | |||||
General reserve (Note) | - | |||||
Net income | 15,170 | |||||
Purchase of treasury stock | (25) | |||||
Net increase / decrease during the term | (840) | (40) | (840) | |||
Total increase / decrease | (840) | (40) | 8,778 | |||
Balance at March 31, 2007 | ¥1,529 | ¥(639) | ¥209,005 |
Note: Appropriation Retained Earnings under the resolutions at the annual general meeting of shareholders on June, 2006.
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Critical accounting policies
1. Securities:
(1) Investments in subsidiaries and affiliated companies:
Valuation at cost, with cost determined using the moving average method
(2) Other securities with fair value:
Stated at fair value based on market price as of March 31, 2008. (Both unrealized gains and losses are reported as net unrealized loss on securities. The cost of other securities sold is computed using the moving average method.)
(3) Other securities not practicable to fair value:
Stated at cost determined using the moving average method.
2. Derivatives:
Stated at fair value
3. Inventories:
(1) Finished products, raw materials, work in process:
Stated at the lower of cost or market method with cost determined using the moving average method.
(2) Supplies:
Stated at the lower of cost or market method with cost determined using the last purchase price method.
4. Method of depreciation of fixed assets:
(1) Tangible fixed assets: Declining balance method
Stated based on the declining-balance method except for buildings purchased after April 1, 1998, for which the straight-line method is applied. Major economic lives of tangible fixed assets are as follows:
Buildings and structures 3 to 50 years
Machinery and equipment 2 to 9 years
Change in accounting policy
Due to the amendment of Japanese Corporate Tax Law in March 30, 2007, the changed was in its method of depreciation of tangible fixed assets on or after April 1, 2007 to the method at rate prescribed in the amended corporate tax law.
The changes in accounting for depreciation did not have a material impact on the statements of income.
Additional information
Tangible fixed assets purchased on or before March 31, 2007 are depreciated in five years based on the straight line method from the fiscal year after the assets are depreciated to their depreciation limits.
The changes in accounting for depreciation did not have a material impact on the statements of income.
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(2) Intangible fixed assets:
Straight-line method
With respect to software for internal use, amortization is computed on the straight-line method over the expected useful life (mainly 5 years).
5. Accounting for deferred assets:
Recognized as expenses
6. Translation of foreign currencies:
Assets and liabilities denominated in foreign currencies are translated at the exchange rate on March 31, 2008, with the resulting difference included in gains or losses.
7. Accounting for allowances:
(1) Allowances for doubtful accounts:
Appropriate allowances are made for general receivables based on the historical rate of credit loss experienced. S pecific doubtful accounts are investigated on an individual basis, and the amounts of estimated losses are provided.
(2) Accrued bonuses to employees:
E stimated amount for payment to employees ..
(3) Accrued severance and benefit costs:
Provision of employee retirement and severance benefits are stated on the projected benefit obligation less pension plan assets at the end of the fiscal year.
Unrecognized actuarial gain or loss is being recognized over average remaining years of service (within 5 years) at the end of each fiscal year beginning from the next fiscal year of its accrual.
8. Leases:
Financial leases other than those that are deemed to transfer the ownership of the leased assets to the lessees are accounted for by a method similar to that applicable to operating leases.
9. Hedge activities:
(1) Hedge accounting policy:
Assets and liabilities denominated in foreign currencies with foreign currency forward contracts are translated at forward contract rates.
(2) Method and object of hedge:
(a) Method of hedge: Forward exchange contracts
(b) Object of hedge: E xposure to fluctuations in fair value and the fixed cash flow, such as foreign currency receivables.
(3) Hedge policy:
In order to reduce market risk exposures from fluctuations in foreign exchange rate and interest rates, Nidec Corporation has a comprehensive and flexible stance towards hedging.
(4) Evaluating effectiveness of hedging activities:
With regard to forward exchange contracts, Nidec omitt ed evaluating the effectiveness if the denominated currency, the notional amount and the contract period are the same.
