Kyocera 6-K 2005
Documents found in this filing:
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of June 2005
Commission File Number: 1-07952
6 Takeda Tobadono-cho, Fushimi-ku,
Kyoto 612-8501, Japan
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F X Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Registration S-T Rule 101(b)(1):
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Registration S-T Rule 101(b)(7):
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
If Yes is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b); 82-
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
Date: June 9, 2005
Information furnished on this form:
NOTICE OF THE 51ST ORDINARY GENERAL
MEETING OF SHAREHOLDERS
TO BE HELD IN KYOTO, JAPAN ON JUNE 28, 2005
(Translation of the Japanese notice circulated to shareholders in Japan)
6 Takeda Tobadono-cho, Fushimi-ku, Kyoto, Japan
June 6, 2005
To Our Shareholders:
Notice of the 51st Ordinary General Meeting of Shareholders
This is to inform you that the Company will hold its 51st Ordinary General Meeting of Shareholders, as described below, which you are cordially invited to attend.
If you are unable to attend, you may exercise your voting rights in writing. If you wish to do so, after examining the attached reference materials, please indicate your votes by filling out and signing the enclosed form for exercising voting rights, and return the form to us no later than Monday, June 27, 2005, Japan time.
3. Purpose of the Meeting:
Matters to be reported upon:
Matters to be resolved:
The non-consolidated financial statements, copies of the auditors reports and consolidated financial statements are set out in the Financial Report for the year ended March 31, 2005 as attached hereto (from page 2 to page 32).
FOR THE EXERCISE OF VOTING RIGHTS
The Company considers that the best way to respond to shareholders expectations is to improve the consolidated performance of the Company into the future.
Therefore, the dividend policy of the Company is to determine dividend amounts based on an overall assessment, taking into consideration various factors, such as enhancement of the linkage between dividend amounts and the consolidated performance of the Company and the amount of capital expenditures necessary for the medium to long-term growth of the Company.
Pursuant to this policy, the Company proposes that the year-end dividend for the one-year period ended March 31, 2005 (fiscal 2005) shall be 50 yen per share, a 20 yen per share increase from the previous fiscal period. When aggregated with the interim dividend, the total annual dividend amount will be 80 yen per share. The Company also proposes that a general reserve amount of 18,000 million yen, taking into account the necessary reserve amounts for development of new markets and new technologies, and acquisition of outside management resources in order to achieve stable and sustainable corporate growth of the Company. The Company proposes bonuses to Directors and Corporate Auditors of 60 million yen in aggregate, the same amount as in the previous fiscal period, out of which 4.5 million yen shall be the bonuses to Corporate Auditors a reduction of 1 million yen from the previous fiscal period.
The proposed appropriation of retained earnings is as follows:
PROPOSED APPROPRIATION OF RETAINED EARNINGS
(The underlined portion indicates the proposed amendment.)
The terms of office of thirteen (13) Directors will expire at the close of this General Meeting of Shareholders. It is proposed that thirteen (13) Directors be elected.
The candidates for Directors are as follows:
The term of office of a Corporate Auditor, Mr. Atsushi Mori, will expire at the close of this Ordinary General Meeting of Shareholders. It is proposed to elect two (2) Corporate Auditors to increase one (1) Corporate Auditor in order to further enhance auditing system of the Company.
With respect to this Agendum, consent from the Board of Corporate Auditors has been obtained.
The candidates for Corporate Auditors are as follows:
Mr. Kazuo Inamori will retire from the office of Director upon expiration of his term at the close of this Ordinary General Meeting of Shareholders. The Company proposes to pay retirement allowance to the Director for his service rendered during his term in office, in amount which is reasonable and in accordance with the standards prescribed by the Company.
It is also proposed that the particular amount, timing and method of payment of such allowance be determined through discussion at the meeting of the Board of Directors.
The brief personal history of the retiring Director is stated below:
Mr. Atsushi Mori will retire from the office of Corporate Auditor upon expiration of his term at the close of this Ordinary General Meeting of Shareholders. The Company proposes to pay retirement allowance to the Corporate Auditor for his service rendered during his term in office, in amount which is reasonable and in accordance with the standards prescribed by the Company.
It is also proposed that the particular amount, timing and method of payment of such allowance be determined through discussion among the Corporate Auditors.
