Annual Report 2008 (PDF:5.5MB)

Annual Report 2008 (PDF:5.5MB)
For the year ended March 31, 2008
Performance Enhanced
Annual Report 2008
Contents
01
03
Financial Highlights
05
Message to Our Shareholders
07
Interview with the President
12
Special Feature: Towards the Realization of Visions for 2012
21
Product Group Outline
23
Fiscal 2007 Review by Product Group
27
R&D and Intellectual Property
29
Corporate Social Responsibility (CSR)
31
Corporate Governance
33
Risk Factors
35
Directors, Corporate Auditors and Executive Officers
36
Financial Section
66
Investor Information
Sharp Annual Report 2008
Profile
Since its foundation in 1912, Sharp has devised a string of
Japan-first and world-first products based on the spirit to
“make products that others want to imitate.” Over the
years, Sharp has fashioned a name as a global electronics
manufacturer with a focus on consumer and information
products such as LCD TVs and mobile phones and on
electronic components such as LCDs and solar cells.
A key competitive advantage held by Sharp is its “Spiral
Strategy” that involves maximizing synergies to propel the
development of distinctive products infused with unique
devices. Through further innovation of this integrated
business model, Sharp aims to be a “valued one-of-a-kind
company” that offers new lifestyles and brings new levels
of satisfaction to people everywhere.
02
Financial Highlights
Sharp Corporation and Consolidated Subsidiaries
Years Ended March 31
Yen
(millions)
2004
Net Sales .............................................................
2005
2006
U.S. Dollars
(thousands)
2007
2008
2008
¥ 2,257,273 ¥ 2,539,859 ¥ 2,797,109 ¥ 3,127,771 ¥ 3,417,736 $ 34,522,586
Domestic sales ...............................................
1,143,548
1,329,711
1,397,081
1,526,938
1,590,747
16,068,152
Overseas sales................................................
1,113,725
1,210,148
1,400,028
1,600,833
1,826,989
18,454,434
Operating Income ................................................
121,670
151,020
163,710
186,531
183,692
1,855,475
Income Before Income Taxes and
Minority Interests................................................
102,720
128,184
140,018
158,295
162,240
1,638,788
Net Income ..........................................................
60,715
76,845
88,671
101,717
101,922
1,029,515
Net Assets ...........................................................
943,532
1,004,326
1,098,910
1,192,205
1,241,868
12,544,121
Total Assets .........................................................
2,150,250
2,385,026
2,560,299
2,968,810
3,073,207
31,042,495
Capital Investment ...............................................
248,178
243,388
238,839
314,301
344,262
3,477,394
R&D Expenditures................................................
138,786
148,128
154,362
189,852
196,186
1,981,677
Net income .....................................................
55.37
70.04
80.85
93.25
93.17
0.94
Cash dividends ...............................................
18.00
20.00
22.00
26.00
28.00
0.28
Net assets.......................................................
864.77
920.09
1,006.91
1,084.76
1,119.09
11.30
Return on Equity (ROE) ........................................
6.6%
7.9%
8.4%
8.9%
8.4%
—
Number of Shares Outstanding
(thousands of shares).........................................
1,090,672
1,091,075
1,090,901
1,090,678
1,100,525
—
Number of Employees..........................................
46,164
46,751
46,872
48,927
53,708
—
Per Share of Common Stock (yen and U.S. dollars)
(Notes) 1. The translation into U.S. dollar figures is based on ¥99=U.S.$1.00, the approximate exchange rate prevailing on March 31, 2008. All dollar figures herein
refer to U.S. currency.
2. Effective for the year ended March 31, 2007, net assets are presented based on the new accounting standard, “Accounting Standard for Presentation of
Net Assets in the Balance Sheet” (Accounting Standards Board Statement No. 5) and the “Implementation Guidance for the Accounting Standard for
Presentation of Net Assets in the Balance Sheet” (Financial Standards Implementation Guidance No. 8). Prior year figures have not been restated.
3. The amount of properties for lease is included in capital investment.
4. The computation of net income per share is based on the weighted average number of shares of common stock outstanding during each fiscal year.
5. The number of shares outstanding is net of treasury stock.
Forward-Looking Statements
This annual report contains certain statements describing the future plans, strategies and performance of Sharp Corporation and its consolidated subsidiaries
(hereinafter “Sharp”). These statements are not based on historical or present fact, but rather assumptions and estimates based on information currently available.
These plans, strategies and performance are subject to known and unknown risks, uncertainties and other factors. Sharp’s actual performance, business activities
and financial position may differ materially from the assumptions and estimates supplied on account of such risks, uncertainties and other factors. Sharp is under no
obligation to update these forward-looking statements in light of new information, future events or any other factors. The risks, uncertainties and other factors that
could affect actual results include, but are not limited to:
(1) The economic situation in which Sharp operates
(2) Sudden, rapid fluctuations in demand for Sharp’s products and services, as well as intense price competition
(3) Changes in exchange rates (particularly between the yen and the U.S. dollar, the euro and other currencies)
(4) Sharp’s ability to respond to rapid technical changes and changing consumer preferences with timely and cost-effective introductions of new products and services
(5) Regulations such as trade restrictions in other countries
(6) Litigation and other legal proceedings against Sharp
03
Sharp Annual Report 2008
Net Sales
Operating Income
(billions of yen)
Net Income
(billions of yen)
3,417
3,500
(%)
12
200
8
186 183
3,127
3,000
101 101
163
2,797
2,539
(%)
(billions of yen)
120
151
150
9
88
90
6
2,500
2,257
76
121
2,000
100
6
60
50
3
30
0
0
60
4
1,500
1,000
2
500
0
0
04 05 06 07 08
04 05 06 07 08
Ratio to net sales
(billions of yen)
(billions of yen)
1,500
350
Ratio to net sales
R&D Expenditures
Capital Investment
Net Assets*
0
04 05 06 07 08
(billions of yen)
344
(%)
196
200
12
189
314
1,241
1,192
1,200
300
1,098
1,004
250
248
148
150
154
9
138
243 238
943
900
200
100
6
50
3
150
600
100
300
50
0
0
0
04 05 06 07 08
to footnote (Note 2)
* Refer
on page 3
04 05 06 07 08
0
04 05 06 07 08
Ratio to net sales
04
Message to Our Shareholders
Looking back at the business environment of fiscal 2007 (ended March 31, 2008), the
year was marked with stirrings of significant change in the structure of the global
economy. Uncertainty increased in the economies of industrialized nations, particularly
the United States, due to turmoil in international financial and capital markets, triggered
by the subprime mortgage loan problem, and to soaring prices for resources, such as
crude oil. Meanwhile, the economies of emerging countries, especially the BRICs, were
spurred on by solid growth.
As the business environment heads toward a major turning point, we announced our
“21st century manufacturing complex” concept under a new management structure
initiated in April 2007. This involves concentrating our cutting-edge LCD panel and
solar cell plants, incorporating relevant infrastructure and facilities, and attracting
relevant material and other manufacturers to set up their plants on the same site.
Construction of the complex is already underway. Additionally, we actively advanced
business measures aimed at driving future growth, such as the creation of a global
production system for LCD TVs, the deployment of a brand strategy in core markets
around the world, and the promotion of partnerships and collaboration with prominent
companies in growth fields. In order to realize stable growth into the future as a true
valued one-of-a-kind company, we formulated “Visions for 2012” for our 2012
centennial anniversary, a significant milestone for Sharp. (For further details, please
refer to the Special Feature on pages 12~20.)
Sharp has positioned fiscal 2008 as a critical year in initiating a new growth strategy
aimed at realizing “Visions for 2012.” We will continue working to further increase
profitability and enhance corporate value by boldly tackling diverse management
challenges. We ask all shareholders for their continued support.
July 2008
Katsuhiko Machida, Chairman & CEO
Mikio Katayama, President & COO
05
Sharp Annual Report 2008
Katsuhiko Machida
Mikio Katayama
Chairman & CEO
President & COO
06
Interview with the President
Aiming for New Growth by Promoting
“Sincerity and Creativity” in All Our
Business Activities
President Katayama explains the future direction of Sharp amid a drastically
changing business environment.
Q
Please review Sharp’s business
performance in fiscal 2007.
Fiscal 2007 (ended March 31, 2008) was marked
by a rapidly changing business environment.
Protracted steep increases in prices for crude oil
and other materials put downward pressure on
corporate earnings. Coupled with this, the
electronics industry was hit with sudden fluctuations
in exchange rates and a decline in product prices,
culminating in extremely demanding circumstances.
Meanwhile, the subprime mortgage loan problem in
the United States impacted financial markets
around the world, and cast a serious shadow over
the actual economy.
Under these conditions, we achieved consolidated
net sales for fiscal 2007 of ¥3,417.7 billion, up
9.3% over the previous year. This figure
represents a historic high for the fifth consecutive
07
Sharp Annual Report 2008
year. Looking at results by segment, sales of
Consumer/Information Products amounted to
¥2,291.7 billion, up 10.8% over the previous year.
Sales of core products such as LCD TVs and
mobile phones were brisk. In Electronic
Components, sales were up 12.9% to ¥1,762.8
billion due to substantial growth in sales of LCDs,
driven mainly by an increase in production at the
Kameyama No. 2 Plant.
Operating income was ¥183.6 billion, down 1.5%
from the previous year, due to such factors as a
change in the calculation method for depreciation
and amortization in line with an amendment to the
Corporate Tax Law in Japan. If we calculate
operating income using the previous method, the
amount would have been ¥198.7 billion, up 6.5%.
Net income was ¥101.9 billion, up 0.2% over the
previous year. As with net sales, this was a new
record high for the fifth year in a row.
“ Sharp’s two new visions are to ‘Realize a
true ubiquitous network society with our
world’s best LCDs’ and ‘Contribute to
society by environment- and health-related
business with energy-saving and energycreating equipment as the core.’”
Q
Can you explain “Visions for 2012” that
Sharp embarked upon at the beginning
of 2008?
We have established two visions for the 2012
centennial anniversary of our foundation: “Realize a
true ubiquitous network society with our world’s best
LCDs” and “Contribute to society by environmentand health-related business with energy-saving and
energy-creating equipment as the core.”
Progress is expected in digital convergence, in
which media, equipment and functions will be
integrated around a core of digital technology.
These infrastructure changes will provide us with
key business opportunities. In the ubiquitous
network society, LCDs will increase in importance
as “windows of information.” We possess an
extensive line-up of LCDs, from small to large
sizes, and our display technology, including for
peripheral devices, is at the highest level in the
world. Leveraging these competitive advantages,
we will contribute to the realization of a true
ubiquitous network society. Specifically, we will
offer new lifestyles that use LCD-equipped
products such as LCD TVs and mobile phones as
portal terminals that function as gateways to
network services.
and falling birth rate, particularly in industrialized
nations. These changes have heralded
outstanding opportunities for Sharp to fully utilize
the strengths we have accumulated over a long
period in energy-saving and energy-creating
technologies. We will promote energy saving and
energy creation by such measures as enhancing
the development of LCDs that boast excellent
environmental performance, creating energyefficient home appliances and office equipment,
and expanding business of clean-energy solar
cells. We are also working to offer healthy lifestyles
to the world by encouraging the widespread use
of health-promoting appliances that make the
most of our Plasmacluster Ion and superheated
steam technologies.
Q
What are the features and aims of the “21st
century manufacturing complex” being
built in Sakai City, Osaka Prefecture?
The major feature of the complex is that it will be
home not only to Sharp’s new LCD panel plant
and solar cell plant but will also incorporate
Meanwhile, people’s lifestyles are quickly
becoming more environment- and healthconscious against a backdrop of worsening
environmental problems, and the aging population
08
“ We aim to create new businesses by
boldly challenging new ideas and
pursuing dreams.”
relevant infrastructure and facilities, and attract
material and other manufacturers to construct
plants on the same site. Our aim is to create an
advanced environmentally friendly complex in
which all companies can comprehensively reduce
waste in manufacturing processes and energy
consumption as one virtual company.
The LCD panel plant will be the first in the world to
use 10th generation glass substrates. Exploiting
this advantage to maximum effect, we will produce
LCD panels for TVs that mark the industry’s
highest standards in quality, cost and performance
through the fusion of the know-how and
knowledge of each company in the complex.
Meanwhile, the solar cell plant being developed at
the site will focus on producing thin-film solar cells
based on the same thin-film technology as TFT
LCD panels. Shared infrastructure within the
complex, such as gas, substrate cleaning water
and related facilities, can provide for improved
productivity and investment efficiency.
Q
Please explain initiatives in the LCD TV
business.
Global demand for LCD TVs in fiscal 2008 is
forecast to grow to 100 million units, up 1.3 times
over the previous year, due in particular to the
spread of digital broadcasting around the world
09
Sharp Annual Report 2008
and rapid expansion of the LCD TV market in
emerging countries, notably the BRICs.
We started the integrated production of LCD TVs
from LCD module to finished set at our new plants
in Mexico and Poland, along with an increase in
production at the Kameyama No. 2 Plant in July
2007, as part of our efforts to create a global
production system with the Kameyama Plant at its
nucleus. In fiscal 2008, we will be working to
strengthen the competitiveness of AQUOS LCD
TVs by improving operations at our global
manufacturing bases and by pursuing cost
reductions throughout the total value chain.
In addition, for the purpose of enhancing profit, we
will be mounting a global effort to deploy LCD TVs
that are better adapted to the specific needs of
each region rather than unnecessarily seeking to
expand market share. We will be focusing on the
Japanese and North American markets, where
steady demand is expected, and on markets such
as China, where rapid growth is expected. We will
be keeping a close watch on market conditions
and trends in the broadcast infrastructure, and will
work to strengthen our LCD TV business through
product development and sales promotions that
cater to specific regional characteristics.
We also aim to improve the AQUOS brand further
by differentiating it from other companies by
enhancing picture quality, slimness and
environmental performance achieved through
advanced technological expertise.
Q
Can you describe initiatives in the solar cell
business?
Sharp’s solar cell business has strengths in
technical capabilities amassed over many years,
and we believe the business can expand over the
medium to long term as a second pillar, together
with LCDs.
There is now a common understanding around the
world of the issues surrounding global warming
and energy, which is driving higher expectations
for renewable energy, especially photovoltaic
power generation. Demand for solar cells is
increasing worldwide. To meet this burgeoning
demand, in addition to the conventional crystalline
type, Sharp will bolster production of thin-film solar
cells, where solid growth is expected, and work for
the further expansion of our solar cell business
with these two types.
The production of thin-film solar cells requires only
1/100th the amount of silicon needed for the
crystalline type. Additionally, thin-film solar cells are
characterized by lower reduction of conversion
efficiency at high temperature, compared to the
crystalline type. Moreover, thin-film solar cells have
a non-complex structure and can be produced in a
simple process, meaning that we can reduce costs
significantly through economies of scale. It is no
exaggeration to say that their performances and
cost competitiveness depend on the technological
innovation of production equipment that is plasma
CVD equipment. In light of this fact, Sharp has
realized higher conversion efficiency with the internal
manufacture of plasma CVD equipment based on
accumulated technology. Moving ahead, we will
make further technological innovations, and strive to
further enhance the performance and cost
competitiveness of thin-film solar cells.
On a production front, we are planning to increase
annual production capacity of thin-film solar cells
at the Katsuragi Plant from 15MW to 160MW in
October 2008. At the “21st century manufacturing
complex,” we are planning to build a new plant
for thin-film solar cells that will enable us to
expand annual production capacity to 1,000MW.
We aim to start production by March 2010,
beginning with a production capacity of 480MW
as the first phase.
Q
Can you explain efforts to strengthen
corporate governance?
A high degree of expertise is required in order to
constantly create market-leading products and
devices for the fast-changing electronics industry,
where technological innovations occur at
breakneck speed. For this reason, it is important
for management and manufacturing divisions to
work very closely to make critical management
decisions. Our business activities are limited to the
development, production and sales of products
and devices, which have a strong interrelation and
require high expertise. This enables our directors,
who are highly adept at business, to make swift
and accurate management decisions, and it also
serves to clarify reciprocal managerial
responsibilities and promote mutual supervisory
functions. In addition, we introduced the Executive
Officer System on June 24, 2008, creating a
structure that steadily facilitates nimble, efficient
business execution by executive officers with
operational responsibilities in each division. We will
continue seeking to increase the transparency,
soundness and effectiveness of management by
steadily enhancing corporate governance.
10
“ Sharp will create never-seenbefore products and stimulate
new demand to contribute to
the enhancement of society
and lifestyles.”
Q
What is Sharp’s basic approach for returns
to shareholders?
Sharp considers distributing profits to shareholders
to be one of management’s top priorities. While
maintaining consistently stable dividend pay-outs,
and while carefully considering our consolidated
business performance, financial situation and future
business development in a comprehensive
manner, we will implement a set of measures to
return profits to our shareholders, such as
increasing the amount of periodic dividends. Under
this policy, we distributed an annual dividend of
¥28 per share for fiscal 2007, an increase of ¥2
over the previous year. With this dividend increase,
our dividends have been raised for eight
consecutive years. We will work hard to continue
returning profit actively, targeting a dividend payout ratio of 30% on a consolidated basis. Internal
reserve funds are being provided for investment in
plant and equipment in areas of future growth, and
for development of uniquely featured products and
proprietary electronic devices. They are also being
provided for overseas business expansion and
environmental protection measures.
11
Sharp Annual Report 2008
Q
Finally, please describe your basic
management philosophy.
My fundamental management stance is to “stay
true to basics and general principles.”
The business philosophy of Sharp declares that
“we do not seek merely to expand our business
volume. Rather, we are dedicated to the use of
our unique, innovative technology to contribute to
the culture, benefits, and welfare of people
throughout the world.” Based on this philosophy,
we are dedicated to our business creed —
“Sincerity and Creativity” — in all our business
practices. With this as our foundation, we aim to
drive continuous corporate growth.
Additionally, Sharp has fashioned a history and
climate of supplying world-first and Japan-first
products that incorporate our unique technology
to the world one after the other. This tradition of
manufacturing is one of our areas of comparative
strength. I always assert that “Technology knows
no limits.” Even barriers thought to be too high
can be overcome with persistent efforts, as well
as a passion and a vision for development to
propel continued evolution. Going forward, Sharp
seeks to promote technological innovation, create
never-seen-before products, and stimulate new
demand to contribute to the enhancement of
society and lifestyles.
Special Feature:
Towards the Realization of
Visions for 2012
Sharp formulated two new visions for its 2012 centennial anniversary:
“Realize a true ubiquitous network society with our world’s best
LCDs” and “Contribute to society by environment- and healthrelated business with energy-saving and energy-creating
equipment as the core.”
This special feature introduces the 21st century manufacturing complex and
the strategic businesses at the heart of these visions.
12
Special Feature: Towards the Realization of Visions for 2012
All companies in the “21st century manufacturing
complex” will work together as one in a fresh new style
of manufacturing
Conceptual diagram of the “21st century manufacturing complex”
Sharp is pushing ahead with the construction of the
“21st century manufacturing complex” in the coastal
area of Sakai City, Osaka Prefecture that will produce
energy-saving LCD panels and energy-creating solar
cells, aiming to begin production by March 2010. The
complex will also incorporate relevant infrastructure and
facilities, as well as material and other manufacturers,
thereby driving advanced manufacturing as one virtual
company that operates as if it were the single plant of a
single company.
