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Headquarters: Kowa Nibancho Bldg. 11–19, Nibancho, Chiyoda-ku, Tokyo 102-0084, JapanPhone : (03)5214-8500 Fax : (03)5214-8501URL http://www.djk.co.jp/
Printed in Japan on recycled paper
2009. 8 P
ANNUAL REPORT
DAIICHI JITSUGYO CO., LTD. 2009
ANN
UAL R
EPORT
2009D
AIICH
I JITSU
GYO
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., LTD
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FOUNDING SPIRIT
As a trading company, Daiichi Jitsugyo Co., Ltd. strives
to facilitate the logistics of an economic society in order to
contribute to social prosperity. Corporate activities are based
on a proactive approach and spirit of unified cooperation. The
company aims for stable growth based on sound management,
while striving to improve the lifestyles and welfare of its
employees.
Profile of Our Company 1
Consolidated Financial Highlights 2
To Our Stakeholders 3
DJK Business Segments 4
Corporate Governance 13
The DJK Overseas Network 18
The DJK Domestic Network 20
Financial Section 21
Corporate Data / Investor Information 50
Commitment to the Environment 51
Contents
Environmental policy
As a company conducting international trade as well as sales in Japan of energy-, semiconductor-, plastic-injection molding-, and pulp-and-paper-related machinery and equipment, Medical equipment and engineering materials and aerospace-related devices, we will carry out environmental management of our business based on the following policies.
1. We will be constantly aware of the environmental issues regarding our merchandise and service activities, and will take steps to prevent environmental pollution. In addition, we will pursue constant improvement in our environmental management activities.
2. To comply with environmentally related laws, regulations, and accords regarding our merchandise and service activities, we will establish and follow our own voluntary standards.
3. Among the environmental issues regarding our merchandise and service activities, we will make the following issues special priority themes.
(1) Reducing amounts of energy and resources used through greater operating efficiency
(2) Handling and promotion of environmentally friendly merchandise(3) Promoting understanding of the importance of environmental issues
inside and outside the Company
To achieve these environmental policies, we will establish environmental targets and goals. Working together, all employees and directors in all sections of the company will pursue environmental management.
Recognizing that conducting environmentally conscious
business activities is one of its social obligations, DJK has
established the following environmental policy, which is being
pursued by all employees and directors companywide.
DJK acquired ISO 14001 certification on January 24, 2004 and revised it on January 23, 2007.
Commitment to the Environment
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Profile of Our Company
Daiichi Jitsugyo Co., Ltd., (DJK) is an engineering trading company that supplies optimum production equipment and systems to a wide range of industries. In that capacity, the Company is evolving into an advanced solutions company that offers integrated machinery (hardware), technology (software), and services by combining the diverse capabilities of its Group. We are committed to contributing to the creation of a creative global society through the sophisticated fusion of our leading technology, the knowledge of our predecessors, and our highly skilled employees. Based on that commitment, we intend to remain a company that has an ongoing necessary role in the eyes of the international community.
The DJK Group comprises DJK, 21 direct and indirect subsidiaries and 4 affiliates globally. The Group works together to achieve the most efficient networks possible for the procurement and sales of manufactured goods. The Group’s subsidiaries manufacture some of the products marketed by the Group.
Key consolidated subsidiaries within the DJK Group network are DAIICHI MECHA-TECH CORPORATION, providing after sale technical services and parts and developing new equipment and systems; DAIICHI JITSUGYO (AMERICA) INC., a strategic global partner with eight bases in North and Central America, including a Brazilian subsidiary; SHANGHAI YISHI TRADING CO., LTD.; DJTECH CO., LTD., which develops, designs, and manufactures solder print inspection equipment; DAIICHI JITSUGYO VISWILL CO., LTD., which develops, designs, and manufactures external inspection equipment for pharmaceuticals and chip condensers; DAIICHI JITSUGYO ASIA PTE. LTD., the regional manager for Southeast Asia; DAIICHI JITSUGYO (THAILAND) CO., LTD.; DAI-ICHI JITSUGYO (MALAYSIA) SDN. BHD; DAIICHI JITSUGYO (PHILIPPINES) INC. and DAIICHI JITSUGYO (HONG KONG) LIMITED. In addition, DJK EUROPE GMBH was established in August 2008 in Frankfurt, Germany.
Through 60 years of professional experience in worldwide sales and services for machinery and equipment, the DJK Group is globally recognized as a technical solutions provider for industry based on leading-edge products and technologies.
Disclaimer regarding forward-looking statementsStatements made in this annual report with respect to DJK’s forecasts and business targets that are not historical facts, are forward-looking statements about the future performance of the Company and its consolidated subsidiaries and are based on information currently available. Readers are cautioned that for a variety of reasons actual results could differ significantly from the projections presented in this report.
ExpansionforGlobal
the Top2009DA
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Thousands of Millions of yen U.S. Dollars*
2009 2008 2007 2009For the year: Net sales ¥127,286 ¥135,050 ¥123,336 $1,295,795 Operating income 2,893 5,273 4,648 29,454 Net income 1,385 3,000 2,687 14,098
At the year-end: Total assets ¥64,067 ¥82,533 ¥74,267 $652,213 Total equity 21,694 24,116 24,151 220,850
Per share of common stock (in yen and U.S. dollars): Net income ¥25.76 ¥52.83 ¥47.27 $0.26 Cash dividends applicable to the year 11.00 18.00 13.00 0.11
* U.S. dollar figures have been converted from Japanese yen, for the convenience of readers outside Japan at the rate of ¥98.23 to U.S.$1.
Consolidated Financial HighlightsDAIICHI JITSUGYO CO., LTD. AND CONSOLIDATED SUBSIDIARIESYears ended March 31, 2009, 2008 and 2007
Net Sales
0
30,000
60,000
90,000
120,000
150,000
2005
(Millions of yen)
2006 2007 2008 2009
Operating Income
0
1,000
2,000
3,000
4,000
5,000
6,000
2005
(Millions of yen)
2006 2007 2008 2009
Net IncomeNet Income per Share
0
500
1,000
1,500
2,000
2,500
3,000
2005
(Millions of yen) (Yen)
2006 2007 2008 2009
Total AssetsTotal Equity
0
20,000
40,000
60,000
80,000
100,000
2005
(Millions of yen)
2006 2007 2008 20090
10
20
30
40
50
60
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To Our Stakeholders
I would like to take this opportunity to thank our shareholders for their support over the past fiscal year.
Having completed our 86th term, the fiscal year from April 1, 2008 to March 31, 2009, we are pleased to report in this
document an outline of the business performance of the DJK Group.
Under the impact of the global economic downturn, the stagnation in the Japanese economy is expected to continue for
the time being, with no clear signs of direction. We believe that such business conditions test our true corporate capabilities,
and considering that “crisis presents opportunity,” we are working together as a company to survive global competition and
demonstrate our corporate power.
In doing so, we look forward to the continuing support of our shareholders.
Kunihiro YanoPresident & CEO
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DJK Business Segments
EnergyEngineeringElectronicsPlasticsPulp & PaperAutomobilePharmaceuticalsOthers
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EnergyMachinery and equipment for the energy, petroleum, and petrochemical industries
Offshore rig (Japan Drilling Co., Ltd.) Power plant for independent power producer
Ethylene center compressor stationTop drive system
BusinessDJK is known in the energy industry as a highly reputable, specialist supplier of machinery. Against the backdrop of its rich experience and solid technology accumulated over the years, the Company has actively addressed new themes in its business and achieved results in the energy conservation, alternative energy, new energy, and environmental protection fields. Its business departments provide detailed services for customers in the fields of engineering, construction, and maintenance as well as consulting services for soil remediation in the way only DJK can. For example, the energy development department can provide environmental assessments for development projects, physical exploration equipment and analysis software for exploration on land or at sea, and marine drilling rigs and mine drilling equipment. On the other hand, the production and refining department can supply petroleum, gas, and geothermal production field systems, wind and solar electric power generation systems, petroleum refining plants, and petrochemical plants.
Operating environmentAlthough there was a sharp decline in large orders for petroleum refining plants and other equipment from major petroleum companies in the second half of the fiscal year, existing orders for petroleum refining plants for major petroleum companies and plants for major chemical companies contributed to sales.
Despite the economic downturn, we expect orders for work required to maintain safety conditions, such as regularly scheduled factory maintenance and repair, or plant concentration activities to reduce excess production equipment, will be on the rise.
New BusinessThe Group formed a new project team that will be responsible for establishing new energy businesses. The project team also is considering entering water-related businesses, such as well drilling and sewage treatment.
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EngineeringMachinery and equipment for the plant engineering, and construction industries
Refinery plant Petroleum refinery plant
Plant control system Plant control system
BusinessIntegration, combination, and systematization of basic engineering processes are the foundations of today’s advanced technologies. Our mission as a technology-oriented trading firm in the engineering industry is to be a leader in supplying our customers with the latest and most advanced machinery and technology. As our source of business is large orders received via engineering companies for equipment to be used in domestic and overseas petroleum refining and chemical plants in Japan and overseas, performance fluctuates widely in response to regional economic conditions.
Operating environmentAlthough there were orders received through major engineering companies for overseas petrochemical and chemical plants and accessories, orders for factory equipment, such as independent power generation equipment and piping work declined. Similar to the energy sector, DJK anticipates firm orders for work required to maintain safety conditions, such as periodical maintenance work, or plant concentration activities to reduce excess production equipment.
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ElectronicsMachinery and equipment for the industries of electronics, IT, electric machinery, precision machinery, optical and audio equipment, and musical instruments
Solder print inspection system
SMT line
Modular placement machine/BM123
BusinessThe infrastructure of our society is made up of a range of basic industrial technologies, among which electronics play an essential role. To support the increasing use of electronics in those technologies, we market a wide range of electronic machinery and equipment, including factory automation systems and computers and peripheral equipment. To support progress in leading-edge industrial electronics, we also provide the industry with semiconductor manufacturing-related equipment, including PCB (printed circuit board), SMT (surface mounting technology), COB (chip on board), and IC packaging equipment.
Operating environmentBecause this business segment only handles single product lines, especially with semiconductor testing equipment, the drop in demand from the semiconductor testing equipment industry was directly reflected in performance. In addition, sales of IT and digital devices to the still growing Asian market, centered on China and the Republic of Korea, and domestic and overseas sales of in-car devices fell sharply in the second half of the fiscal year under review.
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PlasticsMachinery and equipment for the plastic, rubber, ceramics, glass, and fiber industries
Large-scale electric injection molding machine Electric injection molding machine
Electric injection molding machine
BusinessDevelopment of an exciting range of new materials, such as fine ceramics and high-grade and fiber-reinforced plastics, is continuing at an accelerated rate, driven by high demand from global markets. Since these materials have special, unique properties, they are being utilized in a growing range of manufactured products, from sports goods to integrated circuits, due to their exceptional features.
Compared with the materials, however, there is significant room for improvement of the structural processing of these materials by machines. DJK is doing its part to support the development of new technologies and processing methods through the provision of information.
Operating environmentBecause of the dramatic drop in demand for consumer electronics, automobile components, and other products, demand was weak for large- and small-scale injection molding machines and for related equipment.
In the fiscal year under review, DJK held technology seminars on improving the defect rate in plastic molding processes that were very enthusiastically received in the market. Utilizing our strength in defect rate improvement technology, we established a marketing system that enables DJK to propose other related products as well.
Thermo forming machine
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Pulp&PaperMachinery and equipment for the pulp and paper and related industries
Pulp plant DD washer Pulp plant
Paper machine
BusinessIn our pulp and paper operations, we carry a wide range of equipment for wood and pulp processing, chemical recovery, paper manufacturing, coating, and finishing processes. In addition, we provide customized automated systems that utilize the latest computer technology to coordinate various types of machinery involved in the paper production process. Among printing equipment, we offer a range of machinery used in high-quality printing processes, such as screen, anastatic, and gravure printing.
Operating environmentDemand from major paper companies for such items as paper-making-related equipment, biomass boiler-related equipment, and pulp-bleaching equipment was favorable during the fiscal year under review. However, it was a tough year for this business segment because in addition to falling demand for paper, the capital investment cycle for the overall pulp and paper industry was bottoming out.
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AutomobileMachinery and equipment for the automobile, steel, metal, shipbuilding, and heavy machinery industries
Plastic molding machine Electric injection molding machine
Die-casting machine
Operating environmentAlthough the business segment was directly affected by the worsening of the economy, overseas orders from Southeast Asia and China were favorable, holding overall segment sales to a small decline. We expect that there are still large cutbacks to come in capital investment by customers because of their continued reductions in production levels in reaction to the lack of signs of a recovery in the global economy. However, in the automobile business, along with heightened interest in environmentally friendly automobiles, we see steady trends toward greater production of electric car-related components and reinforcement of local production facilities in line with the shift of production out of Japan. Based on these trends, we anticipate growth in capital investment by companies in the automobile industry.