The brief personal history of the retiring Corporate Auditor is stated below:
Aggregate remuneration to the Directors of the Company in the amount of no more than 55 million yen per month was approved at the 37th General Meeting of Shareholders of the Company held on June 27, 1991. Taking into consideration the reduction in the number of the Directors resulting from introduction of the executive officer system, which took place thereafter, and subject to the condition that the proposal set out in Agendum No. 2 to reduce the stated number of the Director provided for in the Articles of Incorporation to twenty (20) is approved, it is proposed that aggregate remuneration to Directors of the Company be reduced to no more than 30 million yen per month.
It should be noted that the above mentioned remuneration to the Directors shall not include salaries for services as employees or Executive Officers, in the event that any certain Directors also serve simultaneously as employees or Executive Officers.
If Agendum 3 is approved as proposed, the number of Directors of the Company shall become thirteen (13).
The Company requests the shareholders to approve the issuance of stock acquisition rights to Directors, Corporate Auditors, Executive Officers and employees of the Company and its subsidiaries pursuant to Articles 280-20 and 280-21 of the Commercial Code of Japan in order to grant them stock options.
The issuance of stock acquisition rights without any consideration is intended to enable the grant of stock options (i) to Directors, Executive Officers and employees of the Company and its subsidiaries, in order to enhance the incentive to participate in the management of group companies, to facilitate improvement in the performance of the Company, and to provide increased incentive for contribution thereto and (ii) to Corporate Auditors of the Company and its subsidiaries in order to enhance moral when conducting audits and with the objective of achieving healthy management of group companies.
Persons approved by the Board of Directors of the Company from among the Directors, Corporate Auditors, Executive Officers and employees of the Company and its subsidiaries.
Up to 1,500,000 shares of Common Stock of the Company Provided that when the Company makes stock split or stock consolidations, adjustment shall be made in accordance with the following formula. Such adjustment shall be made only with respect to the number of shares to be issued upon exercise of the stock acquisition rights not yet exercised at the time of such adjustment and any number of shares less than one share resulting from such adjustment shall be disregarded.
When certain event happens which requires adjustment of the number of shares to be issued upon exercise, including the merger and corporate split, the number of shares to be issued upon exercise shall be reasonably adjusted taking into consideration of the terms and conditions of such merger and corporate split.
Up to 15,000 (one stock acquisition right will entitle the holder thereof to acquire 100 shares) provided that when adjustment set out in (2) above is made, such number shall be also adjusted accordingly.
The amount to be paid in upon exercise of each stock acquisition right shall be the amount of the acquisition price per share (the Exercise Price) multiplied by the number of shares to be issued upon exercise of each stock acquisition right, as provided for in (3) above.
The Exercise Price shall be the average of the closing price of the shares of the Common Stock of the Company at the Tokyo Stock Exchange (regular way) on each day (excluding any day on which there is no closing price of the shares of the Company) during the month immediately preceding the month in which the stock acquisition rights are issued, multiplied by 1.1 and rounded up to the nearest one (1) yen; provided, however, that in the event such amount is less than the closing price of the shares of Common Stock of the Company on the day of issuance of the stock acquisition rights (if there is no closing price on such day, on the day immediately preceding such day), the Exercise Price shall be the closing price on the day of issuance of the stock acquisition rights.
Provided that when the Company makes stock split or stock consolidations after issuance of the stock acquisition rights, the Exercise Price shall be adjusted in accordance with the following formula and rounded up to the nearest one (1) yen.
Provided, further, that in the event of any issuance by the Company of new shares or any disposition of its own shares of Common Stock at a price less than the market price thereof (excluding issuance or disposition as a result of exercise of the stock acquisition rights), the Exercise Price shall be adjusted in accordance with the following formula and rounded up to the nearest one (1) yen.
From October 1, 2005 to September 30, 2008
Transfer of stock acquisition rights shall be subject to approval at the meeting of the Board of Directors of the Company.
TABLE OF CONTENTS
Kyocera Management Philosophy
Respect the Divine and Love People
Preserve the spirit to work fairly and honorably, respecting people, our work, our company and our global community.
To provide opportunities for the material and intellectual growth of all our employees, and through our joint effort, contribute to the advancement of society and humankind.
To coexist harmoniously with nature and society.
Harmonious coexistence is the underlying foundation of all our business activities as we work to create a world of abundance and peace.
