Annual Report 2012 (PDF:8.4MB)

Annual Report 2012 (PDF:8.4MB)
Bringing the World
a One-of-a-Kind Competitive Edge
2012
2010
2005
2004
2002
2001
2000
1993
1992
1991
1989
1973
1966
1964
1963
1962
1953
1925
1915
1912
Annual Report 2012
For the year ended March 31, 2012
In September 2012, Sharp marks its 100th anniversary.
Since its founding in 1912, Sharp has created numerous Japan-first and world-first products,
based on the spirit of “Make products that others want to imitate.”
Harnessing the creativity that flows through its corporate DNA, Sharp will be re-activating its
spiral strategy of devices and products.
Through the global market introduction of one-of-a-kind products that will impress and amaze,
Sharp will work to realize a new society built around electronics.
S ha rp’s One-of-a-K ind H is t o r y
Begins the world’s first mass production of LCD panel
incorporating oxide semiconductors (IGZO)
Markets a robotic home appliance
2012
Debuts the industry’s first LED ceiling light
2010
Starts selling the 65-inch full-HD AQUOS LCD TV
2005
Commences sales of a superheated steam oven, the first in home cooking appliance
2004
Begins mass production of System LCDs as a display for mobile phones and other mobile devices
2002
Starts selling the AQUOS LCD TV
2001
Debuts air purifier equipped with Plasmacluster Ion technology
2000
Commercializes industry’s first camera-equipped mobile phone
1993
1992
1991
1989
1973
1966
1964
1963
1962
1953
1925
1915
1912
65"
Sharp’s founder Tokuji Hayakawa testing the crystal radio set (1925)
Cont ent s
6
14
16
Commences sales of Zaurus,
a new personal information tool
Starts selling the LCD ViewCam, a camcorder that allows
the user to view images on the LCD monitor while shooting
Begins selling the world’s first wall-mounted TV
equipped with color TFT LCD panel
Debuts the industry’s first refrigerator-freezer
with a dual-swing door
Commences sales of the world’s first pocket
electronic calculator incorporating an LCD
Starts selling the first Japan-made
home microwave oven with a turntable
Launches the world’s first all transistor-diode
electronic desktop calculator
Begins mass production of standard solar cell modules
Commences mass production of
Japan’s first microwave oven
Begins full-scale mass production
of the first Japan-made TV
Succeeds in assembling the first Japan-made crystal
radio set. Begins mass production and marketing
Invents the Hayakawa mechanical pencil
and begins mass production
Founder Tokuji Hayakawa invents Tokubijo snap
buckle for belts and sets up his own business
18
Interview with the President
Special Feature
Fiscal 2011 was an unprecedentedly difficult year for Sharp. In
fiscal 2012, it is likely that the outlook for the business environment
will remain unclear. To achieve a
recovery and restore trust, we will
make group-wide efforts in four
core initiatives.
This part introduces Sharp’s new
initiatives for achieving future
growth: “shift in business categories” and “generate new demand.”
Financial Highlights
Message to Our
Shareholders
Interview with
the President
2
4
6
Special Feature 1:
Reinforcing the
Solutions Business
Special Feature 2:
One-of-a-Kind Devices
and Products
Segment Outline
14
16
20
Fiscal 2011 Review
by Product Group
R&D and
Intellectual Property
Corporate Social
Responsibility (CSR)
22
26
28
Corporate
Governance
Risk Factors
Directors,
Corporate Auditors
and Executive Officers
31
34
Financial Section
Investor Information
37
69
36
Annual Report 2012
1
Fi n ancial Highlight s
Sharp Corporation and Consolidated Subsidiaries
Years Ended March 31
Yen
(millions)
2008
Net Sales
2009
U.S. Dollars
(thousands)
2010
2011
2012
2012
¥3,417,736 ¥2,847,227 ¥2,755,948 ¥3,021,973 ¥2,455,850 $30,319,136
Financial Highlights
Domestic sales
1,590,747 1,302,261
1,429,057
1,592,909 1,181,168 14,582,321
Overseas sales
1,826,989 1,544,966
1,326,891
1,429,064 1,274,682 15,736,815
Operating Income (Loss)
183,692 (55,481)
51,903
78,896 (37,552) (463,605)
Income (Loss) before Income
Taxes and Minority Interests
162,240 (204,139)
6,139
40,880 (238,429) (2,943,568)
Net Income (Loss)
101,922 (125,815)
4,397
19,401 (376,076) (4,642,914)
Net Assets
1,241,868 1,048,447
1,065,860
1,048,645 645,120 7,964,445
Total Assets
3,073,207 2,688,721
2,836,255
2,885,678 2,614,135 32,273,272
Capital Investment
344,262 260,337
215,781
172,553 118,899 1,467,889
R&D Expenditures
196,186 195,525
166,507
173,983 154,798 1,911,086
Net income (loss)
93.17 (114.33)
4.00
17.63 (341.78) (4.22)
Cash dividends
28.00 21.00
17.00
17.00 10.00 0.12
1,119.09 944.24
949.19
932.46 568.83 7.02
8.4% (11.1%)
0.4%
1.9% (45.5%) —
Number of Shares Outstanding
(thousands of shares)
1,100,525 1,100,480
1,100,414
1,100,346 1,100,324 —
53,999
55,580 56,756 —
Per Share of Common Stock
(yen and U.S. dollars)
Net assets
Return on Equity (ROE)
Number of Employees
53,708 54,144
Notes:1.The translation into U.S. dollar figures is based on ¥81=U.S.$1.00, the approximate exchange rate prevailing on March 31, 2012. All
dollar figures hereinafter refer to U.S. currency.
2.The amount of leased properties is included in capital investment.
3.The computation of net income (loss) per share is based on the weighted average number of shares of common stock outstanding
during each fiscal year.
4.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 future 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 provided 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) Regulations such as trade restrictions in other countries
(5) The progress of collaborations and alliances with other companies
(6) Litigation and other legal proceedings against Sharp
(7) Rapid technological changes in products and services
2SHARP CORPORATION
10
11
-100Ratio to net sales [right axis]
12
08
09
10
-40
12
11
08
-100
Ratio to net sales [right axis]
09
10
11
12
08
売上高に対する比率[右軸]
200
損失)
(%) of yen)
(billions
100
8 3,500
(十億円)
(十億円)
300
4
2
0
10
10
11
11
1,500
-300
1,000
-400
12 -2 500
-4
12
0
-4
1500
-8
-100
100
50
-200
-12
0
-16
08-300 0908 1009 1110 1211
-400Ratio to net sales [right axis]
(%)
200
250
8
4
150
900
6
100
200
4
1000
600
4
1500
0
-4
50
2
-100
100
-4
300
-8
0
0
50
-200
-8
12 -2
0
-300
-4
-400
0
-16
-100
1,500
(損失)
(%) of yen)
(billions
8 1,200
200
4 900
150
(十億円)
-4
1,500
150
1,200
100
50
600
10
11
0
12 -12 -50 08
-16 -100
12
に対する比率[右軸]
08
3000
0
200
9
250
100
200
6
3
1500
-100
100
08
09
10
11
12
-16
Ratio to net sales [right axis]
R&D Expenditures
Net Income (Loss)
(%)
(billions of yen)
1,500
150
8
200
9
250
8
6
100
200
6
0
150
4
0
2
-100
100
3
-4
0
50
-200
-8
売上高に対する比率[右軸]
-400
-4
12
0908 1009 1110 1211
08
08
09
09
10
10
11
11
12 -12
12
-16
Net Assets
9
1,200
100
6
900
50
600
3000
0
3
08
08
09
10
11
12
0
Ratio to net sales [right axis]
09
10
11
12
Ratio to net sales [right axis]
R&D Expenditures
(%)
(billions of yen)
200
Net Assets
12
8
300
4
0
200
-4
1,500
150
9
6
900
50
350
300
1,200
100
Capital Investment
(billions of yen)
(billions of yen)
(%)
350
150
12 -12
(%)
設備投資
Net Income
(Loss)
250
11
12
00
(十億円)
10
200
0908 1009 1110 1211 -2 12 -300
(%)of yen)
(billions
(billions of300
yen)
12
09
(billions of yen)
Capital Investment
12 350
11
08
12
350
Ratio to net sales [right axis]
費
10
11
(billions of(%)
yen)
4
900
50
09
10
(billions of yen)
(%)
300
(十億円)
300
-8
0
11
08
09
Capital Investment
200
純資産
Operating
Income (Loss)
0 100
600
10
08
Ratio to net sales [right axis]
研究開発費
Net Assets
(billions of yen)
Net Income (Loss)
8
(%)
売上高に対する比率[右軸]
に対する比率[右軸]
-4
(billions of300
yen)
-12
12 -50
12
0908 1009 1110 1211
08
350
Operating Income (Loss)
1,200
2008
0
100
200
2,500
-100
2,000
-200
4
12
(billions of yen)
(%)
(billions of yen)
200
250
0
6 3,000
1,500
8
11
Capital Investment
Net Assets
(billions of yen)
(%)
350
当期純利益(損失)
Net Sales
10
Ratio to net sales [right axis]
設備投資
Net Income
(Loss)
(billions of yen)
09
Financial Highlights
高に対する比率[右軸]
250
200
3
150
Annual Report 2012
3
M es sa ge to Our Shar ehol der s
Faced with an increasingly severe operating environment in the electronics
industry, we will promote further reforms to our business structure under a new
administration and will press forward to reinforce our business foundations.
Message to Our Shareholders
In fiscal 2011, ended March 31, 2012, the Japanese
economy showed signs of a partial recovery. Overall,
however, conditions remained challenging, including
the continuing strength of the yen, as well as a progressive decline in prices for digital appliances, especially
for LCD TVs.
Overseas, a strong sense of uncertainty persisted
due to the European debt crisis and the slower growth
in China and emerging countries.
In particular, a steep drop in demand in Japan’s LCD
TV market, a deterioration in the supply/demand balance for large-size LCD panels, and sluggish demand
for solar cells had a substantial impact on our performance, and in fiscal 2011, we were forced to post the
largest-ever loss in our history.
To respond to the rapidly changing business environment, and with the aims of achieving business growth over
the medium to long term and strengthening its business
foundations, Sharp has instituted a new administration.
Since its establishment, Sharp has contributed to
society by consistently making unique products unlike
any other, thereby engendering new demand. Harnessing the creativity that flows through our corporate DNA,
we will be re-activating our spiral strategy of devices and
products, and will accelerate the global market launch of
new one-of-a-kind products that will impress and amaze.
Meanwhile, in terms of production strategy, Sharp
has entered into an agreement with the Hon Hai Group,
the world’s leading electronic manufacturing service
company, to establish a strategic global partnership to
collaborate primarily in the highly competitive area of
digital appliances. Through this partnership, we aim
to create a structure that will enable us to compete
in global markets, and thus enhance our international
4SHARP CORPORATION
competitiveness. We will establish, on a global scale, a
new business model with vertical integration, combining the strengths of each company: Sharp’s capability
for developing one-of-a-kind devices and products, and
the Hon Hai Group’s production technology and cost
competitiveness.
In September 2012, Sharp will mark its 100th anniversary. Several times in the past, we have been faced
with immense difficulties, including the Great Kanto
Earthquake, fiscal and monetary tightening after World
War II, and the appreciation of the yen following the
Plaza Accord.
Nevertheless, each time, we have overcome these
crises by taking up the challenge to the creation of new
products and technologies never before seen in the world.
The severe business environment is expected to continue in fiscal 2012, but we will push ahead with efforts
to improve our business performance and reinforce our
business foundations by improving our financial position
and making changes in our business model.
In addition, we will work to raise our corporate value
by taking steps to expand our CSR activities group-wide,
including strengthening our corporate governance, helping to preserve the global environment, and enforcing
compliance in business management. We look forward
to your ongoing support and encouragement.
July 2012
President
Message to Our Shareholders
Takashi Okuda
April 1978 Joined Sharp Corporation
June 2001 Division General Manager, Visual Equipment Division,
Audio-Visual Systems Group
May 2003 Group General Manager, Audio-Visual Systems Group
June 2003 Director, Group General Manager,
Audio-Visual Systems Group
April 2006 Director, Group General Manager,
Corporate Procurement Group
June 2008 Executive Officer, Group General Manager,
International Production Planning Group
April
2010 Executive Officer, Group General Manager,
Global Market Development Group
-Emerging Markets, Asia, Oceania
October 2011 Executive Managing Officer,
General Manager, Global Business, Administration and
Manufacturing Promotion; Group General Manager,
Global Business Group
April 2012 President of Sharp Corporation
June 2012 Representative Director, President of Sharp Corporation
Annual Report 2012
5
In te r vie w with the Pr es i dent
Interview with the President
Sharp has earned high acclaim from customers and continued its business endeavors as a unique company that creates products never before seen in the
world. These have included Japan’s first and world’s first products. We are aiming to become a “globally competitive company” through continuous efforts
to create one-of-a-kind products that impress and amaze people and to change
our business model in the commoditized digital products field.
6SHARP CORPORATION
Q
Please summarize Sharp’s performance in fiscal 2011, and describe the initiatives and
policies for the future in your role as the new president.
A
Fiscal 2011 was an unprecedentedly difficult year for Sharp. To achieve a recovery and
restore trust, we will make group-wide efforts centering on four core initiatives.
Becoming a globally competitive company
Consolidated net sales fell 18.7% year on year, to
¥2,455.8 billion in fiscal 2011. This was mainly due to Japan’s rapid decline in demand for LCD TVs, deterioration
in the supply/demand balance for large-size LCD panels,
and a steep price decline for products and devices.
2011年度連結業績
Regrettably, we posted an operating loss of ¥37.5
billion. In addition, we incurred a loss on suspension
of large-size LCD
plant operation and business foun売 上 高
2兆4,558億円
dation improvement expenses associated with the
restructuring of our LCD business. We also recorded an
increase in deferred tax expenses owing to the review
of deferred
tax assets375億円
as a result of tax reforms and our
営業損
失
worsening performance. Consequently, we posted a
net loss of ¥376.0 billion.
In fiscal 2012, the outlook for the business environ当期純損失
3,760億円
ment is likely to remain
unclear. Nevertheless, we will
make a group-wide effort to achieve a recovery and restore trust by pursuing initiatives that include a thorough
reduction in total costs and business restructuring.
The reason for the deterioration in our performance
was that we failed to address major structural changes
in the electronics industry—stemming from digitalization and globalization—with sufficient speed. We were
unable
to leverage
the strengths
of ourResults
vertically inteFiscal 2011
Consolidated
Financial
grated business model in the face of such structural
changes.
Sharp’s
domain
of digitalbillion
products, notably
Net mainstay
sales
¥2,455.8
LCD TVs and mobile phones, has become a “power
game” in which success or failure in the global market
is determined by sheer production scale. In this context,
having
a slight technological
advantage
no longer carries
Operating
loss
¥37.5 billion
any meaning in the face of overwhelming capacity.
In light of this situation, Sharp has decided that it
needs to become a “globally competitive company,”
loss
¥376.0 billion
and willNet
work
on four core initiatives.
4つの重点項目
Fiscal 2011 Consolidated Financial Results
Four Core Initiatives
① 自前主義からの脱却
Net sales
¥2,455.8 billion
② 真のグローバル企業への成長
Operating loss
1. Break away from
a self-sufficient mindset
2. Grow into a truly global company
¥37.5 billion
3. Transform business model to
place more importance on services
③ サービスを含めた業態への転換
Net loss
④ 新たな需要の創造
Interview with the President
Substantial net loss posted in fiscal 2011
¥376.0 billion
4. Generate new demand
Annual Report 2012
7
What are the four core initiatives?
A
We will work on the following specific initiatives: 1) break away from a self-sufficient
mindset in the digital home appliances field through our alliance with the Hon Hai
Group; 2) grow into a truly global company; 3) transform our business model to place
more importance on services; and 4) generate new demand.
Break away from a self-sufficient mindset
Our first initiative is to break out of our self-sufficient
mindset of the past. On March 27, 2012, Sharp announced its capital and business alliance with the Hon
SDPの共同運営
Hai Group, the world’s leading electronic manufacturing
service company. I will describe the details and objec鴻海グループ
シャープtives of the alliance.
Interview with the President
プ
Q
(1) Joint management of SDP
凸版印刷グループ
The agreement with the Hon Hai Group entails joint
management of Sharp Display Products Corporation
production company for large-size
SDP (SDP), which is a大日本印刷グループ
LCD panels in Sakai, Osaka. The aims of the collaboration are to enhance cost-competitiveness and achieve
ねらい
stable operations at the Sakai Plant.
コスト競争力強化・安定操業の実現
Part of the shares of SDP will be transferred to the
Hon Hai Group, enabling the latter to best fulfill its responsibilities for joint management of SDP.
Meanwhile, the LCD color filter businesses at the
Sakai Plant operated by the Toppan Printing Group and
the Dai Nippon Printing Group will be transferred to
SDP in the manner of an absorption-type company split.
Through the unified operation of the LCD color filter
and LCD panel businesses, we plan to further enhance
efficiency and cost-competitiveness.
デジタル家電分野における協業
Joint Management of SDP
シャープ
Sharp
ブランド
Collaboration in Digital Home Appliances Field
鴻海
生産技術力
(2) Collaboration in the digital home appliances field
In the digital home appliances field, which includes
LCD
and mobile phones,
JointTVs
Management
of SDP the consumer purchasing benchmarks in the world market are shifting from
“quality, brand and technology” to “price.” AccordingHon
Hai Group
ly, theSharp
sheer scale of production
capacity
has become
the main determinant for competitiveness.
In this field, therefore, it isToppan
no longer
sufficient for
Printing
Sharp to solely undertake all processes,
Group from R&D
to design, production, sales and after-sales services.
Instead,
we need a new framework,
in which we colDai Nippon
SDP
Printing
laborate with a strong business partner. Group
Aims
To best deploy Sharp’s brand, product planning and
development
capabilities on the world stage, we will
Strengthen cost-competitiveness and realize stable
operations
utilize
the strengths of the Hon Hai Group in production
technologies, procurement capabilities and cost-competitiveness. In this way, we plan to actively promote
Sharp-brand products with cost advantages to markets
around the world.
To further strengthen the alliance, the Hon Hai Group
will make an equity investment in Sharp Corporation.
Hon
Hai Group
グループ
Sharp
Brand
Product
planning
調達力
Toppan
商品企画力
開発力
(商品/デバイス)
コスト競争力
SDP
シャープ株式会社本体への出資
Printing
Group
Development
ねらい
Aims
(1)鴻海グループの生産技術力
・調達力などを活用
Strengthen cost-competitiveness
and realize stable
operations
(2)
コスト力のあるシャープ製品を世界市場に積極投入
8SHARP CORPORATION
(products/devices)
Dai Nippon
Printing Group
Production
technologies
Hon Hai
Group
Procurement
Costcompetitiveness
Equity investment in Sharp Corporation
Aims
(1) Utilize the Hon Hai Group’s production technologies
and procurement capabilities
(2) Introduce Sharp products with cost-competitiveness
in world markets
欧州
中近東・
アフリカ
中国
米州
ASEAN
Grow into a truly global company
Outline of the Hon Hai Group
The Hon Hai Group is a Taiwanese group of companies,
centered on Hon Hai Precision Industry Co., Ltd.*, which
has worldwide manufacturing bases with China as its main
base and a total of approximately one million employees.
In 2011, the Group’s consolidated net sales were 3,452.6
billion Taiwan dollars (TWD) (approximately ¥8,787.0
billion), up 15% year on year, and net income was 77.1
billion TWD (approximately ¥196.0 billion), up 6%.
Regionally Autonomous Operations Overseas
Europe
Middle East
& Africa
China
Americas
ASEAN
Interview with the President
Our second initiative is to grow into a truly global company. To date, Sharp has maintained steady sales and
profits in the Japanese market. However, we did not
build an adequate framework to pursue product development, sales, and servicing that meet the needs of
overseas markets, especially in rapidly growing emerging markets.
For this reason, we have set up regional headquarters in core overseas regions in order to expedite
decision making. In addition, we are enhancing our
marketing capabilities—in such fields as product development, sales and servicing—according to customer
needs, and we are shifting to a regionally autonomous
operational framework.
We have already established regional headquarters
in the Americas in 2010, China in 2011 and Europe in
2012. To accelerate our business expansion in ASEAN
nations, we plan to establish an Asian regional headquarters in 2014.
*Hon Hai Precision Industry Co., Ltd.
Headquarters:
New Taipei City, Taiwan
Name of Representative: Terry Tai-Ming Gou, Chairman
Date of Establishment: February 20, 1974
Capital:
106.9 billion TWD
(approximately ¥272.0 billion)
Purpose of Business:
Electronic manufacturing service
Note: As of the end of December 31, 2011. The translation of TWD is based on 1 TWD=¥2.545.
Annual Report 2012
9
Transform business model to place more
importance on services
Interview with the President
Our third initiative is to transform our business model
to place more importance on・services.
To explain this,
エネルギーソリューションビジネスの強化
拡大
I will cite the example of our solar business. In Japan,
a total of around one million homes have been fitted
① システム機器
with solar power generation
systems, and nearly half
of those, or 470,000,(蓄電池・
were
made
by Sharp. We posHEMSなど)
sess both patterns for installation and extensive knowhow tailored to the ②
various
roof designs of Japanese
設計・建設
太陽電池
エネルギー
houses.
Going
forward,
we
will
take advantage of our
モジュール
ソリューション
販売中心
ビジネス
support
system cultivated in the home appliances field,
③ 発電
which has earned top customer satisfaction, for use in
our solar business. In addition, Sharp aims to reinforce
and expand its energy
solutions business by increas④ メンテナンス
ing its product lineup in the field of system equipment,
which includes storage batteries and HEMS*, as well
as by advancing its business across the wide range of
the value chain that includes the design, construction,
power generation, and maintenance of mega solar
power generation systems.