Utilizing our global network, we are receiving orders for automobile-related equipment, especially spray painting robots, surfacing equipment, plastic injection molding equipment, and diecast machines.
Japanese and other leading auto manufacturers around the world are continuing to shift toward low-fuel-consumption hybrid cars and electric cars. This condition is expected to persist in the near future. As an end result, all automobile manufacturers are trying to achieve an early introduction of eco-cars, including hybrid, electric, and fuel cell-powered cars, and are working intensively on development and production. The automobile manufacturers also are continuing efforts to reduce car weight to boost fuel efficiency. This policy has produced a rapid shift to plastic components in the automobile industry. Manufacturing processes for metal components are also being improved to reduce costs.
Business strategyThe Automobile Industry Div.’s organization was divided into sales and development departments during the fiscal year under review, achieving greater efficiency in its organizational operations.
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PharmaceuticalsMachinery and equipment for the pharmaceutical, food, cosmetics, and oils & fats
PTP wrapping line Tablets video inspecting system
Binding equipment (Notter)Four-way seal wrapping line
BusinessThis segment handles a diverse range of manufactured products utilizing its abundant experience and wide-ranging knowledge in the pharmaceuticals, food products, cosmetics, and oil and fat businesses. For example, we handle all types of upstream and downstream products in the pharmaceutical industry— from drug discovery and research to pharmaceutical packaging—supplying pharmaceutical preparation devices, filling equipment, various types of inspection equipment, and the latest packaging production lines.
Furthermore, the segment provides efficient production plants and devices, playing a major role in the development of the core pharmaceutical industry.
Operating environmentThe business segment saw robust business during the fiscal year under review under conditions of close to special demand. The backdrop to the high level of activity was aggressive capital investment by generic drug manufacturers commissioned under the revised Pharmaceutical Affairs Law, growth in use of generic drugs due to the change in the input method for drug prescriptions, and surplus capital investment funds in the industry resulting from some major mergers and tie-ups.
Product strategyThe Group plans to expand its sales of the new pharmaceutical tablet/capsule printing machine of the Group’s DAIICHI JITSUGYO VISWILL CO., LTD., and its mainstay tablet/capsule inspection equipment to include the production lines of food product, cosmetics, and beverage manufacturers. In addition, we are emphasizing upgrading the capabilities of our tablet/capsule inspection equipment.
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OthersMachinery and equipment for other industries
Deicer Deicer
Towing tractor
BusinessThe majority of business in the others categories comes from national and local governing agencies, centered on the Ministry of Construction and the construction bureaus of regional government entities. The main types of merchandise being sold in these transactions are agricultural water pumps, water and sewage pipes, carbon fiber sheet used as reinforcing material to increase earthquake resistance, health promenades, and Ground Support Equipment (G.S.E.) for airports.
In particular, as a general supplier of G.S.E. and airport facility-related equipment, DJK provides support for the air transport industry, handling a full range of equipment and boasting a strong delivery record with airlines and domestic and overseas airports. DJK is a supplier of a wide-range of equipment in this field, including deicers, towing tractors, air stand units, sweeper cars for snow removal, various types of aerial support materials, and water hydrant materials.
We import a deicer for airplanes manufactured by Denmark’s G. Vestergaard A/S, and have supplied a total of more than 100 units to almost all of Japan’s scheduled airlines. The deicer is highly regarded by airlines around the world as well as those in Japan as contributing to safe operations. DJK has established its own service system for this product and is providing enhanced after sales care using staff with specialized technical capabilities.
Operating environmentIn the fiscal year under review, the performance of airline companies declined substantially in accordance with the sudden drop in the numbers of passengers and volume of cargo in the second half over and above the soaring fuel prices. Demand from the public sector remained tight under the influence of continued budget reductions. However, demand was firm in the private sector and for after care services, leading to an overall favorable performance by the business segment. Thanks to our efforts over the past few years, we made our first sales of container loaders to airline companies and explosive detection systems (EDS) to government bodies. These sales have given us a foothold on which to expand our product and customer bases in the public and private sector. The measures implemented to make our after care services system stronger and more helpful are beginning to take effect.
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Corporate Governance
Basic corporate governance policyFrom the perspective of reinforcing our corporate capabilities to survive global competition, we place high priority on promoting accurate and speedy business decision-making, while at the same time, enhancing our management oversight function to ensure the transparency of our business.
Corporate governance organizationOur Board of Directors comprises 13 directors (At June 25, 2009 14 directors) and meets in principle once a month or as necessary. The board carries out a vigorous exchange of opinions in deciding basic business policy and other important matters, while also fulfilling its function as an oversight body for business execution. According to the Company’s Articles of Incorporation, the Board of Directors shall comprise 14 members or less, who shall be elected by a general meeting of shareholders. To elect directors, one third or more of the shareholders holding voting rights must be in attendance, of which half or more must vote for said directors.
DJK has chosen to use a Board of Auditors system. In addition to attending every Board of Directors meeting, these corporate auditors attend other important internal meetings to monitor the business execution performance of directors from an objective perspective. According to the Articles of Incorporation, the Company shall have five corporate auditors or less, who shall be elected by a general meeting of shareholders. To elect corporate auditors, one third or more of the shareholders holding voting rights must be in attendance, of which half or more must vote for said corporate auditors.
The Company has concluded an auditing agreement with the certified public accounting firm Deloitte Touche Tohmatsu to act as its independent auditor. In addition to providing accounting auditing services in a fair and unbiased manner, the auditing firm provides advice on accounting matters as appropriate.
Internal audits are led by the Internal Audit Division and assess the internal control system from the point of view of whether the job execution of employees has been in accordance with laws and regulations and the Articles of Incorporation and the basic internal control policy.
DJK has also concluded advisory agreements with several lawyers to act as its legal advisers, from which the Company receives advice as necessary.
To increase the transparency of its business, the Company proactively discloses information through its IR-PR Department. In addition, as one of its IR activities, the Company holds information meetings on business results and information meetings for individual shareholders. In these meetings, DJK reports on and explains business conditions and strategies for the future to shareholders and investors. In conjunction with these meetings, the Company makes timely and appropriate disclosure of business information through its website.
Establishing an internal control systemAs a necessary tool to ensure that directors execute their business duties and conduct their business practices in accordance with laws and regulations and the Articles of Incorporation and other methods necessary to ensure proper company operations, the Company has formulated a “ basic internal control policy,” the details of which are as follows.
1. Systems to ensure that directors comply with laws and regulations and Articles of Incorporation in the execution of their business duties
(1) In accordance with our business practices policy and code of conduct, the representative director/president shall ensure that business activities are premised on compliance with laws and regulations, the Articles of Corporation, and corporate ethics by repeatedly reminding the officers and employees of the Company of this policy.
(2) To ensure that the business execution of the Company is carried out in an overall appropriate and sound manner, the directors shall endeavor to establish a practical internal control system and an overall legal compliance system from the perspective of further strengthening the Company’s corporate governance. Furthermore, the corporate auditors shall audit the effectiveness and functional capability of the internal control system, and if necessary report recommendations on improvements for the system to directors.
(3) To deal with antisocial forces, the Company shall thoroughly manage information on the elimination and the eradication of such influences in a unified manner. External pressure applied by such antisocial forces shall be reported to the risk management committee for assessment of its importance and investigation.
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2. System to store and manage information on business execution by directors Information on business execution by directors shall be recorded in written form or electronic media (Hereinafter referred to as “written, etc. records”) based on the Company’s filings rules. These records shall be stored and managed so that they can be easily searched in an appropriate and accurate manner.
Directors and corporate auditors shall have free access to view these written, etc. records.
3. Systems providing rules to manage possible losses and other matters
As a foundation for the risk management system, the Company will determine risk management rules, assign managers to be in charge of the different types of risk, and establish a risk management system based on those rules.
When a management crisis occurs as determined by said rules, DJK shall set up a task force with the president as its head as well as an information liaison team and an outside advisory team including legal counsels. Based on these actions, the Company shall establish on organization to minimize damages and prevent them from growing through quick response.
4. Systems to ensure that directors carry out job execution effectively
(1) In the Company’s mid-term management and annual business plans that are built around its corporate principles, each operating section shall work toward achieving the goals of the plan. In addition, each operating section shall check whether the business plan is proceeding on schedule on a monthly basis based on performance reports.
(2) In executing their duties, directors shall comply with all of the obligations of the Board of Directors regarding business decisions as set out in the rules of the Board of Directors. Based on the principles of business decision-making, the Company will set up a system that distributes adequate information on items prior to their discussion to all directors and corporate auditors.
Board of Directors and DirectorsAppointment/Dismissal
Appointment and Oversight
Appointment/Dismissal Appointment/Dismissal
Representative Director Internal Audit Div.
Internal Control Dept.
Management Div.
Administration Div.
Finance & Accounting Div.
Business divisions and domestic and overseas associated companies
Board of Auditors and Auditors
IRPR Dept.
Risk Management Dept.
Subsidiaries and Affiliates Dept.
General Meeting of Shareholders
Independent Auditor
DJK’s Corporate Governance System (As of June 25, 2009)
(3) As the foundation of the system to ensure that directors carry out the execution of their duties effectively, in principle, the Board of Directors will meet regularly once a month and as otherwise necessary. Important matters regarding the business policy and strategy of the Company will first be discussed by an Executive Committee comprising directors with a ranking of managing director or above, and passed on for approval by the Board of Directors before execution.
(4) The business execution of decisions made by the Board of Directors shall be carried out by directors in accordance with the division of duties decided at the start of each fiscal year, with the execution procedure for the responsibility assigned to each employee determined in detail.
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5. Systems for ensuring that employees execute their business duties in accordance with laws and regulations and the Articles of Incorporation
(1) As a foundation for the compliance system, employees will be made thoroughly aware of the code of conduct.
(2) An Internal Audit Division will be established under the supervision of the president and will determine internal audit rules and establish, maintain, and improve an internal control system. As necessary, the Division shall carry out audits and training sessions in all business sections.
(3) When a major legal violation or other significant incident regarding compliance has been discovered, directors shall promptly report it to the president and to the corporate auditors.
(4) As an in-house information system to report legal violations or other incidents regarding compliance, the manager of the Internal Audit Division will promptly establish an internal communication system where information can be directly reported and operate it in accordance with the internal communications rules.
(5) When corporate directors recognize that there is a problem with the operation of the Company’s legal compliance system or internal communication system, they may give their opinion and require that improvement measures be formulated.
6. System to ensure the fairness of operations of the corporate group comprising the parent company and its subsidiaries
(1) To ensure the appropriate and fair conduct of the Group companies, each Group company will create a code of conduct and formulate its own related rules based on it.
(2) The Company will appoint a director in charge of business administration of the Group, which will managed based on prior consultation meetings and a reporting system. If necessary the director in charge will undertake monitoring.
(3) If a director recognizes that a Group company has violated some aspect of the business management or business guidance systems or if a compliance problem is discovered, the director shall report it to the president.
7. System for requesting staff to aid corporate auditors and the independence of those staff members from the influence of directors
(1) Corporate auditors may instruct the Internal Audit Division manager to provide assistance in matters necessary to the auditing process. The staff of the Internal Audit Division who have been instructed by the corporate auditors to provide assistance regarding matters necessary to the auditing process may not receive other instructions regarding those matters from directors.
(2) Based on meetings with the Board of Auditors, the Internal Audit Division manager will perform internal audits on items requested by corporate auditors and report the results to the Board of Auditors.
8. System for directors and employees to report to the corporate auditors, system for making other reports to corporate
auditors, and system to enable corporate auditors to do an effective audit
(1) Directors and employees shall report the following important items regarding the Company’s business or influence on business performance on a case-by-case basis.• Activities of the sections related to the establishment of the Company’s internal control system.• The Company’s principal accounting policies and standards and any changes in them.• Details of announcements on business performance or business forecasts, details of important disclosure items.• Details of operations and communications of internal communications system.
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Board of Directors (As of June 25, 2009)
President & CEOKunihiro Yano*
Senior Managing Director & CFOMasanobu Shimoda*
Managing DirectorsYoshiharu NakagawaTatsuo UmemuraNagoya Sales Div.
Directors
Yukio KonishiDaiichi Jitsugyo (America), Inc.Michiaki SugiuraAviation & Industrial Machinery Business Div.Koji YamagataElectronic Systems Business Div. and Daiichi Jitsugyo Asia Pte. Ltd.Takanori OguraShanghai Yishi Trading Co., Ltd.Yoshihide YamanakaOsaka Sales Div.Toru TakataPlant & Energy Business Div.Tohru TsudaFinance & Accounting Div.Hajime KimotoElectronic Systems Business Div.Hiroshi YoshidaOsaka Sales Div.Junzo TakaiAdministration Div.