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10. Other important items regarding the basis of preparation of financial statements:
(1) Accounting for consumption taxes:
Computed by the net of tax method
(2) Application of consolidated taxation system:
C onsolidated taxation system
Additional information
Accrued bonuses to directors and auditors
As a result of adoption of the annual salary system, accrued bonuses for the Company's directors and
auditors have not been reported in this financial statements for the year ended March 31, 2008.
Change of representation of accounts in the non-consolidated financial statement
Non-Consolidated Balance Sheets
“Software in progress” which had been included in “Other intangible assets” until the previous year is independently stated as of the current year as they have importance of the total amount of assets for the current year. The amount at the end of the previous year was ¥0 million for “Software in progress”.
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Notes to Non-Consolidated Balance Sheets
1. Treatment of matured notes at the end of fiscal year
As of March 31, 2008
Not applicable
As of March 31, 2007
As the financial institutions were not operated on March 31, 2007 that was the regular weekend day off, ¥74 million of matured notes receivable were not settled and included in notes receivables on the balance sheet.
2. Depreciation amount deducted from acquisition cost of tangible fixed assets
Yen in millions | ||
As of March 31, 2008 | As of March 31, 2007 | |
Buildings | ¥26 | ¥26 |
3. Accumulated depreciation of tangible fixed assets
Yen in millions | ||
As of March 31, 2008 | As of March 31, 2007 | |
Accumulated depreciation of tangible fixed assets | ¥14,989 | ¥14,033 |
4. Deposits received included in the Cash Management System (CMS)
Yen in millions | ||
As of March 31, 2008 | As of March 31, 2007 | |
Deposits received | ¥16,998 | ¥11,235 |
5. Loan commitment agreements
The company concluded master agreements for CMS that have set out the availability granted among companies. The remaining portion of credit line which has not been loaned to the company under these agreements is as follows.
Yen in millions | ||
As of March 31, 2008 | As of March 31, 2007 | |
Total availability granted by CMS | ¥37,252 | ¥38,293 |
Used portion of credit line | 18,676 | 27,864 |
Remaining portion of credit line | ¥18,576 | ¥10,429 |
Number of subsidiaries | 15 companies | 14 companies |
6. Contingent liabilities
As of March 31, 2008
Nidec guarantees the debt of Nidec Motors & Actuators (Spain),S.A. such as letter of comfort.
Affiliated company | Amount | Contents |
Nidec Motors & Actuators(Spain),S.A. | ¥295 million | Bank loan payable |
As of March 31, 2007
Not applicable
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Note to Non-Consolidated Statements of Income
1. Research and development expenses
Yen in millions | |||
For the year ended March, 31 | |||
2008 | 2007 | ||
Research and development expenses included in SG&A expenses and cost of sales | ¥15,604 | ¥20,171 |
2. Loss on support of affiliated companies
For the year ended March 31, 2008
Not applicable
For the year ended March 31, 2007
Loss on support of affiliated company is debt forgiveness to short-term loans by CMS of Nidec Power Motor Corporation.
3. Loss on impairment
For the year ended March 31, 2008
No remarks due to materiality
For the year ended March 31, 2007
Grouping unit of assets for impairment test is business entity basis. But regarding idle assets which are unforeseeable to use in the future, they are grouped individually.
Carrying amounts of idle assets, which are from closing of factories, are deducted to their recoverable value. The deducted amounts are recognized as “loss of impairment” (¥37 million of extraordinary losses).
The details are as follows:
Assets | Address | Loss of impairment |
Land | Kyotango, Kyoto | ¥37 million |
Recoverable value is calculated based on amount of available-for-sale. Market value is evaluated based on real-estate appraising and assessed value of fixed assets. Assets are unforeseeable to use in the future are zero.
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Note to Statement of Shareholders' Equity
For the year ended March 31, 2008
1. Type and number of issued and outstanding
(Unit: shares) | |||||||
Number of shares as of March 31, 2007 | Increase during the fiscal year | Decrease during the fiscal year | Number of shares as of March 31, 2008 | ||||
Common stock (Note) | 144,780,492 | 207,000 | - | 144,987,492 |
Note: Increase in the number of 207,000 shares of common stock is due to execution of stock option.