*Home Energy Management System
Generate new demand
Our fourth initiative is to generate new demand. We
have advanced our business to date based on a “oneof-a-kind
in Energy
which we
createBusiness
uniquelyReinforce strategy”
and Expand
Solutions
featured products centered on devices incorporating
proprietary Sharp technologies, with an emphasis on
1. System
home appliances.
equipment
(storage
batteries,
Going forward, we will broaden
the
current “oneHEMS, etc.)
of-a-kind strategy” to cover a “new one-of-a-kind
Centered that includes items
2. Design
&
strategy”
other than
home apEnergy
on
construction
pliances,
this concept with the aim of
solutions
solar cell and promote
module new demand.
business
generating
3. Power
sales
generation
In the field of home appliances,
we will create “new
essential products” that provide new levels of value to
Maintenance
customers. These products will 4.
reflect
customers’ changing needs associated with an evolving social environment.
In fields other than home appliances, we will create
one-of-a-kind products that incorporate our own proprietary technologies, including our IGZO LCD technology*1
using new materials and our Plasmacluster Ion technology*2 for purifying air. In the process, we will tap new
markets in such areas as medical care and education.
*1 Please refer to “Technology Revolution in LCD Panels” on pages 16–17.
*2 Detailed information on Plasmacluster Ion technology is available at the
following website:
http://www.sharp-pci.com/en/
新たな需要の創造
Reinforce and Expand Energy Solutions Business
大
新オンリーワン戦略
従来の
オンリーワン戦略
Centered
on
家電商品が中心
solar cell
module
sales
「新・必需品」
に進化
10
SHARP CORPORATION
1. System
equipment
(storage batteries,
HEMS, etc.)
家電以外の商品
2. Design &
Energy
construction
solutions
business
3. Power
generation
4. Maintenance
医療・教育などの
分野で新たな需要を創造
Generate New Demand
New one-of-a-kind strategy
Current
one-of-a-kind strategy
centered on
home appliances
Create “new
essential products”
Products other than
home appliances
Generate new demand in
such fields as medical care
and education
Q
Can you explain your “new one-of-a-kind strategy?”
A
By deploying our proprietary technologies, we will develop products and devices
in new categories, such as robotic home appliances, for example. We will use this
strategy to tap new markets by creating new applications and providing levels of
value unseen in the past.
Now, I will introduce an example of efforts we’re
making in new markets outside of home appliances.
Our IGZO LCDs offer three key features: high-definition, low power consumption and high-performance
touchscreen capability. IGZO LCDs can be expected to
not only find applications
as an extension of conven新たな需要の創造
tional LCDs in consumer and office-use equipment,
but also generate new
demand in other fields, such as
医療分野への応用
medical equipment.
IGZO LCDs enable
medical diagnostic imaging
画像診断モニターなど
monitors to display realistic images by applying a multiprimary color technology cultivated in AQUOS LCD TVs.
By also combining
IGZO LCDs with camera mod日用品のインテリジェンス化
ules, another Sharp strength, we can realize a digital
3次元
・高精細デジタルミラー、
電子教科書、
users to see themselves
in 3D highmirror that
allows
デジタル文具
(ノート・手帳)
など
definition quality.
By advancing our “new one-of-a-kind strategy” of
creating new applications and providing levels of value
unseen in the past, we intend to cultivate new markets
and generate new demand.
Interview with the President
First of all, I will explain the meaning of “new essential
products” in the context of home appliances.
Let’s cite the example of the vacuum cleaner, which
was
meant to be a “simple and convenient” appliance.
新オンリーワン戦略
Responding to growing awareness about people’s
health カテゴリーシフ
and the environment,
we incorporated
our
トによる
「新・必需品」
の創出
Plasmacluster Ion technology for purifying air into our
vacuum cleaners, thus elevating them to a new catコモディティ
簡単
・便利な家電商品
掃除機
egory
of “health
and
environmental products.”
Our vacuum cleaners カテゴリーシフ
continuedトto make progress
in becoming robotic home appliances, which take over
「プラズマクラスター」
オンリーワン
健康・
環境商品comfort技術搭載掃除機
housekeeping
tasks,
offering
and reassurance
amid a rise in the number of households consisting of
singles, working couples and the elderly.
lighting, 安心
as ・
well,
response
the growing em 新・
In
必需品
安全 in
ロボッ
ト家電 toCOCOROBO
phasis on saving energy, we have started selling the
industry’s first LED ceiling light. In order to meet the
demand for home appliances that are health conscious
and environmentally friendly, we hope to develop ceiling
lights incorporating our Plasmacluster Ion technology.
Going forward, we plan to implement a further “shift in
categories” in home appliances by deploying our proprietary technologies. In this way, we will offer “new essential
products” that people realize they always wanted.
New One-of-a-Kind Strategy
Create “New Essential Products” through a Shift in Categories
Commoditized
products
Simple and convenient
home appliances
Vacuum cleaner
Health and environmental
products
For application in the medical care field
Medical diagnostic imaging monitors, etc.
Shift in category
One-of-a-kind
products
Generate New Demand
Plasmacluster
Ion vacuum cleaner
High-tech daily commodities
New
essential
products
Comfortable and reassuring
home appliances
Robotic home
appliance
3D high-definition digital mirrors,
electronic textbooks, digital stationery
(notebooks and schedule books), etc.
Annual Report 2012
11
Q
Please describe the efforts you are making to improve your business foundations.
A
We will split off the large-size LCD business, which has become unprofitable, from
Sharp. At the same time, we will work on measures such as cutting inventories and
paring down noncurrent assets.
Interview with the President
For a start, we will split off the large-size LCD business, which has become unprofitable, from Sharp.
This business will be moved to Sakai Display Products
Corporation, which is jointly operated by the Hon Hai
Group and Sharp.
経営体質の改善
The major part of our ¥376.0 billion net loss in fiscal
from the large-size LCD business. By
2011 stemmed
大型液晶事業の切り離しによる経営の安定化
splitting off this business, we will stabilize our operations.
2011年度under joint collaboration
今後
Through a new framework
with the Hon Hai Group, we will work to cut costs and
研究開発
シャープ
シャープ
increase the competitiveness of the large-size LCD business. However, the R&D function will remain with Sharp,
シャープof production technology
モジュールの
including
the development
生産
・
販売
(大型液晶事業本部)
and elemental technology. We will continue
developing
堺ディスプレイ
next-generation large-screen displays, notably
for 4K
プロダク
ト TV,
シャープ
offering
four times the
pixels
of full-HD TV.
パネルの生産
(SD
P・大型液晶
事業本部)
With respect to our financial position, we will work
to achieve an improvement of a total of ¥400 billion.
We will make off-balance-sheet arrangements for our
large-size LCD business and enhance equity capital by
issuing new shares through a third-party allotment to
the Hon Hai Group. We will also cut inventories and
reduce noncurrent
assets. In addition, we will improve
合計4,000億円規模の財務体質改善
cash flows by lowering capital investment. By steadily
テーマ
影響項目
pursuing
the aforementioned
initiatives, we 金額
will work
to大型液晶事業の
improve our business foundations.
1,100億円
オフバランス化
資産・負債の減少
第三者割当増資
自己資本の増加
669億円
在庫の適正化及び
固定資産の圧縮
棚卸資産の減少
固定資産の減少
1,500億円
設備投資の圧縮
キャッシュ・フロー
の改善
700億円
Improve Business Foundations
Stabilize Operations by Splitting off Large-size LCD Business
Fiscal 2011
R&D
Sharp
Production and
sales of
LCD modules
Sharp
Production of
LCD panels
12
SHARP CORPORATION
(Large-size LCD
Business Group)
Sharp
(SDP, Large-size
LCD Business Group)
Future
Sharp
Sakai
Display
Products
Improve Financial Position by a Total of ¥400 billion
Theme
Affected items
Amount
Off-balance-sheet
arrangements of
large-size LCD business
Decrease in assets
and liabilities
¥110.0 billion
Issue new shares through
third-party allotment
Increase in equity
¥66.9 billion
Optimize inventories and
reduce noncurrent assets
Decrease in
inventories and
noncurrent assets
¥150.0 billion
Reduce capital investment
Improve cash flows
¥70.0 billion
Q
What are your thoughts on efforts to improve corporate value?
A
We consider the improvement of our profitability and financial position to be among
our top priorities for raising our corporate value. Sharp's management is committed
to producing steady results.
In September 2012, Sharp will mark the 100th anniversary of its founding. Throughout our history, we have
earned high acclaim from customers and have consistently conducted our business operations as a unique
company that creates products never before seen in the
world. These have included Japan’s first crystal radios
and TVs and the world’s first all-transistor calculators.
We are aiming to become a “globally competitive
company” through continuous efforts to create one-ofa-kind products that impress and amaze people and to
change our business model in the commoditized digital
products field.
Interview with the President
Raising corporate value has a variety of meanings. In
light of our current harsh business environment, raising
shareholder value through the improvement of profitability and the strengthening of our financial position is
among our top・priorities.
重点事業分野
海外売上の拡大
It is the management’s responsibility to work with
utmost
effort to achieve
a performance
recovery and
重点事業分野
売上構成比
海外売上構成比
restore
trust,
and
produce
steady
results,
step
by step.
100%
To achieve this, we will steadily advance the four
国内
その他 earlier, and accelerate changcore initiatives described
es in our business model.
50%
To pursue these重点事業
initiatives, we plan to raise the share
分野
in net sales occupied
by core priority businesses—such
海外
健康・環境・
エネルギー
as health and environment, and energy solutions; conソリューション、
sumer and office-use
equipment using IGZO and other
医療・教育
など
new
0% technologies; and the medical care and education
field—from
the current
60%年度
in the中期目標
medium
中期目標40% to 2011
2011年度
term. We also plan to raise the overseas sales ratio to
70%, from the current 50%.
Expansion of Strategic Business Fields and Overseas Sales
100%
Sales ratio of
strategic business fields
Overseas sales ratio
Japan
Other
Strategic
business
fields
50%
0%
FY2011
Overseas
Health and
environment,
energy solutions,
medical care
and education,
etc.
Mid-term target
FY2011
Mid-term target
Annual Report 2012
13
Special Feature 1: Reinforcing the Solutions Business
太陽電池の市場規模
(GW)
30
25
20
One of the15world’s largest solar power generation plants, with capacity
of 73MW (Lop Buri, Thailand) (Satellite image courtesy of ©DigitalGlobe)
10
Solar Cell Business Evolves into an50 Energy Solutions Business
Special Feature 1: Reinforcing the Solutions Business
10
日本
11
欧州
12
米州
13
中国
14
(年度)
その他
(出所:シャープ)
Sharp will reinforce its energy solutions business through a wide variety
of activities, including the provision of residential solar power generation
systems and the design, construction, sales, power generation and
maintenance services of large-scale solar power generation plants.
Solar Cell Market Trends
The world solar cell market is expected to contract
temporarily in fiscal 2012 due to a slump in demand in
Europe stemming from the debt crisis and revisions to
feed-in tariff systems. By contrast, demand is expected
to remain healthy in other regions. Included among
these is Japan, which enacted new legislation in July
2012 requiring power companies to purchase all electricity from renewable energy sources. This is expected
to create a surge in demand for solar cells.
From fiscal 2013, the global market for solar cells is
expected to continue expanding, with particularly strong
growth in the Americas, China and emerging countries.
Market for Solar Cells
(GW)
30
25
20
15
10
5
0
10
Japan
11
Europe
12
The Americas
13
14
China
Other
(Source: Sharp)
14
SHARP CORPORATION
(FY)
LED lighting
Solar cells
Roles of a HEMS
Air conditioner
Utility power
Visualizes electricity
usage
Dedicated tablet terminal
Security
Storage battery
Refrigerator
Electric vehicle
LCD TV
Controls home
appliances
Enables optimal control
of energy sources
Water heater
Image of Home Energy Management System (HEMS)
Sharp has increased sales of residential solar power
generation systems, primarily in Japan, by drawing on
the know-how and reliability it has amassed over many
years, as well as its rich product lineup. Going forward,
we will bolster our support systems, including services
that monitor solar power systems via the Internet. We
will also expand our lineup of system equipment, including storage batteries and HEMS.
Meanwhile, in Europe, Sharp operates an independent power producer business as a joint venture with
Italy’s Enel Green Power. In Thailand, we constructed a
mega solar power plant that is one of the largest of its
kind in the world, and supplied thin-film solar cell modules and peripheral systems. We have been contracted
to provide maintenance services to the plant, which
Solar power generation plant built by Sharp and Enel Green Power
in southern Italy, with capacity of 8.2MW (Altomonte, Calabria)
began operating in the spring of 2012. In the United
States, Recurrent Energy, a subsidiary of Sharp, is engaged in the development and sale of its own largescale solar power generation plants.
In Japan, the enactment of new legislation requiring
power companies to purchase all electricity from renewable energy sources is expected to generate growth in
the market for solar cells for industrial applications.
Deploying our extensive track record, we will reinforce our energy solutions business by expanding
operations across a wide range of the value chain—
from the provision of residential solar power generation
systems to the design, construction, sales, power generation and maintenance services of large-scale solar
power generation plants.
Special Feature 1: Reinforcing the Solutions Business
Strengthening the Energy Solutions Business
Part of a large-scale solar power generation plant in Ontario, Canada
(Conceptual drawing of completed plant courtesy of Recurrent Energy)
Annual Report 2012
15
Special Feature 2: One-of-a-Kind Devices and Products
Technology Revolution in LCD Panels
Special Feature 2: One-of-a-Kind Devices and Products
Leveraging Sharp’s proprietary technologies, centered on IGZO LCDs,
we will realize the features of high-definition, low-power consumption
and high-performance touch screens, and will create new demand.
Sharp Begins Mass Production of IGZO LCDs
—a World’s First
Sharp has been working to expand applications for its
high-performance mobile LCDs, employing one-of-akind technologies, such as CG-Silicon technology.
Demand for higher-definition mobile LCDs is expected to grow, due to the ongoing enlargement of
smartphone screens and expansion in the market for
tablet terminals.
Under such circumstances, Sharp commenced the
world’s first production of high-performance IGZO LCDs
employing oxide semiconductors*1 at the Kameyama
No. 2 Plant in March 2012. In April, the transition to
mass production took place, and we are planning to further enhance production capacity in the future.
16
SHARP CORPORATION
The Kameyama No. 2 Plant, which produces IGZO LCDs
(millions of
units)
Market for Tablet Terminals
300
250
200
150
100
50
0
11
12
13
14
15
1280×800 pixels and lower 1920×1200 pixels and higher
(Source: Sharp)
タブレット
高精細化
従来比※3
2倍
Front: IGZO
LCD featuring
touchscreen
端末
Back: Shows the signals and the noise status of the touchscreen
in the graph
※3
低消費電力化 従来比
1/5∼1/10
アモルファス
シリコン TFT
高精細
ノートPC
IGZO TFT
スムーズな
操作感
高精細
液晶モニター
Features of IGZO LCDs
Targeting Wider Applications
IGZO LCDs employ oxide semiconductors (IGZO) comprising Indium (In), Gallium (Ga) and Zinc (Zn) to their
thin-film transistors (TFTs). This enables miniaturization
of TFTs compared to conventional amorphous silicon
TFTs and shrinking of wiring width, which allows for
特長2
:
:
increased light transmittance特長1
per pixel.
These
advances
配線の細線化
TFTの小型化
make it possible to produce LCD panels that achieve
high-definition and low power consumption. In addition, the application of the UV2A technology*2 used in
AQUOS LCD TVs enables a high image quality.
Not only for use in tablet terminals, Sharp anticipates the
application of IGZO LCDs to extend to high-definition
notebook PCs and LCD monitors—which are both expected to grow in demand. In addition, we also foresee
demand in new fields that are not an extension of conventional applications, such as medical equipment. The
IGZO technology can also be adapted for use in OLEDs.
Sharp is creating new demand by offering one-of-akind products employing its proprietary technologies,
such as IGZO and CG-Silicon technologies.
Higher
definition
Twice as
high*3
Lower power Reduced to
consumption 1/5-1/10*3
Amorphous
silicon TFT
Special Feature 2: One-of-a-Kind Devices and Products
タッチパネル
の高性能化
Tablet
terminals
High-definition
notebook PCs
IGZO TFT
Higher
performance
touchscreens
Smooth
touch
operation
High-definition
LCD monitors
Features of IGZO LCDs and expansion of applications
Feature 1:
Miniaturization
of TFTs
Feature 2:
Shrinking
of wiring width
Comparison of display quality and close-ups of pixel images
Conventional LCD (left) and IGZO LCD (right)
*1 A TFT using oxide semiconductors (IGZO) has been developed in collaboration with Semiconductor Energy Laboratory Co., Ltd.
*2 Photo-alignment technology that can precisely control the alignment of
liquid crystal molecules in a simple LCD panel structure
*3 Compared with Sharp’s LCD panels that employ amorphous silicon TFTs
Annual Report 2012
17
Plasmacluster Ion air purifier/humidifier and robotic home appliance
Creation of New Essential Products and Expansion of Business Fields
Special Feature 2: One-of-a-Kind Devices and Products
18
We will deploy one-of-a-kind technology to make a shift in categories
for home appliances and provide new solutions.
Plasmacluster Ion Technology
Sharp also has a history of generating new demand by
developing various one-of-a-kind technologies in the
field of home appliances.
Plasmacluster Ion technology is one such example.
It is an air purification technology that removes airborne
mold spores and other impurities, while also suppressing the activity of airborne viruses and reducing static
electricity.
Since 2000, when we launched an air purifier
equipped with Plasmacluster Ion technology for the
first time, its application has spread in tandem with the
growing consumer awareness about health and the
environment. Sharp now incorporates this proprietary
technology in many other home appliances, including
Plasmacluster Ion generators, air conditioners, refrigerators and vacuum cleaners.
SHARP CORPORATION
Plasmacluster Ion technology is also being adopted
in a wide array of products in other companies, and its
application is spreading in transportation and public
spaces including vehicles, train cars and elevators.
Plasmacluster Ion generators
(From left: For personal use with a humidifying function, a portable
model with a humidifying function, for car use, a portable model
for small spaces and a mobile model)
Commoditized
products
Simple and convenient
home appliances
Vacuum cleaner
Shift in category
One-of-a-kind
products
Health and environmental
products
New
essential
products
Comfortable and reassuring
home appliances
Plasmacluster
Ion vacuum cleaner
Robotic home
appliance
Expanding Markets for Plasmacluster Ion Technology
Solution for space hygiene and energy conservation
• Marine product processing plants
• Food processing plants
• Supermarket back rooms
Solution for air quality
• Daycare centers, nursery schools
• Medical centers, elderly care facilities
• Restaurants
A Category Shift for Home Appliances
Delivering New Solutions
In addition to the growing health and environmental
concerns, in recent years there has been a rise in the
number of households consisting of singles, working
couples and the elderly. Consequently, there is a growing need for appliances that reduce household chores
or take over housekeeping duties and also make daily
life more safe and secure. In response to this trend,
Sharp has made a category shift for its vacuum cleaner
equipped with Plasmacluster Ion technology by launching a robotic home appliance that makes daily life more
comfortable and reassuring in June 2012.
The robotic home appliance not only employs Plasmacluster Ion technology, but is also equipped with artificial
intelligence technology, allowing users to enjoy a diverse
range of responses based on the level of battery power
available and other factors. It is also able to process speech
operations through its voice recognition function*1. In
addition, by connecting the robotic home appliance to a
wireless LAN, users can check images taken with its builtin camera from a remote location via smartphones*2.
Sharp is now, more and more frequently, incorporating
Plasmacluster Ion technology into a variety of businesses as a solution for both saving energy and ensuring
a hygienic environment. Recently, Sharp conducted
practical trials*3 at a marine product processing plant.
It was confirmed that environmental hygiene could be
maintained at previous levels, even if the controlled interior temperature is raised by two degrees, from 15˚C
to 17˚C, when Plasmacluster Ion technology is used.
This is expected to enable reductions in cooling costs
in places such as factories where temperatures must
be kept constantly low. We will work to create new
markets by promoting B2B business that deploys these
distinctive features.
The voice recognition function makes it possible for the
robot to respond to your commands
Special Feature 2: One-of-a-Kind Devices and Products
Create “New Essential Products” through a Shift in Categories
Creation of New Essential Products and
Expansion of Business Fields
Sharp will expand its business fields by providing
new solutions while creating new essential products
through a category shift for home appliances.
*1 Only the top-of-the-line model (RX-V100) has a voice recognition function.
It is equipped with a voice recognition engine developed by RayTron, INC.
*2 The top-of-the-line model (RX-V100) only. Wireless LAN is in compliance
with IEEE 802.11b/g. Broadband Internet connection and set-up, wireless
routers, smartphones and other devices as well as specialized applications
(available for download from Sharp-designated websites) are required.
*3 Conducted a joint testing with Tarumizu City Fishermen’s Cooperative
(Kagoshima Prefecture, Japan) for six-month period from October 2011.
Results may differ depending on the testing conditions.
Annual Report 2012
19
S egment Outline
Sharp Corporation and Consolidated Subsidiaries
Years Ended March 31
Consumer/Information Products
Electronic Components
Consumer/Information Products
Audio-Visual and Communication Equipment
Sales
42.0%
Main Products
LCD color televisions, color televisions,
projectors, DVD recorders, Blu-ray Disc
recorders, Blu-ray Disc players, mobile
phones, mobile communications handsets,
electronic dictionaries, calculators,
facsimiles, telephones
58.0%
Health and Environmental Equipment
Main Products
Refrigerators, superheated steam ovens,
microwave ovens, air conditioners, washing
machines, vacuum cleaners, air purifiers,
dehumidifiers, humidifiers, electric heaters,
small cooking appliances, beauty appliances,
Plasmacluster Ion generators, LED lights, solarpowered LED lights, network control units
Total Assets
30.7%
Information Equipment
Segment Outline
Main Products
POS systems, handy data terminals,
electronic cash registers, information
displays, digital MFPs (multi-function
printers), options and consumables,
software, FA equipment, ultrasonic
cleaners
69.3%
Capital Investment
Electronic Components
LCDs
22.0%
Main Products
TFT LCD modules, Duty LCD modules,
System LCD modules
78.0%
Solar Cells
•Sales figures shown on pages 20-21 include internal sales
between segments (Consumer/Information Products and
Electronic Components). The percentage of sales in the pie
chart has been calculated accordingly.
•Operating income (loss) figures shown on page 21 are the
amounts before adjustment of intersegment trading.