Standing Statutory AuditorIsao Takesue
Statutory AuditorsTakafumi ShinmotoTsuyoshi TeruiSumio Kanemoto
* Representative Director
• Internal management approval (Ringi) documents, applications for different types of transactions, and the obligation to keep minutes of meetings as required by corporate auditors.
(2) As necessary, corporate auditors may request reports on preceding issues from directors and employees.
(3) The Board of Auditors and the president shall establish regular meetings to exchange opinions.
(4) The Company will ensure an appropriate system for reporting to corporate auditors on legal violations and other compliance issues by maintaining the proper application of the in-house communication rules.
(5) Corporate auditors will operate independently of the Company’s independent certified public accounting firm, and will request reports and explanations of the details of the independent certified public accounting firm’s audit and collaborate with the audit firm through periodic exchanges of information and other activities.
Business Risk
The following section indicates matters that could have a significant bearing on the investment decision of those considering investment in the Company with regard to the business conditions and accounting procedures stated in this annual report. However, it does not represent in any way an exhaustive description of business risks.
Risk of change in the macroeconomic environmentThe Company’s major business involves the sale of various types of machinery, fixtures, parts, administration services, and plastic raw materials, which it sells domestically and imports and exports. Overseas, the Group is accelerating business development based on the global 4-axis network it has been promoting since the start of the new medium-term management plan GET 2009 in April 2007, and working to strengthen its profitability. Therefore, the Group’s business performance may be affected by changes not only in economic trends in Japan but also on a global scale. Especially with the economic growth in China and the Asian region as well as in the North, Central, and South americas and Europe, while these conditions provide the possibility of expanded business opportunities for the Group, a slowdown in economic activity in these regions could have a negative impact on the business results of the Group.
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Risk of increase in proportion of overseas sales Japanese companies continued to enter overseas markets and transferred their production bases overseas. In response, the DJK Group is also proceeding with the globalization of its operations by expanding its overseas network and other activities, aiming to expand its business opportunities. The proportion of overseas sales and consolidated net sales in the fiscal year under review was 37.7%.
It is expected that the proportion of overseas sales in net sales will continue to rise, raising the possibility that the international financial environment, exchange rate trends, international trends in crude oil and raw material prices, and capital investment trends for customers’ production bases could affect the business results of the Group. In addition, the Company’s overseas business activities are exposed to the risk of unexpected changes in political systems or economic environments and social disturbances based on legal and regulatory changes.
Risk of increases in interest ratesThe Company has signed trade commitment agreements with the five banks. By making progress with the reduction of interest-bearing debt, the consolidated interest-bearing debt of the Company and its subsidiaries at March 31, 2009 amounted to ¥5,567 million. Going forward, the Company will aim to systematically and stably procure working capital and to reduce interest expenses. However, should the balance of the Company’s financial income and expenses deteriorate because of the trend in net sales or in interest rates, it could impact negatively on the Company’s business results and financial position. In addition, if substantial turmoil occurs in major financial markets in Japan or overseas, financing costs could increase.
Credit riskAt March 31, 2009, the total trade receivables of the Company and its consolidated subsidiaries amounted to ¥30,634 million, or 47.8% of total assets. As a result, the Company is exposed to the risk of losses due to the credit of its clients worsening or their businesses failing. For that reason, the Company acts in accordance with its rules regarding trading rights and risk management, setting maximum credit and transaction amounts in its required transaction approval procedures, requires collateral or guarantees depending on the credit rating of the debtor, and puts in place risk hedges, such as the factoring or securitization of debt. Despite these measures, if the client experiences a liquidity crisis or a chain reaction bankruptcy due to a worsening of the business environment or a specific major debtor experiences business problems resulting in it becoming impossible to recover credit extended, it could have a negative influence on the business results and financial position of the Group.
Business development risk related to mid-term management planUnder the medium-term management plan GET 2009 that began in April 2007, the Group’s basic policy is to endeavor to strengthen earning power by proactively developing its businesses in growth fields, including the use of mergers and acquisitions (M&A) strategies. Nevertheless, depending on the cost required for strategic business development and whether or not the timing and scale of the effective allocation of business resources based on the progress of business development is appropriate, the Group could lose earnings opportunities and increase its financial burden, resulting in a negative impact on its business results and financial position.
Risk of disasterShould a disaster, such as an earthquake, typhoon, fire or infectious disease epidemic occur, the DJK Group’s offices; plants; computer systems; directors, executive officers, and employees; or other related assets may suffer damages or interruptions may occur in the Group’s business or production activities. To be able to determine whether or not its directors, executive officers, and employees are safe and to implement its business continuity plan (BCP), the Company has produced risk management manuals for the different possible disasters and established such measures as backup systems for computer system data and emergency fire drills, and implement other disaster-related activities. Nevertheless, there is no guarantee that these measures will allow the Group to completely avoid any damages from disasters, and should major damages occur, they could impact negatively on the business results and financial position of the DJK Group.
Furthermore, should one of the Group’s major customers or vendors suffer substantial damages from a disaster, the suspension of the business and production activities of the customer or vendor could have a negative effect on the performance of the DJK Group.
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Headquarters
The DJK Overseas Network(As of July 1, 2009)
OVERSEAS OFFICES
Seoul Branch8F, Textile Center, 944-31, Daechi 3 dong, Kangnam-ku, Seoul, Korea 135-713Phone: +82-2-528-1400Fax: +82-2-528-1403
OVERSEAS SIGNIFICANT SUBSIDIARIES
DJK EUROPE GMBHConsolidated subsidiary
Headquarters (Frankfurt)Mergenthalerallee 79-81 D-65760 Eschborn, GermanyPhone: +49-6196-776-14-18Fax: +49-6196-776-14-19
Praha BranchOffice Park Nove Butovice, Bucharova 2/1281, 158 00 Praha 5, Czech RepublicPhone: +420-233-320-090Fax: +420-233-320-095
Budapest BranchEast-West Business Center, 1088 Budapest Rákóczi út 1-3, HungaryPhone: +36-1-235-0323Fax: +36-1-266-1886
Warsaw Branchul.Rejtana 17/26,02-516 Warsaw, PolandPhone: +48-22-542-41-22Fax: +48-22-542-41-24
DAIICHI JITSUGYO ASIA PTE. LTD.Consolidated subsidiary
Headquarters (Singapore)No. 31 Kaki Bukit Road 3 #02-02 Techlink Singapore 417818Phone: +65-6338-3732Fax: +65-6337-6761
Jakarta OfficeSkyline Building 16th Floor Jalan. M. H. Thamrin No.9, Jakarta 10340, IndonesiaPhone: +62-21-390-4930Fax: +62-21-390-4961
Ho Chi Minh OfficeUnit 1107 11th Floor ZEN PLAZA, 54-56 Nguyen Trai Street, District 1, Ho Chi Minh City, VietnamPhone: +84-8-3925-6900Fax: +84-8-3925-6877
Hanoi OfficeUnit 410-A 4th Floor V-Tower 649 Kim Ma Street, Ba Dinh District, Hanoi, VietnamPhone: +84-4-3766-5990Fax: +84-4-3766-5992
Delhi Office1109, 11th Floor, Antriksh Bhawan, 22-Kasturba Gandhi Marg, C.P, New Delhi 110001, INDIAPhone: +91-11-4352-3155Fax: +91-11-4352-3133
Bangalore Liaison OfficeOffice No. 1404 Regus UB City Level 14&15, Concord Towers UB City, 1 Vittal Mallya Road Bangalore 560001, IndiaPhone: +91-80-40300435Fax: +91-80-40300400
DAIICHI JITSUGYO (THAILAND) CO., LTD.Consolidated subsidiary252/124 Unit E-F, 26th Floor, Muang Thai Phatra Office Tower II Rachadaphisek Road, Huaykwang, Bangkok 10310, ThailandPhone: +66-2-693-2681Fax: +66-2-693-2683
DAI-ICHI JITSUGYO (MALAYSIA) SDN. BHD.Consolidated subsidiarySuite 21B, Box No.80, 21st Floor, UBN Tower, No.10 Jalan P. Ramlee 50250, Kuala Lumpur, MalaysiaPhone: +60-3-2070-6913Fax: +60-3-2070-6912
DAIICHI JITSUGYO (PHILIPPINES), INC.Consolidated subsidiaryUnit 2001-2002, Philippine AXA Life Centre, Sen. Gil Puyat Avenue, Makati City, 1200, PhilippinesPhone: +63-2-759-6944Fax: +63-2-759-6946
DJK EUROPE GMBHSeoul Branch DAIICHI JITSUGYO ASIA PTE. LTD.
Ho Chi Minh Office DAI-ICHI JITSUGYO (MALAYSIA) SDN. BHD.
DAIICHI JITSUGYO (THAILAND) CO., LTD.
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Headquarters
DJK FACTORY SOLUTIONS (PHILIPPINES), INC.Orient Goldcrest Building, Lot 32-D Block 2 Phase 5 East Main Avenue, Laguna, PhilippinesPhone: +63-49-544-0229
SHANGHAI YISHI TRADING CO., LTD.Consolidated subsidiary
Headquarters (Shanghai)Room 13F02-06 Aetna Tower No.107, Zunyi Road, Shanghai, 200051, P.R.ChinaPhone: +86-21-6237-5800Fax: +86-21-6237-5288
Tianjin OfficeRoom 1605-6, Tianxin Building, 125 Weidi Road, Hexi District, Tianjin, P.R.ChinaPhone: +86-22-2840-8723Fax: +86-22-2840-8726
Suzhou OfficeRoom 203, NO.1 Building RunJie Palza, NO.9 Dengwei Road, SDN Suzhou, JiangSu, P.R.China.Phone: +86-512-6802-6128Fax: +86-512-6802-6125
DAIICHI JITSUGYO (HONG KONG) LIMITEDConsolidated subsidiarySuites 1316-16A, 13/F, Ocean Centre, Harbour City, Kowloon, Hong Kong, P.R.ChinaPhone: +852-2802-8233Fax: +852-2802-9734
DAIICHI JITSUGYO (GUANGZHOU) TRADING CO., LTD.Unit 1310, Goldlion Digital Network Center, 138 Tiyu Road East, Guangzhou, 510620 P.R.ChinaPhone: +86-20-3877-2405Fax: +86-20-3877-2410
Shenzhen Office25A, 25/F., Times Plaza, No.1 Taizi Road, Shekou, Shenzhen, P.R.China Phone: +86-755-2669-2515Fax: +86-755-2669-2539
DJK (TAIWAN) CORP.11th Floor-3,23, Sec 1, Chang-An East Road Taipei, TaiwanPhone: +886-2-2537-1017Fax: +886-2-2521-6389
DAIICHI JITSUGYO (AMERICA), INC.Consolidated subsidiary
Headquarters (Chicago)939 AEC Drive, Wood Dale, Illinois 60191, U.S.A.Phone: +1-630-875-0101Fax: +1-630-875-0422
Houston Office2950 North Loop West, Suite 455, Houston, Texas 77092, U.S.A.Phone: +1-713-682-1571Fax: +1-713-682-1782
San Diego Office2320 Paseo de las Americas, Suite #114, San Diego, California 92154, U.S.A.Phone: +1-619-710-1448Fax: +1-619-710-2569
Knoxville Office1708 Triangle Park Drive Maryville Tennessee 37801, U.S.A.Phone: +1-865-983-7042Fax: +1-865-983-8678
Phoenix Office2447 W. 12th Street, Suite 6 Tempe, Arizona 85281, U.S.A.Phone: +1-480-516-0721Fax: +1-480-516-0722
DAIICHI JITSUGYO PUERTO RICO, INC.100 Food Court, Suite 50 Las Piedras, Puerto Rico 00711-3208Phone: +1-787-746-5396Fax: +1-787-746-5396
DJK GLOBAL MEXICO, S.A. DE C.V.Blvd. Bellas Artes 17686-114 Fracc. Garita de Otay C.P. 22645, Tijuana, B.C. MexicoPhone: +52-664-647-8471Fax: +52-664-647-8473
DAIICHI JITSUGYO DO BRASIL COMERCIO DE MAQUINAS LTDA.Rua do Paraiso 45-CJ51 Sao Paulo, SP-04103-000, BrazilPhone: +55-11-3284-1500Fax: +55-11-3171-3169
DAIICHI JITSUGYO (PHILIPPINES), INC.
SHANGHAI YISHI TRADING CO., LTD.
DAIICHI JITSUGYO(HONG KONG)LIMITED
DJK (TAIWAN) CORP. DAIICHI JITSUGYO (AMERICA), INC.