At the LCD panel plant, Sharp engineers will work
closely with their counterparts at leading material and
other manufacturers to share knowledge and expertise,
and create the world’s best LCD panels for TVs from
image quality, performance and cost perspectives.
The solar cell plant will manufacture thin-film solar cells
based on the same thin-film technology used in the
production of TFT LCD panels. Shared infrastructure
within the complex, including gas facilities, can provide
for improved investment efficiency.
Sharp aims to ensure it is an environmentally advanced
13
Sharp Annual Report 2008
complex through the introduction of LED lighting, the
use of waste heat from the plants, and the installation of
photovoltaic power generation systems.
Overview of the “21st Century Manufacturing Complex”
Location: Sakaihama District of Sakai City, Osaka Prefecture
Site area: Approx. 1.27 million m2
Participating companies (as of April 2008; no particular order):
<Glass substrates> Corning Japan K.K./ASAHI GLASS CO., LTD.
<Color filters> Dai Nippon Printing Co., Ltd./TOPPAN PRINTING CO., LTD.
<Chemical supply/recycling> NAGASE & CO., LTD.
<Ultrapure water supply/wastewater treatment> Kurita Water Industries Ltd.
<Bulk gas supply> Daido Air Products Electronics, Inc.
<Bulk and electronics material gas supply> TAIYO NIPPON SANSO CORPORATION
<Liquid hydrogen supply> Iwatani Corporation
<Gas supply> OSAKA GAS CO., LTD.
<Energy supply> Kanden Energy Solution Company Incorporated
<Power supply> The Kansai Electric Power Co., Inc.
<Logistics> NIPPON EXPRESS CO., LTD.
<Reclaimed water supply> Kobelco Eco-Solutions Co., Ltd.
LCD panel plant
Glass substrate size:
Input capacity:
Amount of investment:
Main products:
2,850mm x 3,050mm (10th generation)
72,000 substrates per month (initial capacity at start
of operations: 36,000 substrates per month)
Approx. ¥380.0 billion (including land acquisition
costs for the entire complex)
LCD panels for large-screen TVs in the 40-, 50- and
60-inch classes
Solar cell plant
Plant scale:
Initial production capacity:
Glass substrate size:
Amount of investment:
Production item:
1,000MW per year
480MW per year
1,000mm x 1,400mm
Approx. ¥72.0 billion
Thin-film solar cells
Leveraging unique cutting-edge technology to create top
quality, cost-competitive LCD panels for TVs
The new LCD panel plant currently under construction (as of July 2008)
10G glass substrate employed at the new LCD panel plant
The Kameyama Plant employs 6G and 8G glass substrates
The new LCD panel plant being built in Sakai City,
Osaka will be the first in the world to use 10th
generation (10G) glass substrates, ensuring highly
efficient production of large-size LCD panels in the 40inch class and above, where demand is expected to
increase.
This will enable us to make LCD panels with
overwhelming cost benefits and further boost the
competitiveness of AQUOS. Additionally, with increased
production capacity, we can realize a stable supply of
LCDs that facilitates fully-fledged sales to other leading
TV manufacturers based on strategic partnerships.
Once this new plant starts operations, along with the
Kameyama No. 1 Plant utilising sixth generation (6G)
glass substrates and the Kameyama No. 2 Plant
employing eighth generation (8G) glass substrates,
Sharp will be able to efficiently produce a wide range
of LCD panel sizes for TVs.
As part of our efforts, Sharp agreed to form an alliance
with Toshiba Corporation in LCD and semiconductor
businesses. We also concluded a non-binding
memorandum of intent with Sony Corporation to
create a joint venture, by splitting out from Sharp the
LCD panel plant under construction in Sakai City.
Sharp President Katayama shakes hands with Toshiba President
Nishida (right) at the press conference
Sharp President Katayama and Sony President Chubachi (left)
shake hands at the press conference
14
Special Feature: Towards the Realization of Visions for 2012
Proposing new lifestyles with next-generation LCD TVs
incorporating leading-edge technology
Sharp has devised innovative designs for new LCD TVs (prototype) that will revolutionize living spaces — folding screen style (left) and wall-mounted style (right)
The integration of broadcasting infrastructure is
expected to progress around the world for Next
Generation Network (NGN) focused on broadband
communications, mobile communications and home
networks. Televisions will shift from being mere devices
that display signals delivered from broadcasting
stations and increase in importance as “windows of
information” in the home. As a result, they will need to
offer even higher expression and bring a more refined
sense of quality to interior décor.
In response, Sharp announced in August 2007 a
prototype LCD TV with a thickness of 20mm (main
display section) that far surpasses existing models in
terms of image quality, thin-profile design and
environmental performance. Sharp aims to bring further
innovation to LCD TVs going forward. Along with
seeking to enhance basic display performance, we are
promoting the joint development of acoustic systems
for LCD TVs with Pioneer Corporation, our business
and capital alliance partner. We will also strive to
strengthen network technology and interface with a
view to increasing infrastructure sophistication and
content diversification. Through these initiatives, we will
15
Sharp Annual Report 2008
enhance the expression and operability of LCD TVs as
well as bring further refinement to interior décor.
Sharp will be creating LCD TVs that will completely
transform living spaces and become the driving force
behind the digital video culture of the 21st century.
52"
46"
65"
With AQUOS R Series TVs,
viewers can enjoy the Internet on
a large screen in high definition
and with high image quality
Sharp President Katayama
shakes hands with Pioneer
President Sudo (right) at the
press conference
Technological innovations in unique devices facilitate
the birth of new mobile equipment
Ultra mobile PC for WILLCOM, Inc.
Mobile phone for SOFTBANK MOBILE Corp.
Wireless PDA for T-Mobile USA
A true ubiquitous network society where people
worldwide can access a network anytime and
anywhere is close at hand. To help realize this, further
advancements are required in LCDs, the key device
responsible for information propagation, and in
electronic devices, such as camera modules, for mobile
equipment.
In addition, Sharp will further strengthen development
of unique devices, including high-resolution camera
modules, and small, thin tuner modules for “One Seg”
terrestrial digital broadcast reception, while striving to
create advanced, user-friendly mobile equipment that
improves upon and integrates technology accumulated
over many years in TVs, mobile phones, PDAs and
personal computers.
Sharp boasts a variety of one-of-a-kind LCD
technology, such as System LCDs, and going forward,
we will work toward greater technological innovation to
increase the performance of our LCDs, as well as make
them slimmer, lighter and consume less power.
Devices Supporting Ubiquitous Products
Small- and medium-size LCD
Camera module
CCD
Tuner module for
“One Seg” reception
Laser diode
LED module
16
Special Feature: Towards the Realization of Visions for 2012
Contributing to environmental preservation through
increased use of energy-creating solar cells
Photovoltaic power generation systems installed at an elementary school in California
Tackling global warming and energy problems are
global common challenges. As such, expectations are
increasing worldwide for photovoltaic power
generation as it harnesses natural energy from the
sun’s rays and does not discharge CO2, one of the
causes of global warming, during operation. Demand
for these systems is therefore rapidly rising.
Amid these circumstances, Sharp will strengthen
production of thin-film solar cells in addition to the
conventional crystalline type with the intention of
making solar cells into the next pillar of business after
LCDs.
17
Crystalline solar cells
Thin-film solar cells
Features: High conversion efficiency,
suitable for places with
limited installation area
Features: Low reduction of
conversion efficiency
at high temperatures
Sharp Annual Report 2008
Crystalline solar cells have higher conversion efficiency
than thin-film solar cells, and are appropriate for use in
residences with limited installation area. Thin-film solar
cells, on the other hand, are characterized by lower
reduction of conversion efficiency at high temperature,
compared to the crystalline type, and as a result,
demand is expected to expand in warm regions in
such fields as large electricity-generating systems.
Sharp will work to develop business for both types in
order to supply solar cells that best fit the needs of
respective regions, and to expand use of photovoltaic
power generation around the world.
Thin-film solar cells installed at a company in Germany
Thin-film see-through solar cells installed at the Kameyama No. 2 Plant (left: external appearance, right: view from inside)
To increase the use of thin-film solar cells, Sharp
seeks to further enhance conversion efficiency by
making use of unique technologies amassed over
many years.
Sharp developed thin-film solar cells with a triplejunction structure that includes one more amorphous
silicon layer than the conventional tandem-type
structure (amorphous silicon and microcrystalline
silicon) through utilization of production equipment
(plasma CVD equipment) incorporating our unique
know-how. Through this, we have made effective use
of light energy at a wide range of wavelengths and
realized higher conversion efficiency.
On a production front, we are planning to increase
annual production capacity of thin-film solar cells at
the Katsuragi Plant from 15MW to 160MW in October
2008. At the “21st century manufacturing complex” in
Sakai City, Osaka, we are planning to build a new
plant for thin-film solar cells that will enable us to
expand annual production capacity to 1,000MW.
We aim to start production by March 2010, beginning
with a production capacity of 480MW as the first phase.
The cutting-edge plasma CVD equipment developed
jointly with Tokyo Electron Limited will be installed at
the new plant. Large glass substrate size of 1,000 x
1,400mm coupled with unique know-how will
considerably boost production efficiency and further
cut costs. Sharp plans to create a global production
system for thin-film solar cells, using this new plant as
a model when deploying other plants overseas.
In addition, Sharp is promoting the development of
new technology aimed at further expanding the solar
cell business, notably concentrator photovoltaic
power systems that apply compound semiconductor
technology and dye-sensitized solar cells that use
organic materials. We are also working on the
development of storage batteries that store power
generated by solar cells.
Structure of Thin-Film Solar Cells (Image)
Tandem thin-film solar cell
Glass substrate
Transparent electrode
Amorphous silicon cell
Triple-junction thin-film solar cell
Glass substrate
Transparent electrode
Amorphous silicon cell
Amorphous silicon cell
Microcrystalline
silicon cell
Microcrystalline
silicon cell
Back electrode
Back electrode
Concentrator photovoltaic power systems (image)
18
Special Feature: Towards the Realization of Visions for 2012
Creating high-value-added products made with
environment- and health-related technology
Air conditioner incorporating
Plasmacluster Ion technology
Air purifier equipped with Plasmacluster
Ion technology
Superheated steam oven
HEALSIO
Plasmacluster Ion Technology
Plasmacluster Ion technology is a unique technology
equipped in Sharp air purifiers, air conditioners and
other products that purifies the air by removing
airborne mold, viruses and allergens (mite feces and
bodies). The technology is being increasingly
employed in other areas as well, and has now been
used in the products of over 20 different companies,
including shower-toilets and car air conditioners. The
total shipment volume of Plasmacluster Ion generating
units, incorporated in products made by Sharp as well
as those of other companies, amounted to 18 million
worldwide at the end of March 2008. Going forward,
Sharp will expand the range of products featuring this
technology based on the concept of “fill every space
with Plasmacluster Ions.” We also aim to expand
application to medical facilities and public
transportation.
Working Mechanism to Suppress Airborne Mite Allergens
with Plasmacluster Ion Technology (Image)
The OH radicals sever the
protein on the surface
Positive and negative ions
cluster on the surface of
airborne mite allergens
• Test Method: Mite allergens are dispersed into the air of a 1m3 chamber and
Plasmacluster Ions are released into the space from a Plasmacluster Ion
generating unit, and the behavior of the allergens measured.
• Eradication Method: Plasmacluster Ions are released into the air.
• Testing & Verification Organization: Graduate School of Advanced
Sciences of Matter, Hiroshima University
■ Efficacy of Plasmacluster Ions Proven in Japan and
Overseas (As of July 2008)
•Ishikawa Health Service
Association (Airborne mold)
Japan
Superheated Steam Oven
Sharp’s superheated steam oven HEALSIO is the first
oven for home use to cook food using superheated
steam technology. The health benefits gained from
19
Sharp Annual Report 2008
A chemical reaction occurs on the
The OH radicals remove
surface, and the ions are
hydrogen atoms from the mite
transformed into hydroxyl OH
allergen, destroy the protein
radicals (powerfully active substance) and turn into water vapor
•The Kitasato Institute
The Kitasato Institute Medical
Center Hospital
Research Center for Medical
Environment (Airborne viruses)
Canada •Asthma Society of Canada
(Airborne allergens)
•University of Lübeck (Airborne mold)
Germany
•Kitasato Research Center of
Environmental Sciences
(Airborne viruses)
•Graduate School of Advanced
Sciences of Matter, Hiroshima
University (Airborne allergens)
U.S.A.
•Harvard School of Public Health
Dr. Melvin W. First, Professor
Emeritus (Airborne bacteria)
•Aachen University of Applied
Sciences
Professor Gerhard Artmann
(Biochemical research into
pathogen removal mechanism)
China
•Shanghai Municipal Center for
Disease Control and Prevention
(Natural airborne bacteria)
Korea
•Seoul University
(Airborne viruses)
U.K.
•Retroscreen Virology, Ltd.
(Airborne viruses)
using HEALSIO, including fat removal, salt reduction
and nutrient retention, have been highly praised,
making it a hit in Japan. In the future, Sharp will
strengthen global expansion of HEALSIO, beginning
with North America and including Asia, Oceania,
Europe and China, while working to expand products
incorporating this technology by making the engine
more advanced.
LED Lighting
LED lighting is not only energy efficient and long
lasting, it boasts other features such as flicker-free
illumination, is mercury-free, and does not emit
infrared or ultraviolet rays. Application is therefore
expected in a wide range of fields. Sharp is expanding
the use of solar-LED street lights incorporating LEDs
with outstanding environmental performance and
powered by natural energy from the sun’s rays, as
viable forms of outside illumination for the 21st
century. Aiming to expand LED business, we will
continue with the spiral deployment of products and
devices that we excel in, and strengthen applied
products by pushing ahead with the development of
environmentally friendly lighting using LEDs.
Copiers/Printers
Sharp has expanded its line-up of digital MFPs
featuring Mycrostoner with high environmental
performance. This uniquely developed toner
suppresses toner consumption, while delivering highresolution, high-quality printed output. Efforts to
ensure energy-saving design in our MFPs include
suppressing standby power consumption in facsimile
mode to under 1W* to reduce environmental burden.
Moving ahead, besides working to further improve
environmental performance, we will make aggressive
strides in strengthening information security, one of
our core strengths, and propose document solutions
that enhance business efficiency in the office.
* In facsimile standby mode with the power off
Schematic Illustration of the Superheated Steam Function
2
Steam
Heat further using superheated steam
generating unit
Superheated
Steam
Retain Nutrients
1
3
Water
Heat using steam
generating unit
Fat
Salt
Spray superheated
steam from the top
and side to heat the
food
With this mechanism, food is cooked using superheated steam, obtained by
heating ordinary steam at 100ºC to a higher temperature of up to 340ºC. This
causes a portion of the fat and salt contained in meat, fish and fried foods to
drop away, while low-oxygen cooking makes it possible to retain vitamin C and
polyphenols, which are easily destroyed by oxygen.
Solar-LED street light with outstanding
environmental performance
Digital full-color MFP with eco-friendly
features such as Mycrostoner
20
Product Group Outline
Sharp Corporation and Consolidated Subsidiaries
Year Ended March 31, 2008
Consumer/Information Products
Audio-Visual and Communication Equipment
% of Total Sales
Main Products
LCD color televisions, color televisions, projectors, DVD recorders, DVD
players, Blu-ray Disc recorders, Blu-ray Disc players, 1-bit digital audio
products, facsimiles, telephones, mobile phones, PHS (personal handyphone system) terminals
Sales (billions of yen)
1,598
1,381
1,091
39.4%
06
07
08
Home Appliances
% of Total Sales
Main Products
Sales (billions of yen)
Refrigerators, superheated steam ovens, microwave ovens, air
conditioners, washing machines, vacuum cleaners, air purifiers,
dehumidifiers, humidifiers, electric heaters, small cooking appliances
224
239
249
06
07
08
6.2%
Information Equipment
% of Total Sales
Main Products
Personal computers, personal mobile tools, mobile communications
handsets, electronic dictionaries, calculators, POS systems, handy data
terminals, electronic cash registers, LCD color monitors, information
displays, electrostatic copiers/printers, electrostatic copiers, supplies for
copiers and printers, software, FA equipment, ultrasonic cleaners
Sales (billions of yen)
426
446
442
06
07
08
10.9%
Notes: 1. Sales by product group include internal sales between segments (Consumer/Information Products and Electronic Components). Percentage of total sales
is calculated accordingly. The LSI group’s sales do not include internal sales to the LCD/Other Electronic Component group.
2. Effective for the year ended March 31, 2008, some items previously included in Other Electronic Components have been reclassified and are included in
LSIs. In this connection, sales by product group of 2007 has been restated to conform with the 2008 presentation.
21
Sharp Annual Report 2008
Electronic Components
LSIs
% of Total Sales
Main Products
Sales (billions of yen)
CCD/CMOS imagers, LSIs for LCDs, microcomputers, flash memory,
combination memory, analog ICs
190
200
203
06
07
08
5.0%
LCDs
% of Total Sales
Main Products
Sales (billions of yen)
TFT LCD modules, Duty LCD modules, System LCD modules
1,234
1,042
857
30.5%
06
07
08
Other Electronic Components
% of Total Sales
Main Products
Sales (billions of yen)
Solar cells, components for satellite broadcasting, terrestrial digital
tuners, RF modules, network components, laser diodes, LEDs, optical
pickups, optical sensors, components for optical communications,
regulators, switching power supplies
310
319
325
06
07
08
8.0%
22
Fiscal 2007 Review by Product Group
Consumer/Information Products
Audio-Visual and Communication Equipment
LCD TVs
Demand for large-screen, high-resolution TVs is increasing in line with ongoing
advancement in digital broadcasting and increasing high-definition content. In
response, Sharp sought to strengthen its range of full high-definition LCD TVs
through the release of the industry’s first 26- and 22-inch models, in addition to
introducing new large-size models. We also released LCD TVs that boast the
industry’s thinnest profile* at 3.44cm (at the thinnest part), staying one step
ahead of diversifying demand, such as wall-mounting capabilities that bring a
refined sense of quality to interior décor. On a production front, we expanded
the integrated production of LCD TVs from LCD module to finished set at the
global level, along with an increase in production capacity of LCD panels at the
Kameyama No. 2 Plant. Sharp aims to roll out highly-advanced, costcompetitive LCD TVs to the market in a timely manner and develop AQUOS
into a true global brand.
X-Series AQUOS LCD TV
*As of January 24, 2008, for digital high-definition LCD TVs for the Japanese market
Video Recorders/Players
Amid rising demand for video recording quality that matches high-definition
broadcasting, sales steadily expanded of high-definition recorders with
AQUOS Familink that enables users to operate LCD TV, video recorder and
surround sound system with a single remote control. Going forward, we will
enhance our line of models to record and play Blu-ray Discs that are ideal for
large-volume recording of high-definition content.