2. Type and number of treasury stock
(Unit: shares) | |||||||
Number of shares as of March 31, 2007 | Increase during the fiscal year | Decrease during the fiscal year | Number of shares as of March 31, 2008 | ||||
Common stock (Note) | 44,966 | 2,529 | - | 47,495 |
Note: Increase in the number of 2,529 shares of common stock held in treasury is due to repurchase of odd-lot shares.
3. New share and treasury stock acquisition rights
Breakdown of new share acquisition rights | Purpose of new share acquisition rights and stock category | New share acquisition rights by purpose (Number of shares) | Value as of March 31, 2008 (Yen in millions) | |||
March 31, 2007 | Increase during the fiscal year | Decrease during the fiscal year | March 31, 2008 | |||
Stock option (Note) | Common stock | 232,000 | - | 232,000 | - | - |
The yen denominated convertible bonds with stock acquisition rights due 2008 | Common stock | 4,022,040 | - | - | 4,022,040 | 27,000 |
Note: Decrease in the number of 232,000 shares of stock option is due to execution and invalid of the rights.
4. Dividends
(1) Cash dividends paid
Date of resolution | Type of shares | Amount of dividend payment | Dividends per share | Record date | Effective date | ||||
Board of Directors Meeting on May 26, 2007 | Common stock | ¥3,618 million | ¥25.00 | March 31, 2007 | June 8, 2007 | ||||
Board of Directors Meeting on October 26, 2007 | Common stock | ¥3,624 million | ¥25.00 | September 30, 2007 | December 7, 2007 |
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(2) Dividends which have effective date is the next fiscal year
The declaration of dividends are as follows :
Date of resolution | Type of shares | Amount of dividend payment | Source of dividends | Dividends per share | Record date | Effective date | |||||
Board of Directors Meeting on May 26, 2008 | Common stock | ¥4,348 million | Retained earnings | ¥30.00 | March 31, 2008 | June 10, 2008 |
For the year ended March 31, 2007
1. Type and number of issued and outstanding
(Unit: shares) | |||||||
Number of shares as of March 31, 2006 | Increase during the fiscal year | Decrease during the fiscal year | Number of shares as of March 31, 2007 | ||||
Common stock (Note) | 144,661,292 | 119,200 | - | 144,780,492 |
Note: Increase in the number of 119,200 shares of common stock is due to execution of stock option.
2. Type and number of treasury stock
(Unit: shares) | |||||||
Number of shares as of March 31, 2006 | Increase during the fiscal year | Decrease during the fiscal year | Number of shares as of March 31, 2007 | ||||
Common stock (Note) | 42,110 | 2,856 | - | 44,966 |
Note: Increase in the number of 2,856 shares of common stocks held in treasury is due to repurchase of odd-lot shares.
3. New share and treasury stock acquisition rights
Breakdown of new share acquisition rights | Purpose of new share acquisition rights and stock category | New share acquisition rights by purpose (Number of shares) | Value as of March 31, 2007 (Yen in millions) | |||
March 31, 2006 | Increase during the fiscal year | Decrease during the fiscal year | March 31, 2007 | |||
Stock option (Note) | Common stock | 351,200 | - | 119,200 | 232,000 | 853 |
The yen denominated convertible bonds with stock acquisition rights due 2008 | Common stock | 4,022,040 | - | - | 4,022,040 | 27,000 |
Note: Decrease in the number of 119,200 shares of stock option is due to execution of the rights.