DAIICHI JITSUGYO DO BRASIL COMERCIO DE MAQUINAS LTDA.
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Headquarters
The DJK Domestic Network(As of July 1, 2009)
HEADQUARTERS
Kowa Nibancho Bldg. 11-19 Nibancho, Chiyoda-ku, Tokyo 102-0084, JapanPhone: (03) 5214-8500 (information desk)Fax: (03) 5214-8501
DOMESTIC SIGNIFICANT SUBSIDIARIES
DAIICHI MECHA-TECH CORPORATIONConsolidated subsidiaryHeadquarters: 8-6 Ryoke 5-chome, Kawaguchi, Saitama 332-0004, JapanPhone: (048) 222-1692Fax: (048) 222-1630Technical development and services related to equipment handled by DJK
DJTECH CO., LTD.Consolidated subsidiaryHeadquarters: 15 Asahidai Moroyama, Iruma-gun, Saitama 350-0444, JapanPhone: (049) 295-4975Fax: (049) 295-4972Development, designing, manufacturing, and sales of PCB-mounting inspection device, handlers for semiconductor post-process, and image-processing application systems.
DAIICHI JITSUGYO VISWILL CO., LTD.Consolidated subsidiary12-43 Honamicho, Suita, Osaka 564-0042, JapanPhone: (06) 6378-6115Fax: (06) 6378-6117Development, designing, manufacturing, sales and maintenance of Visual Inspection Systems for pharmaceuticals and chip condensers.
AFFILIATES
SULZER DAIICHI K.K.A joint venture with Sulzer Pumps (Switzerland)TSI Hakozaki Bldg, 20-5, Nihonbashi Hakozaki-cho Chuo-ku, Tokyo 103-0015, JapanPhone: (03) 3664-5721Fax: (03) 3664-5737Sales and services of pumps for paper, pulp plants and other equipment
NATCO JAPAN CO., LTD.A joint venture with National Tank Company of the U.S.A. and MODEC, INC6-2 Gobancho, Chiyoda-ku, Tokyo 102-0076, JapanPhone: (03) 3288-1901Fax: (03) 3288-1904Design, manufacture and sales of equipment for petroleum manufacturing plants
Headquarters Osaka Branch Nagoya Branch
Headquarters and Domestic offices
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FINANCIAL SECTION
Management’s Discussion and Analysis of 22 Financial Condition and Results of Operations
Five-Year Summary 25
Consolidated Balance Sheets 26
Consolidated Statements of Income 28
Consolidated Statements of Changes in Equity 29
Consolidated Statements of Cash Flows 30
Notes to Consolidated Financial Statements 31
Independent Auditors’ Report 47
Contents
ANNUAL REPORT 2009
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Management’s Discussion and Analysis ofFinancial Condition and Results of Operations
The fiscal year under review was the middle year of the three-year medium-term management plan GET 2009. However, instead of predicted conditions, DJK faced global economic stagnation on a scale that is said to happen only once a century. The impact of the financial crisis that began with the subprime mortgage loan problem in the United States spread to major U.S. financial institutions, then flooded over to the financial institutions of industrialized countries, then swept through the globalized international economy in a powerful wave. Almost all industries were affected and consumers around the world reacted, upsetting the demand and supply balance. Even at this point, it is difficult to predict the direction of the economy in the short term. The DJK Group also started to be affected in many ways by the financial crisis from October 2008 onward, resulting in a business performance in the fiscal year under review nowhere near planned figures. On the other hand, having just celebrated the 60th anniversary of the Company, the year 2009 clearly represents a chance for DJK to rise from the ashes of the world economic recession and prepare for growth in the new century by re-creating the Company in the light of the new era. The environment surrounding us is changing in every aspect— business, lifestyles, concepts, behavior, systems and other areas. Although these kinds of changes and transformations do not happen overnight, we believe they will proceed at a much more rapid pace than before. We are convinced that our efforts to globalize our operations based on our international 4- axis network through our medium-term management plans will provide us with future advantages. Going forward, we believe DJK must understand, absorb, and analyze the changes going on in industrialized, emerging, and developing countries in which we do business and utilize that knowledge to develop new businesses.
PerformanceDuring the fiscal year ended March 31, 2009, after the financial crisis that originated in the United States surfaced, it spread around the globe in a chain reaction, affecting the real economy. The global economy deteriorated rapidly, particularly from fall 2008 onward. The Japanese economy was affected as well, with exports dropping sharply due to the decline in global demand, causing stagnation in production. In addition, the progressive appreciation of the yen further eroded corporate profits. These factors combined with falling capital investment and individual consumption to indicate signs that the economic recession would be prolonged.
Despite these circumstances, the DJK Group devoted to its full energies to achieving the goals set at the beginning of the fiscal period through its sales efforts. Nevertheless, in the face of the unparalleled economic recession, customers began curtailing their capital investments one after the other and orders and sales fell to low levels, primarily in the electronics and plastics business segments. As a result, consolidated net sales declined ¥7,764 million, or 5.7%, to ¥127,286 million. Profitability also worsened, with operating income falling ¥2,380 million, or 45.1%, to ¥2,893 million; and net income contracting ¥1,615 million, or 53.8%, to ¥1,385 million.
Performance by business segment was as follows.
MachineryIn the energy development, oil and gas refining, and chemicals related fields, sales of petroleum refining plants to major petroleum companies expand substantially. Among engineering and construction-related sales, sales of overseas ethylene plants through major engineering companies were favorable. In contrast, sales of semiconductor testing equipment sunk significantly because of a dramatic drop in demand for IT and digital devices in the previously favorable Asian markets, especially Korea and China, as well as a sharp fall in automobile-equipment-related demand in Japan and overseas. In plastic-related equipment, sales of large- and small-sized plastic injection molding machines and peripheral equipment in Japan and Overseas also languished under the radical decline in demand for such products as consumer electronics and automobile components. In total, net sales decreased ¥7,491 million, or 5.8%, to ¥121,674 million, while operating income fell ¥2,324 million, or 46.6%, to ¥2,663 million.
MaterialsNet sales declined ¥877 million, or 16.9%, to ¥4,327 million. Operating income decreased ¥29 million, or 26.8%, to ¥77 million.
OtherNet sales increased ¥604 million, or 88.7%, to ¥1,285 million, operating income declined ¥27 million, or 15.4%, to ¥153 million.
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Financial positionAt March 31, 2009, total assets amounted to ¥64,067 million, contracting ¥18,466 million year on year. The decrease can be mainly attributed to a decline in notes and accounts receivables due to the lower sales in the electronics and plastics business segments and a drop in accounts prepaid due to the end of the sales cycle for major plant facilities.
Total liabilities amounted to ¥42,373 million, contracting ¥16,044 million from the previous fiscal year. The main factors were a decrease in notes and accounts payable due to the decline in sales and the reduced advance received due to the end of the sales cycle for major plant facilities.
Total equity amounted to ¥21,694 million, falling ¥2,422 million from a year earlier. The decline despite the Company posting net income of ¥1,385 million can mainly be attributed to the contraction in retained earnings because of the payment of dividends, a decline in the unrealized gain on available for sales securities, and the purchase of treasury shares. As a result, shareholders’ capital totaled ¥21,393 million, and the equity ratio was 33.4%.
Cash and cash equivalents, end of year for the period under review amounted to ¥12,282 million, increasing ¥4,706 million year on year.
Consolidated cash flows by activity for the fiscal year ended March 2009 were as follows.
Operating ActivitiesNet cash provided by operating activities totaled ¥8,526 million, an increase of ¥5,881 million. Major components of cash outflows were declines in notes and accounts payable and advances received from customers, while the main components of cash inflow were income before income taxes and minority interests and declines in notes and accounts receivable, inventories, and accounts prepaid.
Investing ActivitiesNet cash used in investing activities totaled ¥592 million, an increase of ¥1,869 million year on year. The cash outflow resulted primarily from expenditures for investment in property, plant and equipment and in investment securities.
Financing Activities Net cash used in financing activities totaled ¥2,985 million, a decrease of ¥2,764 million from the previous year. The principal reasons were the payment of dividends and the purchase of treasury shares. DA
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Strengthening Business Earning Power
Accelerate overseas business development and reinforce consolidated business base.• June 2007: Opened Sao Paulo Office.• Dec. 2007: Opened Bangalore Office. • Dec. 2007: Opened Warsaw Office.• Aug. 2008: Established DJK Europe GmbH.• Oct. 2008: Converted Seoul Representative Office to a branch.Nurture and strengthen core business.• Expanded sales of inspection equipment of DAIICHI JITSUGYO VISWILL and DJTECH.• Developed nanotechnology materials.• Actively developed business in emerging countries.• Aggressively entered the solar power generation business.• Expanded sales of energy and labor conservation and eco-related products.Appropriately allocate business resources through application of “business exit rule.”• Implemented system based on “rule.”• Confirmed business policy in companywide meeting.
Increasing Consolidated Corporate Value
Effectively use Group business resources and strengthen financial structure.• Re-awarded credit rating of BBB+ in Sept. 2008 by Japan Credit Rating Agency, Ltd.Create and efficiently use a global network.• In the process of unifying overseas systems in line with progress in IT management system. • Expansion and promotion of use of global network used for TV and Internet conferencing systems.Develop and effectively use human resources globally.• Promoted local hiring in overseas local subsidiaries.• Promote overseas training for employees.• Actively promoted English language education for employees through in-house training courses.
Establishing and Reinforcing a Good Management Structure
Build greater transparency in management and a feeling of Group unity• Preparing to build a new mission critical system that will unify management and business accounting.• Taking proactive action to spread the use of the mid-term management plan throughout Group companies.• Start introducing new core system to strengthen business management.Take corporate society responsibility (CSR) into consideration in managing business• Through collaboration with a Group company, developed new process for steel plants to achieve zero gas emissions.• Establish organizational structure based on setting up the Internal Control Department.• Contribute to the use of biomass fuel by the pulp and paper industry by supplying evaporators.• Concentrate on handling firing furnace for lithium batteries used in electric and hybrid cars batteries.• Commence selling pilot plants for thin film tandem solar power cells.• Acquisition of shares.• Contribute environmental awareness bulletin boards.• Contribute funds to support the victims of the Sichuan earthquake in China.• Be sponsor of the EU-Japan Fest Japan Committee.• Maintain and strengthen support system for disaster measures.• Participate in Eco-Cap Campaign that supplies children in developing countries with polio vaccine by collecting and selling
the caps of used PET bottles.
Mid-Term Management Plan GET 2009The three-year management plan that got under way in the previous fiscal year is GET 2009 (Global Expansion for the Top 2009). It stands for our decision to aim for the top of our industry in expanding globally, and for our commitment to work together as a Group in achieving goals and improving performance.
Our performance goals for the second year of the three-year plan were as follows.
StrengtheningBusiness Earning Power
IncreasingConsolidated Corporate Value
Establishing and Reinforcinga Good Management Structure
ExpansionforGlobal
the Top2009
Basicpolicy
Under the impact of the global economic downturn, the stagnant economic conditions are anticipated to continue for the time being, with no clear sign of future movement. Under these circumstances, DJK has revised some of its performance targets for the final year of the plan.