Mobile Phones
Despite long-standing demand for high-end mobile phones, the number of
users seeking models that focus on specific applications is increasing. Sharp
worked to expand business by deploying an extensive line-up, including
AQUOS mobile phones, through the application of various technologies
accumulated in LCD TVs and other products. Through these efforts, Sharp
has achieved top share* in the Japanese market for three consecutive years
since fiscal 2005. We will continue to create further distinctive mobile phones
by leveraging our unique device technology.
AQUOS HD recorder
*According to MM Research Institute, Ltd.
Mobile phones for (from above) SOFTBANK MOBILE
Corp., KDDI CORPORATION, NTT DoCoMo, Inc.
23
Sharp Annual Report 2008
Home Appliances
Home Appliances with Plasmacluster Ion Technology
Amid rising awareness toward healthy living and the environment, Sharp’s
unique Plasmacluster Ion technology has received high praise in the market for
its ability to remove harmful substances such as airborne viruses and allergens.
Sharp augmented its range of distinctive products incorporating this
technology, including air conditioners equipped with an air flow control function,
air purifiers with a humidifier function, and drum-type washer-dryers. Sharp’s
Plasmacluster Ion technology is being increasingly employed in the products of
various other companies as well, including shower-toilets, car air conditioners
and elevators. We will continue to expand this business into the future.
Air conditioner incorporating Plasmacluster Ion
technology
Other Home Appliances
Sharp enhanced the fat-removal, salt-reduction and nutrient retention features
of its superheated steam oven HEALSIO. We also launched refrigerators that
reduce the drying of food and keep freshness through a unique cooling
system. Sharp will continue supporting people’s lives by enhancing its range of
health-related products.
Information Equipment
Superheated steam oven HEALSIO
Wireless PDAs
Sharp supplies wireless PDAs to WILLCOM, Inc. and EMOBILE Ltd. in Japan
and T-Mobile USA overseas. The design and user-friendliness of the products
were evaluated highly by the market, leading to brisk sales. Sharp will continue
striving to create distinctive products for the high-growth-potential wireless
PDA market.
Copiers/Printers
Sharp released high-speed digital MFPs capable of printing 110 pages per
minute, and high-speed digital full-color MFPs capable of printing 50 pages
per minute in color, creating an extensive line-up that ranges from low-speed
to high-speed models. Sharp’s digital MFPs were honored in December 2007
with the prestigious Line of the Year Award 2007 from Buyers Laboratory Inc.
(BLI), a U.S.-based independent evaluation organization for business-use
office equipment, in the digital MFP category, receiving high marks in the areas
of reliability, operability and network-supporting functions. Sharp looks forward
to continued business expansion by further bolstering product range and
strengthening its approach to the latest document solutions.
Wireless PDAs for (from left) WILLCOM, Inc. and
EMOBILE Ltd.
High-speed digital MFP
24
Fiscal 2007 Review by Product Group
Electronic Components
LSIs
CCD/CMOS Imagers
Sales of camera modules for mobile phones and CCDs for digital cameras
were strong. We launched high-performance camera modules that contribute
to thinner, more sophisticated mobile phones by utilizing our high-density
mounting technology. Another development was CCDs for surveillance
cameras that boast the industry’s highest* sensitivity. Into the future, Sharp will
make efforts to expand application into new areas such as security,
automotive and medical realms.
*As of March 2008, for 1/3-type 270,000 pixel and 320,000 pixel CCDs
CMOS camera module with auto-focus function
System LSIs
Sales of core LCD drivers for LCD applied products such as LCD TVs were
brisk. During the period, Sharp established a joint venture with Renesas
Technology Corp. and Powerchip Semiconductor Corp. for the development
and sale of drivers and controllers for small- and medium-size LCDs. Going
forward, we will strengthen development of drivers for large-size LCDs for TVs,
while also focusing on the creation of system devices that bring distinctive
functions to LCD applied products.
LCDs
Large-size LCDs
The tight supply/demand balance for large-size LCDs continued due to growing
demand for LCD TVs, notebook PCs and LCD monitors. In response, Sharp
doubled its eighth generation substrate input capacity to 60,000 sheets per
month at the Kameyama No. 2 Plant in July 2007, thereby increasing its supply
of LCD panels for TVs. We plan to raise this figure to 90,000 in July 2008 to
meet burgeoning demand. In line with this increase in production capacity, we
will strengthen sales inside the company as well as to strategic partners. We
also started construction of a new plant for LCD panels, which will be the
nucleus of the “21st century manufacturing complex” planned for Sakai City,
Osaka Prefecture. The LCD plant will be the first in the world to use 10th
generation glass substrates. We plan to start production there by March 2010.
25
Sharp Annual Report 2008
Kameyama Plant
Small- and Medium-size LCDs
In addition to expanding demand for mobile phones, applications for smalland medium-size LCDs are growing, including portable media players and
personal navigation devices. Amid these circumstances, Sharp expanded
business for System LCDs enabling high-definition, high-quality displays and
that contribute to significant cost reductions. We applied our System LCD
technology in the development of new System LCDs with embedded optical
sensors that provide input capabilities including touch screen and scanner
functions. Going forward, we will continue to strengthen development of our
one-of-a-kind LCDs incorporating our unique, pioneering technology and
contribute to advancement in mobile equipment.
System LCD with embedded optical
sensors
Other Electronic Components
Solar Cells
Demand for photovoltaic power generation is rising amid increasing
awareness of environmental preservation. Under these circumstances, Sharp
was the first in the world to achieve cumulative solar cell production volume of
2,000MW at the end of 2007. In crystalline solar cells, in response to a
shortage of silicon materials caused by demand expansion, we strove to
secure stable supply by boosting procurement from material manufacturers
and increasing the in-house production of silicon for solar cells. In thin-film
solar cells, we pushed ahead with innovation of our production technology
aimed at expanding production capacity. We will keep endeavoring to improve
the performance and cost competitiveness of solar cells as a means to
contribute to global environmental preservation through proliferation of
photovoltaic power generation.
Others
Sales of electronic components were buoyant, notably digital tuners, laser
diodes and LEDs for use mainly in digital equipment. Sharp launched tuner
modules for “One Seg” terrestrial broadcast reception for mobile phones that
feature the industry’s smallest package size and lowest power consumption*.
We also mass-produced high-power blue-violet laser diodes for Blu-ray Disc
recorders/players that achieve power outputs of 210mW to enable high-speed
recording, and developed laser diodes that realize outputs of 250mW, an
industry-leading level. Sharp aims to create distinctive devices that contribute
to advancement in digital equipment.
Thin-film solar module
High-power blue-violet laser diodes
*As of June 2007 (Sharp developed modules with an even smaller size and lower power consumption
in February 2008)
26
R&D and Intellectual Property
Sharp advances a fundamental R&D policy of “selection and
concentration” aimed at realizing sustainable growth. An aggressive
patent strategy, meanwhile, helps build strong business foundations.
R&D Strategy
In addition to conducting R&D to strengthen core businesses
such as LCD TVs, mobile phones and solar cells, Sharp focuses
on themes that are expected to translate into future business
pillars. To improve R&D efficiency and minimize risk, we make
the most of opportunities generated by industry-academia-government collaboration.
Next-Generation LCD Technologies
Sharp has developed new LCD technologies that realize outstanding image quality, super-thin profile design and advanced
environmental performance by bringing together the essence of
its one-of-a-kind LCD technologies amassed over many years.
The next-generation LCD TV embodying these technologies
achieves a contrast ratio of 100,000:1 and color reproducibility
covering 150% of NTSC color gamut in image performance, far
better than any existing LCD TV. Meanwhile, annual power consumption* has been reduced to around half that of our existing
sets of the same size class, giving it enhanced environmental
friendliness. These extremely high performance levels are
achieved with a design boasting thickness of just 20mm (main
display section). By working to achieve further innovations in
LCD technologies, Sharp will be creating next-generation LCD
TVs that will become the driving force behind the high-resolution
digital video culture of
the 21st century.
*Annual power consumption
is the amount of electrical
power used in one year
calculated according to the
Energy Conservation Law in
Japan based on screen size
and type of receiver and
standardized to the average
daily viewing time of a typical
household (4.5 hours).
Next-generation 52-inch LCD TV (prototype)
System LCD with Embedded Optical Sensors
Sharp has developed a System LCD with embedded optical
sensors to provide input capabilities including touch screen and
scanner functions. Sharp succeeded in building an optical sensor into each pixel of the LCD panel through its unique System
LCD technology. This technology eliminates the need for films
used in touch screens, resulting in a thinner, beautifully clear
screen display compared to conventional types. In addition, tac-
27
Sharp Annual Report 2008
tile recognition based on simultaneously touching multiple
points on the screen is now possible, a feature previously difficult to implement. Also, the scanner function can be used to
scan in a business card placed on top of the screen, and further
improvements to this
function are expected
to enable fingerprint
authentication in the
future. Sharp will continue to develop new
proprietary one-of-akind LCD technologies
and contribute to
System LCD with embedded optical sensors
further advances in
mobile equipment.
Dye-Sensitized Solar Cells
Sharp is working on R&D into dye-sensitized solar cells that use
dye in materials to absorb sunlight. Since these solar cells do
not employ semiconductor materials such as silicon and eliminate the need for high-temperature, high vacuum processes,
they have high expectations as innovative next-generation solar
cells that can significantly reduce cost of solar power generation. We realized a solar module with the world’s highest* conversion efficiency of 8.2%, by modifying particle arrangement of
titanium dioxide, an electrode material, which increases the
amount of sunlight absorbed by the dye. Moving into the future,
Sharp will promote further R&D into high-efficiency integration technology and technology
to enhance reliability to
drive the practical
application of this type
of solar cell.
*As of March 2008, for dyesensitized solar module of
5cm x 5cm size
Prototype dye-sensitized solar module
Personal Protein Chip
Sharp conducts R&D for biosensing devices based on cuttingedge biotechnology aiming for future application in preventive
medical care and health-related business. Among these, work
is currently being done on the personal protein chip, which can
recognize changes in health condition by identifying changes in
protein constituent patterns in the body. The chip is expected
to contribute to the early discovery of illness and individualized
medical care. At present, highly sophisticated technology and
complex manual procedures are required for the separation
and concurrent detection of different types of protein material.
Sharp is working on
making this process
totally automated. This
will suppress variations
in detectable amount
and considerably
reduce detection time,
making it possible
to use the chip for
medical diagnoses.
Personal protein chip analyzing equipment
Solid-State Lighting Technology
Sharp is promoting the development of solid-state lighting technology using unique high-output semiconductor optical devices
and highly efficient phosphors. Besides featuring exceptional
energy-saving performance compared to existing incandescent
lamps and fluorescent lamps, solid-state lighting does not contain any harmful substances such as mercury, thereby prompting expectations as environmentally friendly next-generation
lighting. Sharp has developed highly efficient phosphors that
can control luminous
wavelength according
to particle size by using
our unique composition method. Sharp is
working toward the
practical application
of solid-state lighting
by further enhancing
luminous efficiency.
Examples of phosphors
Sidebar Widget Technology
Sharp has developed Sidebar Widget technology to provide
Web-based content such as weather, share price and traffic
information on the right side of the screen when watching an
AQUOS LCD TV. The technology has been incorporated into
AQUOS for the North American market. Viewers can configure
widgets to check everyday information with a push of a button
on the remote control,
and switch to fullscreen as required, to
see more detailed
information. Sharp
seeks to propose new
lifestyles by enhancing
the compatibility of its
products with various
network services.
AQUOS equipped with Sidebar Widget technology
Intellectual Property Strategy
Sharp views its intellectual property strategy as one of its key
management measures, promoting it in a coherent manner
with business and R&D strategies. In order to secure a
competitive edge with one-of-a-kind products and one-of-akind devices for stronger business foundations, Sharp is
aggressively promoting patent right obtainment, while
keeping certain technologies as “black-box.”
Sharp has clearly delineated the fields that are central to its
business and has assigned engineers well-versed in patent
matters to each of these core business areas to conduct
strategic patent development close to the frontline. As of
March 31, 2008, Sharp had approximately 17,500 patents
in Japan and 21,500 overseas.
Sharp utilizes these patents to strengthen its strategic
businesses. In addition, to make further effective use of
patents, a proactive patent strategy is pursued. The products
of other companies are scrutinized, and if an infringement is
discovered, an appropriate warning is issued. In certain
cases, more aggressive action is taken, including filing
lawsuits. Sharp is also promoting obtainment of design and
trademark registrations based on its brand strategy and
aiming to increase the number of applications and
registrations globally.
28
Corporate Social Responsibility (CSR)
Sharp seeks to gain the trust of society by strengthening its CSR
activities based on the business creed of “Sincerity and Creativity.”
CSR Concept
Environmental Activities
“Make products that others want to imitate.” The spirit embodied in
these words, spoken by Sharp’s founder, has been passed down
from generation to generation as Sharp has sought to contribute to
society through manufacturing since its inception. In 1973, Sharp
codified the unchanging spirit of its founder in the company’s
business philosophy and business creed. The business philosophy
states that Sharp aims for mutual prosperity with all stakeholders
and seeks to contribute to the culture, benefits and welfare of
people throughout the world, which forms the foundation of CSR
today. The business creed calls for “Sincerity and Creativity” and
all employees must hold to it and follow it in order to realize the
business philosophy.
Business Philosophy
We do not seek merely to expand our business volume.
Rather, we are dedicated to the use of our unique, innovative
technology to contribute to the culture, benefits, and welfare of
people throughout the world.
It is the intention of our corporation to grow hand-in-hand with
our employees, encouraging and aiding them to reach their
full potential and improve their standard of living.
Our future prosperity is directly linked to the prosperity of our
customers, dealers, and shareholders… indeed,
the entire Sharp family.
Business Creed
Sharp Corporation is dedicated to two principal ideals:
“Sincerity and Creativity”
By committing ourselves to these ideals, we can derive
genuine satisfaction from our work, while making a
meaningful contribution to society.
Sincerity is a virtue fundamental to humanity...
always be sincere.
Harmony brings strength...
trust each other and work together.
Politeness is a merit...
always be courteous and respectful.
Creativity promotes progress...
remain constantly aware
of the need to innovate and improve.
Courage is the basis of a rewarding life...
accept every challenge with a positive attitude.
29
Sharp Annual Report 2008
With the goal of becoming an “environmentally advanced company,”
Sharp has set a corporate vision of having “zero global warming
impact by 2010.” To achieve this objective, we deploy forwardthinking measures aimed at environmental preservation in all our
corporate activities. Sharp is dedicated to realizing sustainable
manufacturing to protect the environment, with a focus on expanding
the use of photovoltaic power generation, promoting environmentally
conscious product design, developing unique environmental
technologies and reducing negative environmental impacts in
production facilities.
Examples of Initiatives
Expanded the use of photovoltaic power generation
Sharp has built up technology and trust over more than 40 years
since commencing mass-production of solar cells in 1963, and
we were the first in the world to achieve cumulative solar cell
production volume of 2,000MW at the end of 2007. A new plant
for thin-film solar cells in Sakai City, Osaka Prefecture is slated to
begin operations by March 2010, capable of expanding annual
production volume to 1,000MW. By increasing production
efficiency significantly at the plant, Sharp will contribute to the
reduction of power generation costs and further use of photovoltaic
power generation.
Promoted environmentally conscious product design
Sharp is committed to ensuring environmentally conscious product
design. Our LCD TV AQUOS employs eco-friendly materials to the
greatest extent possible, including plant-based resin paint developed
in collaboration with Kansai Paint Co., Ltd. and a closed-loop material
recyclable cabinet. The technology used in the practical application
of the plant-based resin paint garnered the Excellence Award at the
2nd Monodzukuri Nippon Grand Awards sponsored by the Ministry
of Economy, Trade and Industry. Additionally, in August 2007, we
announced a prototype 50inch-class LCD TV that boasts
52"
an ultra-thin profile of just 20mm
(main display section) as well as
outstanding environmental
performance with annual power
consumption of 140kWh/year
(calculated according to the
AQUOS employing plant-based
Energy Conservation Law
resin paint on the stand and other
in Japan).
eco-friendly materials
Developed new technology to expand plastic recycling
Sharp developed a closed-loop material recycling technology that
enables the repeated reuse of plastic materials from used home
appliances in parts for new products. The technology was put into
practical use in fiscal 2001. We developed a new technology in
fiscal 2007, enabling plastic components, in which metal parts
and different types of resins still remain attached, to be reused.
Furthermore, a surface processing method that applies technology
from Ube Industries, Ltd. to incorporate colored pigments has made
it possible to employ used plastics in the exterior components of
refrigerators and washing machines.
Strengthened environmental friendliness at all plants worldwide
Sharp is systematically promoting efforts to increase environmental
friendliness at its production facilities around the world. Based on
Sharp’s own assessment standards, we designate plants that are
environmentally friendly as “Green Factories” and those that are
extremely environmentally friendly as “Super Green Factories.” In
fiscal 2007, five plants in Japan and three plants overseas newly
achieved Super Green Factory status. Through these efforts, we
achieved our goal of ensuring that all 10 plants of Sharp Corporation
are Super Green Factories and all group plants enjoy status above
that of Green Factory. From fiscal 2008, we will start on a new
measure, “Super Green Factory II (SGFII),” which will see our
production facilities with an even higher degree of eco-friendliness.
Environmental and Social Contribution Activities
The Sharp Green Club (SGC), a voluntary organization jointly
established by Sharp and its labor union, is the key company
organization for planning and running a variety of community-based
social contribution activities in Japan and overseas. Besides getting
employees to contribute to local communities through active social
contribution campaigns, the Club aims to increase employee
awareness of the environment and volunteering. Further, in
conjunction with Weather Caster Network, an NPO, Sharp has been
educating youngsters at elementary schools throughout Japan
about the environment since October 2006. The classes help to
deepen consciousness of environmental issues in children, the
leaders of tomorrow, so they can practice eco-friendly living habits.
Examples of Initiatives
Expanded “Sharp Forests”
One of the main activities of the SGC is to deploy forest preservation
activities through the creation of “Sharp Forests” near our
production facilities and sales and service locations around Japan.
Sharp pushed ahead with activities to promote Sharp Forests at 10
locations in fiscal 2007. We newly
opened Kagawa Sharp Forest and
Fukuoka Sharp Koso Forest, and
preparations were made to
establish forests in Kameyama
City, Mie Prefecture and Naha City,
Okinawa Prefecture.
Fukuoka Sharp Koso Forest
Educated elementary school children on the environment
After receiving requests from over 1,000 schools nationwide, Sharp
held classes on the environment for around 37,000 children at a
total of 537 schools in fiscal 2007. The classes were centered
around the themes of global warming, recycling and photovoltaic
power generation, and included
hands-on experiments. The initiative has been praised highly by
students and everyone else
involved. We plan to conduct the
program in fiscal 2008 at over 500
schools, while increasing its scope
Class on the environment at a school
in China and the United States.
for Japanese children in Shanghai
Concerning Socially Responsible
Investment (SRI) Indices
Sharp’s proactive CSR activities have received high acclaim both in
Japan and overseas. As of June 2008, Sharp was a constituent of
the following major SRI indices.