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4. Dividends
(1) Cash dividends paid
Date of resolution | Type of shares | Amount of dividend payment | Dividends per share | Record date | Effective date | ||||
Ordinary General Meeting of Shareholders held on June 22, 2006 | Common stock | ¥2,892 million | ¥20.00 | March 31, 2006 | June 23, 2006 | ||||
Board of Directors Meeting on October 27, 2006 | Common stock | ¥2,893 million | ¥20.00 | September 30, 2006 | December 8, 2006 |
(2) Dividends which have effective date is the next fiscal year
Date of resolution | Type of shares | Amount of dividend payment | Source of dividends | Dividends per share | Record date | Effective date | |||||
Board of Directors Meeting on May 26, 2007 | Common stock | ¥3,618 million | Retained earnings | ¥25.00 | March 31, 2007 | June 8, 2007 |
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Notes to Marketable Securities
As of March 31, 2008
Investments in subsidiaries and affiliated companies available for fair value
Yen in millions | |||||
Carrying amount | Fair value | Difference | |||
Investment in subsidiaries | ¥128,037 | ¥197,474 | ¥69,437 | ||
Investment in affiliated companies | - | - | - | ||
Total | ¥128,037 | ¥197,474 | ¥69,437 |
As of March 31, 2007
Investments in subsidiaries and affiliated companies available for fair value
Yen in millions | |||||
Carrying amount | Fair value | Difference | |||
Investment in subsidiaries | ¥117,314 | ¥198,104 | ¥80,790 | ||
Investment in affiliated companies | - | - | - | ||
Total | ¥117,314 | ¥198,104 | ¥80,790 |
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Notes to Accounting for income tax
1. Details for deferred tax assets and liabilities
Yen in millions | ||
Year ended March 31 | ||
2008 | 2007 | |
Deferred tax assets (current): | ||
Disallowed provisions for bad debts | ¥261 | ¥658 |
Disallowed provisions for accrued bonus | 730 | 702 |
Disallowed unpaid business tax | 327 | 423 |
Write-down of inventories | 153 | 41 |
Disallowed accrued expense | 115 | 119 |
Allowed deferred credit | 302 | 246 |
Others | 32 | 47 |
Subtotal | 1,920 | 2,236 |
Valuation allowance | (26) | (121) |
Total | 1,894 | 2,115 |
Deferred tax assets, net (current) | 1,894 | 2,115 |
Deferred tax assets (non-current): | ||
Valuation loss on investment securities | 87 | 88 |
Disallowed depreciation | 211 | 219 |
Disallowed loss on retirement of fixed assets | 318 | 322 |
Accrued severance and benefit costs | 514 | 530 |
Accrued retirement benefit to directors | 9 | 34 |
Foreign tax credit to be unused | 1,034 | 1,294 |
Allowed long-term deferred credit | 559 | 410 |
Impairment loss of fixed assets | 167 | 164 |
Loss on write-down of investments in subsidiaries | 458 | 458 |
Disallowed advances paid | 345 | - |
Others | 9 | 10 |
Subtotal | 3,711 | 3,529 |
Valuation allowance | (547) | (656) |
Total | 3,164 | 2,873 |
Deferred tax liabilities (non-current): | ||
Net unrealized loss on securities | 599 | 1,050 |
Total | 599 | 1,050 |
Deferred tax assets, net (non-current) | ¥2,565 | ¥1,823 |
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2. Details for the difference between statutory rate of taxation and obligation rate based on the tax effect accounting
Year ended March 31 | ||
2008 | 2007 | |
Statutory rate of taxation | 41.0% | 41.0% |
(Adjustments) | ||
Disallowed expenses such as entertainment | 0.5 | 2.4 |
Disallowed profit such as dividend income | (5.2) | (4.8) |
Foreign tax credit | (16.7) | (16.8) |
Inhabitant tax per capita levy | 0.1 | 0.1 |
Additional tax related to transfer price transaction | - | 11.3 |
Valuation allowance | (0.8) | 2.3 |
Others | (3.0) | (0.5) |
Obligation rate based on the tax effect accounting | 15.9% | 35.0% |
Subsequent event
Not applicable
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6. CHANGE IN DIRECTOR
Please refer to the “Nidec to Introduce Executive Officer System” announced on Apr. 23, 2008 for “Change in director”.
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