Millions of yen
2008(Actual)
2009(Actual)
2010(Plan)
Net sales ¥135,050 ¥127,286 ¥110,000Operating income 5,273 2,893 2,900Net income 3,000 1,385 1,600Total assets 82,533 64,067 63,000Total shareholders’ equity 23,824 21,393 22,500
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CONSOLIDATED FIVE-YEAR SUMMARYDAIICHI JITSUGYO CO., LTD. AND CONSOLIDATED SUBSIDIARIES
Years ended March 31
Millions of yen
Thousands of U.S. Dollars
(Note 1)
2009 2008 2007 2006 2005 2009
For the year:Net sales: ¥127,286 ¥135,050 ¥123,336 ¥112,861 ¥112,018 $1,295,795 Machinery 121,674 129,165 117,033 106,425 103,955 1,238,660 Materials 4,327 5,204 5,602 5,834 7,411 44,046 Other 1,285 681 701 602 652 13,089Gross profit 14,288 17,256 17,054 14,838 13,070 145,454Operating income: 2,893 5,273 4,648 4,000 3,445 29,454 Machinery 2,663 4,987 4,411 3,764 3,197 27,114 Materials 77 104 75 67 67 778 Other 153 182 162 169 181 1,562Net income 1,385 3,000 2,687 2,355 1,920 14,098Overseas sales: 47,952 53,831 43,592 39,819 41,764 488,157 Asia 39,625 43,239 34,048 31,430 31,962 403,391 Europe 2,572 3,699 3,157 3,036 2,069 26,176 North and Central America 3,646 6,343 5,124 4,572 6,167 37,117 Other 2,109 550 1,263 781 1,568 21,473Depreciation and amortization 357 382 366 378 395 3,639Capital expenditures 264 633 574 238 179 2,686
At the year-end:Total assets ¥ 64,067 ¥ 82,533 ¥ 74,267 ¥ 66,875 ¥ 69,520 $ 652,213Working capital 15,464 13,874 15,002 12,276 10,443 157,422Interest-bearing debt 5,567 5,707 4,550 8,235 15,903 56,673Total equity 21,694 24,116 24,151 21,911 18,556 220,850
Per share of common stock (in yen and U.S. dollars):Net income ¥ 25.76 ¥ 52.83 ¥ 47.27 ¥ 40.43 ¥ 33.73 $ 0.26Cash dividends 11.00 18.00 13.0 11.0 9.0 0.11Equity 410.63 423.39 420.00 384.33 328.20 4.18
Other statistics:Number of shares of common stock outstanding (thousand) 52,099 56,270 56,857 56,846 56,390Number of employees 942 931 892 760 651
Key ratio (%):Gross profit margin 11.2 12.8 13.8 13.1 11.7Operating income margin 2.3 3.9 3.8 3.5 3.1Return on sales 1.1 2.2 2.2 2.1 1.7Return on assets 1.9 3.8 3.8 3.5 2.8Return on equity 6.1 12.6 11.7 11.6 10.9Assets turnover (times) 1.70 1.72 1.75 1.65 1.61Current ratio 137.3 124.2 131.4 129.1 121.4Equity ratio 33.4 28.9 32.2 32.8 26.7Debt to equity ratio (times) 0.26 0.24 0.19 0.38 0.86
Notes: 1. U.S. dollar figures have been converted from Japanese yen, for convenience only, at the rate of ¥98.23 to U.S.$1. 2. Minority interests in equity have been excluded from equity when key ratio is calculated.
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Millions of yen
Thousands of U.S. Dollars
(Note 1)
2009 2008 2009
ASSETSCurrEnT ASSETS:
Cash and cash equivalents ¥ 12,282 ¥ 7,576 $ 125,034Marketable securities (Note 3) 3,000 30,541Time deposits 55 54 562Receivables:
Notes receivable 5,073 6,033 51,642Accounts receivable 24,909 35,054 253,580Unconsolidated subsidiaries and associated companies 26 51 269Other 1,957 2,272 19,922Allowance for doubtful receivables (28) (31) (281)
Lease investment assets (Note 13) 626 6,370Inventories (Note 4) 3,733 6,983 38,003Deferred tax assets (Note 10) 282 543 2,871Accounts prepaid 4,536 11,852 46,174Other current assets 509 807 5,174
Total current assets 56,960 71,194 579,861
ProPErTy, PlAnT And EquiPmEnT:Land 523 523 5,322Buildings and structures 1,383 1,377 14,078Machinery and equipment 427 424 4,353Furniture and fixtures 584 539 5,947Leased assets (Note 13) 889 2,298 9,046Construction in progress 3
Total 3,806 5,164 38,746Accumulated depreciation (2,140) (3,066) (21,790)
Net property, plant and equipment 1,666 2,098 16,956
invESTmEnT And oThEr ASSETS:Investment securities (Note 3) 3,510 7,711 35,732Investment in and advances to unconsolidated subsidiaries and associated companies 653 452 6,652Goodwill 105 210 1,072Long-term deposit 555 571 5,646Deferred tax assets (Note 10) 288 2,935Other assets 589 536 5,995Allowance for doubtful accounts (259) (239) (2,636)
Total investment securities and other assets 5,441 9,241 55,396ToTAl ¥ 64,067 ¥82,533 $ 652,213
See notes to consolidated financial statements.
CONSOLIDATED BALANCE SHEETSDAIICHI JITSUGYO CO., LTD. AND CONSOLIDATED SUBSIDIARIES
March 31, 2009 and 2008
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Millions of yen
Thousands of U.S. Dollars
(Note 1)
2009 2008 2009
liABiliTiES And EquiTyCurrEnT liABiliTiES:
Short-term bank loans (Note 6) ¥ 4,954 ¥ 4,950 $ 50,437Current portion of long-term debt (Note 6) 150 150 1,535Payables:
Notes payable 384 549 3,910Accounts payable 23,732 31,351 241,594Unconsolidated subsidiaries and associated companies 375 426 3,814Other 26 37 263
Income taxes payable 226 1,211 2,302Accrued expenses 761 1,172 7,752Advance received 10,744 17,277 109,378Other current liabilities 144 197 1,454
Total current liabilities 41,496 57,320 422,439
long-TErm liABiliTiES:Long-term debt (Note 6) 456 606 4,638Liability for retirement benefits (Note 7) 410 329 4,178Deferred tax liabilities (Note 10) 3 159 28Other long-term liabilities 8 3 80
Total long-term liabilities 877 1,097 8,924
CommiTmEnTS And ConTingEnT liABiliTiES (Notes 13,14 and 15)
EquiTy (Notes 8 and 17)Common stock,
authorized, 160,000,000 shares;issued, 57,432,000 shares in 2009 and 2008 5,105 5,105 51,970
Capital surplus 3,791 3,792 38,594Retained earnings 14,985 14,636 152,556Unrealized gain on available-for-sale securities 52 831 529Deferred gain on derivatives under hedge accounting (9) (91)Foreign currency translation adjustments (306) (119) (3,118)Treasury stock-at cost,
5,332,855 shares in 2009 and 1,162,372 shares in 2008 (2,225) (421) (22,652)Total 21,393 23,824 217,788
Minority interests 301 292 3,062Total equity 21,694 24,116 220,850
ToTAl ¥ 64,067 ¥82,533 $ 652,213
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Millions of yen
Thousands of U.S. Dollars
(Note 1)
2009 2008 2009
nET SAlES ¥ 127,286 ¥135,050 $ 1,295,795
CoST of SAlES 112,998 117,794 1,150,341
Gross profit 14,288 17,256 145,454
SElling, gEnErAl And AdminiSTrATivE
ExPEnSES (Note 11) 11,395 11,983 116,000
Operating income 2,893 5,273 29,454
oThEr inComE (ExPEnSES):
Interest and dividend income 220 218 2,241
Interest expense (64) (108) (654)
Purchase discount 212 290 2,153
Gain on sales of investment securities 5 365 48
Gain (loss) on sales of property, plant and equipment (3) 69 (29)
Evaluation loss of investment securities (28) (425) (285)
Other – net (179) (268) (1,818)
Other income – net 163 141 1,656
inComE BEforE inComE TAxES And minoriTy inTErESTS 3,056 5,414 31,110
inComE TAxES (Note 10): Current 1,260 2,298 12,824
Deferred 359 51 3,659
Total income taxes 1,619 2,349 16,483
minoriTy inTErESTS in nET inComE 52 65 529
nET inComE ¥ 1,385 ¥ 3,000 $ 14,098
YenU.S. Dollars
(Note 1)
PEr ShArE of Common SToCk (Notes 2.p and 16)
Basic net income ¥25.76 ¥52.83 $0.26
Diluted net income 25.71 52.67 0.26
Cash dividends applicable to the year 11.00 18.00 0.11
CONSOLIDATED STATEMENTS OF INCOMEDAIICHI JITSUGYO CO., LTD. AND CONSOLIDATED SUBSIDIARIES
Years ended March 31, 2009 and 2008
See notes to consolidated financial statements.
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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITYDAIICHI JITSUGYO CO., LTD. AND CONSOLIDATED SUBSIDIARIES
Years ended March 31, 2009 and 2008
Thousands Millions of yen
Number ofshares of
common stockoutstanding
Commonstock
Capitalsurplus
Retainedearnings
Unrealizedgain on
available-for-sale
securities
Deferredgain on
derivativesunder hedge
accounting
Foreigncurrency
translationadjustments
Treasurystock Total
Minorityinterests
Totalequity
BAlAnCE, mArCh 31, 2007 56,857 ¥5,105 ¥3,792 ¥12,752 ¥2,335 ¥15 ¥20 ¥(139) ¥23,880 ¥271 ¥24,151Adjustment of retained earning for newly consolidated subsidiaries (8) (8) (8)Net income 3,000 3,000 3,000Cash dividends, ¥19.50 per share (1,108) (1,108) (1,108)Purchase of treasury stock (631) (290) (290) (290)Disposal of treasury stock 44 8 8 8Net change in the year (1,504) (15) (139) (1,658) 21 (1,637)BAlAnCE, mArCh 31, 2008 56,270 ¥5,105 ¥3,792 ¥14,636 ¥831 ¥(119) ¥(421) ¥23,824 ¥292 ¥24,116Adjustment of retained earnings due to an adoption of PITF No.18 (Note 2.b) 3 3 3Adjustment of retained earning for newly consolidated subsidiariesNet income 1,385 1,385 1,385Cash dividends, ¥19.00 per share (1,039) (1,039) (1,039)Purchase of treasury stock (4,208) (1,813) (1,813) (1,813)Disposal of treasury stock 37 (1) 9 8 8Net change in the year (779) (9) (187) (975) 9 (966)BAlAnce, MArch 31, 2009 52,099 ¥5,105 ¥3,791 ¥14,985 ¥52 (9) ¥(306) ¥(2,225) ¥21,393 ¥301 ¥21,694
Thousands of U.S. Dollars (Note 1)
Commonstock
Capitalsurplus
Retainedearnings
Unrealizedgain on
available-for-sale
securities
Deferredgain on
derivativesunder hedge
accounting
Foreigncurrency
translationadjustments
Treasurystock Total
Minorityinterests
Totalequity
BAlAnCE, mArCh 31, 2008 $51,970 $38,610 $148,995 $8,461 $4 $(1,212) $(4,294) $242,534 $2,968 $245,502Adjustment of retained earnings due to an adoption of PITF No.18 (Note 2.b) 30 30 30Adjustment of retained earning for newly consolidated subsidiariesNet income 14,098 14,098 14,098Cash dividends, $0.19 per share (10,567) (10,567) (10,567)Purchase of treasury stock (18,450) (18,450) (18,450)Disposal of treasury stock (16) 92 76 76Net change in the year (7,932) (95) (1,906) (9,933) 94 (9,839)BAlAnce, MArch 31, 2009 $51,970 $38,594 $152,556 $529 $(91) $(3,118)$(22,652) $217,788 $3,062 $220,850
See notes to consolidated financial statements.
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CONSOLIDATED STATEMENTS OF CASH FLOwSDAIICHI JITSUGYO CO., LTD. AND CONSOLIDATED SUBSIDIARIES
Years ended March 31, 2009 and 2008
Millions of yen
Thousands of U.S. Dollars
(Note 1)
2009 2008 2009
OPERATING ACTIvITIES:Income before income taxes and minority interests ¥ 3,056 ¥ 5,414 $ 31,110Adjustments for:
Income taxes-paid (2,242) (2,102) (22,823)Depreciation and amortization 357 382 3,639Amortization of goodwill 105 105 1,073Changes in operating assets and liabilities:
Decrease in notes and accounts receivable-trade 10,349 1,357 105,353Decrease (increase) in advance payments to suppliers 7,285 (4,372) 74,162Decrease (increase) in inventories 3,201 (4,346) 32,582Decrease in notes, acceptance and accounts payable-trade (7,763) (486) (79,027)Decrease (increase) in advances from customers (6,487) 8,848 (66,037)Decrease in interest and dividends receivable (5) (2) (51)Decrease (increase) in interest payable (2) 2 (22)
Other – net 672 (2,155) 6,841Total adjustments 5,470 (2,769) 55,690Net cash provided by operating activities 8,526 2,645 86,800
INvESTING ACTIvITIES:Acquisition of property, plant and equipment (141) (299) (1,434)Proceeds from sales of property, plant and equipment 5 246 49Acquisition of marketable and investment securities (343) (3,089) (3,491)Proceeds from sales of marketable and investment securities 12 483 124Increase in loans receivable (96) (30) (972)Collection of loans receivable 45 27 457Other – net (75) 199 (766)
Net cash used in investing activities (593) (2,463) (6,033)
FINANCING ACTIvITIES:Increase in short-term bank loans-net 5 1,317 50Repayment of long-term debt (150) (150) (1,529)Purchase of treasury stock (1,813) (290) (18,450)Disposal of treasury stock 8 8 76Dividends paid (1,036) (1,106) (10,544)
Net cash used in financing activities (2,986) (221) (30,397)
FOREIGN CURRENCY TRANSLATIONS ADjUSTMENT ON CASh AND CASh EqUIvALENTS (241) (161) (2,458)NET INCREASE (DECREASE) IN CASh AND CASh EqUIvALENTS 4,706 (200) 47,912CASh AND CASh EqUIvALENTS OF NEwLY CONSOLIDATED SUBSIDIARIES, BEGINNING OF YEAR 17CASh AND CASh EqUIvALENTS, BEGINNING OF YEAR 7,576 7,759 77,122CASh AND CASh EqUIvALENTS, END OF YEAR ¥ 12,282 ¥ 7,576 $ 125,034
See notes to consolidated financial statements.