•Total assets figures shown on pages 20-21 are the amounts
before adjustment of intersegment trading. The percentage of
total assets in the pie chart has been calculated accordingly.
•Capital investment figures shown on pages 20-21 include the
amounts of leased properties, and do not include unallocated
capital investments. The percentage of capital investment in the
pie chart has been calculated accordingly.
•Effective for the year ended March 31, 2011, the Company
has applied the “Accounting Standard for Disclosures about
Segments of an Enterprise and Related Information” (Accounting
Standards Board of Japan (ASBJ) Statement No. 17, issued by
the ASBJ on March 27, 2009) and the “Guidance on Accounting
Standard for Disclosures about Segments of an Enterprise and
Related Information” (ASBJ Guidance No. 20, issued by the
ASBJ on March 21, 2008). In this connection, sales, operating
income (loss) and total assets for 2010 shown on page 21 have
been restated to conform with the 2011 presentation.
20
SHARP CORPORATION
Main Products
Crystalline solar cells, thin-film solar cells
Other Electronic Devices
Main Products
CCD/CMOS imagers, LSIs for LCDs,
microprocessors, flash memory, analog
ICs, 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
2,000
(十億円)
1,500
150
(billions of yen) Operating Income (Loss)
総資産
150
(billions of yen)
(billions
of 100
yen) Sales
営業利益
(損失)
3,000
50
(billions of yen)
1,500
150
0
2,000
50
500
(十億円)
-100
150
50
500
-50
1,000
-100
09 08
10 09
11 10
12 11
(billions
of yen) Sales
営業利益
(損失)
0
08
3,000 09 08
10 09
11 10
12 11
08
100 売上高
3,000
50
12
2,0000
12
2,000
08
0
09 08
10 09
11 10
12 11
11
12
12
0
300
(billions of yen)
50
500
(billions of yen) Operating Income (Loss)
0 総資産
-100
2,000
150 09 08
08
10 09
11 10
12 11
08
08
10 09
12
(十億円)
300
12
12
09
10
11
12
10
11
12
09
10
11
12
09
10
11
12
Total Assets
08
Operating Income (Loss)
50
500
11 10
12 11
12
08 Investment
08(billions of yen) 09Capital
10 09
11 10
12 11
12
09 08
10 09
0
(billions of yen) Total Assets
設備投資
2,000
200
0
0
-50
-100
(billions of yen)
08
09
10
11
12
08
09
10
11
12
10
11
12
Capital Investment
300
1,500
100
200
Capital
08 Investment
09
100
1,000
-50
08
08
0 Total Assets
2,000
08
1,500
150
2,0000
1,000
-100
0
500
(billions of yen)
300
(十億円)
11
(billions of yen)
(billions
of yen) Sales
営業利益
(損失)
100
3,000
50
50
500
-100
10
1,000
0
0
-50 09
12 11
0
0
-50
09
1,500
100
11 10
100
1,000
08
12
2,000
200
1,000
100
1,000
1,000
-100
(billions of yen)
(billions of yen) Operating Income (Loss)
総資産
1,500
150
1,500
100
1,500
150
Operating Income (Loss)
11
-50
設備投資
08(billions of yen) 09Total Assets
10
2,000
300
(十億円)
10
2,0000
1,000
0
0
500
09
100 Sales
3,000
50
(十億円)
2,000
200
150
08
(billions of yen)
-50
(十億円)
0
0
-50
(billions of-100
yen)
(十億円)
1,000
-100
Operating Income (Loss)
100
1,000
100
1,000
0
0
-50
Total Assets
2,000
Segment Outline
(十億円)
200
1,000
100
0
500
09
10
11
12
(billions of yen) Total Assets
0
0 設備投資
2,000 09 08
300
08
10 09
11 10
12 11
12
08
(十億円)
(十億円)
2,000
200
1,500
100
(billions of yen)
総資産
1,500
150
100
1,000
100
0 Capital Investment
300
08
09
(billions of yen)
Operating Income (Loss)
(billions of yen)
2,000
200
1,500
100
Total Assets
Annual Report 2012
21
Fi sca l 20 11 Rev iew by Pr oduc t G r oup
Sharp Corporation and Consolidated Subsidiaries
Years ended March 31
Consumer/Information Products
売上高
Audio-Visual
and Communication Equipment
(十億円)
Sales
2,000
37.7%
(billions of yen)
2,000
37.7%
1,000
0
1,000
0
08
09
10
11
12
08
09
10
11
12
This product group posted decreases in sales and profits due to the effect of Japan’s rapid decline in
demand and price erosions for LCD TVs, as well as intensified competition in the mobile phone market.
LCD Color TVs
In Japan, the market environment shifted with difficulties due to a fall in demand and price declines following the end of analog broadcasting. Overseas
markets also exhibited a downturn in demand due to such factors as market
saturation in Europe and the U.S. and the slowing of the growth rate in the Chinese market. In this context, Sharp actively introduced large-screen models that
are 60 inches and larger and expanded sales mainly in North America. We also
released the Free-Style AQUOS—a thin, lightweight model that attracted much
attention. Going forward, we will continue to establish Sharp’s brand image as a
leading company of large-screen TVs, based on the global rollout of large-screen
Sales
(billions
of yen)
models, while striving to create products that will
stimulate
new demand.
80"
Fiscal 2011 Review by Product Group
80-inch AQUOS
売上高
(十億円)
300
300
10.4%
Blu-ray Disc Recorders/Players
200
10.4%
100
AQUOS Blu-ray Disc recorder
0
08
09
In Japan, while the demand grew considerably due 200
to a last-minute rush prior
to the end of analog broadcasting, it subsequently declined on the following
100 Sharp released models
rebound in the second half of the year. In this context,
with a Wi-Fi connection that can easily establish a network without having to
0
use a wireless LAN router. Going forward, we will continue releasing prod11 12
08 09 10 11 12
ucts that address market needs, such as models adapted to record three
programs at once and models for which the recording capacity can be easily
increased with a “slot-in” type hard disk drive.
10
Mobile Phones
Smartphone for NTT DOCOMO
While the shift to smartphones progressed rapidly worldwide, in Japan, a demand for conventional mobile phones decreased and we encountered strict
competition due to the full-scale entry of foreign manufacturers. Sharp introduced smartphones with features including connectivity with AQUOS LCD
TVs, built-in power-saving technologies, a large-screen and a slim frame, and
focused on establishing the AQUOS PHONE brand. Going forward, we will
continue working to create unique features and functions and launch competitive smartphones with the global market in mind.
•Sales figures shown on pages 22-25 include internal sales between segments (Consumer/Information Products and Electronic Components). The percentage of sales in pie charts has
been calculated accordingly. The Other Electronic Devices group’s sales do not include internal sales to the LCD/Solar Cell groups.
(billions
of yen)
•Effective for the year (十億円)
ended March 31, 2009, product grouping had been recategorized. In this connection, results for 2008 have been
restated
to conform with the 2009 presentation.
Also, effective for the year ended March 31, 2010, some items previously included in Information Equipment had been reclassified and were included in Audio-Visual and Communication
500 March 31, 2011, the Company has
500 results for 2009 have been restated to conform with the 2010 presentation. In addition, effective for the year ended
Equipment. In this connection,
applied the “Accounting Standard for Disclosures about Segments of an Enterprise and Related Information” (Accounting Standards Board of Japan (ASBJ) Statement No.17, Issued by
400 (ASBJ Guidance No. 20, issued by
400and the “Guidance on Accounting Standard for Disclosures about Segments of an Enterprise and Related Information”
the ASBJ on March 27, 2009)
the ASBJ on March 21, 2008). In this connection, results for 2010 have been restated to conform with the 2011 presentation.
売上高
22
9.9%
SHARP CORPORATION
Sales
300
200
100
9.9%
300
200
100
08
売上高
09
10
11
12
Health and
Environmental Equipment
(十億円)
Sales
10.4%
10.4%
Sales
200
10.4%
(十億円)
300
100
200
0
100
09
10
11
12
08
09
10
11
12
(billions of yen)
300
300
売上高
08
08
09
10
11
12
10.4%
200
(billions of yen)
300
100
200
0
100
This product group posted growth in both sales and profits thanks to strong sales of such products as
0 consciousness.
0 purifiers, reflecting rising awareness of energy saving and health
LED lights and air
08 09 10 11 12
08 09 10 11 12
売上高
With the LED light market growing due to rising awareness of energy saving,
Sharp worked to increase sales of LED lights, with a focus on ceiling lights.
In addition, against the backdrop of growing health consciousness, we increased sales of air purifiers equipped with Plasmacluster Ion technology. We
also started the business of beauty appliance and launched a Plasmacluster
Ion hair dryer. Going forward, we aim to develop business in new categories
such as robotic home appliances and expand our overseas business through
strengthening sales of health and environmental products in growth areas
such as ASEAN and China.
Sales
(十億円)
500
売上高
400
Sales
9.9%
500
200
400
100
9.9%
Plasmacluster Ion hair dryer
(billions of yen)
500
Information
300Equipment
(十億円)
9.9%
Fiscal 2011 Review by Product Group
Health and Environmental Products
400
(billions of 300
yen)
500
200
400
100
3000
200 08
09
10
11
12
9.9%
100
3000
200 08
09
10
11
12
09
10
11
12
100
0
0
08
09
10
11
12
08
Although sales basically remained on par with the previous year’s level due to a freeze in corporate
capital investment, this product group posted an increase in profits thanks to the steady performance
of digital full-color MFPs.
Digital MFPs
Amid ongoing steady demand especially in emerging countries, Sharp
worked to expand production capacity by establishing a new plant in China.
We have revamped our lineup of low- to medium-speed monochrome MFPs
targeting emerging countries where stable demand is expected. For color
MFPs, we launched a top-of-the-line digital full-color model capable of highspeed output (62 sheets/minute) and established a diverse lineup. Going
forward, we will expand our business by offering solutions that help customers enhance the efficiency of office operations, such as connecting MFPs
with interactive whiteboards and mobile devices.
High-speed digital full-color MFP
Annual Report 2012
23
Electronic Components
売上高
LCDs
Sales
(十億円)
1,500
25.6%
(billions of yen)
1,500
1,000
25.6%
500
0
1,000
500
0
08
09
10
11 12
08
09
10
11 12
Despite sales of mobile LCDs increasing steadily, this product group posted a decrease in sales mainly due to
production adjustments at large-size LCD plants, caused by the deterioration in the supply/demand balance.
In addition to a decline in sales, an inventory write-down led to a decrease in profits.
Mobile LCDs
Fiscal 2011 Review by Product Group
売上高
With the rapid growth in demand for high-definition panels for smartphones
and tablet terminals, we made active efforts to strengthen our mobile LCD
business, centered on our Kameyama Plants. At the Kameyama No. 2 Plant,
we engaged in the mass production of LCD panels using oxide semiconductors (IGZO), which are capable of achieving both high-definition and low
power consumption at a high level. Going forward, we will strive to broaden
the applications such as for high-definition monitors with larger screens and
enhance advantages of IGZO LCDs by technological renovation. Furthermore, we will start up a production line of mobile LCDs for smartphones
Sales
(billions of yen)
introducing CG-Silicon technology at the Kameyama
No. 1 Plant. We will
300
establish a framework for mass production of high-value
added LCDs at both
the Kameyama No. 1 and No. 2 Plants. With these approaches, we will strive
200
to enhance and expand our mobile LCD business, aiming
to address the market demand for the higher-performance LCD panels that feature thinness,
100
high-definition and low power consumption.
6.1-inch IGZO LCD for mobile
devices (prototype)
(十億円)
300
7.9%
200
7.9%
100
0
08
09
70-inch LCD for digital signage
売上高
24
8.5%
SHARP CORPORATION
(十億円)
10
0
Large-size LCDs
11 12
08 09 10 11 12
The market condition deteriorated globally, reflecting the slowing growth
in the Chinese market, a disruption in components procurement due to the
impact of the Great East Japan Earthquake and a rapid decrease in demand
for LCD TVs in Japan. As a result, we made production adjustments at our
plants. Going forward, we will strive to achieve synergies through our strategic partnership with the Hon Hai Group and the business integration involving
LCD color filter operations at the Sakai Plant. Through business development
with a broad value chain and the establishment of a vertically integrated business model at the global level, we intend to achieve stable operations and
enhance cost competitiveness at the Sakai Plant.
Sales
(billions of yen)
400
400
300
300
200
100
8.5%
200
100
0
0
08
売上高
09
10
11 12
Solar Cells
(十億円)
Sales
200
7.9%
Sales
(十億円)
100
300
10
11 12
0
200 08
09
10
11 12
(billions of yen)
200
(billions of100
yen)
300
0
200 08
7.9%
09
300
300
7.9%
売上高
08
09
10
11 12
7.9%
This product 100
group posted decreases in both sales and profits, due to the 100
deterioration of global
supply/demand conditions and ongoing price erosions stemming from intense competition.
0
0
Solar Cells
09
10
11 12
08
Market conditions deteriorated even further, due to factors such as continuing price
declines caused by excess supply and intense competition. In this context, with the
aim of improving profitability, Sharp worked to change its sale approach from solely
focusing on solar cell modules to total systems and establish a business model
that is more resilient to changing market conditions and currency rate fluctuations.
In Japan, we devoted our efforts to expanding sales of Black Solar high-efficiency
monocrystalline solar cells designed for residential applications. Overseas, we enhanced the development of solar power generation plants and reinforced power
generation business. Going forward, even in Japan, we will intensify efforts in the
売上高
Sales
(十億円)
areas of the mega-solar
power generation plants and power generation businesses,
400transformation of our business and profit structures.
and undertake the
200
8.5%
Other Electronic Devices
(十億円)
8.5%
Sales
8.5%
11 12
Black Solar high-efficiency monocrystalline
solar cells
(billions of yen)
400
200
(billions of yen)
100
400
100
400
0
300
10
300
300
売上高
09
Fiscal 2011 Review by Product Group
08
08
09
10
11 12
200
0
300
8.5%
08
09
10
11 12
08
09
10
11 12
200
100
100
0
0
08
09
10
11 12
This product group posted decreases in sales and profits, due to the decline in demand and prices
centering on devices used in digital appliances such as LCD TVs.
Electronic Devices
In the electronic devices market, while demand for devices used in smartphones grew, demand for devices used in LCD TVs declined, and the
downward trend in prices continued. In this context, Sharp worked to expand
sales of distinctive devices, such as camera modules and proximity sensors
for smartphones, and to intensify development of LED lighting devices. Going forward, we will work to develop and increase sales of devices for green
products, with a focus on LEDs for which demand expansion is expected as
a growth field, as well as devices for smartphones and tablet terminals.
Proximity sensor with
integrated ambient light sensor
Annual Report 2012
25
R & D a nd Inte llect ual Pr oper t y
R&D Strategy
Sharp conducts R&D activities with the goal of developing the technologies needed to constantly create oneof-a-kind products from the perspective of users. The
final objective is to ensure that customers are satisfied
with Sharp products. To accomplish this objective, we
focus on three approaches to R&D. First is creating
unique products through the vertical integration of our
core technologies. Second is leveraging commodity
technologies shared in and outside of Sharp. Third is
using “open innovation” and cooperation with partners
to gain expertise in fields of technology that are new to
Sharp. Using all three approaches allows us to perform
R&D that is distinctive, speedy and efficient.
R&D and Intellectual Property
Home energy visualization system
Sharp has developed a home energy visualization system
enabling real-time confirmation of the power consumed by
home appliances, as well as the amount of power generated and sold by a solar power generation system. While
the conventional system only displays the total power
consumed by one breaker, Sharp’s system enables confirmation of the power consumed by individual appliances
by attaching dedicated plugs, which transmit power consumption data, to sockets within the home. The plugs can
be installed easily without requiring special wiring work,
and data on the amount of power generated and amount
of power consumed by each appliance can be seen on a
dedicated tablet terminal via a repeater. Sharp will continue
to create products that raise awareness of saving electricity and support comfortable energy-saving lifestyles.
Solar power generation system
Repeater
Broadband
router
LCD color
monitor
Dedicated
plug
that is simpler and materials that are cheaper than the
traditional silicon-based solar cells, and expectations are
placed on its potential for mass production at low cost. In
addition, the high degree of freedom in processing methods and dye materials enables it to be manufactured
in a variety of designs and colors. In terms of energy
conversion efficiency, with such results as 11.0% for a
1cm × 1cm cell and 9.0% for a 15cm × 15cm module*1,
Sharp has developed a world-class technology* 2. Going forward, Sharp will strive to increasingly enhance
conversion efficiency as well as improve reliability and
durability in an aim for early commercialization.
*1 Values measured by the public research institute National Institute of
Advanced Industrial Science and Technology
*2 Achieved as a result of conducting research based on entrustment from
the Incorporated Administrative Agency New Energy and Industrial Technology Development Organization (NEDO)
Dye-sensitized solar cell modules
Recovery support system for elderly motor function
Sharp has developed a motor function recovery support
system that links medical institutions and the homes of
the elderly via a high-speed communications network to
enable the elderly to be instructed by physical therapists in
their own home. This utilization of IT combining TVs, sensors, and other devices enables ongoing proper training.
With this system, it is expected that there are also economic and social benefits in that it can reduce the burden
such as medical and nursing care costs. There are also
benefits for medical institutions in that, based on gait tests,
blood pressure measurements and other data, physical
therapists can conduct real-time instruction and detailed
medical management. Going forward, Sharp will verify the
effectiveness of the system by testing it at medical institutions with the aim of putting it into practical use.
Dedicated tablet terminal
Image of home energy visualization system
Dye-sensitized solar cell technology
Sharp is working to develop dye-sensitized solar cells,
which are drawing attention as low-cost next-generation
solar cells. Dye-sensitized solar cells use pigments to
convert light energy into electrical energy in a process
similar to the photosynthesis that plants go through. For
this reason, dye-sensitized solar cells have a structure
26
SHARP CORPORATION
Image of recovery support system for elderly motor function
*A technology for forming concavoconvex structures that are several tens
of nanometers to several hundreds of nanometers in size through the
transfer of the pattern onto resin using a mold
Super Hi-Vision LCD
As the world’s first direct-view type display for a nextgeneration, high-definition TV broadcast service, Sharp
has developed* an 85-inch LCD (7,680 horizontal × 4,320
vertical pixels). This was achieved by enhancing display
quality utilizing Sharp’s proprietary UV2A technology. Super Hi-Vision, which is a next-generation TV broadcast
service advocated by Japan Broadcasting Corporation
(NHK), is a super-high-definition display system with a
number of pixels that is 16 times as many as that of the
current HDTV broadcasting, and when seen on a display
with a large screen, provides an overwhelmingly realistic sensation and a powerful visual experience. Sharp
will continue to work on the development of displays,
through collaboration with NHK, that realize highdefinition images toward the start of its experimental
broadcasting, which is scheduled for 2020.
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-a-kind devices for stronger business
foundations, Sharp is aggressively promoting patent
right obtainment.
Sharp has clearly delineated the fields that are central to each business group 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. Sharp also obtains useful
patents arising from alliance activities from collaboration with other companies or universities. As of March
31, 2012, Sharp had approximately 20,644 patents in
Japan and 24,232 overseas.
Sharp utilizes these patents to strengthen its strategic businesses. In addition, we take actions to protect
our patents, such as by examining the products of
competitors. We exercise care concerning the intellectual property of other companies, however, our
policy is to have other companies respect our intellectual property in return. If we discover an infringement
on any of our patents, we issue a warning. 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.
R&D and Intellectual Property
Ultra-low-reflection surface treatment technology
(moth-eye technology)
Sharp has developed a technology that realizes ultralow-reflection surfaces with reflectance of 0.1% or
less by forming moth-eye-like nanostructures on film.
It also features the outstanding property of being able
to provide wide-angle high-level visibility, and use of nanoimprinting technology* enables mass production of
ultra-low-reflection surface treatment film at a low cost.
With this ultra-low-reflection surface treatment film,
a variety of applications are available, such as for TVs,
tablet terminals and digital signage, and significantly
minimizing reflected glare on the screen can realize
displays of a higher picture quality. In addition, applying
the film on show windows and other glass prevents the
reflection of light from illuminations and so applications
other than screen displays can also be expected.
* International patent applications (PCT applications) in 2011: Sharp ranked
4th among applicants (WIPO data)
*Jointly developed with NHK
85-inch Super Hi-Vision LCD
Annual Report 2012
27
C o rpor a te Socia l Res pons i bi l i t y ( CSR)
CSR Concept
Corporate Social Responsibility (CSR)
“Make products that others want to imitate.” This
Business Philosophy
message of Sharp’s founder Tokuji Hayakawa encapsuWe do not seek merely to expand our business volume.
lates management’s stance of contributing to society
Rather, we are dedicated to the use of our unique, innovative
by quickly grasping and responding to the needs of
technology to contribute to the culture, benefits and welfare
of people throughout the world.
the next era as a manufacturer. Management over the
It is the intention of our corporation to grow hand-in-hand
years may have used different words to express this
with our employees, encouraging and aiding them to reach
concept, but all have managed Sharp with the aim of
their full potential and improve their standard of living.
全ての事業プロセスで
をもって業務を行い、
経営理念を実現する
continuing to be a「誠意と創意」
trusted company
that contributes
to
Our future prosperity is directly linked to the prosperity of
society through manufacturing. our customers, dealers and shareholders …indeed, the entire
In 1973, Sharp codified the unchanging spirit of its
Sharp family.
founder in the Company’s business philosophy and
business creed. The business philosophy, which states
Business Creed
Sharp’s vision, includes statements such as “Contribute to the culture, benefits and welfare of people
throughout the world.” This forms the foundation of
CSR at Sharp today, aimed at achieving co-existence
and mutual prosperity with society and stakeholders.
By committing ourselves to these ideals, we can derive genuine satisfaction
from our work, while making a meaningful contribution to society.
The business creed calls for “Sincerity and Creativity,”
and all employees must adhere to and follow it in order
Sincerity is a virtue fundamental
to fully realize this business philosophy.
to humanity … always be sincere.