• FTSE4Good Global Index (U.K.): March 2008
• Ethibel Sustainability Index (Belgium)
• Morningstar Socially Responsible Investment Index (Japan): September 2007
• KLD Global Climate 100 Index (U.S.A.): May 2007
For further details on CSR activities, please see the Sharp Environmental and Social
Report 2008 or access the Sharp homepage:
http://sharp-world.com/corporate/eco/index.html
30
Corporate Governance
Sharp seeks to enhance the transparency, soundness and effectiveness of
management through a corporate governance system that intimately unites
management and manufacturing divisions.
Basic Concept Concerning Corporate
Governance
Sharp has always been a manufacturing and technology
oriented company. In an effort to further strengthen manufacturing competency, Sharp is committed to improving the
speed and quality of managerial decisions. Our business
activities are limited to the development, production and sales
of products and devices, which have a strong interrelation
and require high expertise. This enables our directors, who
are highly adept at business, to make swift and accurate
management decisions through the mutual exchange of
ideas. It also serves to clarify reciprocal managerial responsibilities and promote mutual supervisory functions. We have
also introduced the Executive Officer System, creating a
structure that steadily facilitates nimble, efficient business
execution. Sharp seeks to further strengthen the current
Director/Corporate Auditor System, which allows management and manufacturing divisions to work very closely,
enabling the business to expand. Sharp works to enhance
its corporate governance through this system.
Status of Corporate Governance System
The Board of Directors meetings of Sharp Corporation are
held on a monthly basis to make decisions on matters stipulated by law and management-related matters of importance,
thereby exercising its oversight responsibility over its business
affairs. To improve management agility and flexibility, and to
clarify the responsibilities of company management during
each accounting period, the term of office for members of
the Board of Directors is set at one year.
In addition to the Board of Directors, the company has the
Executive Management Committee, where matters of importance related to corporate management and business operation are discussed and reported twice a month. Through this
committee, executive decisions are made promptly. To further
strengthen our operational and business execution system,
we instituted the Executive Officer System on June 24, 2008.
The Board of Corporate Auditors formulates audit policies,
listens to reports from accounting auditors, and receives
31
Sharp Annual Report 2008
reports on the execution of duties, in particular from the
Board of Directors. Corporate auditors also exchange
information and opinions on such matters as auditing (on-site
auditing) results and the progress of deliberations of important
meetings, which increases the validity of audits.
Strengthening Internal Controls
Sharp has set up the Internal Audit Division as a means to
reinforce internal controls. By checking the validity of business execution as well as the appropriateness and efficiency
of management, the division makes concrete proposals on
how to improve business operations. Furthermore, Sharp
has the Internal Control Committee as an advisory body to
the Board of Directors. Deliberating on the basic policies and
the state of development and operations regarding internal
controls and internal audits, the committee reports on and
discusses important matters with the Board of Directors.
The Internal Control Group within the CSR Promotion
Department, which is responsible for internal control of all
business execution departments company-wide, was
reorganized into the Internal Control Promotion Department
within the CSR Promotion Group in April 2008.
To enhance compliance throughout the group, in May 2005,
Sharp introduced the Sharp Group Charter of Corporate
Behavior, a set of principles to guide corporate behavior,
and the Sharp Code of Conduct, which clarifies the conduct
expected of every employee and director of Sharp.
In order to comprehensively and systematically deal with
diverse business risk, Sharp formulated the Business Risk
Management Guideline to help identify and anticipate potential risks, minimize possible effects and react appropriately.
Sharp constantly works to strengthen its business risk
management at the initiative of the CSR Promotion Group.
Plan Regarding Large-Scale Purchases of Sharp
Corporation Shares (Takeover Defense Plan)
Sharp Corporation is a publicly traded company that permits
shareholders to freely sell and purchase its shares. Therefore,
the Board of Directors of Sharp Corporation will not reject all
large-scale purchases of its shares aimed at takeover so long
as the large-scale purchase contributes to corporate value
and the common interests of shareholders. Whether to permit
a large-scale purchase of Sharp Corporation shares should
be ultimately entrusted to the shareholders. However, there
may also be inappropriate large-scale purchases that could
harm corporate value and the common interests of shareholders. In order to prevent such large-scale purchases, the
Board of Directors of Sharp Corporation decided to adopt
the prior warning type of defense measures called the Plan
Regarding Large-Scale Purchases of Sharp Corporation
Shares (Takeover Defense Plan) (hereinafter referred to as the
“Plan”) upon approval by a majority of shareholders present
at the Ordinary General Meeting of Shareholders held in June
2007. The effective term of the Plan was set to end at the
conclusion of the 114th Ordinary General Meeting of
Shareholders. Sharp proposed to continue the Plan with a
partial amendment and received approval of a majority of
Shareholders present at the 114th Ordinary General Meeting
of Shareholders in June 2008. The effective term of the
amended Plan* ends at the conclusion of the 115th Ordinary
General Meeting of Shareholders scheduled for June 2009.
The Plan clarifies the rules (large-scale purchase rules) that
must be adhered to by a group of shareholders with intent
to obtain 20% or more of the voting rights of the company.
The Board of Directors of Sharp Corporation shall receive
advice and counsel from the Special Committee consisting
of experienced outsiders and Sharp's outside corporate
auditors before deciding to take countermeasures in the
following cases: (1) if a large-scale purchaser does not follow
the large-scale purchase rules; or, (2) although the large-scale
purchaser complies with these rules, the large-scale
purchase is deemed to be harmful to corporate value and
common interests of shareholders.
A specific countermeasure is selected from what applicable
laws and the articles of incorporation of the company deem
appropriate as the authority of the Board of Directors at the time.
*For details of the Plan, please visit the Sharp homepage:
http://sharp-world.com/corporate/ir/topics/pdf/080624.pdf
32
Risk Factors
Listed below are the principal business risks of Sharp that
may have a significant influence on investors’ decisions. Note
that in addition to these there exist certain other risks that are
difficult to foresee. Each of these risks has the potential to
impact the operations, business results and financial position
of Sharp. All references to possible future developments in
the following text were made by Sharp as of March 31, 2008.
(1) Global Market Trends
Sharp manufactures and sells products and services in
different regions around the world. Business results and
financial position are thus subject to economic and consumer
trends (especially trends in private consumption and
corporate capital investment), competition with other
companies, product demand, raw material supply and price
fluctuations in each region. The political and economic
situation in respective areas may also exert an influence on
business results and financial position.
(2) Exchange Rate Fluctuations
The proportion of consolidated net sales accounted for by
overseas sales stood at 50.1% in fiscal 2005, 51.2% in fiscal
2006 and 53.5% in fiscal 2007. Although Sharp employs
forward exchange contracts to hedge the risk of exchange
rate fluctuations while simultaneously seeking to expand and
strengthen overseas production, such fluctuations may affect
the business results of Sharp.
(3) Strategic Alliances and Collaborations
Sharp implements strategic alliances and collaborations with
other companies in respective business fields to bolster the
development of new technologies and products, and to
enhance competitiveness. If, however, any strategic or other
business issues arise, or objectives change, it may become
difficult to maintain such alliances and collaborative ties with
these companies, or to generate adequate results. In such
cases, the business results and financial position of Sharp
may be impacted.
33
Sharp Annual Report 2008
(4) Business Partners
Sharp procures materials and receives services from a large
number of business partners, and transactions are made only
once a detailed credit check of the company has been
completed. However, there exists the possibility that business
partners suffer deterioration in performance due to slumping
demand or severe price erosion, face unexpected M&A, or be
impacted by natural disasters or accidents, which may affect
the business results and financial position of Sharp.
(5) Technological Innovation
New technologies are rapidly emerging in the markets that
Sharp operates. Such condition could change social
infrastructure and intensify market competition, which may
impact the business results and financial position of Sharp.
(6) Intellectual Property Rights
Sharp strives to protect its proprietary technologies by
acquiring patents and other intellectual property rights.
However, there are possibilities that rights are not granted,
and Sharp may be unable to get sufficient legal protection of
its proprietary technologies. In addition, there may be times
that a third party infringes on the intellectual property rights of
Sharp. Sharp may launch legal action against a third party in
response to the wrongful use of its intellectual property rights.
Conversely, a third party may launch legal action against
Sharp if it deems that its intellectual property rights have been
breached. Such litigation may impose a heavy financial
burden on Sharp. Although compensation is given to
employees for innovations that they make in the course of
their work pursuant to a patent reward system governed by
internal regulations, an employee may consider such payment
inadequate and initiate legal action.
(7) Product Liability
Sharp manufactures products in accordance with strict
quality control standards to ensure the utmost in quality. In
order to fulfill responsibility as a manufacturer in case product
defects do arise, Sharp has taken out insurance to cover
compensations based on product liability. Nonetheless, there
still exists the possibility of a large-scale product recall or
litigation caused by unforeseen events, which may adversely
affect brand image or influence the business results and
financial position of Sharp.
(8) Laws and Regulations
The business activities of Sharp are subject to various
regulations in countries where it operates, including business
and investment approval, export regulations, tariffs,
accounting standards and taxation. Sharp must also adhere
to various laws and regulations concerning trading, antitrust
practices, product liability, consumer protection, intellectual
property rights, product safety, the environment and
recycling. Changes in such laws and regulations, and
additional expenses to comply with the amendments may
affect the business results and financial position of Sharp.
Further, in case a major accident occurs related to one of
Sharp’s products, disclosure of said incident, based on a
system of accident reporting and disclosure pursuant to the
Consumer Product Safety Law and related regulations in
Japan, could diminish its brand image.
Extreme care is taken to protect this information. A companywide management system promotes employee education
and other measures aimed at ensuring compliance with
management regulations. If information is leaked, however,
it may reduce confidence in Sharp or result in substantial
costs (associated with leakage prevention measures or
indemnification for damages, for instance), which may affect
the business results and financial position of Sharp.
(11) Other Key Variable Factors
In addition to the aforementioned risks, the business results
of Sharp may be significantly affected by accidents and
natural calamities, or major fluctuations in the stock and
bond markets.
(9) Litigation and Other Legal Proceedings
Sharp deploys business activities around the world, and as
such, is subject to risk associated with litigation and other
legal proceedings. Differences in legal and judicial system
according to region make it difficult to predict the result of
litigation or other legal proceedings currently involving Sharp
or of these which may arise in the future. An adverse result
due to litigation and measures taken by the regulatory
authorities could affect the business results and financial
position of Sharp.
(10) Leak of Personal Data and Other Information
Sharp retains personal data and other confidential information
concerning its customers, business partners and employees.
34
Directors, Corporate Auditors and Executive Officers
(As of June 24, 2008)
Directors
Representative Director,
Chairman
Katsuhiko Machida
Representative Director,
President
Mikio Katayama
Representative Director
Masafumi Matsumoto
Representative Director
Toshio Adachi
Representative Director
Toshishige Hamano
Representative Director
Yoshiaki Ibuchi
Director
Kenji Ohta
Director
Takashi Nakagawa
Director
Tetsuo Onishi
Director
Nobuyuki Taniguchi
Corporate Auditors Executive Officers
Full-time Corporate Auditors
Junzo Ueda
Shinji Hirayama
CEO
Katsuhiko Machida
COO
Mikio Katayama
Corporate Auditors
Hiroshi Chumon
Yoichiro Natsuzumi
35
Sharp Annual Report 2008
Executive Vice
Presidents
Masafumi Matsumoto
Toshio Adachi
Toshishige Hamano
Yoshiaki Ibuchi
Senior Executive
Managing Officer
Kenji Ohta
Executive Managing
Officers
Takashi Nakagawa
Kohichi Takamori
Yoshisuke Hasegawa
Shigeaki Mizushima
Nobuyuki Sugano
Toshihiko Hirobe
Executive Officers
Yoshiki Sano
Takashi Okuda
Tetsuo Onishi
Toshihiko Fujimoto
Takuji Okawara
Takashi Nukii
Toru Chiba
Daisuke Koshima
Masatsugu Teragawa
Nobuyuki Taniguchi
Tetsuroh Muramatsu
Moriyuki Okada
Kazutaka Ihori
Norikazu Hohshi
Fujikazu Nakayama
Masami Ohbatake
Tsuneo Nakamura
Motohiko Hayashi
Shigeo Terashima
Hiroshi Morimoto
Financial Section
37
Five-Year Financial Summary
38
Financial Review
43
Consolidated Balance Sheets
45
Consolidated Statements of Income
46
Consolidated Statement of Changes in Net Assets
47
Consolidated Statements of Cash Flows
48
Notes to Consolidated Financial Statements
64
Independent Auditors’ Report
65
Consolidated Subsidiaries
36
Five-Year Financial Summary
Sharp Corporation and Consolidated Subsidiaries
Years Ended March 31
Yen
(millions)
2004
Net Sales ......................................................... ¥
Domestic sales................................................
Overseas sales................................................
Operating Income ...........................................
Income Before Income Taxes and Minority Interests...
Net Income ......................................................
Net Assets*1 ....................................................
Total Assets ....................................................
Capital Investment*2 .......................................
Depreciation and Amortization*3....................
R&D Expenditures...........................................
Sales by Product Group*4 (Sales to Outside Customers)
Audio-Visual and Communication Equipment......
Home Appliances.........................................
Information Equipment.....................................
Consumer/Information Products .....................
I Cs ..............................................................
LCDs ...........................................................
Other Electronic Components .....................
Electronic Components...................................
Total ...............................................................
Audio-Visual and Communication Equipment......
Home Appliances.........................................
Information Equipment.....................................
Consumer/Information Products .....................
LSIs .............................................................
LCDs ...........................................................
Other Electronic Components .....................
Electronic Components...................................
Total ...............................................................
Sales by Region*5
Japan..............................................................
The Americas ..................................................
Europe ............................................................
Asia.................................................................
Other ..............................................................
Total ...............................................................
Japan..............................................................
The Americas ..................................................
Europe ............................................................
China ..............................................................
Other ..............................................................
Total ...............................................................
Per Share of Common Stock
Net income ..................................................... ¥
Diluted net income ..........................................
Cash dividends ..............................................
Net assets.......................................................
Other Financial Data
Return on equity (ROE)....................................
Return on assets (ROA)...................................
Equity ratio ......................................................
2005
2006
U.S. Dollars
(thousands)
2007
2008
2008
2,257,273 ¥ 2,539,859 ¥ 2,797,109 ¥ 3,127,771 ¥ 3,417,736 $ 34,522,586
1,397,081
1,526,938
1,329,711
16,068,152
1,590,747
1,143,548
1,400,028
1,600,833
1,210,148
18,454,434
1,826,989
1,113,725
163,710
186,531
151,020
1,855,475
183,692
121,670
140,018
158,295
128,184
1,638,788
162,240
102,720
88,671
101,717
76,845
1,029,515
101,922
60,715
1,098,910
1,192,205
1,004,326
12,544,121
1,241,868
943,532
2,560,299
2,968,810
2,385,026
31,042,495
3,073,207
2,150,250
238,839
314,301
243,388
3,477,394
344,262
248,178
193,114
217,715
175,969
2,793,606
276,567
159,831
154,362
189,852
148,128
1,981,677
196,186
138,786
837,390
208,473
392,833
1,438,696
169,754
421,741
227,082
818,577
2,257,273
—
—
—
—
—
—
—
—
—
972,563
212,064
416,310
1,600,937
140,915
543,804
254,203
938,922
2,539,859
972,563
212,064
416,310
1,600,937
132,375
543,804
262,743
938,922
2,539,859
—
—
—
—
—
—
—
—
—
1,090,905
224,650
421,208
1,736,763
135,754
633,493
291,099
1,060,346
2,797,109
—
—
—
—
—
—
—
—
—
1,381,105
239,081
437,923
2,058,109
146,556
628,821
294,285
1,069,662
3,127,771
—
—
—
—
—
—
—
—
—
1,598,199
249,843
437,299
2,285,341
163,504
683,310
285,581
1,132,395
3,417,736
—
—
—
—
—
—
—
—
—
16,143,424
2,523,667
4,417,162
23,084,253
1,651,555
6,902,121
2,884,657
11,438,333
34,522,586
1,143,548
308,807
330,772
279,161
194,985
2,257,273
—
—
—
—
—
—
1,329,711
372,184
407,455
207,186
223,323
2,539,859
—
—
—
—
—
—
1,397,081
450,307
488,945
214,131
246,645
2,797,109
1,397,081
450,307
488,945
195,333
265,443
2,797,109
—
—
—
—
—
—
1,526,938
582,588
523,301
305,895
189,049
3,127,771
—
—
—
—
—
—
1,590,747
625,841
584,252
412,470
204,426
3,417,736
—
—
—
—
—
—
16,068,152
6,321,626
5,901,535
4,166,364
2,064,909
34,522,586
55.37 ¥
54.73
18.00
864.77
U.S. Dollars
Yen
80.85 ¥
93.25 ¥
70.04 ¥
0.94
93.17 $
—
90.00
69.60
0.88
86.91
22.00
26.00
20.00
28.00
0.28
1,006.91
1,084.76
920.09
1,119.09
11.30
6.6%
2.9%
43.9%
7.9%
3.4%
42.1%
8.4%
3.6%
42.9%
8.9%
3.7%
39.9%
8.4%
3.4%
40.1%
—
—
—
for the year ended March 31, 2007, the Company adopted the new accounting standards, “Accounting Standard for Presentation of Net Assets in the
*1 Effective
Balance Sheet” (Accounting Standards Board Statement No. 5) and the “Implementation Guidance for the Accounting Standard for Presentation of Net Assets
in the Balance Sheet” (Financial Standards Implementation Guidance No. 8). Prior year figures have not been restated.
2 The amount of properties for lease is included in capital investment.
3 Pursuant to an amendment to the Corporate Tax Law, effective for the year ended March 31, 2008, tangible fixed assets acquired on and after April 1, 2007,
have been depreciated in accordance with the method stipulated in the amended Corporate Tax Law.
4 Effective for the year ended March 31, 2006, the IC group was renamed the LSI group and some items previously included in ICs had been reclassified and
were included in Other Electronic Components. In this connection, “Sales by Product Group” of 2005 has been restated to conform with the 2006 presentation.
Effective for the year ended March 31, 2008, some items previously included in Other Electronic Components have been reclassified and are included in LSIs.
In this connection, “Sales by Product Group” of 2007 has been restated to conform with the 2008 presentation.
5 For the year ended March 31, 2007, the Company recategorized its segmentation for “Overseas sales” information. Consequently, “China,” which had been
previously included in “Other,” is indicated as one of the geographic segments and “Asia,” which had been indicated as one of the geographic segments, has
been reclassified into “Other.” In this connection, “Sales by Region” of 2006 has been restated to conform with the 2007 presentation.
*
*
*
*
37
Sharp Annual Report 2008
Financial Review
Sharp Corporation and Consolidated Subsidiaries
Operations
Consolidated net sales for the year ended March 31, 2008
increased by 9.3% against the prior year, to ¥3,417,736 million,
marking a new record high for the fifth consecutive year.
and air purifiers equipped with Plasmacluster Ion technology,
and superheated steam ovens. Sales of refrigerators also
expanded. Sales in this group increased by 4.5% to
¥249,872 million.