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The accompanying consolidated financial statements have been prepared in accordance with the provisions set forth in the Japanese financial instruments and Exchange Act 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 of international financial reporting Standards.
in preparing these consolidated financial statements, certain reclassifications and rearrangements have been made to the consolidated financial statements issued domestically in order to present them in a form which is more familiar to readers outside Japan. in addition, certain reclassifications have been made in the 2008 financial statements to conform to the classifications used in 2009.
Certain reclassifications have been made in the 2008 financial statements to conform to the classifications used in 2009.
The consolidated financial statements are stated in Japanese yen, the currency of the country in which dAiiChi JiTSugyo Co., lTd. (the “Company”) is incorporated and operates. The translation of Japanese yen amounts into u.S. dollar amounts are included solely for the convenience of readers outside Japan and have been made at the rate of ¥98.23 to $1, the approximate rate of exchange at march 31, 2009. Such translations should not be construed as representations that the Japanese yen amounts could be converted into u.S. dollars at that or any other rate.
a. Consolidation The consolidated financial statements as of march 31, 2009 include the accounts of the Company and its 11
significant (10 in 2008 ) subsidiaries (together, the “group”). Consolidation of the remaining unconsolidated subsidiaries would not have a material effect on the accompanying consolidated financial statements.
under the control or influence concept, those companies in which the Company, directly or indirectly, is able to exercise control over operations are fully consolidated.
investments in the remaining unconsolidated subsidiaries and associated companies are stated at cost. if the equity method of accounting had been applied to the investments in these companies, the effect on the accompanying consolidated financial statements would not be material.
The excess of cost of the Company’s investments in consolidated subsidiaries over its equity in the fair value of the net assets at the respective dates of acquisition (“goodwill”), is being amortized on a straight-line basis over 5 years.
All significant intercompany balances and transactions have been eliminated in consolidation. All material unrealized profit included in assets resulting from transactions within the group is eliminated.
b. Unification of Accounting Policies Applied to Foreign Subsidiaries for the Consolidated Financial Statements
in may 2006, the Accounting Standards Board of Japan (the “ASBJ”) issued ASBJ Practical issues Task force (PiTf) no.18, “Practical Solution on unification of Accounting Policies Applied to foreign Subsidiaries for the Consolidated financial Statements”. PiTf no.18 prescribes: (1) the accounting policies and procedures applied to a parent company and its subsidiaries for similar transactions and events under similar circumstances should in principle be unified for the preparation of the consolidated financial statements, (2) financial statements prepared by foreign subsidiaries in accordance with either international financial reporting Standards or the generally accepted accounting principles in the united States of America tentatively may be used for the consolidation process, (3) however, the following items should be adjusted in the consolidation process so that net income is accounted for in accordance with Japanese gAAP unless they are not material: 1) amortization of goodwill; 2) scheduled amortization of actuarial gain or loss of pensions that has been directly recorded in the equity; 3) expensing capitalized development costs of r&d; 4) cancellation of the fair value model accounting for property, plant, and equipment and investment properties and incorporation of the cost model accounting; 5) recording the prior years' effects of changes in accounting policies in the income statement where retrospective adjustments to financial statements have been incorporated; and 6) exclusion of minority interests from net income, if contained. PiTf no.18 was effective for fiscal years beginning on or after April 1, 2008 with early adoption permitted.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDAIICHI JITSUGYO CO., LTD. AND CONSOLIDATED SUBSIDIARIES
Years ended March 31, 2009 and 2008
1. BASiS oF PreSenting ConSolidAted FinAnCiAl StAtementS
2. SUmmAry oF SigniFiCAnt ACCoUnting PoliCieS
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The Company applied this accounting standard effective April 1, 2008. The effect of this change is slight.
c. Cash equivalents Cash equivalents are short-term investments that are readily convertible into cash and that are exposed to
insignificant risk of changes in value. Cash equivalents include time deposits, certificates of deposit, commercial paper and bond funds, all of which mature or become due within three months of the date of acquisition.
d. inventories Prior to April 1, 2008, inventories were stated at cost, determined by the first-in, first-out method. in July 2006,
the ASBJ issued ASBJ Statement no.9,” Accounting Standard for measurement of inventories”, which was effective for fiscal years beginning on or after April 1, 2008 with early adoption permitted. This standard requires that inventories held for sale in the ordinary course of business be measured at the lower of cost or net selling value, which is defined as the selling price less additional estimated manufacturing costs and estimated direct selling expenses. The replacement cost may be used in place of the net selling value, if appropriate.
The Company applied the new accounting standard for measurement of inventories effective April 1, 2008. The effect of this change is immaterial.
e. marketable and investment Securities marketable and investment securities are classified and accounted for, depending on management’s intent, as
follows: i) held-to-maturity debt securities, which are expected to be held to maturity with the positive intent and
ability to hold to maturity are reported at amortized cost and ii) available-for-sale securities, are reported at their fair value, with unrealized gains and losses, net of
applicable taxes, reported in a separate component of equity. non-marketable available-for-sale securities are stated at cost determined by the moving-average method. for other than temporary declines in fair value, marketable and investment securities are reduced to net realizable value by a charge to income.
f. Property, Plant and equipment Property, Plant and Equipment are stated at cost. depreciation of property, plant and equipment of the
Company and its consolidated domestic subsidiaries is computed substantially by the declining-balance method based on the estimated useful lives of the assets, while the straight-line method is principally applied to the property, plant and equipment of consolidated foreign subsidiaries.
depreciation of leased assets is computed by the straight-line method based on the lease term of the respective assets. The range of useful lives is principally from 2 to 50 years for buildings, from 2 to 17 years for machinery, equipment and vehicles and from 2 to 23 years for furniture and fixtures.
g. long-lived Assets The group reviews its long-lived assets for impairment whenever events or changes in circumstance indicate
the carrying amount of an asset or asset group may not be recoverable. An impairment loss would be recognized if the carrying amount of an asset or asset group exceeds the sum of the undiscounted future cash flows expected to result from the continued use and eventual disposition of the asset or asset group.
The impairment loss would be measured as the amount by which the carrying amount of the asset exceeds its recoverable amount, which is the higher of the discounted cash flows from the continued use and eventual disposition of the asset or the net selling price at disposition.
h. retirement and Pension Plans The Company and certain domestic consolidated subsidiaries have non-contributory and contributory
funded defined benefit pension plans for employees which cover their benefits. other consolidated subsidiaries have unfunded retirement benefit plans.
The group accounts for the liability for retirement benefits based on the projected benefit obligations and
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plan assets at the balance sheet date. retirement benefits for directors and corporate auditors of the Company and certain domestic
consolidated subsidiary are provided at the amount which would be required if all directors and corporate auditors retired at the balance sheet date.
i. research and development Costs research and development costs are charged to income as incurred.
j. leases (lessee) in march 2007, the ASBJ issued ASBJ Statement no.13, “Accounting Standard for lease Transactions”,
which revised the previous accounting standard for lease transactions issued in June 1993. The revised accounting standard for lease transactions is effective for fiscal years beginning on or after April 1, 2008 with early adoption permitted for fiscal years beginning on or after April 1, 2007.
under the previous accounting standard, finance leases that deem to transfer ownership of the leased property to the lessee were to be capitalized. however, other finance leases were permitted to be accounted for as operating lease transactions if certain “as if capitalized” information is disclosed in the note to the lessee’s financial statements. The revised accounting standard requires that all finance lease transactions should be capitalized to recognize lease assets and lease obligations in the balance sheet. in addition, the revised accounting standard permits leases which existed at the transition date and do not transfer ownership of the leased property to the lessee to be accounted for as operating lease transactions.
The Company applied the revised accounting standard effective April 1, 2008. in addition, the Company accounted for leases which existed at the transition date and do not transfer ownership of the leased property to the lessee as operating lease transactions. The effect of this change is immaterial.
(lessor) in march 2007, the ASBJ issued ASBJ Statement no.13, “Accounting Standard for lease Transactions”,
which revised the previous accounting standard for lease transactions issued in June 1993. The revised accounting standard for lease transactions is effective for fiscal years beginning on or after April 1, 2008 with early adoption permitted for fiscal years beginning on or after April 1, 2007.
under the previous accounting standard, finance leases that deem to transfer ownership of the leased property to the lessee were to be treated as sales. however, other finance leases were permitted to be accounted for as operating lease transactions if certain "as if sold" information is disclosed in the note to the lessor's financial statements. The revised accounting standard requires that all finance leases that deem to transfer ownership of the leased property to the lessee should be recognized as lease receivables, and all finance leases that deem not to transfer ownership of the leased property to the lessee should be recognized as investments in lease.
The Company applied the revised accounting standard effective April 1, 2008. There was no effect on profit as a result of this change.
k. Bonuses to directors and Corporate Auditors Bonuses to directors and corporate auditors are accrued at the year end to which such bonuses are
attributable.
l. income taxes The provision for income taxes is computed based on the pretax income included in the consolidated
statements of income. 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 and the tax bases of assets and liabilities. deferred taxes are measured by applying currently enacted tax laws to the temporary differences.
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m. Foreign Currency transactions All short-term and long-term monetary receivables and payables denominated in foreign currencies are
translated into Japanese yen at the exchange rates at the balance sheet date. The foreign exchange gains and losses from translation are recognized in the income statement to the extent that they are not hedged by forward exchange contracts.
n. Foreign Currency Financial Statements The balance sheet accounts of the consolidated foreign subsidiaries are translated into Japanese yen at the
current exchange rate as of the balance sheet date except for equity, which is translated at the historical rate. differences arising from such translation were shown as “foreign currency translation adjustments” in a separate component of equity.
revenue and expense accounts of consolidated foreign subsidiaries are translated into yen at the average exchange rate.
o. derivatives and Hedging Activities The group uses derivative financial instruments to manage its exposures to fluctuations in foreign exchange
and interest rates. foreign exchange forward contracts and interest rate swaps are utilized by the group to reduce foreign currency exchange and interest rate risks. The group does not enter into derivatives for trading or speculative purposes.
derivative financial instruments and foreign currency transactions are classified and accounted for as follows : a) all derivatives be recognized as either assets or liabilities and measured at fair value, and gains or losses on derivative transactions are recognized in the income statement and b) for derivatives used for hedging purpose, if derivatives qualify for hedge accounting because of high correlation and effectiveness between the hedging instruments and the hedged items, gains or losses on derivatives are deferred until maturity of the hedged transactions.
The foreign currency forward contracts employed to hedge foreign exchange exposures for export sales and import purchases are measured at the fair value and the unrealized gains/losses are recognized in income. forward contracts applied for forecasted (or committed) transactions are also measured at the fair value but the unrealized gains/losses are deferred until the underlying transactions are completed.
The interest rate swaps which qualify for hedge accounting and meet specific matching criteria are not measured at market value but the differential paid or received under the swap agreements are recognized and included in interest expenses or income.
p. Per Share information Basic net income per share is computed by dividing net income available to common shareholders by the
weighted-average number of common shares outstanding for the period, retroactively adjusted for stock splits. diluted net income per share reflects the potential dilution that could occur if securities were exercised or
converted into common stock. diluted net income per share of common stock assumes full exercise of outstanding warrants.
Cash dividends per share presented in the accompanying consolidated statements of income are dividends applicable to the respective years including dividends to be paid after the end of year.