Sharp aims to realize the business philosophy and
Harmony brings strength … trust each
contribute to the establishment of a sustainable sociother and work together.
ety through its business activities. In 2012, the 100th
Politeness is a merit … always
be courteous and respectful.
anniversary of its founding, Sharp is reaffirming those
Creativity promotes progress … remain
commitments. To ensure that Sharp remains a compaconstantly aware of the need to
ny trusted by society, we will maintain sincerity in our
innovate and improve.
actions and business activities, while simultaneously
Courage is the basis of a rewarding
working to create new products found nowhere else
life … accept every challenge with a
in the world, harnessing the creativity that has flowed
positive attitude.
through Sharp’s corporate DNA since its founding.
Achieve the Tenets of the Business Philosophy by Promoting “Sincerity and Creativity” in All Business Practices
Realization of Business Philosophy
Sales
■
Service
Production
Business Creed
Dedicated to two
principal ideals
Sincerity and
Creativity
Planning
Business Activities
R&D
Design
Social Contribution
Activities
Perspective of social contribution
through business activities
“Contribute to the culture, benefits, and
welfare of people throughout the world”
■
Perspective concerning employees
“It is the intention of our corporation to
grow hand-in-hand with our employees”
■
Perspective concerning stakeholders
“Prosperity is directly linked to the
prosperity of the entire Sharp family”
Procurement
United Nations Global Compact
Sharp has been a participant in the United Nations
Global Compact since June 2009. The Global Compact contains 10 principles in the
areas of human rights, labor, the
environment and anti-corruption.
Sharp has set targets for specific
activities in each of these areas
and is promoting efforts across
the group.
28
SHARP CORPORATION
•The business creed is the central axis of all business
activities.
•“Sincerity” means a working attitude mindful of what
will offer genuinely useful solutions and happiness to
everyone.
•“Creativity” means a working attitude not content with
the way things are. An attitude that always seeks to add
value, and to make efforts to innovate and improve.
Socially Responsible Investment (SRI) Recognition
Sharp has received recognition in Japan and overseas
for its strong commitment to corporate citizenship.
As of March 2012, Sharp was recognized by major
SRI evaluating bodies and either selected for SRI indices or awarded CSR certification as noted below.
•FTSE4Good Global Index (U.K.)
•MSCI Global Climate Index (U.S.A.)
•Morningstar Socially Responsible Investment Index (Japan)
•Corporate Responsibility Prime Status by oekom research AG
(Germany)
Sharp’s corporate vision is to become an Eco-Positive
Company. By working with stakeholders, Sharp aims
to become a company whose positive impact through
contributions
to the environment greatly outweighs
グリーンプロダク
ト
(GP)
の体系図
any negative impact on the environment caused by
business activities. In particular, Sharp is focusing on
スーパー
initiatives to reduce
greenhouse gases, which are
ステップアップ
グリーン
considered to beプロダクト
the
cause of global warming. In fiscal
2011, we achieved our target originally set for fiscal
2012, which was
for greenhouse gas emission reducアドバンスト
グリーンプロダクト
tions caused by
customer use of Sharp energy-creating
ステップアップ
and energy-saving products to be more than double
the volume ofグリーンプロダクト
emissions discharged in the course of
Sharp’s business activities.
To realize the corporate vision, Sharp is promoting
an Eco-Positive Strategy, which comprises four channels of action: Technologies, Business, Operations and
Communications. Sharp is proactively deploying this
strategy on a global scale.
Corporate Vision: Eco-Positive Company
Environmental contribution
Environmental burden
such as greenhouse gas
emissions from
company operations
<Negative Impact>
<
SGFⅡ
S
70点
0
Super
Green
Products
Improved
Advanced Green
Products
Improved
Green Products
Eco-Positive Operations
Sharp works actively to raise the environmental performance of various operations at its plants, offices and
logistics, in order to reduce their impact on the environment. At plants, it has its own assessment standards for
designating plants with a certain level of environmental
performance as Green Factories (GFs), and those with
exceptionally high levels of environmental performance
as Super Green Factories (SGFs). In an ongoing effort
to raise our environmental performance even further,
we have introduced SGF II as a higher standard set for
plants that are already certified as SGFs.
Green Factory (GF) System
SGFⅡ
180点
S
Examples of Initiatives
A
Eco-Positive Technologies
160点
B
Since fiscal 2001, Sharp has
been using
its proprietary
140点
closed-loop material recycling
technology developed in
C
SGF
an effort to create environmentally friendly materials.
ThisGF
is Sharp’s one-of-a-kind technology that repeatedly
recovers plastic from used consumer electronics products and reuses it in the parts made for new products.
We have been steadily expanding the volume of plastic recycled using this technology every year, and the
cumulative total has reached 7,000 tons. With this technology as the core, Sharp will undertake development
of new technologies, and thereby pursue effective use
of limited resources.
Eco-Positive Business
Sharp is working to make positive contributions to the environment by enhancing the environmental performance
of its products and devices to further reduce carbon
dioxide emissions, for example. Regarding products, environmentally conscious products are certified as Green
Products (GPs) based on Sharp’s own assessment criteria. GPs that offer particularly high levels of environmental
performance are called Advanced Green Products (AGPs),
Green Product (GP) System
200点
ステップアップ
100点
90点
ステップアップ
グリーンファクトリー
(GF)
の体系図
such as greenhouse gas
emission reductions
through products and services, etc.
<Positive Impact>
and AGPs that are extremely environmentally conscious
are called Super Green Products (SGPs). We are making
efforts to raise the proportion of these products.
Corporate Social Responsibility (CSR)
Environmental Activities
A
B
100 points
90 points
70 points
C
SGF
GF
200 points
180 points
160 points
140 points
Improved
Improved
0
Eco-Positive Communications
Sharp works to raise mutual awareness of environmental issues by introducing its environmental initiatives to
its wide range of stakeholders and exchanging views.
We actively undertake environment-related communications, such as the introduction of our environmental
protection initiatives in an easy-to-understand manner
on the “Social & Environmental Activities” page of the
corporate website, participation in environmental exhibitions, the holding of forums on the environment, and
active use of newspapers, television and other media.
Annual Report 2012
29
Social Contribution Activities
Committed to meeting the expectations and earning the
trust of society, Sharp actively engages in social contribution activities based on the spirit of Sharp’s founder to
show gratitude and Three Important Fields of Social
appreciation. Sharp Contribution Activities
focuses particular attention on the fields
of the environment,
education and social welfare, and
undertakes voluntary
activities in these
three fields on an ongoing basis.
Corporate Social Responsibility (CSR)
Examples of Initiatives
Biodiversity preservation activities
The Sharp Green Club (SGC)* is involved in the creation
of Sharp Forests at 12 locations as well as Ramsar
Convention wetlands preservation activities in 10 locations in Japan, among other activities. Notably, Sharp
Forest activities are being carried out under the new
concept of “creating forests in which owls live,” aimed
at cultivating forests with increasingly more diverse
ecosystems. In addition, clean & green activities and
various other biodiversity preservation activities are
being promoted, mainly in locations where Sharp has
business facilities. In Sendai, the City presented the
SGC with a certificate of appreciation in recognition of
cleanup activities that were continued in the wake of
the Great East Japan Earthquake.
classes. By end of 2011, Sharp had run these programs
at a total of 3,000 schools around the world (a total of
about 190,000 students had taken part in these programs). These activities have earned high acclaim from
the schools, and have also received various awards,
including the Minister of Education, Culture, Sports, Science and Technology (MEXT) Prize at the 3Rs (Reduce,
Reuse and Recycle) promotion merit awards and the
Minister of Economy, Trade and Industry (METI) Award
at the Career Education Awards. Going forward, Sharp
plans to pursue various other activities, such as career
guidance for children with disabilities.
Awarded the MEXT Minister’s
Prize at the fiscal 2011 3Rs
promotion merit awards
Won the METI Minister’s
Award at the Second Career
Education Awards
Activities to support people with disabilities
Sharp conducts various activities to support people with
disabilities. Sharp promotes the employment of people
with disabilities through its subsidiary Sharp Tokusen
Industry Co., and also offers job assistance by providing the opportunity to sell products from vocational aid
centers at its business sites. In addition, Sharp runs environmental education classes for children with disabilities.
*A joint organization, comprising labor and the management, which undertakes planning and runs volunteer events centering on the environment,
such as the conservation of forests and natural areas and cleanup activities. Founded in June 2003.
Work experience training at
Sharp Tokusen Industry Co.
At a Sharp Forest, working to
“create forests in which owls
live” (Osaka Prefecture)
Ramsar Convention wetlands
preservation activities
(Lake Man, Okinawa Prefecture)
Educational support activities
To help raise children’s environmental awareness and
interest in the sciences, Sharp has run programs of environmental education classes at elementary schools
since October 2006. While advancing this initiative,
Sharp extended its activities to a variety of other activities, including a program of environmental education
classes outside of Japan, a program of craftsmanship
education classes and an educational program that combines factory tours with environment/craftsmanship
30
SHARP CORPORATION
Class at school for special
needs education
Great East Japan Earthquake response
Sharp made monetary donations and also provided company products (home appliances, solar power generation
systems, etc.) to people in the
disaster-stricken areas right after
the Great East Japan Earthquake.
Sharp continues to carry out support activities that include the
provision of educational support
for children in the affected areas,
while employees take part in reconstruction efforts as volunteers and
purchase products made at welfare Employees take part in
reconstruction efforts
workshops in the affected areas.
Detailed information on Sharp’s CSR activities is available at the following website:
http://sharp-world.com/corporate/eco/index.html
C o rp o rate Gov er nance
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 sale of products and devices, which
have a strong interrelation and require high expertise.
This enables our directors, who are highly adept at our
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 are also striving to preserve transparency, objectivity and soundness in management together with
realizing appropriate management. From the viewpoint
of increasing our consideration of shareholders and
corporate social responsibility, we have appointed
outside directors with an international and multi-fac-
eted perspective, including regarding compliance, on
wide-ranging issues such as the social and economic
environment, and the future direction of Sharp. In doing
so, we have strengthened the decision-making functions within the Board of Directors and the functions
for supervising directors’ execution of duties. We have
also introduced the Executive Officer System, thereby
creating a structure that steadily facilitates nimble, efficient business execution.
Sharp has taken these measures to further strengthen the current Director/Corporate Auditor System,
which allows management and manufacturing divisions
to work together very closely, enabling the business to
expand. Sharp works to enhance its corporate governance through this system.
Sharp strives to achieve timely and accurate disclosure
of information to all stakeholders, such as shareholders
and investors, and is increasing the transparency of
management by widely publicizing information.
Corporate Governance
Basic Concept Concerning Corporate
Governance
Corporate Governance System (As of June 26, 2012)
Shareholders’ Meeting
Election/dismissal
Supervisory/decision-making functions
Supervision/
decision making
Supplement supervisory functions
Election/dismissal
Report
Board of Directors Meeting
Report
Directors
Report
Appointment/
removal
(Election/
dismissal)
Compensation Committee
Supervision
Nominating Committee
Audit
Accounting auditors
Report
Report
Internal Control Committee
Special Committee
Election/dismissal
Audit functions
Board of Corporate
Auditors
Monitoring
Corporate auditors
Audit
Coordination
Resolution/
report
Coordination
Coordination
Coordination
Internal Audit Division
Business execution functions
Representative directors/
managing directors
(Executive officers)
Supplement business
execution functions
Deliberation on key policies, etc.
Executive Management Committee
Corporate
Auditors Office
Executive officers, etc.
Strategic and Consultative
Committees
Technology Strategy Committee
One-of-a-Kind Product
Strategy Committee
Investment Committee
CSR/BRM Committee
Compliance Committee
Business
execution
and
checks
Discussion/report
Information sharing of
business status, etc.
Business Promotion Committee
Report
Operational
audit
Operational
audit
Accounting
audit
Executive officers
Division general managers
Sales subsidiary presidents, etc.
Ensure apt policy execution/
information sharing
Business execution (Business groups/functional groups/sales and marketing groups/subsidiaries and affiliates)
Annual Report 2012
31
Status of Corporate Governance System
Corporate Governance
The Board of Directors Meetings of Sharp Corporation
are held on a monthly basis in principle to make decisions on matters stipulated by law and managementrelated matters of importance, and to supervise the
state of business execution. To improve management
agility and flexibility, and to clarify the responsibilities
of the company management during each accounting
period, the term of office for members of the Board of
Directors is set at one year.
As an advisory body to the Board of Directors, Sharp
has established an Internal Control Committee, which deliberates on basic policies, the state of development and
implementation regarding internal controls and internal
audits, then reports on and discusses important matters
with the Board of Directors. As advisory bodies to the
Board of Directors, Sharp has also established a Nominating Committee and a Compensation Committee.
To strengthen the decision-making functions within the
Board of Directors and the functions for supervising directors’ execution of duties, the Company appointed outside
directors. The outside directors serve as members of the
Nominating Committee and the Compensation Committee, as well as the Special Committee that forms part of the
takeover defense plan. The Company also introduced the
Executive Officer System to carry out swift and efficient
business execution, and to maximize the functions of the
Board of Directors by optimizing the number of members.
In addition to the Board of Directors, the Company
has an Executive Management Committee, where matters of importance related to corporate management
and business operation are discussed and reported
twice a month in principle. This committee facilitates
prompt executive decision making.
The Board of Corporate Auditors is composed of four
corporate auditors, three of whom are outside corporate
auditors with a high degree of independence. Each corporate auditor meets regularly with the representative
directors, the directors, the executive officers, the accounting auditors, the head of the Internal Audit Division
and others to exchange opinions and work to ensure that
business is executed legally, appropriately and efficiently.
Remuneration to Directors and
Corporate Auditors
Monthly remuneration is decided within the scope of
the respective maximum amount of total remuneration
as set forth by a resolution of the General Meeting of
Shareholders (directors: up to ¥60 million per month;
corporate auditors: up to ¥6.5 million per month).
Monthly remuneration for each director is decided by
the Compensation Committee as delegated by the
Board of Directors, taking into consideration the business performance, extent of risks and other factors.
Monthly remuneration for each corporate auditor is decided by consultation among the corporate auditors.
Bonuses are subject to approval of the total amount
payable to directors and corporate auditors, respectively, by resolution of the Ordinary General Meeting
of Shareholders. Based on this approval, the amount
of the bonus for each director is decided by the Compensation Committee as delegated by the Board of
Directors, taking into consideration the individual’s
performance and level of contribution. The amount of
bonus for each corporate auditor is decided by consultation among the corporate auditors.
Retirement remuneration for both directors and corporate auditors was abolished as of the conclusion of
the 114th Ordinary General Meeting of Shareholders
held on June 24, 2008.
Information Concerning Outside Directors and Outside Corporate Auditors (As of June 26, 2012)
Classification
Name
Responsibilities
Outside
Director
Kunio Ito
To be involved in decision making by the Board of Directors of
Sharp and supervise directors’ execution of duties, from knowledge
based on accounting, business administration, corporate
governance theories and other research that he has conducted
over many years at university, as well as his experience as an
outside executive of companies in different fields of business, etc.
Important Concurrent Positions at Other Companies
Outside
Director
Makoto
Kato
To be involved in decision making by the Board of Directors of
Sharp and supervise directors’ execution of duties, from a broad
perspective drawn on experience in business and management of
a general trading company over many years
—
Outside
Corporate
Auditor
Shinji
Hirayama
To audit legality and correctness of Sharp’s execution of business
from a broad perspective drawn on long experience in the financial
industry, which is a different field of business to Sharp’s
—
Outside
Corporate
Auditor
Yoichiro
Natsuzumi
To audit legality and correctness of Sharp’s execution of business
from extensive experience as a lawyer specializing in corporate
legal work
Lawyer
Outside Corporate Auditor, Taiyo Kogyo Corporation
Outside Corporate Auditor, ARAYA INDUSTRIAL CO., LTD.
Outside
Corporate
Auditor
Masuo
Okumura
To audit legality and correctness of Sharp’s execution of business
based on objective insight drawn on experience in serving in
important posts with the police
Chairperson, Japan Traffic Safety Association
Outside Corporate Auditor, TV Asahi Corporation
Professor, Graduate School of Commerce and
Management, Hitotsubashi University
Outside Director, Akebono Brake Industry Co., Ltd.
Outside Director, Mitsubishi Corporation
Outside Director, Tokio Marine Holdings, Inc.
Note: Sharp has designated all of the outside directors and outside corporate auditors as independent directors and independent corporate auditors as set forth by the financial instruments exchanges on which Sharp’s stock is listed.
32
SHARP CORPORATION
Classification
Directors
(excluding outside directors)
Total Amount of
Remuneration
¥439 million
Corporate auditors
(excluding outside corporate auditors)
¥28 million
Outside directors/auditors
(2 outside directors and 4 outside corporate auditors)
¥71 million
Notes:
1. The amount above includes remuneration corresponding to fiscal 2011 for one
outside corporate auditor who resigned the position as of the conclusion of
the 117th Ordinary General Meeting of Shareholders held on June 23, 2011.
2. No bonuses to directors/auditors were paid in fiscal 2011.
3. Remuneration does not amount to ¥100 million or more for any party.
Ongoing Development of
the Internal Control System
In May 2006, the Board of Directors passed a resolution
to adopt a basic policy related to the development of systems necessary to ensure the properness of business
(Basic Policy for Internal Control), which was partially
amended in April 2012. This amended policy forms the
basis for Sharp’s ongoing development and implementation of its internal control system. The Internal Control
Committee, which is an advisory body to the Board of
Directors, deliberates on basic policies regarding internal
controls and internal audits, and the state of development and implementation of initiatives related to the
internal control system, then reports on and discusses
important matters with the Board of Directors. The
department promoting internal controls on a companywide basis oversees the internal controls of the business
execution departments. Meanwhile the Internal Audit
Division makes concrete proposals on how to improve
business operations and reinforces internal controls by
checking the validity of business execution as well as the
appropriateness and efficiency of management.
To enhance compliance throughout the group, 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 all directors, auditors, executive officers
and employees of Sharp. Sharp ensures that these
guidelines are thoroughly observed by posting them on
the Web and carrying out position-specific training programs. Based on the basic rules of compliance, Sharp
has also set up a Compliance Committee and is developing a company-wide compliance promotion system.
Meanwhile, Sharp is implementing thorough measures
to prevent compliance breaches by distributing a Sharp
Group Compliance Guidebook to all employees and
implementing training based on the guidebook.
In order to comprehensively and systematically
deal with diverse business risk, Sharp formulated the
Business Risk Management Guideline to achieve prevention of and swift responses to risk.
Plan Regarding Large-Scale Purchases of Sharp
Corporation Shares (Takeover Defense Plan)
In order to protect and enhance the corporate value
and common interests of shareholders of a manufacturing firm such as Sharp, a company must develop inhouse and make good use of advanced technology and
manufacturing technology from a medium- to longterm perspective. Furthermore, Sharp believes it is
essential to build good cooperative relationships with
stakeholders such as customers, business partners
and employees.
The Board of Directors of Sharp believes that determining whether to accept large-scale share purchases
aimed at a takeover should be ultimately entrusted to
the shareholders. However, the Board of Directors of
Sharp also believes that it is not appropriate for any party that conducts an inappropriate purchase, such as one
that clearly harms the corporate value and common interests of shareholders and/or puts undue pressure on
shareholders to sell shares, to take control over Sharp,
and that it is necessary to take reasonable countermeasures against such purchases.
In order to prevent such purchasing activity, Sharp
has adopted 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”).
The Plan provides rules for enabling shareholders
to reach a proper decision, by requiring large-scale purchasers of the Company’s shares who intend to obtain
20% or more of the voting rights of the Company to
provide sufficient information and give an adequate assessment period. If a large-scale purchaser does not
follow the rules, or 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, the Board of Directors
of Sharp will make a decision concerning the implementation of countermeasures after fully taking into
consideration the advice and recommendations of the
Special Committee consisting of three or more persons
who remain independent of Sharp’s management.
At the 117th Ordinary General Meeting of Shareholders held on June 23, 2011, shareholders approved the
continuation of the Plan. The effective term of the Plan is
until the conclusion of the 120th Ordinary General Meeting of Shareholders, which will be held by June 30, 2014.
Corporate Governance
Remuneration to Directors and Corporate Auditors
in Fiscal 2011
*For more details of the Plan, please visit the website below:
http://sharp-world.com/corporate/ir/topics/pdf/110427-1.pdf
For profiles of the Special Committee members, please visit the website
below:
http://sharp-world.com/corporate/ir/topics/pdf/110623-1.pdf
Annual Report 2012
33
R i sk F actor s
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, 2012.
(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.
Risk Factors
(2) Exchange Rate Fluctuations
The proportion of consolidated net sales accounted for
by overseas sales stood at 48.1% in fiscal 2009, 47.3%
in fiscal 2010 and 51.9% in fiscal 2011. Although Sharp
hedges the risk of exchange rate fluctuations by employing forward exchange contracts and expanding and
strengthening overseas production, such fluctuations
may affect its business results.
(3) Strategic Alliances and Collaborations
Sharp implements strategic alliances and collaborations
with other companies in order to enhance corporate
competitiveness, to improve profitability and to bolster
the development of new technologies and products
in various business fields. 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, Sharp’s business results and financial position may be impacted.
(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 is a risk that business partners may suffer deterioration in performance
due to slumping demand or severe price erosion, or
face an unexpected M&A, or be impacted by natural disasters or accidents, or procure materials of insufficient
quality, or become involved in a corporate scandal such
as a breach of the law, or be affected by legal regula-
34
SHARP CORPORATION
tions concerning human rights or environmental issues
such as the problem of “conflict minerals” in the supply
chain. Any of these factors may affect Sharp’s business
results and financial position.
(5) Technological Innovation
New technologies are emerging rapidly in the markets
where Sharp operates. Resultant changes in social infrastructure, intensified market competition, changes in
technology standards, or the appearance of substitute
technologies may impact Sharp’s business results and
financial position.
(6) Intellectual Property Rights
Sharp strives to protect its proprietary technologies by
acquiring patents, trademarks, and other intellectual
property rights in Japan and in other countries, and by
concluding contracts with other companies. However,
there is a risk that rights may not be granted, or a third
party may demand invalidation of an application, such
that Sharp may be unable to obtain sufficient legal
protection of its proprietary technologies. In addition,
intellectual property that Sharp holds may not result in
a superior competitive advantage, or Sharp may not be
able to make effective use of such intellectual property,
such as when a third party infringes on the intellectual
property rights of Sharp. There may also be instances
where a third party launches litigation against Sharp,
claiming infringement of intellectual property rights.