[Sales by Product Group (Including Intersegment Sales)]
The following sales by product group include internal sales
between segments (Consumer/Information Products and
Electronic Components).
• Information Equipment
Although sales of wireless PDAs and copiers/printers, led by
color models, increased steadily, sales of PCs declined. Sales
in this group dipped by 0.9% to ¥442,886 million.
Consumer/Information Products
• Audio-Visual and Communication Equipment
Sales of LCD TVs grew, particularly large-size models, due to
the expanded line-up of products equipped with full-spec
high-definition LCD panels. Sales of mobile phones were brisk
thanks to an extensive range, including models capable of
receiving “One Seg,” a terrestrial digital broadcasting for
mobile equipment in Japan. Sales in this group increased by
15.7% to ¥1,598,948 million.
Electronic Components
• LSIs
Although sales of flash memory decreased, sales of
CCD/CMOS imagers increased, notably camera modules for
mobile phones and CCDs for digital cameras. Sales in this
group increased by 1.6% to ¥203,520 million.
• Home Appliances
Sharp posted steady sales of distinctive products that make
the most of its unique technology, such as air conditioners
• LCDs
Sales in LCD panels for TVs increased due to strengthening
production capacity at the Kameyama No. 2 Plant. Sales of
System LCDs for mobile equipment, such as mobile phones,
increased. Sales in this group increased by 18.4% to
¥1,234,100 million.
Sales by Product Group*1 (Including Intersegment Sales)
Net Sales
Sales by product group below include internal sales between segments (Consumer/Information Products and Electronic Components).
(billions of yen)
2007
2008
Audio-Visual and Communication Equipment ....
¥ 1,381,506
¥ 1,598,948
Home Appliances ...........................................
239,113
249,872
2,523,960
Information Equipment....................................
446,921
442,886
4,473,596
Consumer/Information Products........................
2,067,540
2,291,706
23,148,546
3,127
3,000
2,797
2,539
2,500
2,257
U.S. Dollars
(thousands)
Yen
(millions)
3,417
3,500
2008
$
16,150,990
2,000
LSIs*2 .............................................................
200,341
203,520
2,055,758
1,500
LCDs ..............................................................
1,042,324
1,234,100
12,465,656
Other Electronic Components ........................
319,021
325,265
3,285,505
1,000
Electronic Components .....................................
1,561,686
1,762,885
17,806,919
500
Elimination .........................................................
(501,455)
(636,855)
(6,432,879)
Total ..................................................................
3,127,771
3,417,736
34,522,586
0
04 05 06 07 08
for the year ended March 31, 2008, some items previously included in Other Electronic Components
*1 Effective
have been reclassified and are included in LSIs. In this connection, “Sales by Product Group” of 2007 has been
restated to conform with the 2008 presentation.
*2 The LSI group’s sales do not include internal sales to the LCD/Other Electronic Component group.
38
• Other Electronic Components
Although sales of solar cells remained roughly on par with the
prior year due to a shortage of silicon materials, sales of
electronic components, especially those for digital equipment,
were strong. Sales in this group increased by 2.0% to
¥325,265 million.
Income before income taxes and minority interests
increased by ¥3,945 million to ¥162,240 million. Net income
for the year was ¥101,922 million, up ¥205 million. Net
income per share of common stock was ¥93.17.
Segment Information
[By Business Segment]
Sales in the Consumer/Information Products segment
increased by 10.8% over the prior year to ¥2,291,706 million.
Operating income decreased by 3.0% to ¥79,218 million.
Sales in the Electronic Components segment increased
by 12.9% to ¥1,762,885 million, while operating income
decreased by 1.1% to ¥104,363 million.
Financial Results
Cost of sales rose by ¥248,115 million over the prior year to
¥2,662,707 million. The cost of sales ratio increased from
77.2% to 77.9%.
Selling, general and administrative (SG&A) expenses were
up ¥44,689 million against prior year to ¥571,337 million,
while the ratio of SG&A expenses against net sales decreased
from 16.8% to 16.7%. SG&A expenses included advertising
expenses of ¥75,375 million and employees’ salaries and
other benefits of ¥126,739 million.
As a result, operating income amounted to ¥183,692
million, down ¥2,839 million from the prior year, and the operating income ratio was 5.4% relative to 6.0% in the prior year.
Other expenses, net of other income, improved by
¥6,784 million to an other net loss of ¥21,452 million.
Selling, General and
Administrative Expenses
Cost of Sales
(billions of yen)
(%)
(billions of yen)
3,000
95
600
571
2,662
2,500
2,414
1,959
(%)
(billions of yen)
50
200
(%)
(billions of yen)
12
120
(%)
8
186 183
101 101
163
468
480
40
151
150
422 429
9
88
90
85
240
20
120
10
6
76
121
30
360
80
1,500
Net Income
526
1,713
100
6
60
50
3
30
0
0
60
4
75
1,000
2
70
500
65
0
39
Operating Income
90
2,165
2,000
[By Geographic Segment]
In Japan, sales of large-size LCD panels for TVs and mobile
phones expanded. Regional sales increased by 6.2% over the
prior year to ¥2,941,635 million. Operating income decreased
by 11.5% to ¥144,502 million due to the impact of an
increase in depreciation and amortization in line with an
amendment to the Corporate Tax Law in Japan.
In the Americas, strong sales of LCD TVs led to an
0
0
0
04 05 06 07 08
04 05 06 07 08
04 05 06 07 08
Ratio to net sales
Ratio to net sales
Ratio to net sales
Sharp Annual Report 2008
0
04 05 06 07 08
Ratio to net sales
increase of 8.3% in regional sales to ¥577,912 million.
Operating income was down 21.9% at ¥7,444 million due
mainly to an increase in start-up costs for an LCD TV
production facility.
In Europe, sales of LCD TVs were robust, and sales of
CCD/CMOS imagers grew. Regional sales increased by
11.9% to ¥552,376 million and operating income increased
by 38.8% to ¥11,280 million.
In China, sales of LCD TVs were strong, while sales of
LCD panels for TVs and mobile equipment expanded.
Regional sales increased by 22.4% to ¥641,531 million.
Operating income was up 11.2% at ¥9,835 million.
In Other, sales of LCD TVs and large-size LCD panels for
TVs were brisk, while sales of refrigerators and air
conditioners expanded steadily. Overall sales were up 12.0%
to ¥380,428 million, and operating income climbed 74.1% to
¥3,683 million.
Capital Investment* and Depreciation
Capital investment for the fiscal year was ¥344,262 million, up
9.5% from the prior year. The majority of this was investment
to reinforce production lines at the Kameyama No. 2 Plant
aimed at providing a stable supply of large-size LCD panels,
to develop a new LCD panel plant planned for Sakai City,
Osaka Prefecture, and to strengthen production facilities at
foreign subsidiaries in the Americas and Europe.
The capital investment of Consumer/Information
Products was ¥45,976 million and of Electronic Components
was ¥298,286 million.
Depreciation and amortization increased by 27.0% to
¥276,567 million.
*The amount of properties for lease is included in capital investment.
Assets, Liabilities and Net Assets
Total assets increased by ¥104,397 million over the prior year
to ¥3,073,207 million.
[Assets]
Current assets amounted to ¥1,642,622 million, a decrease of
¥36,641 million from the prior year. This was due mainly to a
decrease in short-term investments of ¥44,673 million to
¥2,492 million and a decrease in notes and accounts receivable
of ¥25,365 million to ¥679,916 million. Inventories totaled
¥454,352 million, up ¥18,709 million. Of this amount, finished
[Consumer/Information Products]
[Electronic Components]
Sales
Operating Income
Sales
Operating Income
(billions of yen)
(billions of yen)
(billions of yen)
(billions of yen)
2,400
2,291
1,762
1,800
90
81
2,067
79
1,561
101
1,500
2,000
1,358
1,742
1,600
120
1,612
62
60
57
1,447
1,200
105 104
93
90
1,197
73
1,004
47
900
1,200
800
60
600
30
30
300
400
0
0
0
04 05 06 07 08
04 05 06 07 08
0
04 05 06 07 08
04 05 06 07 08
40
products were up ¥4,208 million to ¥198,579 million, work in
process was up ¥28,989 million to ¥148,351 million, and raw
materials were down ¥14,488 million to ¥107,422 million.
Plant and equipment increased by ¥92,261 million to
¥1,105,788 million due mainly to capital investment in the
Kameyama No. 2 Plant.
Investments and other assets stood at ¥324,797 million,
up ¥48,777 million, due mainly to an increase in other assets.
[Liabilities]
Current liabilities increased by ¥39,106 million over the prior
year to ¥1,431,371 million. Short-term borrowings increased
by ¥83,590 million to ¥324,328 million. Of this amount,
bank loans increased by ¥1,229 million to ¥120,139 million,
commercial paper increased by ¥135,303 million to ¥158,168
million and current portion of long-term debt decreased
by ¥52,916 million to ¥46,011 million. Notes and accounts
payable were ¥825,510 million, a decrease of ¥48,766
million.
Long-term liabilities were ¥399,968 million, up ¥15,628
million from the prior year. This was due mainly to an increase
of ¥18,828 million in long-term debt.
Depreciation and
Amortization
Capital Investment
(billions of yen)
344
350
250
[Net Assets]
Retained earnings increased by ¥71,178 million over the
prior year to ¥816,387 million. Foreign currency translation
adjustments generated a loss of ¥19,564 million due to
variation in the exchange rate. As a result, net assets
amounted to ¥1,241,868 million, up ¥49,663 million. The
equity ratio was 40.1%.
Cash Flows
Cash and cash equivalents at the end of the year were
¥339,266 million, an increase of ¥9,980 million over the prior
year as proceeds from operating activities and financing
activities exceeded payments in investing activities associated
with capital investments.
Net cash provided by operating activities increased by
¥9,412 million to ¥323,764 million. Despite a turnaround from
an increase in payables of ¥143,425 million recorded in the
prior year to a decrease of ¥28,200 million, there was also a
turnaround from an increase in notes and accounts receivable
Total Assets
(billions of yen)
(billions of yen)
(billions of yen)
3,200
500
3,073
2,968
276
(month)
4.0
454
435
250
248
Inventories
300
314
300
Interest-bearing debt was ¥703,911 million, up ¥102,444
million.
2,560
217
243 238
2,400
175
200
3.2
400
2,150
193
200
2,385
325
300
159
336
2.4
273
1,600
150
150
200
1.6
100
0.8
100
100
800
50
50
0
0
0
04 05 06 07 08
04 05 06 07 08
0
0
04 05 06 07 08
04 05 06 07 08
Ratio to monthly turnover
41
Sharp Annual Report 2008
of ¥73,726 million to a decrease of ¥3,931 million, a decrease
of ¥62,389 million in increase in inventories, and an increase
in depreciation and amortization of properties and intangibles
of ¥57,008 million.
Net cash used in investing activities amounted to
¥394,962 million, an increase of ¥66,173 million. The primary
factor was an increase of ¥68,379 million in purchase of plant
and equipment.
Net cash provided by financing activities totaled ¥84,094
million, up ¥42,924 million. Despite a decrease of ¥128,472
million in proceeds from long-term debt and an increase of
¥93,533 million in repayments of long-term debt, there was a
turnaround from a decrease in short-term borrowings, net, of
¥121,568 million to an increase of ¥128,472 million.
Interest-bearing Debt
Net Assets*
Equity Ratio
Cash and Cash
Equivalents
(billions of yen)
(billions of yen)
(%)
(billions of yen)
800
1,500
50
360
703
601
600
43.9
1,200
40
42.1 42.9
39.9 40.1
339
295 299
300
277
1,098
1,004
525 522
441
1,241
1,192
329
240
943
30
900
400
180
20
600
120
200
10
300
60
0
0
0
04 05 06 07 08
04 05 06 07 08
0
04 05 06 07 08
04 05 06 07 08
Refer to footnote ( 1) on
* page
*
37
42
Consolidated Balance Sheets
Sharp Corporation and Consolidated Subsidiaries as of March 31, 2007 and 2008
Yen
(millions)
2007
U.S. Dollars
(thousands)
2008
2008
ASSETS
Current Assets:
Cash and cash equivalents ............................................................................
¥
329,286
¥
339,266
$
3,426,929
Time deposits................................................................................................
55,365
49,519
500,192
Short-term investments (Note 2) ....................................................................
47,165
2,492
25,172
Trade.......................................................................................................
617,891
596,948
6,029,778
Installment ...............................................................................................
67,222
78,492
792,848
Nonconsolidated subsidiaries and affiliates ..............................................
26,034
10,550
106,566
Allowance for doubtful receivables...........................................................
(5,866)
(6,074)
(61,354)
Inventories (Note 3).......................................................................................
435,643
454,352
4,589,414
Other current assets (Note 4).........................................................................
106,523
117,077
1,182,596
Total current assets............................................................................
1,679,263
1,642,622
16,592,141
Land..............................................................................................................
54,373
90,420
913,333
Buildings and structures ................................................................................
629,443
658,504
6,651,556
Machinery and equipment .............................................................................
1,933,310
2,112,595
21,339,344
Construction in progress................................................................................
60,116
81,795
826,212
2,677,242
2,943,314
29,730,445
(1,663,715)
(1,837,526)
(18,560,869)
1,013,527
1,105,788
11,169,576
Investments in securities (Note 2)...................................................................
115,496
109,884
1,109,939
Investments in nonconsolidated subsidiaries and affiliates..............................
18,260
17,740
179,192
Bond issue cost .............................................................................................
4,865
4,117
41,586
Other assets (Note 4).....................................................................................
137,399
193,056
1,950,061
276,020
324,797
3,280,778
Notes and accounts receivable—
Plant and Equipment, at Cost (Note 6):
Less accumulated depreciation .....................................................................
Investments and Other Assets:
¥
2,968,810
The accompanying notes to the consolidated financial statements are an integral part of these statements.
43
Sharp Annual Report 2008
¥
3,073,207
$
31,042,495
Yen
(millions)
2007
U.S. Dollars
(thousands)
2008
2008
LIABILITIES AND NET ASSETS
Current Liabilities:
Short-term borrowings, including current portion of long-term debt (Note 5).....
¥
240,738
¥
324,328
$
3,276,040
Notes and accounts payable—
Trade.......................................................................................................
742,711
713,541
7,207,485
Construction and other............................................................................
124,100
104,615
1,056,717
Nonconsolidated subsidiaries and affiliates ..............................................
7,465
7,354
74,283
Accrued expenses.........................................................................................
229,042
232,194
2,345,394
Income taxes (Note 4)....................................................................................
27,403
23,154
233,879
Other current liabilities (Note 4) ......................................................................
20,806
26,185
264,495
Total current liabilities.........................................................................
1,392,265
1,431,371
14,458,293
360,765
379,593
3,834,273
Long-term Liabilities:
Long-term debt (Note 5) ................................................................................
Allowance for severance and pension benefits (Note 9) .................................
10,436
6,600
66,667
Other long-term liabilities (Note 4) ..................................................................
13,139
13,775
139,141
384,340
399,968
4,040,081
— 1,110,699 thousand shares...............................................
204,676
204,676
2,067,434
Capital surplus...............................................................................................
262,295
268,582
2,712,949
Retained earnings..........................................................................................
745,209
816,387
8,246,333
20,021 thousand shares in 2007 and 10,174 thousand shares in 2008 .....
(26,844)
(13,711)
(138,495)
Net unrealized holding gains on securities .....................................................
24,381
1,662
16,788
Net unrealized gains on hedging derivatives, net of taxes ..............................
1
145
1,465
Foreign currency translation adjustments.......................................................
(26,591)
(46,155)
(466,212)
Minority interests ...........................................................................................
9,078
10,282
103,859
Contingent Liabilities (Note 8)
Net Assets (Note 7):
Common stock:
Authorized — 2,500,000 thousand shares
Issued
Less cost of treasury stock:
Total net assets .................................................................................
1,241,868
1,192,205
¥
2,968,810
¥
3,073,207
12,544,121
$
31,042,495
44
Consolidated Statements of Income
Sharp Corporation and Consolidated Subsidiaries for the Years Ended March 31, 2007 and 2008
Yen
(millions)
2007
Net Sales........................................................................................................
¥
U.S. Dollars
(thousands)
2008
3,127,771
¥
3,417,736
2008
$
34,522,586
Cost of Sales .................................................................................................
2,414,592
2,662,707
26,896,030
Gross profit .........................................................................................
713,179
755,029
7,626,556
Selling, General and Administrative Expenses ............................................
526,648
571,337
5,771,081
Operating income ................................................................................
186,531
183,692
1,855,475
Other Income (Expenses):
Interest and dividend income .......................................................................
6,913
8,086
81,677
Interest expense ..........................................................................................
(7,668)
(9,957)
(100,576)
Foreign exchange gain, net..........................................................................
401
9,562
96,586
Other, net ....................................................................................................
(27,882)
(29,143)
(294,374)
(28,236)
(21,452)
(216,687)
Income before income taxes and minority interests .............................
158,295
162,240
1,638,788
Current ........................................................................................................
51,264
49,746
502,485
Deferred ......................................................................................................
4,607
9,276
93,697
55,871
59,022
596,182
Income before minority interests ..........................................................
102,424
103,218
1,042,606
Minority Interests in Income of Consolidated Subsidiaries.........................
(707)
(1,296)
(13,091)
Income Taxes (Note 4):
Net income..........................................................................................
¥
101,717
¥
101,922
$
Yen
2007
1,029,515
U.S. Dollars
2008
2008
Per Share of Common Stock (Note 7):
Net income..................................................................................................
¥
93.25
93.17
$
0.94
90.00
86.91
0.88
Cash dividends............................................................................................
26.00
28.00
0.28
The accompanying notes to the consolidated financial statements are an integral part of these statements.
45
¥
Diluted net income.......................................................................................