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marketable and investment securities as of march 31, 2009 and 2008 consisted of the following:
Millions of yenThousands ofU.S. Dollars
2009 2008 2009
CurrentCorporate bonds ¥3,000 $30,541
Total ¥3,000 $30,541
Millions of yenThousands ofU.S. Dollars
2009 2008 2009
Non-currentMarketable equity securities ¥2,913 ¥3,805 $29,653Government and corporate bonds 14 3,014 143Other 583 892 5,936
Total ¥3,510 ¥7,711 $35,732
14 million yen of government bonds are a mortgage for guarantee of dealings.The carrying amounts and aggregate fair values of investment securities at march 31, 2009 and 2008 were as follows:
Millions of yen
March 31, 2009 CostUnrealized
GainsUnrealized
LossesFair
value
Securities classified as:Available-for-sale: Equity securities ¥2,828 ¥829 ¥744 ¥2,913
held-to-Maturity 14 1 15
March 31, 2008
Securities classified as:Available-for-sale: Equity securities ¥2,411 ¥1,642 ¥248 ¥3,805
held-to-Maturity 14 14
Thousands of U.S. Dollars
March 31, 2009 CostUnrealized
GainsUnrealized
LossesFair
value
Securities classified as:
Available-for-sale: Equity securities $28,785 $8,436 $7,568 $29,653
held-to-Maturity 142 6 148
3. mArketABle And inveStment SeCUritieS
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Available-for-sales securities whose fair value was not readily determinable as of march 31, 2009 and 2008 were as follows:
Carrying amount
Millions of yenThousands ofU.S. Dollars
2009 2008 2009
Securities classified as:
Available-for-sale: Equity securities ¥ 583 ¥ 892 $ 5,936
held-to-Maturity 3,000 3,000 30,541
Total ¥3,583 ¥3,892 $36,477
Proceeds from sales of available-for-sale securities for the years ended march 31, 2009 and 2008 were ¥12 million ($124 thousand) and ¥483 million, respectively. The gross realized gain on these sales, computed on the moving average cost basis, was ¥5 million ($48 thousand) for the year ended march 31,2009, and gross realized gain was ¥365 million for the year ended march 31, 2008. The carrying values of debt securities by contractual maturities for securities classified as held-to-maturity at march 31, 2009 and 2008 were as follows:
Millions of yenThousands ofU.S. Dollars
2009 2008 2009
held-to-maturity:Due within one year ¥ 3,000 $ 30,541
Due after one year through five years
¥ 15 ¥3,000 $ 153
Due after five years through ten years
¥ 15
Total ¥ 3,015 ¥3,015 $ 30,694
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inventories at march 31, 2009 and 2008 consisted of the following:
Millions of yenThousands ofU.S. Dollars
2009 2008 2009
Merchandise and finished products ¥2,175 ¥5,384 $22,143
work in process 1,155 1,231 11,756
Raw materials and supplies 403 368 4,104
Total ¥3,733 ¥6,983 $38,003
The group reviewed its long-lived assets for impairment for the years ended march 31, 2009 and 2008.no impairment loss was recognized in the years ended march 31, 2009 and 2008.
Short-term bank loans at march 31, 2009 and 2008 consisted of notes to bank and bank overdrafts. The annual interest rates applicable to the short-term bank loans ranged from 1.06% to 1.88% and 1.30% to 4.19% at march 31, 2009 and 2008, respectively. long-term debt at march 31, 2009 and 2008 consisted of the following:
Millions of yenThousands ofU.S. Dollars
2009 2008 2009
Loans from banks and other financial institutions, due serially to 2013 with interest rates ranging from 1.53% to 1.75% (2009) and from 1.53% to 1.75% (2008):Unsecured ¥606 ¥756 $6,173Less current portion (150) (150) (1,535)
Long-term debt, less current portion ¥456 ¥606 $4,638
Annual maturities of long-term debt, excluding finance leases (see note 13), as of march 31, 2009 were as follows:
Year ending March 31: Millions of yenThousands ofU.S. Dollars
2010 ¥150 $1,535
2011 151 1,540
2012 152 1,546
2013 153 1,552
Total ¥606 $6,173
in order to procure operating funds efficiently and stably, loan commitments were signed on July 25, 2005 with 5 banks. The unused credit balance under those loans as of march 31, 2009 were as follows:
Millions of yenThousands ofU.S. Dollars
Maximum amount of the loan commitment ¥10,000 $101,802
Amount loaned 4,500 45,811
Unused credit balance ¥ 5,500 $ 55,991
4. inventorieS
5. long-lived ASSetS
6. SHort-term BAnk loAnS And long-term deBt
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The Company and certain domestic consolidated subsidiaries have severance payment plans for employees, directors and corporate auditors.under most circumstances, employees terminating their employment are entitled to retirement benefits determined based on the rate of pay at the time of termination, years of service and certain other factors. Such retirement benefits are made in the form of a lump-sum severance payment from the Company or from certain consolidated subsidiaries and annuity payments from a trustee. in certain circumstances, the Company might pay the premium severance on termination of employment. The Company and certain domestic consolidated subsidiaries have non-contributory and contributory funded defined benefit pension plans for employees which cover their benefits. other consolidated subsidiaries have unfunded retirement benefit plans.The contributory funded defined benefit pension plan, which was established under the Japanese Welfare Pension insurance law, covers a substitutional portion of the governmental pension program managed by the Company on behalf of the government and a corporate portion established at the discretion of the Company. The liability for retirement benefits for directors and corporate auditors was ¥198 million ($2,015 thousand) and ¥178 million at march 31, 2009 and 2008, respectively. The retirement benefits for directors and corporate auditors are paid subject to the approval of the shareholders. The liability for employees’ retirement benefits at march 31, 2009 and 2008 consisted of the following:
Millions of yenThousands ofU.S. Dollars
2009 2008 2009
Projected benefit obligation ¥ (2,289) ¥(2,243) $ (23,301)
Fair value of plan assets 1,170 1,525 11,909
Unrecognized actuarial gain 906 567 9,226
Net liability ¥ (213) ¥ (151) $ (2,166)
The components of net periodic benefit costs for the years ended march 2009 and 2008 are as follows:
Millions of yenThousands ofU.S. Dollars
2009 2008 2009
Service cost ¥202 ¥172 $ 2,061
Interest cost 44 44 448
Expected return on plan assets (38) (44) (388)
Recognized actuarial loss 60 38 609
Premium severance pay 48 43 487
Net periodic benefit costs ¥316 ¥253 $ 3,217
Assumptions used for the years ended march 31, 2009 and 2008 are set forth as follows:
2009 2008
Discount rate 2.0% 2.0%
Expected rate of return on plan assets 2.5% 2.5%
Recognition period of actuarial gain/loss 14 years 14 years
Since may 1, 2006, Japanese companies have been subject to the Companies Act of Japan (the “Companies Act”). The significant provisions in the Companies Act that affect financial and accounting matters are summarized below:
7. retirement And PenSion PlAnS
8. eqUity
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a. dividendsunder the Companies Act, companies can pay dividends at any time during the fiscal year in addition to the year-end dividend upon resolution at the shareholders meeting. for companies that meet certain criteria such as; (1) having the Board of directors, (2) having independent auditors, (3) having the Board of Corporate Auditors, and (4) the term of service of the directors is prescribed as one year rather than two years of normal term by its articles of incorporation, the Board of directors may declare dividends (except for dividends in kind) at any time during the fiscal year if the company has prescribed so in its articles of incorporation. The company meets all the above criteria. The Companies Act permits companies to distribute dividends-in-kind (non-cash assets) to shareholders subject to a certain limitation and additional requirements.Semiannual interim dividends may also be paid once a year upon resolution by the Board of directors if the articles of incorporation of the company so stipulate. The Companies Act provides certain limitations on the amounts available for dividends or the purchase of treasury stock. The limitation is defined as the amount available for distribution to the shareholders, but the amount of net assets after dividends must be maintained at no less than ¥3 million.
b. increases/decreases and transfer of Common Stock, reserve and SurplusThe Companies Act requires that an amount equal to 10% of dividends must be appropriated as a legal reserve (a component of retained earnings) or as additional paid-in capital (a component of capital surplus) depending on the equity account charged upon the payment of such dividends until the total of aggregate amount of legal reserve and additional paid-in capital equals 25% of the common stock. under the Companies Act, the total amount of additional paid-in capital and legal reserve may be reversed without limitation. The Companies Act also provides that common stock, legal reserve, additional paid-in capital, other capital surplus and retained earnings can be transferred among the accounts under certain conditions upon resolution of the shareholders.
c. treasury Stock and treasury Stock Acquisition rightsThe Companies Act also provides for companies to purchase treasury stock and dispose of such treasury stock by resolution of the Board of directors. The amount of treasury stock purchased cannot exceed the amount available for distribution to the shareholders which is determined by specific formula.under the Companies Act, stock acquisition rights are presented as a separate component of equity.The Companies Act also provides that companies can purchase both treasury stock acquisition rights and treasury stock. Such treasury stock acquisition rights are presented as a separate component of equity or deducted directly from stock acquisition rights.
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The stock options outstanding as of march 31, 2009 is as follows:Stock
OptionsPersonsGranted
Number ofOptions Granted
Date of Grant
ExercisePrice
ExercisePeriod
2002 Stock 236 1,660,000 2002.10.18 ¥153 From July 1 2003
Options Persons Shares ($1.56) To June 30 2010
The stock option activity is as follows: 2002 Stock Options (Shares)
For the year ended March 31, 2008Non-vestedMarch 31, 2007-Outstanding
GrantedCanceledvested
March 31, 2008-OutstandingvestedMarch 31, 2007-Outstanding 253,000
vestedExercised 40,000
CanceledMarch 31, 2008-Outstanding 213,000
Exercise price ¥153
Average stock price at exercise ¥520
For the year ended March 31, 2009Non-vestedMarch 31, 2008-Outstanding
GrantedCanceledvested
March 31, 2009-OutstandingvestedMarch 31, 2008-Outstanding 213,000
vestedExercised 25,000
CanceledMarch 31, 2009-Outstanding 188,000
Exercise price ¥153
($1.56)
Average stock price at exercise ¥460
($4.68)
9. StoCk oPtionS
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The Company and its domestic subsidiaries are subject to Japanese national and local income taxes which, in the aggregate, resulted in a normal effective statutory tax rate of approximately 40.7% for the years ended march 31, 2009 and 2008. foreign consolidated subsidiaries are subject to income taxes of the countries in which they operate. The tax effects of significant temporary differences and loss carryforwards which resulted in deferred tax assets and liabilities at march 31, 2009 and 2008 were as follows:
Millions of yenThousands ofU.S. Dollars
2009 2008 2009
Deferred tax assets:Allowance for doubtful receivables ¥ 81 ¥ 77 $ 821
Allowance for bonus payable 173 265 1,757
Pension and severance costs 164 136 1,670
Evaluation loss of investment securities 163 157 1,658
Tax loss carry forwards 106 8 1,075
Other 341 479 3,489
Less valuation allowance (386) (143) (3,930)
Total ¥ 642 ¥ 979 $ 6,540
Deferred tax liabilities:Deferred gain on sales of property ¥ (25) ¥ (26) $ (255)
Unrealized gain on available- for-sale securities (36) (569) (370)
Other (14) 0 (137)
Total ¥ (75) ¥ (595) $ (762)
Net deferred tax assets ¥ 567 ¥ 384 $ 5,778
A reconciliation between the normal effective statutory tax rates and the actual effective tax rates reflected in the accompanying consolidated statements of income for the years ended march 31, 2009 and 2008 is as follows:
2009 2008
Normal effective statutory tax rate 40.7% 40.7%
Expenses not deductible for income tax purposes 5.1 3.0
Exclusion from charges against revenue (2.6) (1.4)
Lower income tax rates applicable to income in certain foreign countries (1.8) (1.3)
Overseas income deductible for enterprise tax (0.4) (0.3)
Less valuation allowance 7.5 0.2
Other-net 4.5 2.5
Actual effective tax rate 53.0% 43.4%
10. inCome tAxeS
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Selling, general and administrative expenses for the fiscal years ended march 31, 2009 and 2008 principally consisted of the following:
Millions of yenThousands ofU.S. Dollars
2009 2008 2009
Salaries and fees ¥4,283 ¥4,313 $43,605
Retirement benefit cost 271 222 2,757
Depreciation and amortization 121 92 1,235
Amortization of goodwill 105 105 1,072
Research and development costs 107 152 1,084
Rental expense 1,069 1,088 10,880
research and development costs charged to income for the years ended march 31, 2009 and 2008 were ¥107 million ($1,084 thousand) and ¥152 million, respectively.