Resolution of such cases may place a significant financial burden on Sharp. Furthermore, if such a third-party
claim against Sharp is recognized, Sharp may have to
pay a large amount of compensation, and may incur
further damage by having to cease using the technology in question. Also, as a result of an M&A, a third
party previously unlicensed to use Sharp’s intellectual
property may acquire such license, with the result that
Sharp’s intellectual property may lose its superiority.
Alternatively, an M&A with a third party could result
in Sharp’s business becoming subject to new restrictions to which it had not previously been subject, the
resolution of which may require Sharp to pay additional
compensation. Furthermore, 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. If any of the above problems related to
intellectual property were to occur, it could impact
Sharp’s business results and financial position.
(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 and internal control.
Changes in such laws and regulations, and additional
expenses to comply with the amendments may affect
Sharp’s business results and financial position. Further,
in a case where an accident occurs related to one of
Sharp’s products, report of said incident, based on the
Consumer Product Safety Law and related regulations
in Japan, and disclosure of the accident information
based on a system for public announcements could diminish Sharp’s brand image.
(9) Litigation and Other Legal Proceedings
Sharp conducts business activities around the world,
and as such, there is a risk that Sharp could become
involved with litigation and other legal proceedings in
each country. If Sharp becomes involved in litigation
or other legal proceedings, with the different legal and
judicial systems in each country, depending on the
case, Sharp may be ordered to pay a significant amount
in damages or fines. Sharp is subject to investigations
conducted by the Directorate-General for Competition
of the European Commission, etc., with respect to its
TFT LCD business. In addition, civil lawsuits seeking
monetary damages resulting from alleged anticompetitive behavior have been filed in North America and
Europe against Sharp. Sharp also received a cease
and desist order and a surcharge payment order from
the Japan Fair Trade Commission. However, Sharp
has submitted a complaint to the Commission and the
complaint is pending. It is difficult to predict the result
of these proceedings and litigation at this stage. An adverse result could affect Sharp’s business results and
financial position.
(10) Leakage of Personal Data and Other Information
Sharp retains personal data and other confidential information concerning its customers, business partners
and employees. Extreme care is taken to protect this
information. A company-wide management system
promotes employee education, internal auditing, 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 Sharp’s business results
and financial position.
(11) Large-Scale Natural Disasters
Sharp has created and adopted preventative/emergency
measures and a business continuity plan aimed at rapid
recovery/restoration in order to be prepared and limit
damage in the event of large-scale natural disasters
such as earthquakes and typhoons. However, if Sharp or
its partners’ business activities are impaired due to the
occurrence of a large-scale natural disaster, it may affect
Sharp’s business results and financial position.
Risk Factors
(7) Product Liability
Sharp manufactures products in accordance with strict
quality control standards to ensure the utmost in quality. In order to fulfill its responsibility as a manufacturer
in case product defects do arise, Sharp has taken out
insurance to cover compensations based on product
liability. Nonetheless, there is still a risk of a large-scale
product recall or litigation caused by unforeseen events,
which may adversely affect Sharp’s brand image or influence its business results and financial position.
(12) Risks Accompanying the Nuclear Power Plant
Disaster
The Tokyo Electric Power (TEPCO) Fukushima Daiichi
Nuclear Power Plant accident accompanying the Great
East Japan Earthquake on March 11, 2011, has had
various adverse effects on both Japanese and overseas
markets, which may affect Sharp’s business results
and financial position. Moreover, in response to electricity usage restrictions in the areas served by TEPCO
and Tohoku Electric Power and energy-conservation
requests in the areas served by Kansai Electric Power
and elsewhere in 2011, we are promoting companywide energy-saving efforts. In the future, if electricity
supply shortages due to electricity usage restrictions
by the government, energy-conservation requests from
various power companies, etc., escalate and Sharp
is requested to significantly reduce electricity usage
amounts, or if a situation such as rolling blackouts occurs, plant operations will be reduced or production
temporarily suspended, which may affect Sharp’s business results and financial position.
(13) Other Key Variable Factors
In addition to the aforementioned risks, Sharp’s business results may be significantly affected by humaninduced calamities such as accidents, conflicts,
insurrections or terrorism; the spread of a new strain of
influenza or other infectious disease; or major fluctuations in the stock and bond markets.
Annual Report 2012
35
D i rector s, Cor porat e Audi t or s and
E xecutive Office r s
(As of July 16, 2012)
Directors
Directors, Corporate Auditors and Executive Officers
Director,
Chairman
Representative Director,
President
Mikio Katayama
Takashi Okuda
Representative Director
Tetsuo Onishi
Representative Director
Representative Director
Shigeaki Mizushima
Kozo Takahashi
Director
Director
Director
Nobuyuki Sugano
Fujikazu Nakayama
Toshihiko Fujimoto
Director
Director
Director
Director
Kazutaka Ihori
Nobuyuki Taniguchi
Kunio Ito*1
Makoto Kato*1
Corporate Auditors
Executive Officers
Full-time Corporate Auditors
President
Executive Managing Officers
Executive Officers
Junzo Ueda
Takashi Okuda
Yoshisuke Hasegawa
Masami Ohbatake
Ryutaro Egawa
Executive Vice Presidents
Moriyuki Okada
Masatsugu Teragawa
Noboru Yamazawa
Shigeaki Mizushima
Motohiko Hayashi
Nobuyuki Taniguchi
Kazushi Mukai
Kozo Takahashi
Noboru Fujimoto
Tetsuro Muramatsu
Hiroshi Morimoto
Toshihiko Fujimoto
Kazutoshi Goto
Akira Atarashi
Kazutaka Ihori
Norikazu Hohshi
Paul Molyneux
Tetsuo Onishi
Keiko Okada
Mototaka Taneya
Nobuyuki Sugano
Masayuki Mohri
Toshiyuki Osawa
Shinji Hirayama*2
Corporate Auditors
Yoichiro Natsuzumi
*2
Masuo Okumura*2
Senior Executive
Managing Officers
Fujikazu Nakayama
*1 Outside Directors
*2 Outside Corporate Auditors
36
SHARP CORPORATION
Five-Year Financial
Summary
Financial Review
Consolidated Balance
Sheets
38
40
44
Consolidated
Statements of
Operations
Consolidated
Statements of
Comprehensive Income
Consolidated
Statements of Changes
in Net Assets
46
47
48
Consolidated
Statements of Cash
Flows
Notes to the
Consolidated Financial
Statements
Independent Auditors’
Report
49
50
67
Financial Section
Financial Section
Consolidated
Subsidiaries
68
Annual Report 2012
37
Five-Year Financial Summary
Sharp Corporation and Consolidated Subsidiaries for the Years Ended March 31
Yen
(millions)
2008
2009
2010
2012
2011
2012
Net Sales
¥3,417,736 ¥2,847,227 ¥2,755,948 ¥3,021,973 ¥2,455,850 $30,319,136
Domestic sales
1,590,747 1,302,261 1,429,057 1,592,909 1,181,168 14,582,321
Overseas sales
1,826,989 1,544,966 1,326,891 1,429,064 1,274,682 15,736,815
Operating Income (Loss)
183,692 78,896 (37,552) (463,605)
(55,481) 51,903 Income (Loss) before Income
Taxes and Minority Interests 162,240 (204,139) 6,139 40,880 (238,429) (2,943,568)
101,922 (125,815) 4,397 19,401 (376,076) (4,642,914)
Net Income (Loss)
645,120 7,964,445
Net Assets
1,241,868 1,048,447 1,065,860 1,048,645 Total Assets
3,073,207 2,688,721 2,836,255 2,885,678 2,614,135 32,273,272
344,262 260,337 215,781 172,553 118,899 1,467,889
Depreciation and Amortization 276,567 315,799 277,257 289,602 269,020 3,321,235
196,186 195,525 166,507 173,983 154,798 1,911,086
Capital Investment
*1
R&D Expenditures
Per Share of Common Stock
Financial Section
Yen
17.63 ¥ (341.78) $
— 3.78 16.47 — —
21.00 17.00 17.00 10.00 0.12
949.19 932.46 568.83 7.02
¥
93.17 ¥ (114.33) ¥
Diluted net income
86.91 Cash dividends
28.00 Net assets
1,119.09 944.24 Other Financial Data
Return on equity (ROE)
Return on assets (ROA)
3.4% (4.4%) Equity ratio
40.1% 38.6% 8.4% (11.1%) *1 The amount of leased properties is included in capital investment.
SHARP CORPORATION
U.S. Dollars
4.00 ¥
Net income (loss)
38
U.S. Dollars
(thousands)
(4.22)
1.9% (45.5%) —
0.2% 0.7% (13.7%) —
36.8% 35.6% 23.9% —
0.4% Yen
(millions)
2008
Net Sales
2009
U.S. Dollars
(thousands)
2010
2012
2011
2012
¥3,417,736 ¥2,847,227 ¥2,755,948 ¥3,021,973 ¥2,455,850 $30,319,136
Sales by Product Group*2
(Sales to Outside Customers)
Audio-Visual and
Communication Equipment 1,624,713 1,367,600 1,332,129 1,426,243 1,060,770 13,095,926
Health and
Environmental Equipment 249,843 225,290 244,090 269,845 292,224 3,607,704
410,785 306,077 266,920 273,900 277,561 3,426,679
Information Equipment
683,310 573,854 508,630 614,373 420,226 5,187,975
Solar Cells
151,011 157,095 208,732 265,492 223,869 2,763,815
Other Electronic Devices
298,074 217,311 195,447 172,120 181,200 2,237,037
948,260 912,809 1,051,985 825,295 10,188,827
Electronic Components
1,132,395 Total
3,417,736 2,847,227 2,755,948 3,021,973 2,455,850 30,319,136
Sales by Region*3
Japan
1,590,747 1,302,261 1,429,057 — — —
The Americas
625,841 488,428 342,923 — — —
Europe
584,252 451,090 393,212 — — —
China
412,470 407,777 365,440 — — —
204,426 197,671 Other
225,316 — — —
Total
3,417,736 2,847,227 2,755,948 — — —
Japan
— — 1,429,057 1,592,909 1,181,168 14,582,321
Financial Section
Consumer/Information Products 2,285,341 1,898,967 1,843,139 1,969,988 1,630,555 20,130,309
LCDs
The Americas
— — 283,641 302,021 288,380 3,560,247
Europe
— — 336,642 367,962 282,606 3,488,963
China
— — 422,881 516,977 483,298 5,966,642
Other
— — 283,727 242,104 220,398 2,720,963
Total
— — 2,755,948 3,021,973 2,455,850 30,319,136
*2 Effective for the year ended March 31, 2009, the Company adopted the segment classification presented above in “Sales by Product Group”
in place of the former classification: Audio-Visual and Communication Equipment, Home Appliances, Information Equipment, LSIs, LCDs,
and Other Electronic Components. In addition, some items previously included in Audio-Visual and Communication Equipment had been
reclassified and were included in Information Equipment, and some items previously included in Information Equipment had been reclassified
and were included in Audio-Visual and Communication Equipment. In this regard, “Sales by Product Group” of 2008 has been restated to
conform with the 2009 presentation.
Effective for the year ended March 31, 2010, some items previously included in Information Equipment have been reclassified and are
included in Audio-Visual and Communication Equipment. In this connection, “Sales by Product Group” of 2009 has been restated to conform
with the 2010 presentation.
*3 Effective for the year ended March 31, 2011, the Company has applied the “Accounting Standard for Disclosures about Segments of an
Enterprise and Related Information” (Accounting Standards Board of Japan (ASBJ) Statement No. 17, issued by the ASBJ on March 27, 2009)
and the “Guidance on Accounting Standard for Disclosures about Segments of an Enterprise and Related Information” (ASBJ Guidance No. 20,
issued by the ASBJ on March 21, 2008). In this regard, “Sales by Region” of 2010 has been restated to conform with the 2011 presentation.
Annual Report 2012
39
Cost of Sales
Financial Review
(billions of yen)
Sharp Corporation and Consolidated Subsidiaries
3,000
90
2,000
60
Operations
Consolidated net sales for the year ended March 31,
2012 were ¥2,455,850 million, down 18.7% from the
Net Sales
previous
year.
(billions of yen)
4,000
Net Sales
3,000
4,000
2,000
3,000
1,000
2,000
0
08
09
10
11
12
08
09
10
11
12
from 16.2% to 18.3%. SG&A expenses included R&D
expenditures
of ¥36,630 million and employees’ sala1,000
30
ries and other benefits expenses of ¥123,025 million.
As a result, the operating loss amounted to ¥37,552
million,
compared to operating income of ¥78,896 mil0
0
10
11
12
lion in the08previous09year.
Other expenses,
other
Ratio to net net
sales of
[right
axis] income, were in a net
loss position and amounted to ¥200,877 million.
The loss before income taxes and minority interests
came to ¥238,429 million, compared to income before
income taxes and minority interests of ¥40,880 million in the previous year, and the net loss amounted to
¥376,076 million, compared to net income of ¥19,401
million in the previous year. The net loss per share of
common stock was ¥341.78.
(billions of yen)
0
1,000
(%)
Operating Income (Loss)/Net Income (Loss)
(billions of yen)
200
Financial Results
Financial Section
Cost of sales decreased by ¥408,503 million over the
previous year to ¥2,043,842 million, although the cost
of sales ratio increased from 81.2% recorded in the
previous year to 83.2%.
100
0
-100
-200
Cost of Sales
-300
(billions of yen)
(%)
90
3,000
-400
Cost of Sales
(billions of yen)
(%)
3,000
2,000
90
60
2,000
1,000
60
30
1,000
0
30
0
08
0
09
10
11
12
Ratio to net sales [right axis]
0
08
09
10
11
12
Selling, general
and
administrative
(SG&A)
expenses
Ratio to net sales [right axis]
decreased by ¥41,172 million to ¥449,560 million, and
the ratio of SG&A expenses against net sales increased
08
09
10
11
12
Operating income (loss)
Net income (loss)
Segment Information
Sales in the Consumer/Information Products segment decreased by 17.2% over the previous year to
¥1,630,999 million, and operating income decreased by
35.6% to ¥51,008 million.
Sales in the Electronic Components segment decreased by 23.9% to ¥1,183,008 million. The operating
Sales
loss
amounted to ¥54,699 million, compared to operat(billions of yen)
ing
income of ¥30,728 million in the previous year.
2,500
2,000
1,500
Notes: 1.Effective for the year ended March 31, 2011, the Company has applied the “Accounting Standard for Disclosures about Segments of an
Enterprise and Related Information” (ASBJ Statement No. 17, issued by the ASBJ on March 27, 2009) and the “Guidance on Accounting
1,000
Standard for Disclosures about Segments of an Enterprise and Related Information” (ASBJ Guidance No. 20, issued by the ASBJ on March 21,
2008). In this regard, figures of 2010 included in “Segment Information” have been restated to conform with the 2011 presentation.
500
(Loss)
Operating
2.Sales Income
figures by (Loss)/Net
segment and Income
product group
shown in “Segment Information”
include internal sales between segments (Consumer/
Products and Electronic Components). Operating income (loss) figures are the amounts before adjustment of intersegment trading.
(billions ofInformation
yen)
3. Capital investment figures shown in “Capital Investment and Depreciation”
include the amount of leased properties.
0
200
Operating Income (Loss)/Net Income (Loss)
40
100 of yen)
(billions
SHARP CORPORATION
200
0
100
08
09
10
Consumer/Information Products
Electronic Components
11
12
Net income (loss)
Sales
(billions of yen)
2,500
2,000
1,500
[Reference Information]
Sales
Information by Product Group
1,000 of yen)
(billions
2,500
500
1,500
1,000
08
09
10
11
12
11
12
Consumer/Information Products
Electronic Components
500
0
08
09
10
Consumer/Information Products
Electronic Components
Operating Income (Loss)
(billions of yen)
120
Health and Environmental Equipment
Sales in this group increased by 8.3% to ¥292,303
million, and operating income increased by 47.6% to
¥29,460 million. Contributing to this performance were
increased sales of LED lights and air purifiers, reflecting
a rise in awareness about energy saving and health.
90
60
30
Operating
Income (Loss)
(billions of yen)
0
120
-30
90
-60
60
30
08
09
Consumer/Information Products
Audio-Visual and Communication Equipment
Sales in this group amounted to ¥1,061,092 million,
down 25.6% from the previous year, and the operating
loss was ¥6,194 million, compared to operating income
of ¥40,745 million in the previous year. Sales increased
for large-screen LCD TVs 60 inches and larger, especially in North America. However, overall sales of LCD TVs
declined significantly over the previous year, mainly due
to decreased demand following the end of analog TV
broadcasting in Japan, as well as greater-than-expected
price declines. Sales of mobile phones also decreased,
due to lower domestic demand for conventional mobile
phones and the impact of intensified competition with
overseas manufacturers.
10
11
12
11
12
Consumer/Information Products
Electronic Components
0
Financial Section
2,000
0
Information Equipment
Sales in this group remained mostly unchanged, increasing by 1.3%, to ¥277,604 million. Operating income
increased by 49.5% to ¥27,742 million, mainly due to an
increase in sales of digital full-color MFPs.
-30
Sales
-60 by Product Group
08
09
10
Yen
(millions)
U.S. Dollars
(thousands)
2012
2012
Audio-Visual and Communication Equipment
¥1,426,734 ¥1,061,092
$13,099,901
Health and Environmental Equipment
269,883 292,303 3,608,679
Information
Equipment
Capital Investment/
Depreciation
and Amortization
Consumer/Information
Products
273,953 277,604 3,427,210
2011
Consumer/Information Products
Electronic Components
1,970,570 1,630,999
(billions of yen)
400
20,135,790
LCDs
1,026,959 720,978 8,900,963
Solar Cells
265,538 223,916 2,764,395
Other Electronic Devices
Capital Components
Investment/
Electronic
200
Depreciation
and Amortization
261,520 238,114 2,939,679
300
1,554,017 1,183,008
(billions of yen)
14,605,037
Adjustments
400
(502,614) (358,157) (4,421,691)
Total
3,021,973 2,455,850
100
3000
200
08
09
10
Capital investment
Depreciation and amortization
11
12
30,319,136
Annual Report 2012
41
0
(billions of yen)
2,500
-30
2,000
-60
1,500
08
09
10
11
12
Consumer/Information Products
Electronic Components
1,000
500
Electronic Components
0
LCDs
08
09
10
11
12
Sales in this group decreased by 29.8% to ¥720,978 milConsumer/Information Products
lion, stemming
from production adjustments at large-size
Electronic Components
LCD plants to address deteriorating market conditions
worldwide. By contrast, sales of LCDs for mobile devices
increased. The operating loss amounted to ¥42,236 million, compared to operating income of ¥17,085 million in
the previous year, due to the sales decline, as well as a loss
on valuation of inventories.
Solar Cells
Sales in this group decreased by 15.7% to ¥223,916 milOperating
Income loss
(Loss)
lion,
and the operating
was ¥21,982 million, compared
(billions of yen)
to operating income of ¥2,105 million in the previous year.
120
This was mainly due to a sharp drop in demand in Europe,
90 as declining prices stemming from intense compeas well
tition in the Japanese market.
60
Financial Section
30 Electronic Devices
Other
Sales
in this group decreased by 8.9% to ¥238,114
0
million, and operating income decreased by 17.5% to
-30 million, due to falling sales of devices for digital
¥9,519
products
such as LCD TVs.
-60
08
09
10
11
12
Capital Investment
andProducts
Depreciation
Consumer/Information
Electronic Components
Capital investment
amounted to ¥118,899 million,
down 31.1% from the previous year. Much of this investment was allocated to expansion of mobile LCD
production lines, in order to respond to brisk demand
for LCDs for mobile devices such as smartphones and
tablet terminals.
By business segment, capital investment for Consumer/Information Products was ¥24,391 million, and
for Electronic Components was ¥86,602 million. Unallocated capital investment amounted to ¥7,906 million.
Depreciation and amortization decreased by 7.1% to
¥269,020 million.
Assets, Liabilities and Net Assets
Capital
Investment/
Total
assets
decreased by ¥271,543 million from the
Depreciation
andyear
Amortization
end of the previous
to ¥2,614,135 million.
(billions of yen)
400
Assets
Current assets amounted to ¥1,421,125 million, a de300
crease
of ¥101,425 million. This was mainly due to a
¥47,338 million decrease in cash and cash equivalents,
as200
well as a ¥138,800 million decrease in notes and
accounts receivable, which was partially offset by a
¥41,423
million increase in inventories to ¥527,483
100
million. Included in inventories, finished products increased
by ¥2,592 million to ¥194,220 million, work
0
08 increased
09 by ¥57,963
10
11 to ¥264,577
12
in process
million
million, and
raw
materials
and
supplies
decreased
by
Capital investment
Depreciation
and amortization
¥19,132 million
to ¥68,686
million.
Plant and equipment decreased by ¥92,472 million
to ¥872,442 million, mainly due to a reduction in capital
investment.
Investments and other assets amounted to
¥320,568 million, a decrease of ¥77,646 million, due
largely to a decline in deferred tax assets.
Inventories
(billions of yen)
600
500
400
300
Capital Investment/
Depreciation and Amortization
200
(billions of yen)
100
400
0
300
200
100
0
08
09
10
Capital investment
Depreciation and amortization
42
SHARP CORPORATION
11
12
08
09
10
11
12
Liabilities
Current liabilities increased by ¥145,167 million to
¥1,391,080 million. Short-term borrowings increased by
¥310,667 million to ¥597,997 million. Included in shortterm borrowings, bank loans increased by ¥94,563
million to ¥199,085 million, commercial paper increased
by ¥211,234 million to ¥351,000 million, and current
Interest-Bearing Debt
(billions of yen)
1,200
300
400
200
600
300
100
400
100
0
200
08
08
09
09
10
10
11
11
12
(billions of yen)
1,200
Interest-Bearing Debt
1,000
(billions of yen)
1,200
800
1,000
600
800
400
600
200
200
0
08
09
10
11
12
12
portion of long-term debt increased by ¥4,870 million to
¥47,912 million. Notes and accounts payable amounted
to ¥436,573 million, a decrease of ¥165,508 million.