Sharp Annual Report 2008
Consolidated Statements of Changes in Net Assets
Sharp Corporation and Consolidated Subsidiaries for the Years Ended March 31, 2007 and 2008
Yen
(millions)
(thousands)
Number of
shares
Shareholders’ equity at March 31, 2006 as
previously reported
Reclassification due to adoption of new
accounting standards for presentation of net
assets in the balance sheet at April 1, 2006
Net assets at April 1, 2006
Net income
Cash dividends paid
Directors’ and statutory auditors’ bonuses
Increase resulting from increase in
number of consolidated subsidiaries
Decrease resulting from increase in
number of consolidated subsidiaries
Decrease resulting from change in accounting
standards of consolidated subsidiaries
Increase due to unfunded retirement
benefit obligation of foreign subsidiaries
Purchase of treasury stock
Disposal of treasury stock
Net changes in items other than owners’ equity
Balance at March 31, 2007
Net income
Cash dividends paid
Increase resulting from increase in
number of consolidated subsidiaries
Decrease resulting from increase in
number of consolidated subsidiaries
Decrease resulting from increase in
number of equity method affiliates
Increase due to unfunded retirement
benefit obligation of foreign subsidiaries
Purchase of treasury stock
Disposal of treasury stock
Net changes in items other than owners’ equity
Balance at March 31, 2008
Common
stock
(Note 7)
Capital
surplus
(Note 7)
Retained
earnings
(Note 7)
Treasury
stock
Minority
interests
Total
1,110,699
204,676
262,288
668,687
(26,381)
27,992
—
(38,352)
—
1,098,910
1,110,699
204,676
262,288
668,687
101,717
(26,180)
(468)
(26,381)
27,992
—
(38,352)
8,734
8,734
8,734
1,107,644
101,717
(26,180)
(468)
1,875
1,875
(428)
(428)
(2,826)
(2,826)
2,832
(480)
17
7
1,110,699
204,676
262,295
745,209
101,922
(30,538)
(26,844)
(3,611)
24,381
1
1
11,761
(26,591)
344
9,078
192
(1,597)
(1,597)
(29)
(29)
1,228
(369)
13,502
6,287
1,110,699
204,676
268,582
816,387
(13,711)
(22,719)
1,662
144
145
(19,564)
(46,155)
1,204
10,282
1,228
(369)
19,789
(40,935)
1,241,868
U.S. Dollars
(thousands)
Number of
shares
Common
stock
(Note 7)
Capital
surplus
(Note 7)
1,110,699
2,067,434
2,649,444
Retained
earnings
(Note 7)
7,527,364
1,029,515
(308,465)
Treasury
stock
(271,152)
Net
Net unrealized
Foreign
unrealized gains on hedging currency
holding gains
derivatives,
translation
on securities
net of taxes adjustments
246,273
10
(268,596)
2,712,949
Total
91,697 12,042,474
1,029,515
(308,465)
1,939
(16,131)
(16,131)
(293)
(293)
(3,727)
136,384
63,505
2,067,434
Minority
interests
1,939
12,404
1,110,699
2,832
(480)
24
8,495
1,192,205
101,922
(30,538)
192
(thousands)
Balance at March 31, 2007
Net income
Cash dividends paid
Increase resulting from increase in
number of consolidated subsidiaries
Decrease resulting from increase in
number of consolidated subsidiaries
Decrease resulting from increase in
number of equity method affiliates
Increase due to unfunded retirement
benefit obligation of foreign subsidiaries
Purchase of treasury stock
Disposal of treasury stock
Net changes in items other than owners’ equity
Balance at March 31, 2008
Net
Net unrealized
Foreign
unrealized gains on hedging currency
holding gains
derivatives,
translation
on securities
net of taxes adjustments
8,246,333
(138,495)
(229,485)
16,788
1,455
1,465
(197,616)
(466,212)
12,404
(3,727)
199,889
12,162
(413,484)
103,859 12,544,121
The accompanying notes to the consolidated financial statements are an integral part of these statements.
46
Consolidated Statements of Cash Flows
Sharp Corporation and Consolidated Subsidiaries for the Years Ended March 31, 2007 and 2008
Yen
(millions)
2007
Cash Flows from Operating Activities:
Income before income taxes and minority interests.......................................
Adjustments to reconcile income before income taxes and minority
interests to net cash provided by operating activities—
Depreciation and amortization of properties and intangibles....................
Interest and dividend income ..................................................................
Interest expense .....................................................................................
Foreign exchange loss ............................................................................
Loss on sales and disposal of plant and equipment ................................
Decrease (increase) in notes and accounts receivable.............................
Increase in inventories.............................................................................
(Decrease) increase in payables ..............................................................
Other, net ...............................................................................................
Total ....................................................................................................
Interest and dividends received.....................................................................
Interest paid..................................................................................................
Income taxes paid ........................................................................................
¥
158,295
2008
2008
¥
162,240
$
1,638,788
208,632
(6,913)
7,668
2,760
7,356
(73,726)
(86,946)
143,425
7,756
368,307
9,432
(8,182)
(55,205)
265,640
(8,086)
9,957
3,067
8,039
3,931
(24,557)
(28,200)
(15,109)
376,922
8,939
(9,849)
(52,248)
2,683,232
(81,677)
100,576
30,980
81,202
39,707
(248,051)
(284,848)
(152,616)
3,807,293
90,293
(99,485)
(527,758)
314,352
323,764
3,270,343
(120,063)
95,072
6,480
(294,548)
1,407
(99,502)
105,364
7,514
(362,927)
871
(1,005,071)
1,064,283
75,899
(3,665,929)
8,798
(4,121)
(54,994)
(555,495)
1,944
(1,063)
683
(14,580)
19,385
(510)
347
(10,510)
195,808
(5,151)
3,505
(106,162)
Net cash used in investing activities ..................................................
(328,789)
(394,962)
(3,989,515)
Cash Flows from Financing Activities:
Increase (decrease) in short-term borrowings, net ........................................
Proceeds from long-term debt......................................................................
Repayments of long-term debt .....................................................................
Disposal of treasury stock.............................................................................
Purchase of treasury stock ...........................................................................
Dividends paid..............................................................................................
Other, net .....................................................................................................
(121,568)
218,370
(28,461)
24
(480)
(26,181)
(534)
128,472
89,898
(121,994)
19,786
(369)
(30,530)
(1,169)
1,297,697
908,060
(1,232,263)
199,859
(3,727)
(308,384)
(11,808)
Net cash provided by financing activities ...........................................
41,170
84,094
849,434
Effect of Exchange Rate Changes on Cash and Cash Equivalents............
Net Increase in Cash and Cash Equivalents ................................................
Cash and Cash Equivalents at Beginning of Year .......................................
Cash and Cash Equivalents of Newly Consolidated Subsidiaries ..............
Cash and Cash Equivalents Increased by Merger.......................................
463
27,196
299,466
2,583
41
(4,549)
8,347
329,286
1,439
194
(45,949)
84,313
3,326,121
14,535
1,960
Net cash provided by operating activities ..........................................
Cash Flows from Investing Activities:
Purchase of time deposits ............................................................................
Proceeds from redemption of time deposits .................................................
Proceeds from sales of short-term investments ............................................
Acquisitions of plant and equipment .............................................................
Proceeds from sales of plant and equipment ................................................
Purchase of investments in securities and investments in nonconsolidated
subsidiaries and affiliates ............................................................................
Proceeds from sales of investments in securities and investments in
nonconsolidated subsidiaries and affiliates..................................................
Loans made .................................................................................................
Proceeds from collection of loans .................................................................
Other, net .....................................................................................................
Cash and Cash Equivalents at End of Year .................................................
¥
329,286
The accompanying notes to the consolidated financial statements are an integral part of these statements.
47
U.S. Dollars
(thousands)
Sharp Annual Report 2008
¥
339,266
$
3,426,929
Notes to Consolidated Financial Statements
Sharp Corporation and Consolidated Subsidiaries
1. Summary of Significant Accounting and Reporting Policies
(a) Basis of presenting consolidated financial statements
The accompanying consolidated financial statements of
Sharp Corporation (“the Company”) and its consolidated subsidiaries have been prepared in accordance with the provisions set forth in the Japanese Financial Instruments and
Exchange Law and its related accounting regulations and in
conformity with accounting principles generally accepted in
Japan (“Japanese GAAP”), which are different in certain
respects as to application and disclosure requirements from
International Financial Reporting Standards.
The accounts of the Company’s overseas subsidiaries are
based on their accounting records maintained in conformity
with generally accepted accounting principles prevailing in
their respective countries of domicile. The accompanying
consolidated financial statements have been restructured and
translated into English (with certain expanded disclosures)
from the consolidated financial statements of the Company
prepared in accordance with Japanese GAAP and filed with
the appropriate Local Finance Bureau of the Ministry of
Finance as required by the Japanese Financial Instruments
and Exchange Law. Certain supplementary information
included in the Japanese language statutory consolidated
financial statements, but not required for fair presentation,
is not presented in the accompanying consolidated financial
statements.
The translation of the Japanese yen amounts into U.S.
dollar amounts is included solely for the convenience of readers outside Japan, using the prevailing exchange rate at
March 31, 2008, which was ¥99 to U.S. $1.00. The translations should not be construed as a representation that the
Japanese yen amounts have been, could have been or could
in the future be converted into U.S. dollars at this or any other
rate of exchange.
(b) Principles of consolidation
The accompanying consolidated financial statements include
the accounts of the Company and significant companies over
which the Company has power of control through majority voting right or existence of certain conditions evidencing control by
the Company. Investments in nonconsolidated subsidiaries and
affiliates over which the Company has the ability to exercise
significant influence over operating and financial policies are
accounted for using the equity method.
In the elimination of investments in consolidated subsidiaries, the assets and liabilities of the subsidiaries, including
the portion attributable to minority shareholders, are evalu-
ated using the fair value at the time the Company acquired
control of the respective subsidiary.
Material intercompany balances, transactions and profits
have been eliminated in consolidation.
(c) Translation of foreign currencies
Monetary assets and liabilities denominated in foreign currencies are translated into Japanese yen at current rates at each
balance sheet date, and the resulting translation gains or
losses are charged to income.
Assets and liabilities are translated at current rates at each
balance sheet date, net assets accounts are translated at historical rates, and revenues and expenses are translated at
average rates prevailing during the year. The resulting foreign
currency translation adjustments are shown as a separate
component in net assets.
(d) Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits
on demand placed with banks and highly liquid investments
with insignificant risk of changes in value which have maturities of three months or less when purchased.
(e) Short-term investments and investments in securities
Short-term investments consist of certificates of deposits and
interest-bearing securities.
Investments in securities consist principally of marketable
and nonmarketable equity securities and interest-bearing
securities.
The Company and its domestic consolidated subsidiaries
categorize those securities as “other securities,” which, in
principle, include all securities other than trading securities
and held-to-maturity securities.
Other securities with available fair market values are
stated at fair market value, which is calculated as the average
of market prices during the last month of the fiscal year.
Unrealized holding gains and losses on these securities are
reported, net of applicable income taxes, as a separate component of net assets. Realized gains and losses on the sale of
such securities are principally computed using average cost.
Other securities with no available fair market values are
stated at average cost, except for interest-bearing securities.
Interest-bearing securities are stated at amortized cost, net of
the amount considered uncollectible.
If the fair market value of other securities declines
significantly, such securities are stated at fair market value
48
and the difference between the fair market values and the
carrying amount is recognized as loss in the period of decline.
If the net asset value of other securities (except for interestbearing securities) with no available fair market values
declines significantly, the securities are written down to the
net asset value and charged to income. In these cases, the
fair market value or the net asset value is carried forward to
the next year.
( f ) Leases
Finance leases, except those leases for which the ownership
of the leased assets is considered to be transferred to the
lessee, are primarily accounted for as operating leases.
(g) Inventories
Finished products are principally stated at the lower of moving
average cost or market. However, finished products held by
overseas consolidated subsidiaries are principally valued at
the lower of first-in, first-out cost or market. Work in process
and raw materials are principally stated at current production
and purchase costs, respectively, but not in excess of the
estimated realizable value.
(h) Depreciation and amortization
Depreciation of plant and equipment is primarily computed
using the declining-balance method, except for machinery
and equipment in the Mie and Kameyama plants which are
depreciated using the straight line method over the estimated
useful life of the asset. Buildings acquired by the Company
and its domestic consolidated subsidiaries on and after April 1,
1998 are depreciated using the straight-line method.
Properties at overseas consolidated subsidiaries are mainly
depreciated using the straight-line method.
Maintenance and repairs, including minor renewals and
betterments, are charged to income as incurred.
( i ) Accrued bonuses
The Company and its domestic consolidated subsidiaries
accrue estimated amounts of employees’ bonuses based on
the estimated amounts to be paid in the subsequent period.
( j ) Income taxes
The asset and liability approach is used to recognize deferred
tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
49
Sharp Annual Report 2008
(k) Severance and pension benefits
The Company and its domestic consolidated subsidiaries
have primarily a trustee noncontributory defined benefit pension plan for their employees to supplement a governmental
welfare pension plan.
Certain overseas consolidated subsidiaries primarily have
defined contribution pension plans and lump-sum retirement
benefit plans.
The Company and its domestic consolidated subsidiaries
provide an allowance for severance and pension benefits
based on the estimated amounts of projected benefit obligation and the fair value of plan assets at the balance sheet
date. Projected benefit obligation and expenses for severance
and pension benefits are determined based on the amounts
actuarially calculated using certain assumptions.
The excess of the projected benefit obligation over the
total of the fair value of pension assets as of April 1, 2001 and
the allowance for severance and pension benefits recorded
as of April 1, 2001 (the “net transition obligation”) amounted
to ¥69,090 million. The net transition obligation is being amortized in equal amounts over 7 years commencing with the
year ended March 31, 2002. Prior service costs are amortized
using the straight-line method over the average of the estimated remaining service years (16 years) commencing with
the current period. Actuarial gains and losses are primarily
amortized using the straight-line method over the average of
the estimated remaining service years (16 years) commencing
with the following period.
Effective for the year ended March 31, 2007, the consolidated subsidiaries in the U.S.A. adopted the revised accounting standard for retirement benefits in the U.S.A..
As a result, retained earnings decreased by ¥2,826 million
since prior service costs and actuarial losses that had not
been recognized were charged directly to retained earnings
with an immaterial impact on the net income for the year
ended March 31, 2007.
The effects of these changes on segment information are
stated in Note 10. Segment Information.
( l ) Research and development expenses and software
costs
Research and development expenses are charged to income
as incurred. The research and development expenses are
charged to income amounted to ¥189,852 million and
¥196,186 million ($1,981,677 thousand) for the years ended
March 31, 2007 and 2008, respectively.
Software costs are recorded principally in other assets.
Software used by the Company is amortized by the straightline method over the estimated useful life of principally 5
years, and software embedded in products is amortized over
the forecasted sales quantity.
(m) Derivative financial instruments
The Company and some of its consolidated subsidiaries use
derivative financial instruments, include foreign exchange forward contracts and interest rate swap agreements, in order
to hedge the risk of fluctuations in foreign currency exchange
rates and interest rates associated with assets and liabilities
denominated in foreign currencies, investments in securities
and debt obligations.
All derivative financial instruments are stated at fair value
and recorded on the balance sheets. The deferred method is
used for recognizing gains or losses on hedging instruments
and the hedged items. When foreign exchange forward contracts meet certain conditions, the hedged items are stated
by the forward exchange contract rates.
If certain hedging criteria are met, interest rate swaps are
not recognized at their fair values as an alternative method
under Japanese accounting standards. The net amounts
received or paid for such interest rate swap arrangements are
charged or credited to income as incurred.
Derivative financial instruments are used based on internal
policies and procedures on risk control.
The risks of fluctuations in foreign currency exchange
rates and interest rates have been assumed to be completely
hedged over the period of hedging contracts as the major
conditions of the hedging instruments and the hedged items
are consistent. Accordingly, an evaluation of the effectiveness
of the hedging contracts is not required.
The credit risk of such derivatives is assessed as being
low because the counter-parties of these transactions are of
good credit rating financial institutions.
(n) Changes in accounting methods
(1) Accounting Standard for Directors’ Bonus
Effective for the year ended March 31, 2007, the Company
and its domestic consolidated subsidiaries adopted the new
accounting standard “Accounting Standard for Directors’
Bonuses” (Accounting Standards Board Statement No. 4
issued by the Accounting Standards Board of Japan on
November 29, 2005), resulting in an immaterial impact on the
financial statements for the year ended March 31, 2007. The
effect of this change on segment information is stated in Note
10. Segment Information.
(2) Accounting Standard for Presentation of Net Assets in
the Balance Sheet
Effective for the year ended March 31, 2007, the Company
and its domestic consolidated subsidiaries adopted the new
accounting standard, “Accounting Standard for Presentation
of Net Assets in the Balance Sheet” (Accounting Standards
Board Statement No. 5 issued by the Accounting Standards
Board of Japan on December 9, 2005) and the
“Implementation Guidance for the Accounting Standard for
Presentation of Net Assets in the Balance Sheet” (Financial
Standards Implementation Guidance No. 8 issued by the
Accounting Standards Board of Japan on December 9,
2005), (collectively, “the New Accounting Standards”).
The consolidated balance sheet as of March 31, 2007
prepared in accordance with the New Accounting Standards
comprises three sections, which are the assets, liabilities and
net assets sections. The net assets section includes net unrealized gains on hedging derivatives, net of taxes and minority
interests.
The adoption of the New Accounting Standards had no
impact on the consolidated statement of income for the year
ended March 31, 2007. Also, if the New Accounting
Standards had not been adopted at March 31, 2007, shareholders’ equity amounting to ¥1,183,126 million would have
been presented.
(3) Accounting Standard for Statement of Changes in Net
Assets
Effective for the year ended March 31, 2007, the Company
and its domestic consolidated subsidiaries adopted the new
accounting standard, “Accounting Standard for Statement of
Changes in Net Assets” (Accounting Standards Board
Statement No. 6 issued by the Accounting Standards Board
of Japan on December 27, 2005), and the “Implementation
Guidance for the Accounting Standard for Statement of
Changes in Net Assets” (Financial Standards Implementation
Guidance No. 9 issued by the Accounting Standards Board
of Japan on December 27, 2005).
(4) Royalty and Technical Assistance Fees and Related
Costs
Royalty and technical assistance fees and the corresponding
costs originally included in “Other, net” of Other Income
(Expenses) were reclassified into “Net sales” and “Cost of
sales,” respectively, effective for the year ended March 31,
2007. This change was made to provide more appropriate
presentation or classification of income and cost since the cur-
50
rent increase in income has arisen business activities carried
out by the Company and its consolidated subsidiaries. With
this change, for the year ended March 31, 2007, net sales
were up by ¥15,614 million, cost of sales was up by ¥4,458
million, and operating income was up by ¥11,156 million,
compared to the previous classification with no impact on
income before income taxes and minority interests for the year
ended March 31, 2007. The effect of this change on segment
information is stated in Note 10. Segment Information.
(5) Method of Amortization for Bond Issue Cost
Previously, bond issue cost was fully expensed as incurred.
Effective for the year ended March 31, 2007, however, bond
issue cost was capitalized as deferred assets and amortized
under the straight line method over the redemption period;
This change was made to recognize the effect of financing
cost over the redemption period and realize appropriate periodic accounting of profit and loss. One is because expansion
in scale of bond issue led to increase in bond issue cost.
Other reasons include that the effect of bond issue cost lasts
over redemption period, rather than only when incurred, and
that the amortized cost method is adopted for bonds. Under
this method the difference of ¥5,000 million between the
issue price and face value will be amortized over the redemption period. With this change, for the year ended March 31,
2007, income before income taxes and minority interests was
up by ¥4,865 million, compared to amounts calculated by the
previous method.
(6) Depreciation Methods Used for Amortization for
Tangible Fixed Assets
Effective for the year ended March 31, 2008, pursuant to an
amendment to the Corporate Tax Law, the Company and its
domestic consolidated subsidiaries have depreciated tangible
fixed assets acquired on and after April 1, 2007 in accordance
with the method stipulated in the amended Corporate Tax
Law. As a result, for the year ended March 31, 2008,
operating income and income before income taxes and
minority interests are down by ¥7,234 million ($73,071
thousand) respectively compared to amounts calculated by
the previous method. For the impact that these changes had
on segment information, please refer to Note 10. Segment
Information.