(1) As lesseeThe group rents computer equipment and other assets by lease. Total lease payments under finance for the years ended march 31, 2009 and 2008 were ¥67 million ($681 thousand) and ¥84 million, respectively. As discussed in note 2.j, the Company accounts for leases which existed at the transition date and do not transfer ownership of the leased property to the lessee as operating lease transactions. Pro forma information of such leases existing at the transition date, such as acquisition cost, accumulated depreciation, obligations under finance leases, depreciation expense, interest expense, on a “as if capitalized” basis for the years ended march 31, 2009 and 2008 was as follows:
Millions of yen2009 2008
Furnitureand
Fixtures Others Total
Furnitureand
Fixtures Others TotalAcquisition cost ¥146 ¥134 ¥280 ¥150 ¥147 ¥297Accumulated depreciation 91 102 193 79 82 161
Net leased property ¥ 55 ¥ 32 ¥ 87 ¥ 71 ¥ 65 ¥136
Thousands of U.S. Dollars2009
Furnitureand
FixturesOthers Total
Acquisition cost $ 1,482 $ 1,365 $ 2,847Accumulated depreciation 918 1,040 1,958
Net leased property $ 564 $ 325 $ 889
obligations under finance leases:
Millions of yenThousands ofU.S. Dollars
2009 2008 2009
Due within one year ¥47 ¥ 63 $476
Due after one year 42 74 425
Total ¥89 ¥137 $901
13. leASeS
11. Selling, generAl And AdminiStrAtive exPenSeS
12. reSeArCH And develoPment CoStS
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depreciation expense, interest expense and other information under finance leases:
Millions of yenThousands ofU.S. Dollars
2009 2008 2009
Depreciation expense ¥66 ¥81 $668
Interest expense 1 2 13
Total ¥67 ¥83 $681
depreciation expense and interest expense, which are not reflected in the accompanying statements of income, are computed by the straight-line method and the interest method, respectively.The minimum rental commitments under noncancellable operating leases at march 31, 2009 were as follows:
Millions of yenThousands ofU.S. Dollars
2009 2009
Due within one year ¥37 $373
Due after one year 39 403
Total ¥76 $776
(2) As lessor
The group leases machinery, equipment and other assets. Total lease receipts under finance for the years ended march 31, 2008 were ¥235 million, respectively. information of leased property such as acquisition cost and accumulated depreciation for the years ended march 31, 2008 was as follows:
Millions of yen2008
Machineryand
Equipment Others Total
Acquisition cost ¥1,966 ¥95 ¥2,061
Accumulated depreciation 1,597 65 1,662
Net leased property ¥ 369 ¥ 30 ¥ 399
obligations under finance leases:Millions of yen
2008
Due within one year ¥152
Due after one year 259
Total ¥411
depreciation expense, interest received under finance leases:Millions of yen
2008
Depreciation expense ¥203
Interest received 33
Lease received ¥235
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depreciation expense is computed by the straight-line method.interest received is computed by the interest method, and total interest during the lease period is amount in which acquisition cost is deducted from total lease receipts.The net investments in lease are summarized as follows:
Millions of yenThousands ofU.S. Dollars
2009 2009
Gross lease receivables ¥714 $7,268
Unguaranteed residual values 25 256
Unearned interest income (113) (1,154)
Investments in lease, current ¥626 $6,370
maturities of investment in lease for finance leases that deem not to transfer ownership of the leased property to the lessee are as follows:
Year Ending March 31 Millions of yenThousands ofU.S. Dollars
2010 ¥159 $1,621
2011 141 1,432
2012 139 1,410
2013 107 1,086
2014 74 752
2015 and thereafter 94 967
Total ¥714 $7,268
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A reconciliation of the differences between basic and diluted net income per share (“EPS”) for the years ended march 31, 2009 and 2008 is as follows:
Yen inmillions
Thousandsof shares Yen Dollars
For the year ended March 31,2009 Net income
weightedaverageshares
EPS
Basic EPS Net income available to common shareholders ¥1,385 53,749 ¥25.76 $0.26Effect of Dilutive Securities warrants 120Diluted EPS Net income for computation ¥1,385 53,869 ¥25.71 $0.26
For the year ended March 31,2008Basic EPS Net income available to common shareholders ¥3,000 56,785 ¥52.83 $0.53Effect of Dilutive Securities warrants 172Diluted EPS Net income for computation ¥3,000 56,957 ¥52.67 $0.53
The following appropriations of retained earnings at march 31, 2009 were approved at the shareholders meeting of the Company and certain domestic consolidated subsidiary held on June 2009:
Millions of yenThousands ofU.S. Dollars
Year-end cash dividends, ¥3.5 ($0.04) per share ¥182 $1,856
17. SUBSeqUent eventS
16. net inCome Per SHAre
15. Contingent liABilitieS
The group enters into derivative contracts, including foreign exchange forward contracts, and interest rate swap contracts to hedge foreign exchange risk and interest rate exposures. The group does not hold or issue derivatives for trading purposes. derivatives are subject to market risk and credit risk. market risk is the exposures created by potential fluctuations in market conditions, including in changes in interest or foreign exchange rates. Credit risk is the possibility that a loss may result from a counterparty’s failure to perform according to the terms and conditions of the contract. Because the counterparties to those derivative contracts are limited to major international financial institutions, the group does not anticipate any losses arising from credit risk. derivative transactions entered into by the group have been made in accordance with internal policies which regulate the authorization and credit limit amount. All derivatives qualify for hedge accounting and therefore, the market value information is omitted.
At march 31, 2009, the group had the following contingent liabilities:
Millions of yenThousands ofU.S. Dollars
Trade notes discounted ¥16 $162
Guarantees and similar items of bank loans 22 221
14. derivAtiveS
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The Company operates in the following industries:machinery: various machinery, equipment and parts; their repair and maintenance; and overhauling.
materials: various pipe materials, metallic materials and plastic materials; and chemical products.
other: various machinery and real estate leasing; real estate agency; insurance agency; and others.
information about industry segments, geographical segments and sales to foreign customers of the group for the years ended march 31, 2009 and 2008 is as follows:(1) industry Segmentsa. Sales and operating income
Millions of yen2009
Machinery Materials OtherEliminations/
Corporate Consolidated
Sales to customers ¥121,674 ¥4,327 ¥1,285 ¥127,286Inter-segment sales
Total sales 121,674 4,327 1,285 127,286Operating expenses 119,011 4,250 1,132 124,393
Operating income ¥ 2,663 ¥ 77 ¥153 ¥ 2,893
b. Total Assets, depreciation and Capital ExpendituresMillions of yen
2009
Machinery Materials OtherEliminations/
Corporate Consolidated
Total assets ¥46,560 ¥1,423 ¥1,535 ¥14,549 ¥64,067Depreciation 146 1 192 18 357Capital expenditures 193 1 65 5 264
a. Sales and operating incomeThousands of U.S. Dollars
2009
Machinery Materials OtherEliminations/
Corporate Consolidated
Sales to customers $1,238,660 $44,046 $13,089 $1,295,795Inter-segment sales
Total sales 1,238,660 44,046 13,089 1,295,795Operating expenses 1,211,546 43,268 11,527 1,266,341
Operating income $ 27,114 $ 778 $1,562 $ 29,454
b. Total Assets, depreciation and Capital ExpendituresThousands of U.S. Dollars
2009
Machinery Materials OtherEliminations/
Corporate Consolidated
Total assets $473,992 $14,485 $15,624 $148,112 $652,213Depreciation 1,491 11 1,955 182 3,639Capital expenditures 1,960 15 658 53 2,686
18. Segment inFormAtion
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a. Sales and operating income
Millions of yen2008
Machinery Materials OtherEliminations/
Corporate Consolidated
Sales to customers ¥129,165 ¥5,204 ¥681 ¥135,050Inter-segment sales
Total sales 129,165 5,204 681 135,050Operating expenses 124,177 5,100 500 129,777
Operating income ¥ 4,988 ¥ 104 ¥181 ¥ 5,273
b. Total Assets, depreciation and Capital Expenditures
Millions of yen2008
Machinery Materials OtherEliminations/
Corporate Consolidated
Total assets ¥71,638 ¥2,159 ¥1,016 ¥7,720 ¥82,533Depreciation 132 1 232 17 382Capital expenditures 302 2 313 16 633
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(2) geographical SegmentsThe geographical segments of the group for the year ended march 31, 2009 and 2008 are summarized as follows:
Millions of yen2009
japan Asia OtherEliminations/
Corporate Consolidated
Sales to customers ¥114,381 ¥8,935 ¥3,970 ¥127,286Interarea transfer 4,664 1,680 1,146 ¥ (7,490)
Total sales 119,045 10,615 5,116 (7,490) 127,286Operating expenses 116,449 10,307 5,189 (7,552) 124,393
Operating income ¥ 2,596 ¥ 308 ¥ (73) 62 ¥ 2,893Total assets ¥ 43,538 ¥4,418 ¥1,562 ¥14,549 ¥ 64,067
Thousands of U.S. Dollars2009
japan Asia OtherEliminations/
Corporate Consolidated
Sales to customers $1,164,423 $90,963 $40,409 $1,295,795Interarea transfer 47,476 17,102 11,672 $ (76,250) Total sales 1,211,899 108,065 52,081 (76,250) 1,295,795Operating expenses 1,185,476 104,929 52,818 (76,882) 1,266,341
Operating income $ 26,423 $ 3,136 $ (737) 632 $ 29,454Total assets $ 443,227 $44,975 $15,899 $148,112 $ 652,213
Millions of yen2008
japan Asia OtherEliminations/
Corporate Consolidated
Sales to customers ¥119,512 ¥7,634 ¥7,904 ¥135,050Interarea transfer 5,845 1,434 1,015 ¥ (8,294)
Total sales 125,357 9,068 8,919 (8,294) 135,050Operating expenses 120,767 8,628 8,623 (8,241) 129,777
Operating income ¥ 4,590 ¥ 440 ¥ 296 (53) ¥ 5,273Total assets ¥ 68,455 ¥3,746 ¥2,612 ¥ 7,720 ¥ 82,533
(3) Sales to Foreign CustomersSales to foreign customers for the years ended march 31, 2009 and 2008 amounted to ¥47,952 million ($488,157 thousand) and ¥53,831 million, respectively.
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dAiiCHi JitSUgyo Co., ltd.
date of establishmentAugust 12, 1948
Paid-in Capital¥5,105 million
Stock exchange listingTokyo Stock Exchange, First Section
number of employees436 (Non-consolidated)942 (Consolidated)
transfer Agent and registrarTokyo Securities Transfer Agent Co., Ltd.
major Shareholders (% of total)
Mizuho Corporate Bank, Ltd. 4.91Sumitomo Mitsui Banking Corporation 4.90The Bank of Tokyo-Mitsubishi UFj, Ltd. 4.90NIPPON KOA Insurance Co., Ltd. 4.37japan Trustee Services Bank, Ltd. (Trust Account 4G) 3.73Resona Bank, Limited. 3.25
*Percentages of total shares issued are calculated based on the total number of shares issued excluding treasury stock.
Common StockAuthorized: 160,000,000 sharesIssued: 57,432,000 sharesNumber of shareholders: 8,246
distribution of ownership among Shareholders
Corporate data / investor information(As of March 31, 2009)
Financial Institutions
36.9% Securities Companies
0.6%
Other Companies
11.7%
Foreign Institutions and Individuals
4.1%
Individuals and Others
46.7%
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FOUNDING SPIRIT
As a trading company, Daiichi Jitsugyo Co., Ltd. strives
to facilitate the logistics of an economic society in order to
contribute to social prosperity. Corporate activities are based
on a proactive approach and spirit of unified cooperation. The
company aims for stable growth based on sound management,
while striving to improve the lifestyles and welfare of its
employees.
Profile of Our Company 1
Consolidated Financial Highlights 2
To Our Stakeholders 3
DJK Business Segments 4
Corporate Governance 13
The DJK Overseas Network 18
The DJK Domestic Network 20
Financial Section 21
Corporate Data / Investor Information 50
Commitment to the Environment 51
Contents
Environmental policy
As a company conducting international trade as well as sales in Japan of energy-, semiconductor-, plastic-injection molding-, and pulp-and-paper-related machinery and equipment, Medical equipment and engineering materials and aerospace-related devices, we will carry out environmental management of our business based on the following policies.
1. We will be constantly aware of the environmental issues regarding our merchandise and service activities, and will take steps to prevent environmental pollution. In addition, we will pursue constant improvement in our environmental management activities.
2. To comply with environmentally related laws, regulations, and accords regarding our merchandise and service activities, we will establish and follow our own voluntary standards.
3. Among the environmental issues regarding our merchandise and service activities, we will make the following issues special priority themes.
(1) Reducing amounts of energy and resources used through greater operating efficiency
(2) Handling and promotion of environmentally friendly merchandise(3) Promoting understanding of the importance of environmental issues
inside and outside the Company
To achieve these environmental policies, we will establish environmental targets and goals. Working together, all employees and directors in all sections of the company will pursue environmental management.
Recognizing that conducting environmentally conscious
business activities is one of its social obligations, DJK has
established the following environmental policy, which is being
pursued by all employees and directors companywide.
DJK acquired ISO 14001 certification on January 24, 2004 and revised it on January 23, 2007.
Commitment to the Environment
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Headquarters: Kowa Nibancho Bldg. 11–19, Nibancho, Chiyoda-ku, Tokyo 102-0084, JapanPhone : (03)5214-8500 Fax : (03)5214-8501URL http://www.djk.co.jp/
Printed in Japan on recycled paper
2009. 8 P
ANNUAL REPORT
DAIICHI JITSUGYO CO., LTD. 2009
ANN
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