Long-term liabilities decreased by ¥13,185 million to
¥577,935 million. This was mainly due to a ¥30,760 million decrease in long-term debt.
Interest-bearing debt was ¥1,127,157 million, an inInterest-Bearing
crease
of ¥279,907Debt
million.
400
0
0
08
09
10
11
12
08
09
10
11
12
Net Assets
Net assets amounted to ¥645,120 million, a decrease
of ¥403,525 million. This was mainly due to a ¥388,998
million decrease in retained earnings. The equity ratio
was 23.9%.
Cash Flows
Cash and cash equivalents at end of year stood at
¥193,772 million, a decrease of ¥47,338 million over
the previous year, as combined cash outflows from operating and investing activities exceeded cash inflows
from financing activities.
Net cash used in operating activities amounted
to ¥143,302 million, compared to net cash provided
by Equity
operating
Ratioactivities of ¥167,443 million in the
(%)
previous
year. Main factors included the loss before
50
income
taxes and minority interests of ¥238,429 million compared to income before income taxes and
40
minority interests of ¥40,880 million in the previous
year,
as well as a decrease in payables of ¥147,162
30
million compared to ¥762 million in the previous
year.
20 Meanwhile, there was a decrease in notes and
accounts receivable of ¥146,448 million, compared
10 increase in notes and accounts receivable of
to an
¥60,547 million in the previous year.
0
Net cash
to
08 used in
09 investing
10 activities
11 amounted
12
¥159,557 million, a decrease of ¥85,056 million. This
was mainly due to a ¥77,236 million decline in purchase
of property, plant and equipment.
Net cash provided by financing activities was
¥256,381 million, compared to net cash used in financing activities of ¥6,254 million in the previous year. Main
factors included a net increase in short-term borrowings of ¥305,595 million compared to ¥7,328 million in
the previous year.
Financial Section
200
0
Equity Ratio
(%)
Cash and Cash Equivalents
50
(billions of yen)
Equity Ratio
400
(%)
40
50
30
40
300
20
30
200
10
20
100
0
10
0
08
08
09
09
10
10
Cash and Cash Equivalents
(billions of yen)
11
11
12
0
08
09
10
11
12
12
Annual Report 2012
43
Consolidated Balance Sheets
Sharp Corporation and Consolidated Subsidiaries as of March 31, 2011 and 2012
Yen
(millions)
ASSETS
2011
U.S. Dollars
(thousands)
2012
2012
Current Assets:
Cash and cash equivalents (Note 7)
¥ 241,110 ¥ 193,772 $ 2,392,247
Time deposits (Note 7)
1,200 Short-term investments (Notes 2 and 7)
5,578 Trade
561,430 Nonconsolidated subsidiaries and affiliates
15,996 Allowance for doubtful receivables
(2,730) Inventories (Note 3)
486,060 Deferred tax assets (Note 4)
93,810 Other current assets
120,096 Total current assets
1,522,550 1,421,125
1,341 16,556
2,617
212
Notes and accounts receivable (Note 7) —
428,139 5,285,666
12,164
(4,407) 150,173
(54,407)
527,483 6,512,136
90,394
1,115,975
172,027 2,123,790
17,544,753
Financial Section
Property, Plant and Equipment, at Cost (Note 6):
100,124 Buildings and structures
840,912 Machinery and equipment
2,041,523 2,030,081
Construction in progress
81,245
1,003,025
3,013,828 3,051,371
37,671,247
Less accumulated depreciation
(2,048,914) (2,178,929) (26,900,358)
31,269 98,840
1,220,247
Land
841,205 10,385,247
25,062,728
872,442 10,770,889
964,914 Investments in securities (Notes 2 and 7)
57,505 58,859
726,655
Investments in nonconsolidated subsidiaries and affiliates (Note 7)
40,960 40,547
500,580
Bond issue cost
2,316 1,458 18,000
Other assets
297,433 219,704 2,712,395
398,214 320,568 3,957,630
Investments and Other Assets:
¥2,885,678 ¥2,614,135
The accompanying notes to the consolidated financial statements are an integral part of these statements.
44
SHARP CORPORATION
$32,273,272
Yen
(millions)
LIABILITIES AND NET ASSETS
U.S. Dollars
(thousands)
2012
2011
2012
Current Liabilities:
Short-term borrowings, including current portion
of long-term debt (Notes 5 and 7)
¥ 287,330 ¥ 597,997 $ 7,382,679
Notes and accounts payable (Note 7) —
384,322 4,744,716
Trade
524,641 Construction and other
71,356 Nonconsolidated subsidiaries and affiliates
6,084 Accrued expenses
217,339 Income taxes (Note 4)
12,471 Other current liabilities (Note 4)
126,692 Total current liabilities
1,245,913 1,391,080
590,173
4,447 54,901
47,804
195,506 2,413,654
5,963 73,617
155,041 1,914,087
17,173,827
Long-term Liabilities:
559,920 Allowance for severance and pension benefits (Note 10)
4,618 Deferred tax liabilities (Note 4)
11,600 Other long-term liabilities
14,982 591,120 577,935 7,135,000
204,676 204,676 2,526,864
Capital surplus
268,530 268,528 3,315,161
Retained earnings
648,935 259,937 3,209,099
10,353 thousand shares in 2011 and 10,375 thousand shares in 2012
(13,863) (13,876) Net unrealized holding gains (losses) on securities
5,915 Deferred gains (losses) on hedges
(1,028) Foreign currency translation adjustments
(85,317) Pension liability adjustment of foreign subsidiaries
(1,815) Minority interests
22,612 Total net assets
1,048,645 6,000 74,074
29,304
361,778
13,471
166,309
Financial Section
529,160 6,532,839
Long-term debt (Notes 5 and 7)
Contingent Liabilities (Note 9)
Net Assets (Note 8):
Common stock:
Authorized—2,500,000 thousand shares
Issued
—1,110,699 thousand shares
Less cost of treasury stock:
(171,309)
5,610 69,259
(5,749) (70,975)
(90,305) (1,114,876)
(2,927) 19,226
237,358
645,120 7,964,445
¥2,885,678 ¥2,614,135
(36,136)
$32,273,272
Annual Report 2012
45
Consolidated Statements of Operations
Sharp Corporation and Consolidated Subsidiaries for the Years Ended March 31, 2011 and 2012
Yen
(millions)
U.S. Dollars
(thousands)
2012
2012
Net Sales
¥3,021,973 ¥2,455,850
$30,319,136
Cost of Sales
2,452,345 2,043,842
25,232,617
Gross profit
569,628 412,008 5,086,519
Selling, General and Administrative Expenses
490,732 449,560 5,550,124
Operating income (loss)
78,896 2011
(37,552) (463,605)
Other Income (Expenses):
Financial Section
Interest and dividends income
3,119 2,730 33,704
Interest expenses
(8,001) (8,646) (106,741)
Subsidy income
— 10,000
Impairment loss (Note 12)
— (6,656) (82,173)
Loss on quality compensation
— (11,500) (141,975)
Loss on suspension of large size LCD plant operation (Note 13)
— (25,887) (319,593)
Restructuring charges (Note 14)
Settlement package
— (18,857) (232,802)
Other, net
(20,479) (24,951) (308,037)
(38,016) (200,877) (2,479,963)
40,880 (238,429) (2,943,568)
Current
26,927 Deferred
(7,244) 115,523 1,426,210
19,683 135,140 1,668,395
Income (loss) before minority interests
21,197 (373,569) (4,611,963)
Minority Interests in Income of Consolidated Subsidiaries
(1,796) Net income (loss)
¥
19,401 ¥ (376,076) $(4,642,914)
Income (loss) before income taxes and minority interests
123,457
(12,655) (117,110) (1,445,803)
Income Taxes (Note 4):
19,617
(2,507) Yen
2011
242,185
(30,951)
U.S. Dollars
2012
2012
Per Share of Common Stock (Note 8):
Net income (loss)
¥
17.63 ¥ (341.78) $
Diluted net income
16.47 Cash dividends
17.00 The accompanying notes to the consolidated financial statements are an integral part of these statements.
46
SHARP CORPORATION
(4.22)
—
10.00 0.12
—
Consolidated Statements of Comprehensive Income
Sharp Corporation and Consolidated Subsidiaries for the Years Ended March 31, 2011 and 2012
Yen
(millions)
2011
U.S. Dollars
(thousands)
2012
2012
¥21,197 ¥(373,569)
$(4,611,963)
Net unrealized holding gains (losses) on securities
(1,460) (515)
(6,358)
Deferred gains (losses) on hedges
(1,246) (4,725)
(58,333)
Foreign currency translation adjustments
(13,254) (5,137)
(63,420)
Pension liability adjustment of foreign subsidiaries
(612) (1,112)
(13,728)
(236) 2,197
Income (Loss) before Minority Interests
Other Comprehensive Income:
Share of other comprehensive income of affiliates
accounted for using equity method
178
(16,808) (11,311)
4,389 (384,880)
(4,751,605)
Owners of the parent
3,052 (387,418)
(4,782,938)
Minority interests
1,337 Total other comprehensive income
Comprehensive Income
(139,642)
Comprehensive income attributable to:
31,333
Annual Report 2012
Financial Section
2,538
47
Consolidated Statements of Changes in Net Assets
Sharp Corporation and Consolidated Subsidiaries for the Years Ended March 31, 2011 and 2012
(thousands)
Number of
Shares
Balance at beginning of fiscal 2011
Yen (millions)
Common
stock
(Note 8)
Capital
surplus
(Note 8)
Net
Pension
unrealized
Deferred
Foreign
liability
holding gains
gains
currency adjustment
Treasury
(losses) (losses) on translation of foreign
stock on securities
hedges adjustments subsidiaries
Retained
earnings
(Note 8)
1,110,699 ¥204,676 ¥268,534 ¥649,795 ¥(13,805) ¥7,372 ¥218
¥(72,283) ¥ 0 Minority
interests
Total
¥21,353 ¥1,065,860
Effect of changes in accounting
policies applied to foreign affiliates
accounted for by equity method
(14)
(14)
Transfer to pension liability
adjustment of foreign subsidiaries
fromretained earnings
1,203
0
Net income
19,401
19,401
Dividends from surplus
(22,008)
(22,008)
Change of scope of consolidation
(438)
(438)
Change of scope of equity method
996
996
Purchase of treasury stock
Disposal of treasury stock
(4)
(1,203)
(68)
(68)
10
6
(1,457) (1,246) (13,034) (612) 1,259 (15,090)
Net changes of items other than
shareholders’ equity
Balance at end of fiscal 2011
1,110,699 ¥204,676 ¥268,530 ¥648,935 ¥(13,863) (thousands)
Financial Section
Number of
Shares
Balance at beginning of fiscal 2012
¥5,915 ¥(1,028) ¥(85,317) ¥(1,815) ¥22,612 ¥1,048,645
Yen (millions)
Common
stock
(Note 8)
Capital
surplus
(Note 8)
Net
Pension
unrealized
Deferred
Foreign
liability
holding gains
gains
currency adjustment
Treasury
(losses) (losses) on translation of foreign
stock on securities
hedges adjustments subsidiaries
Retained
earnings
(Note 8)
1,110,699 ¥204,676 ¥268,530 ¥648,935 ¥(13,863) ¥5,915 ¥(1,028) ¥(85,317) ¥(1,815) Minority
interests
Total
¥22,612 ¥1,048,645
Net loss
(376,076)
(376,076)
Dividends from surplus
(13,204)
Change of scope of consolidation
113
113
Change of scope of equity method
169
169
(18)
3
Purchase of treasury stock
Disposal of treasury stock
(2)
Net changes of items other than
(18)
5
shareholders’ equity
Balance at end of fiscal 2012
(305) (4,721) (4,988) (1,112) (3,386)
1,110,699 ¥204,676 ¥268,528 ¥259,937 ¥(13,876) (thousands)
Number of
Shares
Balance at beginning of fiscal 2012
(13,204)
¥5,610 ¥(5,749) ¥(90,305) ¥(2,927) (14,512)
¥19,226 ¥ 645,120
U.S. Dollars (thousands)
Common
stock
(Note 8)
Capital
surplus
(Note 8)
Net
Pension
unrealized
Deferred
Foreign
liability
holding gains
gains
currency adjustment
Treasury
(losses) (losses) on translation of foreign
stock on securities
hedges adjustments subsidiaries
Retained
earnings
(Note 8)
1,110,699 $2,526,864 $3,315,185$ 8,011,543 $(171,148) $73,025 $(12,691) $(1,053,296) Minority
interests
Total
$(22,407) $279,160$12,946,235
Net loss
(4,642,914)
(4,642,914)
Dividends from surplus
Change of scope of consolidation
1,395
1,395
Change of scope of equity method
2,087 2,087
Purchase of treasury stock
Disposal of treasury stock
(24)
(163,012)
(163,012)
(222)
(222)
61
37
Net changes of items other than
shareholders’ equity
Balance at end of fiscal 2012
(3,766) (58,284)
1,110,699 $2,526,864 $3,315,161$ 3,209,099 $(171,309) The accompanying notes to the consolidated financial statements are an integral part of these statements.
48
SHARP CORPORATION
(61,580) (13,729) (41,802)
$69,259 $(70,975) $(1,114,876) (179,161)
$(36,136) $237,358$ 7,964,445
Consolidated Statements of Cash Flows
Sharp Corporation and Consolidated Subsidiaries for the Years Ended March 31, 2011 and 2012
2012
2011
Cash Flows from Operating Activities:
¥40,880
Income (loss) before income taxes and minority interests
Adjustments to reconcile income before income (loss) taxes and minority
interests to net cash (used in) provided by operating activities—
272,081
Depreciation and amortization of properties and intangibles
(3,119)
Interest and dividends income
8,001
Interest expenses
(938)
Foreign exchange gains
7,376
Loss on sales and retirement of noncurrent assets
—
Subsidy income
—
Impairment loss
—
Loss on quality compensation
—
Settlement package
(60,547)
Decrease (increase) in notes and accounts receivable
(83,749)
Increase in inventories
(762)
Decrease in payables
20,022
Other, net
199,245
Total
3,664
Interest and dividends income received
(8,148)
Interest expenses paid
—
Settlement package paid
(27,318)
Income taxes paid
167,443
Net cash (used in) provided by operating activities
Cash Flows from Investing Activities:
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of investments in subsidiaries resulting in change in
scope of consolidation
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of investment securities and investments
in nonconsolidated subsidiaries and affiliates
Other, net
Net cash used in investing activities
Cash Flows from Financing Activities:
Net increase in short-term borrowings
Proceeds from long-term debt
Repayments of long-term debt
Cash dividends paid
Other, net
Net cash provided by (used in) financing activities
U.S. Dollars
(thousands)
2012
¥(238,429)
$(2,943,568)
248,425
(2,730)
8,646
(1,268)
5,950
(10,000)
6,656
11,500
18,857
146,448
(48,686)
(147,162)
(86,519)
(88,312)
3,169
(8,572)
(18,622)
(30,965)
(143,302)
3,066,976
(33,704)
106,741
(15,654)
73,457
(123,457)
82,173
141,975
232,802
1,808,000
(601,062)
(1,816,815)
(1,068,136)
(1,090,272)
39,123
(105,827)
(229,901)
(382,284)
(1,769,161)
(13,200) 31,641 (603)
443
Financial Section
Yen
(millions)
(7,444)
5,469
(24,524) (4,405)
(195,404) (118,168)
992 2,547
(54,383)
(1,458,864)
31,444
(9,738) (3,326)
(34,380) (36,045)
(244,613) (159,557)
(41,062)
(445,000)
(1,969,840)
7,328
85,725
(78,162)
(21,999)
854
(6,254)
305,595
13,286
(53,462)
(13,237)
4,199
256,381
3,772,778
164,025
(660,025)
(163,420)
51,840
3,165,198
(3,790)
Effect of Exchange Rate Change on Cash and Cash Equivalents
(87,214)
Net Decrease in Cash and Cash Equivalents
328,125
Cash and Cash Equivalents at Beginning of Year
199
Increase in Cash and Cash Equivalents from Newly Consolidated Subsidiary ¥241,110
Cash and Cash Equivalents at End of Year
(1,080)
(47,558)
241,110
220
¥193,772
(13,333)
(587,136)
2,976,667
2,716
$2,392,247
The accompanying notes to the consolidated financial statements are an integral part of these statements.
Annual Report 2012
49
Notes to the Consolidated Financial Statements
Sharp Corporation and Consolidated Subsidiaries
1. Summary of Significant Accounting and Reporting Policies
Financial Section
(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 (“IFRS”).
The financial statements of the Company’s overseas
consolidated subsidiaries for consolidation purposes have
been prepared in conformity with IFRS or generally accepted accounting principles in the United States of America
(“US GAAP”), and partially reflect the adjustments which
are necessary to conform with Japanese GAAP.
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, 2012, which was ¥81 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 evaluated using the fair value at the time the Company acquired control of the respective subsidiary.
Material intercompany balances, transactions and unrealized profits have been eliminated in consolidation.
50
SHARP CORPORATION
(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) Investments in securities
Investments in securities consist principally of marketable
and nonmarketable equity 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.
If the fair market value of other securities declines significantly, such securities are stated at fair market value
and the difference between the fair market value and
the carrying amount is recognized as loss in the period
of decline. If the net asset value of other 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) Inventories
Inventories held by the Company and its domestic consolidated subsidiaries are primarily measured at moving
average cost (for balance sheet valuation, in the event
that an impairment is determined inventories impairment
is computed using net realizable value). For overseas consolidated subsidiaries, inventories are measured at the
lower of moving average cost and net realizable value.
(h) 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.
(i) 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.
(j) Severance and pension benefits
The Company and its domestic consolidated subsidiaries
have primarily a trustee non-contributory 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.
Prior service costs are amortized using the straightline 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.
(k) Research and development expenses
Research and development expenses are charged to
income as incurred. The research and development expenses are charged to income amounted to ¥173,983
million and ¥154,798 million ($1,911,086 thousand) for
the years ended March 31, 2011 and 2012 respectively.
(l) Derivative financial instruments
The Company and some of its consolidated subsidiaries use
derivative financial instruments, including foreign exchange
forward contracts in order to hedge the risk of fluctuations
in foreign currency exchange rates associated with assets
and liabilities denominated in foreign currencies.
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.
Derivative financial instruments are used based on internal policies and procedures on risk control.
The risks of fluctuations in foreign currency exchange
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
have good credit ratings with financial institutions.
Financial Section
(g) Depreciation and amortization
For the Company and its domestic consolidated subsidiaries, depreciation of plant and equipment other than lease
assets is computed using the declining-balance method,
except for machinery and equipment at the LCD plants in
Mie, Kameyama and Sakai, as well as buildings (excluding attached structures) acquired by the Company and
its domestic consolidated subsidiaries on and after April
1, 1998; all of which are depreciated using the straightline method over the estimated useful life of the asset.
Properties at overseas consolidated subsidiaries are depreciated using the straight-line method.
Maintenance and repairs, including minor renewals
and betterments, are charged to income as incurred.
Amortization of intangible assets except for lease assets is computed using the straight-line method.
Software costs are included in other assets. Software
used by the Company is amortized using the straightline method over the estimated useful life of principally 5
years, and software embedded in products is amortized
over the forecasted sales quantity.
Depreciation of lease assets under finance leases that
do not transfer ownership is computed using the straightline method, using the lease period as the depreciable life
and the residual value as zero. Lease payments are recognized as expenses for finance leases of the Company and
its domestic consolidated subsidiaries that do not transfer
ownership, for which the starting date of the lease transaction is on and before March 31, 2008.
(m) Additional information
(1) Accounting Standard for Accounting Changes and
Error Corrections
The Company and its domestic consolidated subsidiaries
applied the “Accounting Standard for Accounting Changes and Error Corrections” (ASBJ Statement No.24, issued
by the ASBJ on December 4, 2009) and “Guidance on
Accounting Standard for Accounting Changes and Error
Corrections” (ASBJ Guidance No.24, issued by the ASBJ
on December 4, 2009) to accounting changes and corrections of prior period errors made after the beginning of
the year ended March 31, 2012.
Annual Report 2012
51
(2) Issuance of New Shares through Third-party Allotment Associated with Business Alliance
The Company resolved the formation of business alliance
with Hon Hai Precision Industry Co., Ltd. (“Hon Hai”) and
the issuance of new shares through a third-party allotment
(“Capital Increase Through Third-party Allotment”) to four
companies of the Hon Hai Group at its board of directors
meeting held on March 27, 2012. The outline of the Capital
Increase Through Third-party Allotment is as follows.
1) Outline of Offering
[1]Terms of Payment
From May 31, 2012 through March 26, 2013
[2]Number of New Shares to be Issued
121,649,000 ordinary shares
[3]Issue Price
550 yen per share
[4]Total Amount of Issue Price
66,906,950,000 yen
[5]Amount of Capital to be Increased
33,453,475,000 yen
[6]Amount of Capital Surplus to be Increased
33,453,475,000 yen
[7]Method of Subscription or Allotment
(Expected Allottee)
[8]Others
Third-party allotment
Hon Hai Precision Industry Co., Ltd.
FOXCONN TECHNOLOGY Co., Ltd.
FOXCONN (FAR EAST) Limited
Q-Run Holdings Limited
50,000,000 shares
8,029,000 shares
31,143,000 shares
32,477,000 shares
Financial Section
Payment is to be made promptly after permits and approvals from
the relevant authorities of countries necessary to implement the
Capital Increase Through Third-Party Allotment (notification to and
permission from the competition authorities of relevant countries
with respect to business combination) are obtained.
Notes:1. The Company will not grant to the above new shares any voting rights to exercise at its ordinary general
meeting of shareholders scheduled on June 26, 2012.
2. Issue Price means the amount paid pursuant to the Japanese Corporate Law.
2) Purpose of Offering
The Company resolved the capital and business alliance
with the Hon Hai Group to realize vertical integration
on global level and to reinforce global competitiveness
through a synergistic effect between the parties mainly in
fiercely competitive digital products.