(7) Accounting Method for Reserve for Director and
Corporate Auditor Retirement Benefits
Effective for the year ended March 31, 2008, the amended
“Auditing Treatment Relating to Reserve Defined under the
51
Sharp Annual Report 2008
Special Tax Measurement Law, Reserve Defined under the
Special Law and Reserve for Director and Corporate Auditor
Retirement Benefits” (The Japanese Institute of Certified
Public Accountants (“JICPA”) Auditing and Assurance
Practice Committee Report No. 42, April 13, 2007) was
adopted. As a result, for the year ended March 31, 2008,
operating income and income before income taxes and
minority interests are down by ¥133 million ($1,343 thousand)
and ¥896 million ($9,051 thousand), respectively, compared
to amounts calculated by the previous method.
(o) Additional information
(1) Previously, the cost of software embedded in products
was recognized as manufacturing expense at the time of
inspection due to practical convenience. Effective for the year
ended March 31, 2007, however, the cost of software
embedded in products was capitalized as an asset when
inspected and recognized as manufacturing expense when
the products with the embedded software are sold, in accordance with “Accounting Standard for Research and
Development Costs.” This change was made due to the
increase in the amount of software embedded in products,
as a result of an increase in the number of complicated and
multifunctional products in this fiscal year. With this change,
for the year ended March 31, 2007, operating income and
income before income taxes and minority interests were
up by ¥10,455 million respectively, compared to amounts
calculated by the previous method.
(2) Previously, the Company depreciated tangible fixed assets
acquired on and before March 31, 2007 up to 5% of the
acquisition cost, based on the prior Corporate Tax Law.
Pursuant to an amendment to the Corporate Tax Law, the
Company and its domestic subsidiaries depreciate the
difference between 5% of the acquisition cost and the
memorandum price using the straight line method over 5
years. The straight line depreciation starts from the following
year, when the book value of tangible assets acquired on and
before March 31, 2007 reaches 5% of the acquisition cost.
As a result, for the year ended March 31, 2008, operating
income and income before income taxes and minority
interests are down by ¥7,791 million ($78,697 thousand)
respectively, compared to amounts calculated by the
previous method.
2. Short-term Investments and Investments In Securities
The following is a summary of other securities with available fair market values as of March 31, 2007 and 2008:
Yen (millions)
2008
Equity securities .................................................................
Other .................................................................................
Acquisition cost
Unrealized gains
Unrealized losses
Fair market value
¥
¥
¥
¥
¥
90,652
86
90,738
¥
18,504
—
18,504
¥
(15,282)
—
(15,282)
¥
93,874
86
93,960
U.S. Dollars (thousands)
2008
Equity securities.................................................................
Other .................................................................................
Acquisition cost
Unrealized gains
Unrealized losses
Fair market value
$
$
$
$
$
915,677
869
916,546
$
186,909
—
186,909
$
(154,364)
—
(154,364)
$
948,222
869
949,091
Yen (millions)
2007
Equity securities.................................................................
Other .................................................................................
Acquisition cost
Unrealized gains
Unrealized losses
Fair market value
¥
¥
¥
¥
¥
46,779
150
46,929
¥
42,501
44
42,545
(976)
—
(976)
¥
¥
88,304
194
88,498
Redemption of other securities with maturities as of March 31, 2007 and 2008 was as follows:
Yen
(millions)
2007
Corporate Bonds:
Due within one year .......................................................................................
Due after one year through five years.............................................................
Due after five years through ten years............................................................
Due over ten years ........................................................................................
Convertible Bonds:
Due within one year .......................................................................................
Due after one year through five years.............................................................
Due after five years through ten years............................................................
Due over ten years ........................................................................................
Other:
Due within one year .......................................................................................
Due after one year through five years.............................................................
Due after five years through ten years............................................................
Due over ten years ........................................................................................
¥
U.S. Dollars
(thousands)
2008
7,665
2,498
—
—
¥
2008
2,492
—
—
—
$
25,172
—
—
—
—
30
—
—
—
—
—
—
—
—
—
—
—
102
92
—
—
—
85
—
—
—
859
—
52
The proceeds from sales of other securities were ¥1,882
million and ¥11,275 million ($113,889 thousand) for the years
ended March 31, 2007 and 2008, respectively. The gross
realized gains on those sales were ¥1,432 million and ¥3,310
million ($33,434 thousand), respectively. The gross realized
losses on those sales were ¥2 million and ¥69 million ($697
thousand), respectively.
Other securities with no available fair market values principally consisted of unlisted equity securities whose carrying
amounts were ¥14,326 million and ¥13,728 million ($138,667
thousand) as of March 31, 2007 and 2008, respectively.
3. Inventories
Inventories as of March 31, 2007 and 2008 were as follows:
Yen
(millions)
2007
Finished products ............................................................................................
Work in process ...............................................................................................
Raw materials...................................................................................................
¥
¥
194,371
119,362
121,910
435,643
U.S. Dollars
(thousands)
2008
¥
¥
198,579
148,351
107,422
454,352
2008
$
$
2,005,848
1,498,495
1,085,071
4,589,414
4. Income Taxes
The Company is subject to a number of different income
taxes which, in the aggregate, indicate a normal tax rate in
Japan of approximately 40.6% for the years ended March 31,
2007 and 2008.
The Company and its wholly owned domestic subsidiaries
have adopted the consolidated tax return system of Japan.
The following table summarizes the significant differences between the normal tax rate and the effective tax rate for financial statement purposes for the years ended March 31, 2007 and 2008:
Normal tax rate .............................................................................................................................
Tax credit and other.................................................................................................................
Differences in normal tax rates of overseas subsidiaries............................................................
Dividend income ......................................................................................................................
Undistributed earnings of overseas subsidiaries .......................................................................
Expenses not deductible for tax purposes and other................................................................
Effective tax rate ...........................................................................................................................
53
Sharp Annual Report 2008
2007
2008
40.6 %
(7.5)
(1.9)
2.2
0.6
1.3
35.3 %
40.6 %
(6.0)
(2.9)
1.3
0.7
2.7
36.4 %
Significant components of deferred tax assets and deferred tax liabilities as of March 31, 2007 and 2008 were as follows:
Yen
(millions)
2007
Deferred tax assets:
Inventories.....................................................................................................
Allowance for doubtful receivables ................................................................
Accrued bonuses .........................................................................................
Warranty reserve ...........................................................................................
Software .......................................................................................................
Long-term prepaid expenses ........................................................................
Enterprise taxes ............................................................................................
Other.............................................................................................................
Gross deferred tax assets .....................................................................
Valuation allowance...............................................................................
Total deferred tax assets .......................................................................
Deferred tax liabilities:
Retained earnings appropriated for tax allowable reserves ............................
Undistributed earnings of overseas subsidiaries ............................................
Net unrealized holding gains on securities .....................................................
Other.............................................................................................................
Total deferred tax liabilities ....................................................................
Net deferred tax assets .....................................................................................
¥
¥
U.S. Dollars
(thousands)
2008
2008
20,209
2,739
12,582
2,364
29,317
14,598
2,241
33,369
117,419
(2,727)
114,692
(16,839)
(4,322)
(16,877)
(4,516)
(42,554)
72,138
¥
¥
24,862
2,001
12,534
2,655
26,075
15,302
2,071
34,903
120,403
(2,634)
117,769
(21,132)
(5,424)
(1,314)
(12,401)
(40,271)
77,498
$
$
251,131
20,212
126,606
26,818
263,384
154,566
20,919
352,556
1,216,192
(26,606)
1,189,586
(213,454)
(54,788)
(13,273)
(125,263)
(406,778)
782,808
Net deferred tax assets and liabilities as of March 31, 2007 and 2008 were included in the consolidated balance sheets
as follows:
Yen
(millions)
2007
Other current assets..........................................................................................
Other assets......................................................................................................
Other current liabilities .......................................................................................
Other long-term liabilities ...................................................................................
Net deferred tax assets .....................................................................................
¥
¥
54,123
21,710
(152)
(3,543)
72,138
U.S. Dollars
(thousands)
2008
¥
¥
54,453
26,794
(141)
(3,608)
77,498
2008
$
$
550,030
270,646
(1,424)
(36,444)
782,808
54
5. Short-term Borrowings and Long-term Debt
The weighted average interest rates of short-term borrowings
as of March 31, 2007 and 2008 were 3.4% and 1.9%,
respectively. The Company and its consolidated subsidiaries
have had no difficulty renewing such loans when they have
considered such renewal advisable.
Short-term borrowings, including current portion of long-term debt, as of March 31, 2007 and 2008 consisted of the following:
Yen
(millions)
2007
Bank loans ........................................................................................................
Bankers’ acceptances payable .........................................................................
Commercial paper.............................................................................................
Current portion of long-term debt......................................................................
¥
¥
U.S. Dollars
(thousands)
2008
118,910
36
22,865
98,927
240,738
¥
¥
120,139
10
158,168
46,011
324,328
2008
$
$
1,213,525
101
1,597,657
464,757
3,276,040
Long-term debt as of March 31, 2007 and 2008 consisted of the following:
Yen
(millions)
2007
0.0%—12.1% unsecured loans principally from banks, due 2007 to 2018 ........
0.57% unsecured straight bonds, due 2007 .....................................................
0.62% unsecured straight bonds, due 2010 .....................................................
0.97% unsecured straight bonds, due 2012 .....................................................
0.00% unsecured convertible bonds with subscription rights to shares, due 2013 ...
0.32%—1.18% unsecured Euroyen notes issued by
a consolidated subsidiary, due 2007 to 2013 ..................................................
6.00% mortgage loans for employees housing from a
government-sponsored agency, due 2007 to 2009.........................................
0.48%—1.54% payables under securitized lease receivables, due 2007 to 2014 ..
¥
Less-Current portion included in short-term borrowings....................................
¥
106,260
50,000
30,000
20,000
204,643
U.S. Dollars
(thousands)
2008
¥
120,488
—
30,000
20,000
203,926
2008
$
1,217,051
—
303,030
202,020
2,059,859
15,020
7,409
74,838
1
33,768
459,692
(98,927)
360,765
—
43,781
425,604
(46,011)
379,593
—
442,232
4,299,030
(464,757)
3,834,273
¥
$
The following is a summary of the terms for conversion and redemption of the convertible bonds with subscription rights to shares:
Conversion price
0.00% unsecured convertible bonds with subscription rights to shares, due 2013 .....................................................
The conversion price is subject to adjustment for certain
subsequent events such as the issue of common stock at less
than market value and stock splits.
If all convertible bonds with subscription rights to shares
were converted as of March 31, 2007 and March 31, 2008,
79,020 thousand shares and 79,018 thousand shares of
55
Sharp Annual Report 2008
¥
2,531.00
common stock would have been issuable, respectively.
As is customary in Japan, substantially all of the bank
borrowings are subject to general agreements with each bank
which provide, among other things, that security and
guarantees for present and future indebtedness will be given
upon request of the bank and that any collateral so furnished
will be applicable to all indebtedness to that bank. To date, the
Company has not received such requests from its banks. In
addition, the agreements provide that the bank has the right to
offset cash deposited against any short-term or long-term debt
that becomes due, and in case of default and certain other
specified events, against all other debts payable to the bank.
The aggregate annual maturities of long-term debt as of March 31, 2008 were as follows:
Yen
(millions)
Years ending March 31
2010.............................................................................................................................................
2011.............................................................................................................................................
2012.............................................................................................................................................
2013.............................................................................................................................................
2014 and thereafter.......................................................................................................................
¥
¥
19,307
71,332
17,794
35,792
235,368
379,593
U.S. Dollars
(thousands)
$
$
195,020
720,525
179,738
361,535
2,377,455
3,834,273
6. Leases
Finance leases
Information relating to finance leases, excluding those leases for which the ownership of the leased assets is considered to be transferred to the lessee, as of, and for the years ended March 31, 2007 and 2008 is as follows:
(a) As lessee
(1) Future minimum lease payments
Yen
(millions)
2007
Due within one year .........................................................................................
Due after one year...........................................................................................
¥
¥
U.S. Dollars
(thousands)
2008
98,303
211,031
309,334
¥
¥
103,880
216,013
319,893
2008
$
$
1,049,293
2,181,949
3,231,242
(2) Lease payments
Yen
(millions)
2007
Lease payments ..............................................................................................
¥
U.S. Dollars
(thousands)
2008
19,965
¥
24,230
2008
$
244,747
(b) As lessor
(1) Acquisition cost, accumulated depreciation and book value of leased properties
Yen
(millions)
2007
Machinery and equipment:
Acquisition cost ............................................................................................
Accumulated depreciation ............................................................................
Book value ...................................................................................................
¥
¥
123,363
57,807
65,556
U.S. Dollars
(thousands)
2008
¥
¥
129,799
62,834
66,965
2008
$
$
1,311,101
634,687
676,414
56
(2) Future minimum lease receipts
Yen
(millions)
2007
Due within one year.........................................................................................
Due after one year...........................................................................................
¥
¥
U.S. Dollars
(thousands)
2008
102,667
218,245
320,912
¥
¥
105,871
217,724
323,595
2008
$
$
1,069,404
2,199,232
3,268,636
(3) Lease receipts, depreciation and assumed interest income
U.S. Dollars
(thousands)
Yen
(millions)
2007
Lease receipts .................................................................................................
Depreciation....................................................................................................
Assumed interest income ................................................................................
¥
2008
23,663
21,514
2,262
¥
25,928
23,505
2,409
2008
$
261,899
237,424
24,333
Operating leases
(a) As lessee
Future minimum lease payments as of March 31, 2007 and 2008 were as follows:
Yen
(millions)
2007
Due within one year.........................................................................................
Due after one year...........................................................................................
¥
¥
U.S. Dollars
(thousands)
2008
1,334
2,965
4,299
¥
¥
1,625
4,366
5,991
2008
$
$
16,414
44,101
60,515
(b) As lessor
Future minimum lease receipts as of March 31, 2007 and 2008 were as follows:
Yen
(millions)
2007
Due within one year .........................................................................................
Due after one year ...........................................................................................
¥
¥
57
Sharp Annual Report 2008
1,548
1,341
2,889
U.S. Dollars
(thousands)
2008
¥
¥
1,725
1,428
3,153
2008
$
$
17,424
14,424
31,848
7. Net Assets and Per Share Data
Under the Japanese Corporate Law (“the Law”), the entire
amount paid for new shares is required to be designated as
common stock. However, a company may, by a resolution of
the Board of Directors, designate an amount not exceeding
one-half of the price of the new shares as additional paid-in
capital, which is included in capital surplus.
Under the Law, in cases where a dividend distribution of
surplus is made, the smaller of an amount equal to 10% of the
dividend or the excess, if any, of 25% of common stock over
the total of legal earnings reserve and additional paid-in capital
must be set aside as legal earnings reserve or additional paidin capital. Legal earnings reserve is included in retained
earnings in the accompanying consolidated balance sheets.
As of March 31, 2008, the total amount of legal earnings
reserve and additional paid-in capital exceeded 25% of the
common stock, therefore, no additional provision is required.
Legal earnings reserve and additional paid-in capital may
not be distributed as dividends. By the resolution of
shareholders’ meeting, legal earnings reserve and additional
paid-in capital may be transferred to other retained earnings
and capital surplus, respectively, which are potentially available
for dividends.
The maximum amount that the Company can distribute as
dividends is calculated based on the nonconsolidated financial
statements of the Company in accordance with the Law.
Year end cash dividends are approved by the shareholders
after the end of each fiscal year, and semiannual interim cash
dividends are declared by the Board of Directors after the end
of each interim six-month period. Such dividends are payable
to shareholders of record at the end of each fiscal year or
interim six-month period. In accordance with the Law, final
cash dividends and the related appropriations of retained
earnings have not been reflected in the financial statements at
the end of such fiscal year. However, cash dividends per share
shown in the accompanying consolidated statements of
income reflect dividends applicable to the respective period.
On June 24, 2008, the shareholders approved the
declaration of year end cash dividends totaling ¥15,407 million
($155,626 thousand) to shareholders of record as of March
31, 2008, covering the year then ended.
8. Contingent Liabilities
As of March 31, 2008, the Company and its consolidated subsidiaries had contingent liabilities as follows:
Loans guaranteed .........................................................................................................................
Notes discounted .........................................................................................................................
¥
¥
The Company and some of its subsidiaries are subject to
investigations conducted by the authorities such as the Japan
Fair Trade Commission, the U.S. Department of Justice and
the Competition DG of the European Commission with
Yen
(millions)
U.S. Dollars
(thousands)
2008
2008
5,121
31
5,152
$
$
51,727
313
52,040
respect to TFT LCD business. In addition, civil lawsuits have
been filed in North America against the Company and some
of its subsidiaries with respect to the alleged anti-competitive
behavior.
58
9. Employees’ Severance and Pension Benefits
Allowance for severance and pension benefits of the Company and its domestic consolidated subsidiaries as of March 31, 2007
and 2008 consisted of the following:
Yen
(millions)
2007
Projected benefit obligation...............................................................................
Less - fair value of plan assets ..........................................................................
Less - unrecognized actuarial differences .........................................................
Less - unrecognized net transition obligation ....................................................
Unrecognized prior service costs ......................................................................
Prepaid pension cost ........................................................................................
Allowance for severance and pension benefits ..................................................
In addition, allowance for severance and pension benefits
of ¥9,373 million as of March 31, 2007 and ¥5,209 million
($52,616 thousand) as of March 31, 2008 were provided by
¥
¥
U.S. Dollars
(thousands)
2008
359,995
(381,003)
(23,849)
(2,809)
39,215
9,514
1,063
¥
¥
361,343
(328,051)
(88,848)
—
36,084
20,863
1,391
2008
$
$
3,649,929
(3,313,646)
(897,455)
—
364,485
210,738
14,051
certain overseas consolidated subsidiaries in conformity with
generally accepted accounting principles prevailing in the
respective countries of domicile.
Expenses for severance and pension benefits of the Company and its domestic consolidated subsidiaries for the years
ended March 31, 2007 and 2008 consisted of the following:
Yen
(millions)
2008
2007
Service costs .......................................................................................
Interest costs on projected benefit obligation .......................................
Expected return on plan assets............................................................
Amortization of net transition obligation................................................
Recognized actuarial loss ......................................................................
Amortization of prior service costs..........................................................
Expenses for severance and pension benefits......................................
The discount rate used by the Company and its domestic
consolidated subsidiaries was 2.5% for the years ended
March 31, 2007 and 2008. The rate of expected return on
plan assets used by the Company and its domestic consolidated subsidiaries for the years ended March 31, 2007 and
2008 was 4.5%.
59
Sharp Annual Report 2008
¥
¥
13,091
8,751
(16,092)
2,809
3,392
(3,096)
8,855
U.S. Dollars
(thousands)
¥
¥
13,153
9,014
(17,171)
2,856
3,398
(3,096)
8,154
2008
$
$
132,859
91,051
(173,444)
28,848
34,323
(31,273)
82,364
The estimated amount of all retirement benefits to be paid
at future retirement dates is allocated to each service year
mainly based on points.