3) Intended Use of Proceeds
The proceeds are intended for enhancement and rationalization of manufacturing facilities of LCD related to mobile
devices as well as introduction of new technology of LCD,
and others.
(3) Transfer of Shares in a Subsidiary
The Company resolved a partial transfer of shares of its
consolidated subsidiary, Sharp Display Products Corporation,
to Mr. Terry Tai-Ming Gou, the representative of Hon Hai, at
its board of directors meeting held on March 27, 2012 and
made a share transfer agreement on the same day, aiming
at realizing a strategic global partnership with the Hon Hai
Group. The outline of the share transfer is as follows.
1) Number and Amount of Shares to be Transferred, and Status of Shares Held before and after Transfer
52
[1]Number of Shares Held Before Transfer
2,640,000 shares
(Number of voting rights:
(Holding rate:
[2]Number of Shares Transferred
1,320,000 shares
(Number of voting rights:
1,320,000 units)
(Ratio to total number of issued shares: 46.48%)
(Transfer price:
66,000 million yen)
[3]Number of Shares Held After Transfer
1,320,000 shares
(Number of voting rights:
(Holding rate:
SHARP CORPORATION
2,640,000 units)
92.96%)
1,320,000 units)
46.48%)
2) Schedule
[1]Resolution of Board of Directors Meeting
March 27, 2012
[2]Terms of Transfer
From May 31, 2012 through March 26, 2013
[3]Others
Transfer is to be made promptly after permits and approvals from
the relevant authorities of countries (notification to and permission from the competition authorities of relevant countries with
business combination) are obtained.
3) Outline of Subsidiary
[1]Name
Sharp Display Products Corporation
[2]Principal Business
Development, production and sales of LCD panels
[3]Transaction Relationship Between the Company and the Subsidiary
The Company purchases LCD panels from the subsidiary.
2. Investments in Securities
The following is a summary of other securities with available fair market values as of March 31, 2011 and 2012:
Yen (millions)
Financial Section
2012
Acquisition cost Unrealized gains Unrealized losses Fair market value
Equity securities
¥39,715
¥39,715
¥15,428
¥15,428
¥(6,735) ¥48,408
¥(6,735) ¥48,408
U.S. Dollars (thousands)
2012
Acquisition cost Unrealized gains Unrealized losses Fair market value
Equity securities
$490,309
$490,309
$190,469
$190,469
$(83,148) $597,630
$(83,148) $597,630
Yen (millions)
2011
Acquisition cost Unrealized gains Unrealized losses Fair market value
Equity securities
The proceeds from sales of other securities were ¥131
million and ¥13 million ($160 thousand) for the years
ended March 31, 2011 and 2012, respectively. The gross
realized gains on those sales were ¥24 million and ¥8
¥39,186
¥39,186
¥16,343
¥16,343
¥(6,105) ¥49,424
¥(6,105) ¥49,424
million ($99 thousand), respectively. The gross realized
losses on those sales were ¥0 million and ¥0 million ($0
thousand), respectively.
3. Inventories
Inventories as of March 31, 2011 and 2012 were as follows:
Finished products
Work in process
Raw materials and supplies
Yen
(millions)
U.S. Dollars
(thousands)
2011
2012
2012
¥191,628
206,614
87,818
¥486,060
¥194,220
264,577
68,686
¥527,483
$2,397,778
3,266,383
847,975
$6,512,136
Annual Report 2012
53
4. Income Taxes
The Company is subject to a number of different income
taxes which, in the aggregate, indicate a statutory tax
rate in Japan of approximately 40.6% for the years ended
March 31, 2011 and 2012.
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 statutory tax rate and the effective tax rate
for financial statements purposes for the year ended March 31, 2011:
2011
40.6%
17.9
3.3
2.0
(14.6)
(3.3)
2.2
48.1%
Statutory tax rate
Foreign withholding tax
Dividends income
Expenses not deductible for tax purposes
Differences in normal tax rates of overseas subsidiaries
Tax effect on equity in earnings of affiliates, net
Other
Effective tax rate
The difference between the statutory tax rate and the
effective tax rate for financial statement purposes for the
Financial Section
year ended March 31, 2012 is not disclosed because loss
before income taxes and minority interests is recorded.
Significant components of deferred tax assets and deferred tax liabilities as of March 31, 2011 and 2012 were as follows:
Yen
(millions)
2012
2011
Deferred tax assets:
Inventories
Accrued bonuses
Other accounts payable
Accrued expenses
Software
Long-term prepaid expenses
Loss carried forward
Other
Gross deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Retained earnings appropriated for tax allowable reserves
Prepaid pension cost
Other
Total deferred tax liabilities
Net deferred tax assets
U.S. Dollars
(thousands)
¥40,804
10,972
9,765
14,572
20,569
16,567
115,026
36,864
265,139
(2,897)
262,242
¥ 70,797
8,372
12,904
20,047
17,113
14,104
161,893
27,006
332,236
(197,223)
135,013
$ 874,037
103,358
159,309
247,494
211,272
174,123
1,998,679
333,407
4,101,679
(2,434,852)
1,666,827
(61,752)
(11,539)
(5,488)
(78,779)
¥183,463
(42,445)
(9,966)
(10,106)
(62,517)
¥72,496
(524,012)
(123,037)
(124,766)
(771,815)
$ 895,012
Net deferred tax assets as of March 31, 2011 and 2012 were included in the consolidated balance sheets as follows:
Yen
(millions)
2011
Deferred tax assets (Current Assets)
Other assets (Investments and Other Assets)
Other current liabilities
Deferred tax liabilities (Long-term Liabilities)
Net deferred tax assets
54
2012
SHARP CORPORATION
¥93,810
101,259
(6)
(11,600)
¥183,463
U.S. Dollars
(thousands)
2012
¥90,394
11,421
(15)
(29,304)
¥72,496
2012
$1,115,975
141,000
(185)
(361,778)
$ 895,012
In response to the issuance on December 2, 2011 of
the “Act regulating revision of part of the Income Tax Act
and other related laws/regulations, in order to establish
a taxation system that reflects structural changes in the
economy and society” and the “Act regarding securing
funds necessary for implementing programs promoting
recovery from the Great East Japan Earthquake,” the
Company has changed the statutory tax rate used for calculating the deferred tax assets and deferred tax liabilities
as of March 31, 2012 from 40.6% to 37.9% for revenue
and payments made between the forecast period of April
1, 2012 and March 31, 2015. Those on or after April 1,
2015 will both be changed to 35.5%.
Due to this change, the net deferred tax assets
decreased by ¥1,951 million ($24,086 thousand) and deferred gains (losses) on hedges decreased by ¥256 million
($3,160 thousand), while deferred income tax calculated
for the year ended March 31, 2012 increased by ¥2,054
million ($25,358 thousand) and net unrealized holding
gains (losses) on securities increased by ¥359 million
($4,432 thousand).
5. Short-term Borrowings and Long-term Debt
Short-term borrowings including current portion of long-term debt as of March 31, 2011 and 2012 consisted of the following:
Bank loans
Commercial paper
Current portion of long-term debt
U.S. Dollars
(thousands)
2011
2012
2012
¥104,522
139,766
43,042
¥287,330
¥199,085
351,000
47,912
¥597,997
$2,457,840
4,333,333
591,506
$7,382,679
The weighted average interest rates of short-term borrowings as of March 31, 2011 and 2012 were 0.8% and 0.5%, respectively.
Long-term debt as of March 31, 2011 and 2012 consisted of the following:
Yen
(millions)
0.0%–8.0% unsecured loans principally from banks, due 2011 to 2034
0.970% unsecured straight bonds, due 2012
1.165% unsecured straight bonds, due 2012
1.423% unsecured straight bonds, due 2014
2.068% unsecured straight bonds, due 2019
0.846% unsecured straight bonds, due 2014
1.141% unsecured straight bonds, due 2016
1.604% unsecured straight bonds, due 2019
0.000% unsecured convertible bonds with subscription rights
to shares, due 2013
0.250%–1.177% unsecured Euroyen notes issued by a consolidated
subsidiary, due 2012 to 2013
0.500% unsecured Pound discount notes issued by
a consolidated subsidiary, due 2011 to 2012
lease obligations
Less-Current portion included in short-term borrowings
Financial Section
Yen
(millions)
U.S. Dollars
(thousands)
2011
2012
2012
¥149,554
20,000
10,000
30,000
10,000
100,000
20,000
30,000
¥126,188
20,000
—
30,000
10,000
100,000
20,000
30,000
$1,557,876
246,914
—
370,370
123,457
1,234,568
246,914
370,370
201,783
201,068 2,482,321
5,046
290
26,289
602,962
(43,042)
¥559,920
130
32,690
577,072
(47,912)
¥529,160
6,996 86,370
1,605
403,580
7,124,345
(591,506)
$6,532,839
The following is a summary of the terms for conversion and redemption of the convertible bonds with subscription
rights to shares:
Yen
Conversion price
0.000% unsecured convertible bonds with subscription rights to shares, due 2013
¥ 2,531.00
Annual Report 2012
55
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, 2011 and March
31, 2012, 79,018 thousand shares of common stock
would have been issuable in both years.
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. In addition, the agreements provide that the bank
has the right to offset cash deposited against any shortterm 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, 2012 were as follows:
Yen
(millions)
Years ending March 31
2014
2015
2016
2017
2018 and thereafter
¥280,043
114,859
30,378
21,208
82,672
¥529,160
U.S. Dollars
(thousands)
$3,457,321
1,418,012
375,037
261,827
1,020,642
$6,532,839
The Company and its consolidated subsidiaries have had no difficulty in renewing such loans when loans have come
due or management has determined such renewal advisable.
Financial Section
6. Leases
Finance leases
With regards to finance leases that do not transfer ownership and commenced on and before March 31, 2008, lease
payments are recognized as expenses. Information relating to finance leases that do not transfer ownership and commenced on and before March 31, 2008,
as of, and for the years ended March 31, 2011 and 2012, were as follows:
As lessee
(1) Future minimum lease payments and accumulated impairment loss on leased assets
Yen
(millions)
Future minimum lease payments:
Due within one year
Due after one year
Accumulated impairment loss on leased assets
U.S. Dollars
(thousands)
2011
2012
2012
¥10,183
7,659
¥17,842
¥5,527
2,036
¥7,563
$68,234
25,136
$93,370
¥ 512
¥ 0
$
0
(2) Lease payments, reversal of allowance for impairment loss on leased assets
Yen
(millions)
Lease payments
Reversal of allowance for impairment loss on leased assets
56
SHARP CORPORATION
U.S. Dollars
(thousands)
2011
2012
2012
¥14,182
237
¥10,116
512
$124,889
6,321
Operating leases
(a) As lessee
Future minimum lease payments for only non-cancelable contracts as of March 31, 2011 and 2012 were as follows:
Yen
(millions)
Due within one year
Due after one year
U.S. Dollars
(thousands)
2011
2012
2012
¥36,883
37,860
¥74,743
¥31,444
16,647
¥48,091
$388,198
205,518
$593,716
(b) As lessor
Future minimum lease receipts for only non-cancelable contracts as of March 31, 2011 and 2012 were as follows:
Due within one year
Due after one year
U.S. Dollars
(thousands)
2011
2012
2012
¥1,520
1,961
¥3,481
¥1,777
1,877
¥3,654
$21,938
23,173
$45,111
Financial Section
Yen
(millions)
7. Financial Instruments
(a) Qualitative information on financial instruments
(1) Policies for financial instruments
The Company and its consolidated subsidiaries obtain
necessary funds, mainly through bank loans and issuing bonds, according to its capital investment plan, for
its main business of manufacturing and distributing
electronics equipment and electronic components.
Any surplus funds are invested in high quality financial instruments are deemed to be low risk. Shortterm operating funds are obtained through issuing
commercial paper and bank loans.
Transactions involving such financial instruments
are conducted with creditworthy financial institutions.
The Company utilizes derivative transactions for minimizing risk and not for speculative or dealing purposes.
(2) Description and risks of financial instruments
Notes and accounts receivable (excluding other accounts receivable) are exposed to customer credit
risk. Some notes and accounts receivable are denominated in foreign currencies because the Company has
business relations globally and therefore are exposed
to foreign currency risk exposures. Notes and accounts payable (excluding other accounts payable) are
payable within one year. Some notes and accounts
payable rising from the import of raw materials are
denominated in foreign currencies and therefore are
exposed to foreign currency risk exposures. The Company offsets foreign currency denominated notes and
accounts receivable with notes and accounts payable,
and uses forward exchange contracts to hedge foreign currency risk exposures.
Other securities are held for the long term to
construct better business alliances and relations
with Company customers and suppliers. Other securities are exposed to market price fluctuation risk.
Long-term borrowings (included in long-term debt)
and bonds (included in short-term borrowings and
long-term debt) are mainly in preparation for capital
investments. The longest redemption date of bonds
is seven and a half years after March 31, 2012.
Derivative transactions consist primarily include
forward exchange contracts and currency swap
contracts are used to hedge foreign currency risk exposures. Interest swap contracts are used to hedge
interest rate risk exposures. For hedging instruments,
hedged items, hedging policies and assessment
methods of effectiveness of hedging instruments,
please see Note 1.
(3)Risk management of financial instruments
[1] Management of credit risk
For notes and accounts receivable (excluding other
accounts receivable), the Company periodically reviews the status of its key customers, monitoring
their respective payment deadlines and remaining
outstanding balances.
Annual Report 2012
57
rules established by the Company, and report the
content of such transactions to the Company on a
monthly basis. For interest swap contracts and currency swap contracts, its consolidated subsidiaries
execute transactions after the Company approves.
For other securities and investments in capital,
The Company regularly monitors prices and issuer’s financial positions, and continually reviews
the possession by taking these indices as well as
the relationship with issuers into consideration.
The Company strives to recognize and reduce
irrecoverable risks, due to deteriorating financial
conditions or other factors at an early stage. The
Company’s consolidated subsidiaries also follow
the same monitoring and administration process.
Financial Section
[2] Management of market risk
The Company decides basic policy for derivative
transactions at the Foreign Exchange Administration Committee meeting which is held monthly
and the Finance Administration Committee meeting which is required by the Company’s internal
procedure. The Treasury Department of Corporate
Accounting and Control Group executes transactions and reports the result of such transactions
to the Accounting Department of Corporate Accounting and Control Group on a daily basis. The
Accounting Department has set up the specialized
section for transaction results and position management, and reports the result of transactions to
the General manager of Corporate Accounting and
Control Group on a daily basis.
In addition, the Treasury Department reports
the result of transactions to the Foreign Exchange
Administration Committee and the Finance Administration Committee on a periodic basis. Its
consolidated subsidiaries also manage forward foreign exchange transactions in accordance with the
[3] Management of liquidity risk in financing activities
The Treasury Department manages the liquidity
risk by making and updating the financial plans
based on reports from each section, and maintains
ready liquidity.
(4)Supplementary explanation of fair value of financial
instruments
The fair value of financial instruments is based on the
quoted market price in active market, but in case a
market price is not available, reasonably estimated
prices are included in the fair value. As variable factors are incorporated in the determination of this
reasonably estimated price, it may vary depending on
different assumptions. The contract amount related
to derivative transactions has nothing to do with the
market risk related to the derivative transactions.
(b) Fair values of financial instruments
The consolidated balance sheet amounts, fair values and differences between the two, as of March 31, 2011 and 2012
are as follows:
Yen (millions)
2012
Consolidated
Balance Sheet
Amount
(1)Cash and cash equivalents, Time deposits, and Short-term investments
(2)Notes and accounts receivable (excluding other accounts receivable)
(3)Investments in securities
1) Shares of nonconsolidated subsidiaries and affiliates
2) Other securities
Total Assets
(4)Notes and accounts payable (excluding other accounts payable)
(5)Bank loans and Current portion of long-term borrowings
(included in short-term borrowings)
(6)Commercial paper (included in short-term borrowings)
(7) Straight bonds (included in short-term borrowings and long-term debt)
(8) Bonds with subscription rights to shares (included in long-term debt)
(9) Long-term borrowings (included in long-term debt)
Total of Liabilities
(10) Derivative transactions*
58
SHARP CORPORATION
Fair Value
¥ 195,325 ¥ 195,325
375,411 368,524
3,357
48,408
622,501
389,484
212,321
351,000
217,126
201,068
112,952
1,483,951
(6,881)
2,101
48,408
614,358
389,484
212,321
351,000
220,966
196,997
115,055
1,485,823
(8,051)
Difference
¥ 0
(6,887)
(1,256)
0
(8,143)
0
0
0
3,840
(4,071)
2,103
1,872
(1,170)
U.S. Dollars (thousands)
2012
Consolidated
Balance Sheet
Amount
(1)Cash and cash equivalents, Time deposits, and Short-term investments
(2)Notes and accounts receivable (excluding other accounts receivable)
(3)Investments in securities
1) Shares of nonconsolidated subsidiaries and affiliates
2) Other securities
Total Assets
(4)Notes and accounts payable (excluding other accounts payable)
(5)Bank loans and Current portion of long-term borrowings
(included in short-term borrowings)
(6)Commercial paper (included in short-term borrowings)
(7)Straight bonds (included in short-term borrowings and long-term debt)
(8)Bonds with subscription rights to shares (included in long-term debt)
(9)Long-term borrowings (included in long-term debt)
Total of Liabilities
(10) Derivative transactions*
Fair Value
$ 2,411,420 $ 2,411,420
4,634,704 4,549,679
41,444
597,630
7,685,198
4,808,445
25,938
597,630
7,584,667
4,808,445
2,621,247 2,621,247
4,333,333 4,333,333
2,680,568 2,727,975
2,482,321 2,432,062
1,394,469 1,420,432
18,320,383 18,343,494
(99,395)
(84,951) Difference
$
0
(85,025)
(15,506)
0
(100,531)
0
0
0
47,407
(50,259)
25,963
23,111
(14,444)
Financial Section
Yen (millions)
2011
Consolidated
Balance Sheet
Amount
(1)Cash and cash equivalents, Time deposits, and Short-term investments
(2)Notes and accounts receivable (excluding other accounts receivable)
(3)Investments in securities
1) Shares of nonconsolidated subsidiaries and affiliates
2) Other securities
Total Assets
(4)Notes and accounts payable (excluding other accounts payable)
(5)Bank loans and Current portion of long-term borrowings
(included in short-term borrowings)
(6)Commercial paper (included in short-term borrowings)
(7)Straight bonds (included in short-term borrowings and long-term debt)
(8)Bonds with subscription rights to shares (included in long-term debt)
(9)Long-term borrowings (included in long-term debt)
Total of Liabilities
(10) Derivative transactions*
¥ 247,888
392,780
3,364
49,424
693,456
531,638
128,453
139,766
225,336
201,783
125,623
1,352,599
(1,159)
Fair Value
Difference
¥ 247,888
389,028
¥ 0
(3,752)
2,866
49,424
689,206
531,638
(498)
0
(4,250)
0
128,453
139,766
229,283
195,997
126,992
1,352,129
(1,166)
0
0
3,947
(5,786)
1,369
(470)
(7)
*Net receivables and payables arising from derivative transactions. Net payables are indicated by “( ).”
Annual Report 2012
59
Financial Section
(Note 1)Methods of Calculating the Fair Value of Financial
Instruments and Matters Related to Securities
and Derivative Transactions
(1)Cash and cash equivalents, Time deposits, and
Short-term investments
The fair value of time deposits and Short-term
investments approximates their book value, due
to their short maturity periods.
(2)Notes and accounts receivable (excluding other
accounts receivable)
The fair value of notes and accounts receivable
(excluding other accounts receivable) due within
a year approximates their book value. The fair
value of notes and accounts receivable (excluding other accounts receivable) with long maturity
periods is discounted using a rate which reflects
both the period until maturity and credit risk.
(3)Investments in securities
The fair value of investments in securities is
based on average quoted market prices for the
last month of the fiscal year.
(4)Notes and accounts payable (excluding other accounts payable)
The fair value of notes and accounts payable (excluding other accounts payable) approximates their
book value, due to their short maturity periods.
(5)Bank loans and current portion of long-term borrowings (included in short-term borrowings)
The fair value of bank loans and current portion
of long-term borrowings approximates their book
value, due to their short maturity periods.
(6)Commercial paper (included in short-term borrowings)
The fair value of commercial paper approximates
their book value, due to their short maturity periods.
(7)Straight bonds (included in short-term borrowings and long-term debt)
The fair value of marketable straight bonds is
determined by the quoted market price. The fair
value of non-marketable straight bonds is based
on quoted prices from financial institutions.
(8)Bonds with subscription rights to shares (included
in long-term debt)
The fair value of marketable bonds with subscription rights to shares is determined by the quoted
market prices. The fair value of non-marketable
bonds with subscription rights to shares is based
on quoted prices from financial institutions.
(9)Long-term borrowings (included in long-term debt)
The fair value of long-term borrowings is determined by the total amount of the principal and
interest using the rate which would apply if similar borrowings were newly made.
(10)Derivative transactions
The fair value of currency swap contracts and interest swap contracts is based on quoted prices
from financial institutions. The fair value of forward exchange contracts are based on forward
exchange rate.
(Note 2)As unlisted stocks ¥36,567 million as of March 31,
2011 and ¥37,364 million ($461,284 thousand) as
of March 31, 2012 and equity ¥8,477 million as
of March 31, 2011 and ¥10,277 million ($126,877
thousand) as of March 31, 2012 have no quoted
market price and as it is not possible to accurately
estimate future cash flows, it is very difficult to determine their fair value reasonably. Therefore, they
are not included in “(3) Investments in securities.”
(Note 3)Maturity analysis for Cash and cash equivalents, Time deposits, and Short-term investments, and Notes and accounts receivable.
Yen (millions)
2012
Cash and cash equivalents, Time deposits, and Short-term investments
Notes and accounts receivable (excluding other accounts receivable)
Total
Due in one
year or less
Due after
one year
¥195,325
326,671
¥521,996
¥ —
48,740
¥48,740
U.S. Dollars (thousands)
2012
Cash and cash equivalents, Time deposits, and Short-term investments
Notes and accounts receivable (excluding other accounts receivable)
Total
60
SHARP CORPORATION
Due in one
year or less
Due after
one year
$2,411,420
4,032,975
$6,444,395
$
—
601,728
$601,728
Yen (millions)
2011
Cash and cash equivalents, and Time deposits
Notes and accounts receivable (excluding other accounts receivable)
Total
Due in one
year or less
Due after
one year
¥247,888
343,457
¥591,345
¥ —
49,323
¥49,323
8. Net Assets and Per Share Data
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 operations
reflect dividends applicable to the respective period.