10. Segment Information
The Company and its consolidated subsidiaries operate in
Consumer/Information Products business and Electronic
Components business. Consumer/Information Products business includes audio-visual and communication equipment,
home appliances and information equipment. Electronic
Components business includes LSIs, LCDs and other electronic components.
Information by business segment for the years ended March 31, 2007 and 2008 is as follows:
Yen
(millions)
2007
Net Sales:
Consumer/Information Products:
Customers..............................................................................................
Intersegment ..........................................................................................
Total .......................................................................................................
Electronic Components:
Customers..............................................................................................
Intersegment ..........................................................................................
Total .......................................................................................................
Elimination .....................................................................................................
Consolidated .................................................................................................
Operating Income:
Consumer/Information Products ....................................................................
Electronic Components .................................................................................
Elimination .....................................................................................................
Consolidated .................................................................................................
Total Assets:
Consumer/Information Products ....................................................................
Electronic Components .................................................................................
Elimination and Corporate Assets ..................................................................
Consolidated .................................................................................................
Depreciation and Amortization:
Consumer/Information Products ....................................................................
Electronic Components .................................................................................
Elimination .....................................................................................................
Consolidated .................................................................................................
Capital Expenditures:
Consumer/Information Products ....................................................................
Electronic Components .................................................................................
Elimination .....................................................................................................
Consolidated .................................................................................................
Corporate assets as of March 31, 2007 and 2008 were
¥485,370 million and ¥464,645 million ($4,693,384
thousand), respectively, and were mainly comprised of the
Company’s cash and cash equivalents and investments in
securities.
¥
¥
¥
¥
¥
¥
¥
¥
¥
¥
2,058,109
9,431
2,067,540
1,069,662
492,024
1,561,686
(501,455)
3,127,771
U.S. Dollars
(thousands)
2008
¥
¥
81,705
105,519
(693)
186,531
¥
927,321
1,583,965
457,524
2,968,810
¥
46,560
173,078
(1,923)
217,715
¥
71,479
288,406
(2,802)
357,083
¥
¥
¥
¥
¥
2,285,341
6,365
2,291,706
1,132,395
630,490
1,762,885
(636,855)
3,417,736
2008
$
$
79,218
104,363
111
183,692
$
950,857
1,686,595
435,755
3,073,207
$
71,298
206,429
(1,160)
276,567
$
128,194
308,441
(410)
436,225
$
$
$
$
$
23,084,253
64,293
23,148,546
11,438,333
6,368,586
17,806,919
(6,432,879)
34,522,586
800,182
1,054,172
1,121
1,855,475
9,604,616
17,036,313
4,401,566
31,042,495
720,182
2,085,141
(11,717)
2,793,606
1,294,889
3,115,565
(4,141)
4,406,313
Effective for the year ended March 31, 2007, the
Company and its domestic consolidated subsidiaries adopted
the new accounting standard “Accounting Standard for
Directors’ Bonus” (Accounting Standards Board Statement
No. 4 issued by the Accounting Standards Board of Japan on
60
November 29, 2005), resulting in an immaterial impact on
segment information for the year ended March 31, 2007.
As is stated in Note 1. (n) Changes in accounting
methods, royalty and technical assistance fees and the
corresponding costs originally included in “Other, net” of
Other Income (Expenses) were reclassified into “Net sales”
and “Cost of sales,” respectively, effective for the year ended
March 31, 2007. With this change, for the year ended March
31, 2007, net sales for Consumer/Information Products were
up by ¥3,583 million and operating income was up by ¥731
million, and net sales for Electronic Components were up by
¥12,031 million, and operating income was up by ¥10,425
million, respectively, compared to the previous classification.
Effective for the year ended March 31, 2007, the
consolidated subsidiaries in the U.S.A. adopted the revised
accounting standard for retirement benefits in the U.S.A.,
resulting in an immaterial impact on segment information for
the year ended March 31, 2007.
Effective for the year ended March 31, 2008, pursuant to
an amendment to the Corporate Tax Law, the Company and
its domestic consolidated subsidiaries have depreciated
tangible fixed assets acquired on and after April 1, 2007 in
accordance with the method stipulated in the amended
Corporate Tax Law. With this change, for the year ended
March 31, 2008, operating income for Consumer/Information
Products is down by ¥3,096 million ($31,273 thousand)
and operating income for Electronic Components is down
by ¥4,138 million ($41,798 thousand), compared to amounts
calculated by the previous method.
Effective for the year ended March 31, 2008, the
amended “Auditing Treatment Relating to Reserve Defined
under the Special Tax Measurement Law, Reserve Defined
under the Special Law and Reserve for Director and
Corporate Auditor Retirement Benefits” (The Japanese
Institute of Certified Public Accountants (“JICPA”) Auditing
and Assurance Practice Committee Report No. 42, April 13,
2007) was adopted, resulting in an immaterial impact on
segment information for the year ended March 31, 2008.
Information by geographic segment for the years ended March 31, 2007 and 2008 is as follows:
Yen
(millions)
2007
Net Sales:
Japan:
Customers..........................................................................................
Intersegment ......................................................................................
Total ...................................................................................................
The Americas:
Customers..........................................................................................
Intersegment ......................................................................................
Total ..................................................................................................
Europe:
Customers .........................................................................................
Intersegment ......................................................................................
Total ..................................................................................................
China:
Customers .........................................................................................
Intersegment ......................................................................................
Total ..................................................................................................
Other:
Customers..........................................................................................
Intersegment ......................................................................................
Total ...................................................................................................
Elimination ...................................................................................................
Consolidated ...............................................................................................
61
Sharp Annual Report 2008
¥
¥
1,860,199
909,956
2,770,155
U.S. Dollars
(thousands)
2008
¥
1,971,125
970,510
2,941,635
2008
$
19,910,354
9,803,131
29,713,485
526,325
7,076
533,401
563,501
14,411
577,912
5,691,929
145,566
5,837,495
490,338
3,445
493,783
548,242
4,134
552,376
5,537,798
41,758
5,579,556
129,449
394,878
524,327
191,177
450,354
641,531
1,931,081
4,549,030
6,480,111
121,460
218,244
339,704
(1,533,599)
3,127,771
143,691
236,737
380,428
(1,676,146)
3,417,736
1,451,424
2,391,283
3,842,707
(16,930,768)
$ 34,522,586
¥
Yen
(millions)
2007
Operating Income:
Japan ..........................................................................................................
The Americas ..............................................................................................
Europe ........................................................................................................
China...........................................................................................................
Other...........................................................................................................
Elimination ...................................................................................................
Consolidated ...............................................................................................
Total Assets:
Japan ..........................................................................................................
The Americas ..............................................................................................
Europe ........................................................................................................
China...........................................................................................................
Other...........................................................................................................
Elimination and Corporate Assets ................................................................
Consolidated ...............................................................................................
Corporate assets as of March 31, 2007 and 2008 were
¥485,370 million and ¥464,645 million ($4,693,384
thousand), respectively, and were mainly comprised of the
Company’s cash and cash equivalents and investments in
securities.
For the year ended March 31, 2007, a new geographic
segment “China,” which had been previously categorized as a
part of the “Other” segment, was disclosed separately, and
“Asia,” which had been disclosed separately, was included in
“Other” segment instead, given the increasing materiality of
the China segment. Consequently the geographic segment
“Other” principally consists of “Asia,” “Middle East” and
“Oceania” region.
Effective for the year ended March 31, 2007, the
Company and its domestic consolidated subsidiaries adopted
the new accounting standard “Accounting Standard for
Directors’ Bonus” (Accounting Standards Board Statement
No. 4 issued by the Accounting Standards Board of Japan on
November 29, 2005), resulting in an immaterial impact on
segment information for the year ended March 31, 2007.
As is stated in Note 1. (n) Changes in accounting
methods, royalty and technical assistance fees and the
corresponding costs originally included in “Other, net” of
Other Income (Expenses) were reclassified into “Net sales”
and “Cost of sales,” respectively, effective for the year ended
March 31, 2007. With this change, for the year ended March
31, 2007, net sales for “Japan” were up by ¥38,151 million
¥
¥
¥
¥
U.S. Dollars
(thousands)
2008
163,216
9,533
8,129
8,842
2,116
(5,305)
186,531
¥
2,057,977
193,451
231,344
153,600
103,592
228,846
2,968,810
¥
¥
¥
2008
144,502
7,444
11,280
9,835
3,683
6,948
183,692
$
2,161,836
175,767
246,833
186,909
94,978
206,884
3,073,207
$
$
$
1,459,616
75,192
113,940
99,343
37,202
70,182
1,855,475
21,836,727
1,775,424
2,493,263
1,887,970
959,374
2,089,737
31,042,495
and operating income was up by ¥17,372 million. Also, net
sales for “Elimination” were down by ¥22,537 million and
operating income was down by ¥6,216 million, compared to
the previous classification.
Effective for the year ended March 31, 2007, the
consolidated subsidiaries in the U.S.A. adopted the revised
accounting standard for retirement benefits in the U.S.A.,
resulting in an immaterial impact on segment information for
the year ended March 31, 2007.
Effective for the year ended March 31, 2008, pursuant to
an amendment to the Corporate Tax Law, the Company and
its domestic consolidated subsidiaries have depreciated
tangible fixed assets acquired on and after April 1, 2007 in
accordance with the method stipulated in the amended
Corporate Tax Law. With this change, for the year ended
March 31, 2008, in the Japan, operating income is down
by ¥7,234 million ($73,071 thousand), compared to amounts
calculated by the previous method.
Effective for the year ended March 31, 2008, the
amended “Auditing Treatment Relating to Reserve Defined
under the Special Tax Measurement Law, Reserve Defined
under the Special Law and Reserve for Director and
Corporate Auditor Retirement Benefits” (The Japanese
Institute of Certified Public Accountants (“JICPA”) Auditing
and Assurance Practice Committee Report No. 42, April 13,
2007) was adopted, resulting in an immaterial impact on
segment information for the year ended March 31, 2008.
62
Overseas sales for the years ended March 31, 2007 and 2008 were as follows:
Yen
(millions)
2007
Overseas sales:
The Americas............................................................................................
Europe......................................................................................................
China ........................................................................................................
Other ........................................................................................................
Total .........................................................................................................
Overseas sales were comprised of overseas consolidated
subsidiaries’ sales and the Company’s and its domestic
consolidated subsidiaries’ export sales to customers.
For the year ended March 31, 2007, the Company
recategorized its segmentation for “Overseas sales”
information given the increasing materiality of the China
segment. Consequently “China, ” which had been previously
categorized as a part of the “Other” segment, was disclosed
separately, and “Asia,” which had been disclosed separately,
was included in “Other” segment instead.
¥
¥
582,588
523,301
305,895
189,049
1,600,833
U.S. Dollars
(thousands)
2008
¥
¥
625,841
584,252
412,470
204,426
1,826,989
2008
$
$
6,321,626
5,901,535
4,166,364
2,064,909
18,454,434
As is stated in Note 1. (n) Changes in accounting
methods, royalty and technical assistance fees and the
corresponding costs originally included in “Other, net” of
Other Income (Expenses) were reclassified into “Net sales”
and “Cost of sales,” respectively, effective for the year ended
March 31, 2007. With this change, for the year ended March
31, 2007, overseas sales were up by ¥102 million for
“Europe,” ¥13,126 million for “China,” and ¥1,022 million for
“Other,” respectively, compared to the previous classification.
11. Significant Subsequent Events
On April 1, 2008, based on a basic agreement regarding
partial stock transfer and acquisition of Sharp Finance
Corporation concluded with Fuyo General Lease Co., Ltd.,
the Company transferred 65% of the stock of Sharp Finance
63
Sharp Annual Report 2008
Corporation to Fuyo General Lease Co., Ltd. (payment:
¥31,200 million ($315,152 thousand)). The gain on sales of
investments in securities for the stock transfer was ¥18,521
million ($187,081 thousand).
Independent Auditors’ Report
To the Board of Directors of Sharp Corporation:
We have audited the accompanying consolidated balance sheets of Sharp Corporation and consolidated subsidiaries as of
March 31, 2008 and 2007, and the related consolidated statements of income, changes in net assets and cash flows for the
years then ended, expressed in Japanese yen. These consolidated financial statements are the responsibility of the Company’s
management. Our responsibility is to independently express an opinion on these consolidated financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated
financial position of Sharp Corporation and subsidiaries as of March 31, 2008 and 2007, and the consolidated results of their
operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in Japan.
Without qualifying our opinion, we draw attention to the following:
As discussed in Note 1. (n) to the consolidated financial statements, royalty and technical assistance fees and the
corresponding costs originally included in “Other income (Expenses)” were reclassified into “Net sales” and “Cost of sales,”
respectively, effective for the year ended March 31, 2007.
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March 31, 2008
are presented solely for convenience. Our audit also included the translation of yen amounts into U.S. dollar amounts and, in
our opinion, such translation has been made on the basis described in Note 1. (a) to the consolidated financial statements.
Osaka, Japan
June 24, 2008
64
Consolidated Subsidiaries
Domestic:
Overseas:
<Countries and Areas>
65
Sharp Annual Report 2008
Sharp Electronics Marketing Corporation
Sharp Finance Corporation
Sharp System Products Co., Ltd.
Sharp Manufacturing Systems Corporation
Sharp Engineering Corporation
Sharp Document Systems Corporation
Sharp Amenity Systems Corporation
Sharp Niigata Electronics Corporation
Sharp Trading Corporation
Sharp Business Computer Software Inc.
Sharp Yonago Corporation
SD Future Technology Co., Ltd.
Sharp Electronics Corporation <New Jersey, U.S.A.>
Sharp Laboratories of America, Inc. <Washington, U.S.A.>
Sharp Electronics Manufacturing Company of America, Inc. <California, U.S.A.>
Sharp Electronics of Canada Ltd. <Ontario, Canada>
Sharp Electronica Mexico S.A. de C.V. <Baja California, Mexico>
Sharp Electronics (Europe) GmbH <Hamburg, Germany>
Sharp Electronics (U.K.) Ltd. <Middlesex, U.K.>
Sharp Laboratories of Europe, Ltd. <Oxford, U.K.>
Sharp International Finance (U.K.) Plc. <Middlesex, U.K.>
Sharp Electronica España S.A. <Barcelona, Spain>
Sharp Electronics (Schweiz) AG <Rüschlikon, Switzerland>
Sharp Electronics (Nordic) AB <Bromma, Sweden>
Sharp Electronics France S.A. <Paris, France>
Sharp Manufacturing France S.A. <Soultz, France>
Sharp Electronics (Italia) S.p.A. <Milano, Italy>
Sharp Electronics Benelux B.V. <Houten, The Netherlands>
Sharp Manufacturing Poland Sp. zo. o. <Torun, Poland>
Sharp Electronics Russia LLC. <Moscow, Russia>
Sharp Electronics (Taiwan) Co., Ltd. <Kaohsiung, Taiwan>
Sharp Electronic Components (Taiwan) Corporation <Taipei, Taiwan>
Sharp (Phils.) Corporation <Manila, Philippines>
Sharp-Roxy Sales (Singapore) Pte., Ltd. <Singapore>
Sharp Electronics (Singapore) Pte., Ltd. <Singapore>
Sharp Manufacturing Corporation (M) Sdn. Bhd. <Johor, Malaysia>
Sharp Electronics (Malaysia) Sdn. Bhd. <Selangor, Malaysia>
Sharp Microelectronics Technology (Malaysia) Sdn. Bhd. <Selangor, Malaysia>
Sharp Appliances (Thailand) Ltd. <Chachoengsao, Thailand>
Sharp Manufacturing (Thailand) Co., Ltd. <Nakornpathom, Thailand>
Sharp Software Development India Pvt. Ltd. <Bangalore, India>
Shanghai Sharp Electronics Co., Ltd. <Shanghai, China>
Sharp Office Equipments (Changshu) Co., Ltd. <Changshu, China>
Wuxi Sharp Electronic Components Co., Ltd. <Wuxi, China>
Nanjing Sharp Electronics Co., Ltd. <Nanjing, China>
Sharp Electronics (Shanghai) Co., Ltd. <Shanghai, China>
Sharp Technical Components (Wuxi) Co., Ltd. <Wuxi, China>
Sharp Electronics Sales (China) Co., Ltd. <Shanghai, China>
P.T. Sharp Electronics Indonesia <Jakarta, Indonesia>
P.T. Sharp Semiconductor Indonesia <West Java, Indonesia>
Sharp Corporation of Australia Pty. Ltd. <New South Wales, Australia>
Sharp Corporation of New Zealand Ltd. <Auckland, New Zealand>
Sharp Middle East FZE <Dubai, U.A.E.>
Investor Information
(As of March 31, 2008)
Shareholders
Number of Shareholders
85,032
Principal Shareholders
Number of
shares held
Nippon Life Insurance Company
State Street Bank and Trust Company
Meiji Yasuda Life Insurance Company
Mizuho Corporate Bank, Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Japan Trustee Services Bank, Ltd. (Trust Account)
The Master Trust Bank of Japan, Ltd. (Trust Account)
The Dai-ichi Mutual Life Insurance Company
Mitsui Sumitomo Insurance Company, Limited
Sompo Japan Insurance Inc.
55,667,384
52,730,527
47,359,000
41,910,469
41,678,116
39,234,000
39,113,000
30,704,140
30,658,022
26,870,000
Percentage of
total shares
5.01%
4.75
4.26
3.77
3.75
3.53
3.52
2.76
2.76
2.42
Note: Aside from the above, a total of 4,770,000 shares in Mizuho Corporate Bank, Ltd. have been set up as trust assets
related to the employee pension trust.
Share Distribution
Japanese securities companies
Treasury stock
17,941,235 (1.62%)
10,174,616 (0.92%)
Other Japanese corporations
57,577,778 (5.18%)
Japanese individual shareholders
175,311,644 (15.78%)
Total
1,110,699,887
Japanese financial institutions*
Shares
Foreign shareholders
325,203,511 (29.28%)
524,491,103 (47.22%)
* A total of 76,595,000 shares ( 6.90%) in investment
trusts and pension trust funds are included in
shares held by Japanese financial institutions.
Stock Exchange Listings
Tokyo, Osaka, Nagoya, Fukuoka, Sapporo
Transfer Agent
Mizuho Trust & Banking Co., Ltd.
Osaka Stock Transfer Agency Department
11-16, Sonezaki 2-chome, Kita-ku, Osaka 530-0057, Japan
Investor Relations
Sharp Corporation
Investor Relations
(Osaka) 22-22, Nagaike-cho, Abeno-ku, Osaka 545-8522, Japan
Phone: +81-6-6625-3023 Fax: +81-6-6625-0918
(Tokyo) 8, Ichigaya-Hachiman-cho, Shinjuku-ku, Tokyo 162-8408, Japan
Phone: +81-3-3260-1289 Fax: +81-3-3260-1822
Web sites:
(English)
http://sharp-world.com/corporate/ir/index.html
(Japanese) http://www.sharp.co.jp/corporate/ir/index.html
66
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