On June 26, 2012, the shareholders approved the declaration of year end cash dividends totaling ¥5,502 million
($67,926 thousand) to shareholders of record as of March
31, 2012, covering the year then ended.
Financial Section
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 paid-in capital. Legal earnings
reserve is included in retained earnings in the accompanying consolidated balance sheets.
As of March 31, 2012, 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
9. Contingent Liabilities
As of March 31, 2012, the Company and its consolidated subsidiaries had contingent liabilities as follows:
Yen
(millions)
Loans guaranteed
In relation to TFT-LCD business, the Company and
some of its subsidiaries are currently subject to the investigations being conducted by the Directorate General for
Competition of the European Commission etc., and civil
lawsuits seeking monetary damages resulting from the
alleged anticompetitive behavior have been filed against
U.S. Dollars
(thousands)
2012
2012
¥27,349
¥27,349
$337,642
$337,642
the Company and some of its subsidiaries in North
America and Europe. The Company received a cease and
desist order and an administrative surcharge payment
order from the Japan Fair Trade Commission. However,
the Company has submitted a complaint to the Japan Fair
Trade Commission, which is currently pending.
Annual Report 2012
61
10. Employees’ Severance and Pension Benefits
Allowance for severance and pension benefits of the Company and its domestic consolidated subsidiaries as of March
31, 2011 and 2012 consisted of the following:
Yen
(millions)
2012
2011
Projected benefit obligation
Less - fair value of plan assets
Less - unrecognized actuarial losses
Unrecognized prior service costs
Prepaid pension cost
Allowance for severance and pension benefits
¥353,413
(282,757)
(123,995)
26,049
29,063
¥ 1,773
U.S. Dollars
(thousands)
¥348,986
(268,758)
(129,560)
23,122
27,975
¥ 1,765
2012
$4,308,469
(3,318,000)
(1,599,506)
285,457
345,370
$ 21,790
In addition, allowances for severance and pension benefits of ¥2,845 million as of March 31, 2011 and ¥4,235 million
($52,284 thousand) as of March 31, 2012 were provided by certain overseas consolidated subsidiaries.
Expenses for severance and pension benefits recognized in profit or loss of the Company and its domestic consolidated subsidiaries for the years ended March 31, 2011 and 2012 consisted of the following:
Yen
(millions)
Financial Section
2012
2011
Service costs
Interest costs on projected benefit obligation
Expected return on plan assets
Actuarial losses
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, 2011 and 2012. The rate of expected return on plan assets used by the Company and its domestic
consolidated subsidiaries for the years ended March 31,
¥12,700
8,897
(13,091)
10,813
(3,012)
¥16,307
U.S. Dollars
(thousands)
¥12,398
8,832
(10,458)
11,814
(3,017)
¥19,569
2012
$153,062
109,037
(129,111)
145,852
(37,247)
$241,593
2011 was 4.5% and 2012 was 3.7% respectively.
The estimated amount of all retirement benefits to be
paid at future retirement dates is allocated to each service
year mainly based on points.
11. Segment Information
General information about reportable segments
The Company Group’s reportable segments are components of the Group whose operating results are regularly
reviewed by the Board of Directors when making resource allocation and performance assessment decisions,
and for which discrete financial information is available.
The Group’s reportable segments consist of the Consumer/Information Products business and the Electronic
Components business, based on a classification by
similarity in the manufacturing and marketing method of
products.
The Consumer/Information Products business segment includes audio-visual and communication equipment,
health and environmental equipment and information
equipment. The Electronic Components business segment
includes LCDs, solar cells and other electronic devices.
Basis of measurement about reported segment profit or loss, segment assets and other material items
of the Company’s headquarters and the sales subsidiarThe accounting policies for the reportable segments are
ies depreciable assets not directly allocated to product
basically the same as those described in Note 1. Sumgroups are not allocated to reportable segments. On the
mary of Significant Accounting and Reporting Policies.
other hand, depreciation and amortization of the assets
Intersegment sales and income (loss) are recognized
are allocated to reportable segments in accordance with
based on the current market price.
reasonable standards.
Depreciable assets of sales and distribution groups
62
SHARP CORPORATION
Information about reported segment profit or loss, segment assets and other material items
Segment information as of and for the years ended March 31, 2011 and 2012 were as follows:
Yen
(millions)
2012
2011
2012
¥1,630,555 $20,130,309
5,481
444 1,630,999 20,135,790
825,295
357,713
1,183,008
(358,157)
¥2,455,850
10,188,827
4,416,210
14,605,037
(4,421,691)
$30,319,136
¥ 51,008 $ 629,728
(675,296)
(54,699) (418,037)
(33,861) ¥ (37,552) $ (463,605)
¥ 632,365
1,424,434
557,336
¥2,614,135
Financial Section
Net Sales:
Consumer/Information Products:
¥1,969,988
Customers
582
Intersegment
1,970,570
Total
Electronic Components:
1,051,985
Customers
502,032
Intersegment
1,554,017
Total
(502,614)
Adjustments
¥3,021,973
The amount presented in Consolidated Financial Statements
Segment Income (Loss):
¥ 79,257
Consumer/Information Products
30,728
Electronic Components
(31,089)
Adjustments
¥ 78,896
The amount presented in Consolidated Financial Statements
Segment Assets:
¥ 677,100
Consumer/Information Products
1,484,799
Electronic Components
723,779
Adjustments
¥2,885,678
The amount presented in Consolidated Financial Statements
Other Material Items
Depreciation and Amortization:
¥ 82,276
Consumer/Information Products
190,963
Electronic Components
8,025
Adjustments
¥ 281,264
The amount presented in Consolidated Financial Statements
Amortization of Goodwill:
¥
3,033
Consumer/Information Products
432
Electronic Components
85
Adjustments
¥
3,550
The amount presented in Consolidated Financial Statements
Investments in Nonconsolidated Subsidiaries and Affiliates accounted for using the equity methods:
¥
3,252
Consumer/Information Products
7,716
Electronic Components
21,877
Adjustments
¥ 32,845
The amount presented in Consolidated Financial Statements
Increase in Plant, Equipment and Intangible Assets:
¥ 76,861
Consumer/Information Products
159,220
Electronic Components
14,900
Adjustments
¥ 250,981
The amount presented in Consolidated Financial Statements
U.S. Dollars
(thousands)
$ 7,806,975
17,585,605
6,880,692
$32,273,272
¥ 73,497 $ 907,370
166,030 2,049,753
93,371
7,563 ¥ 247,090 $ 3,050,494
¥
¥
¥
¥
3,336 $
1,730 121 5,187 $
41,185
21,358
1,494
64,037
$
$
41,234
98,383
281,568
421,185
3,340
7,969
22,807
34,116
¥ 67,309 $ 830,976
123,904 1,529,679
166,580
13,493 ¥ 204,706 $ 2,527,235
Annual Report 2012
63
Financial Section
Adjustments of segment income or loss were ¥(31,089)
million and ¥(33,861) million ($(418,037) thousand) for
the years ended March 31, 2011 and 2012, respectively,
and were comprised of elimination of intersegment transactions and corporate expenses not allocated to each
reportable segment. Corporate expenses are mainly attributable to basic R&D expenses and expenses related to the
administrative groups of the Company’s headquarters. The
elimination of intersegment transactions were ¥3,083 million and ¥1,061 million ($13,099 thousand), respectively.
The corporate expenses not allocated to each reportable
segment were ¥(35,880) million and ¥(35,704) million
($(440,790) thousand), respectively.
Adjustments of segment assets as of March 31, 2011 and
2012 were ¥723,779 million and ¥557,336 million ($6,880,692
thousand), respectively, and were comprised of elimination
of intersegment transactions and corporate assets not allocated to each reportable segment. The corporate assets
not allocated to each reportable segment are mainly attributable to cash and cash equivalents, deferred tax assets, the
Company’s investments in securities, as well as depreciable
assets related to: the Company’s R&D groups as well as
the administrative, sales and distribution groups of the
Company’s headquarters. The elimination of intersegment
transactions were ¥(36,464) million and ¥(18,788) million
($(231,951) thousand), respectively. The corporate assets not
allocated to each reportable segment were ¥760,243 million
and ¥576,124 million ($7,112,642 thousand), respectively.
Adjustments of investments in nonconsolidated subsidiaries and affiliates accounted for using the equity methods as of
March 31, 2011 and 2012 were ¥21,877 million and ¥22,807
million ($281,568 thousand), respectively, and were mainly
comprised of investments in Sharp Finance Corporation.
Adjustments of increase in plant, equipment and intangible assets were ¥14,900 million and ¥13,493 million
($166,580 thousand) for the years ended March 31, 2011 and
2012, respectively, and were mainly comprised of increase
in the Company’s R&D groups and the administrative, sales
and distribution groups of the Company’s headquarters.
Adjustments of segment income or loss were made to
reconcile segment income or loss to operating income or loss
presented in the Consolidated Statements of Operations.
Depreciation and amortization includes the amortization of long-term prepaid expenses.
Increase in plant, equipment and intangible assets includes the increase in long-term prepaid expenses.
Related information
Sales by product/service for the years ended March 31, 2011 and 2012 were as follows:
Yen
(millions)
Sales to outside customers:
LCD Color TVs
LCDs
Mobile Phones
Others
Total
U.S. Dollars
(thousands)
2011
2012
2012
¥ 803,592
614,373
413,277
1,190,731
¥3,021,973
¥ 581,357
420,226
305,876
1,148,391
¥2,455,850
$ 7,177,247
5,187,975
3,776,247
14,177,667
$30,319,136
Sales by region/country for the years ended March 31, 2011 and 2012 were as follows:
U.S. Dollars
(thousands)
Yen
(millions)
Sales:
Japan
China
Others
Total
64
2011
2012
2012
¥1,592,909
516,977
912,087
¥3,021,973
¥1,181,168
483,298
791,384
¥2,455,850
$14,582,321
5,966,642
9,770,173
$30,319,136
Sales are classified according to regions or countries where customers are located.
SHARP CORPORATION
Plant and Equipment by region/country as of March 31, 2011 and 2012 were as follows:
Yen
(millions)
2012
2011
Plant and Equipment, at cost less accumulated depreciation:
Japan
Others
Total
¥870,320
94,594
¥964,914
U.S. Dollars
(thousands)
2012
¥780,396 $ 9,634,519
92,046 1,136,370
¥872,442 $10,770,889
Impairment loss of fixed assets by reportable segment
Impairment loss of fixed assets by reportable segment for the years ended March 31, 2011 and 2012 were as follows:
Yen
(millions)
Impairment Loss:
Consumer/Information Products
Electronic Components
Corporate Assets and Elimination
Total
U.S. Dollars
(thousands)
2011
2012
¥ —
—
—
¥ —
¥542
6,114
—
¥6,656
2012
$
$
6,691
75,482
—
82,173
(millions)
Financial Section
Amortization of goodwill and unamortized balance by reportable segment
Amortization of goodwill and unamortized balance by reportable segment as of and for the years ended March 31, 2011
and 2012 were as follows:
Yen
U.S. Dollars
(thousands)
2011
2012
2012
Amortization of Goodwill:
Consumer/Information Products
Electronic Components
Corporate Assets and Elimination
Total
¥3,033
432
85
¥3,550
¥3,336
1,730
121
¥ 5,187
$41,185
21,358
1,494
$64,037
Balance at end of period:
Consumer/Information Products
Electronic Components
Corporate Assets and Elimination
Total
¥7,708
16,385
245
¥24,338
¥ 7,313
15,470
346
¥ 23,129
$ 90,284
190,988
4,271
$285,543
12. Impairment Loss
(Impairment Loss)
With regards to application of accounting for impairment
assets, the Company and its consolidated subsidiaries
identifies cash generating units in consideration of business
characteristics and business operation. As a result, idle assets are identified as respective cash generating units.
The Company and its consolidated subsidiaries reduced
the book value of idle and unused-in-the-future production
equipment of thin-film solar cells in the Katsuragi Plant
etc. to recoverable amount, and recognized the decreased
amount of ¥6,656 million ($82,173 thousand) as impairment loss for the year ended March 31, 2012.
Details are as follows: ¥4,547 million ($56,136 thousand) for lease assets; ¥1,167 million ($14,407 thousand)
for machinery and equipment; ¥942 million ($11,630 thousand) for other.
The recoverable amount of those impaired assets was
measured using their net realizable values, and net realizable values of impaired assets that are not expected to be
sold are regarded as zero.
Annual Report 2012
65
13. Loss on suspension of Large size LCD plant operation
This loss for the year ended March 31, 2012 comprises
extraordinary operating expenses caused by the temporary suspension of production of large-size LCD panels in
the Company and its consolidated subsidiary, Sharp Display Products Corporation.
14. Restructuring Charges
These restructuring charges for the year ended March
31, 2011 are mainly related to the reorganization of LCD
plants, including depreciation and maintenance charges of
plants that have been suspended due to production line
changes to meet the increasing demand for high valueadded products.
These restructuring charges for the year ended March
31, 2012 are related to the LCD business restructuring,
etc. Those mainly comprises depreciation and mainte-
nance changes of ¥37,717 million ($465,642 thousand)
concerning plants that were suspended in the Company
and its consolidated subsidiary, Sharp Display Products
Corporation to improve production to meet the increasing demand for high value-added products, and costs of
¥68,125 million ($841,049 thousand) incurred to reinforce
business foundations (inventory write-down, etc.) in preparation for promoting establishment of strategic vertical
integration of the large-size LCD business.
15. Significant Subsequent Events
Financial Section
Significant subsequent events occurring until June 26,
2012 were as follows:
(2) Nature of divested business
Development, production and sales of LCD panels
Business Divestiture
The Company entered into an agreement to execute capital and business alliance with four companies of the Hon
Hai Group on March 27, 2012.
In association with the above capital and business alliance, the Company entered into an agreement in regard
to the partial transfer of shares of its owned subsidiary,
Sharp Display Products Corporation (“SDP”), to Mr. Terry
Tai-Ming Gou, the representative of Hon Hai Precision
(“Hon Hai”). Furthermore, the Company, Toppan Printing Co., Ltd. (“Toppan”) and Dai Nippon Printing Co.,
Ltd. (“DNP”) executed a basic agreement on April 10,
2012 and have conducted deliberations on concrete issues with regard to the business integration of the LCD
color filter businesses into SDP, whereby the LCD color
filter businesses are operated by Toppan, DNP and DNP’s
wholly owned subsidiary, DNP Color Techno Sakai Co.,
Ltd. (“DNP Color Techno Sakai”) at the Sakai Plant.
The Company resolved at its board of directors meeting held on May 24, 2012 to execute business integration
agreements with Toppan and DNP respectively and
transfer the LCD color filter businesses at the Sakai Plant
operated by Toppan, DNP and DNP Color Techno Sakai, to
SDP in the manner of an absorption-type company split.
(3) Aim of business divestiture
With the efforts such as 1) promotion of the enhancement of cost competitiveness and profit performance
through maintaining a high facility operation rate of SDP
by making practical use of Hon Hai’s purchasing power
and 2) integration of the LCD color filter businesses, the
Company is seeking to promote further efficiency of the
large-size LCD business including the businesses of color
filters, the primary component of LCD panels, as well as
to achieve improvement of the competitiveness of such
businesses.
(a) Outline of Business Divestiture
(1) Name of parties who succeed the divested business
Mr. Terry Tai-Ming Gou, Toppan Printing Co., Ltd., Dai Nippon Printing Co., Ltd. and DNP Color Techno Sakai Co., Ltd.
66
SHARP CORPORATION
(4)Date of business divestiture
[1] Transfer of shares
through March 26,
2013 (Planned)
[2] Absorption-type company split June 30, 2012 (Planned)
(5)Other items with regard to outline of transactions
which includes description of legal form
[1] Transfer of shares
The Company will receive only assets such as cash as
consideration for the transfer of shares.
[2] Absorption-type company split
The method to be employed is an absorption-type company split which designates Toppan, DNP and DNP Color
Techno Sakai as split companies and SDP as their succeeding company.
(b) Name of Reporting Segment which involves the
divested business
Electronic Components
Independent Auditors’ Report
To the Board of Directors of Sharp Corporation:
We have audited the accompanying consolidated financial statements of Sharp Corporation and its consolidated subsidiaries, which comprise the consolidated balance sheets as at March 31, 2012 and 2011, and the consolidated statements
of operations, statements of comprehensive income, statements of changes in net assets and statements of cash flows
for the years then ended, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in Japan, and for such internal control as management determines
is necessary to enable the preparation of consolidated financial statements that are free from material misstatements,
whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to 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
comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free from material misstatement.
Financial Section
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgement, including the assessment of the risks
of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk
assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the consolidated
financial statements in order to design audit procedures that are appropriate in the circumstances, while the objective of
the financial statement audit is not for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control.An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Sharp
Corporation and its consolidated subsidiaries as at March 31, 2012 and 2011, and their financial performance and cash
flows for the years then ended in accordance with accounting principles generally accepted in Japan.
Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March
31, 2012 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.
June 26, 2012
Osaka, Japan
Annual Report 2012
67
Consolidated Subsidiaries*1
Sharp Electronics Marketing 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
Sharp Mie Corporation
Sharp Display Products Corporation
iDeep Solutions Corporation
Sharp Support & Service Corporation
Overseas:
<Countries and Areas>
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 US Holding Inc. <California, U.S.A.>
Recurrent Energy, LLC <California, U.S.A.>*2
Sharp Electronics of Canada Ltd. <Ontario, Canada>
Sharp Electronica Mexico S.A. de C.V. <Baja California, Mexico>
Sharp Corporation Mexico, S.A. de C.V. <Mexico City, Mexico>
Sharp Brasil Comércio e Distribuiçáo de Artigos Eletrônicos Ltda. <San Paulo, Brazil>
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. z o. o. <Torun, Poland>
Sharp Electronics Russia LLC. <Moscow, Russia>
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 Appliances (Thailand) Ltd. <Chachoengsao, Thailand>
Sharp Manufacturing (Thailand) Co., Ltd. <Nakornpathom, Thailand>
Sharp Business Systems (India) Ltd. <New Delhi, 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>
Sharp Electronics Research & Development (Nanjing) Co., Ltd. <Nanjing, China>
Sharp Laboratories of China Co., Ltd. <Shanghai, China>
Sharp (China) Investment co., Ltd. <Beijing, China>
P.T. Sharp Electronics Indonesia <Jakarta, Indonesia>
P.T. Sharp Semiconductor Indonesia <West Java, Indonesia>
Sharp Electronics (Vietnam) Company Limited <Ho Chi Minh City, Vietnam>
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.>
Financial Section
Domestic:
*1 In addition to the companies listed above, there are 17 consolidated subsidiaries.
*2 Although all of the Recurrent Energy, LLC-owned 240 subsidiaries related to solar power generation plants are included in the scope of consolidation, in
counting consolidated subsidiaries of the Company, they and Recurrent Energy, LLC are considered as one company in consideration of the fact that it is
a solar project developer.
68
SHARP CORPORATION
Investor Information
(As of March 31, 2012)
証券会社
39,820,218株
(3.59%)
Shareholders
自己株式
10,375,562株(0.93%)
Number ofその他の法人
Shareholders 139,077
62,989,140株(5.67%)
Principal Shareholders
外国人
215,851,228株(19.43%)
合計
1,110,699,887株
金融機関※
Number of
Percentage of
458,545,167株(41.29%)
shares held
total shares (%)
※ 投資信託・年金信託に係る株式数が
個人
Nippon Life Insurance
Company
51,582,000株
(4.65%)
含まれています。
55,667,384
5.01
Meiji Yasuda Life Insurance Company
45,781,000
4.12
Mizuho Corporate Bank, Ltd.
41,910,469
3.77
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
41,678,116
3.75
Mitsui Sumitomo Insurance Company, Limited
30,658,022
2.76
Japan Trustee Services Bank, Ltd. (Trust Account)
28,405,000
2.56
SHARP Employee Share-Holding Association
25,450,265
2.29
The Master Trust Bank of Japan, Ltd. (Trust Account)
23,272,000
2.10
SSBT OD05 OMNIBUS ACCOUNT-TREATY CLIENTS
22,023,900
1.98
Sompo Japan Insurance Inc.
21,496,000
1.94
323,118,572株(29.09%)
Notes:1. Percentage of total shares is calculated by the number of shares issued (including 10,375,562 treasury shares).
2.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 (Proportion of total issued shares)
Japanese securities companies
39,820,218 (3.59%)
Investor Information
Treasury stock
10,375,562 (0.93%)
Other Japanese corporations
62,989,140 (5.67%)
Foreign shareholders
215,851,228 (19.43%)
Total
1,110,699,887
shares
Japanese individual shareholders
323,118,572 (29.09%)
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
Japanese financial institutions*
458,545,167 (41.29%)
* A total of 51,582,000 shares (4.65%) in
investment trusts and pension trust funds
are included in shares held by Japanese
financial institutions.
Phone: +81-6-6625-3023 Fax: +81-6-6625-0918
8, Ichigaya-Hachiman-cho, Shinjuku-ku, Tokyo 162-8408, Japan
Tokyo
Phone: +81-3-3260-1289 Fax: +81-3-3260-1822
After August 20, 2012:
Seavans South Building, 1-2-3 Shibaura, Minato-ku, Tokyo 105-0023, Japan
Phone: +81-3-5446-8208 Fax: +81-3-5446-8206
Websites:
(English)http://sharp-world.com/corporate/ir/index.html
(Japanese)http://www.sharp.co.jp/corporate/ir/index.html
Annual Report 2012
69
22-22, Nagaike-cho, Abeno-ku, Osaka 545-8522, Japan
Phone: +81-6-6621-1221
http://www.sharp.co.jp
Was this manual useful for you? yes no
Thank you for your participation!

* Your assessment is very important for improving the work of artificial intelligence, which forms the content of this project

Download PDF

advertisement