Kyocera was built upon a unique foundation: the human spirit
When I founded Kyocera, I didnt have sufficient funding, let alone decent facilities or equipment. However, I was fortunate enough to have associates with whom I felt a spiritual bond. We shared every joy and pain, just like a family. I therefore decided to run this company with faith in the human spirit. The human spirit is said to be easily changed. Yet, when a deep sense of trust exists, I have found that there is nothing stronger or more reliable than our spiritual ties.
Today, this faith is the human spirit forms the very heart of Kyocera.
We hope this message finds all of our shareholders well.
We would like to take this opportunity to extend our greetings to you before providing you with the Financial Report for the year ended March 31, 2005.
Kyocera Group is promoting High-Value-Added Diversification aiming to be a Creative Company that Continues to Grow in the 21st Century. Each operating segment pursues synergistic effects within the Group and establishes a highly profitable business to maximize the value of the Group for the shareholders. To promote this consolidated management, Kyocera Corporation introduced a new executive officer system as from June 1, 2005 and appointed a Chief Executive Officer (CEO), a Chief Financial Officer (CFO) and a Chief Operating Officer (COO). Kyocera Corporation also introduced a Corporate Business Group System to enhance its consolidated management structure and to make management responsibility clear. Under these new systems, Kyocera Group will pursue improved Group performance into the future.
Kyocera Corporation also changed its traditional dividend policy, which emphasized stable payment of dividends. The new dividend policy calls for proposal of dividend amounts based on managements overall judgment, taking into consideration the amount of capital expenditures necessary for the growth of Kyocera Group in the mid to long term and in closer linkage with the consolidated performance of the Group. We continue to affirm that the most important challenge for its management is to maximize return of profits to shareholders in order to meet shareholder expectations.
We will very much appreciate the ongoing support of our shareholders for the efforts of Kyocera Group.
1. BUSINESS OUTLINE
In the year ended March 31, 2005 (fiscal 2005), although production activities expanded in the manufacturing sector in the first half of fiscal 2005, they declined markedly from the start of the second half, especially for electronics equipment. This led to a slump in exports and ensuing deceleration in the Japanese economy. Overseas, despite a slowdown in the European economy, the U.S. economy showed steady recovery supported by solid personal consumption and expansion of capital expenditures, while the Asian economy continued to show strong growth, particularly in China.
With respect to the businesses of Kyocera Group, declining demand for mobile phone handsets, computer equipment and digital consumer products forced customers to conduct production adjustments in the second half of fiscal 2005, which resulted in a decline in orders to Kyocera Group. Coupled with this, component prices continued to decline, as did the sales prices of telecommunications equipment and information equipment. Consequently, both the components business and the equipment business were faced with a difficult business environment.
Sales in the Fine Ceramics Group and the Electronic Device Group increased in the first half of fiscal 2005, supported by burgeoning component demand. Conversely, sales in the Equipment Group decreased as compared with fiscal 2004 mainly due to sluggish sales of mobile phone handsets in the Kyocera Groups core markets, the United States and Japan. As a result, consolidated net sales of Kyocera Corporation and its consolidated subsidiaries for fiscal 2005 increased by 3.5% from fiscal 2004 to ¥1,180,655 million.
Due to a one-time charge in the amount of approximately ¥11.7 billion, including charge related to structural reforms in the telecommunications equipment and optical instruments businesses aimed at improving profitability in the future, and to the absence of gains recorded in fiscal 2004 in the amounts of ¥18.9 billion due to settlement of a substitutional portion of the benefit obligations related to employees pension fund at Kyocera Corporation and a subsidiary and ¥6.0 billion in connection with withdrawal from the employees pension fund by a subsidiary, consolidated profit from operations decreased by 7.3% compared with fiscal 2004 to 100,968 million and consolidated income before income taxes decreased by 6.5% compared with fiscal 2004 to ¥107,530 million. Consolidated net income decreased by 32.6% compared with fiscal 2004 to ¥45,908 million due to additional tax in the amount of approximately ¥12.7 billion resulting from a notice of tax assessment from the National Tax Bureau in connection with transfer pricing adjustments relating to the transfers of products between Kyocera Corporation and its overseas subsidiaries for the five years from fiscal 1999 through fiscal 2003.
Note: Photographs and graphs in the Business Report are for reference only.
[Performance by Operating Segments]
(1) Fine Ceramics Group
(2) Electronic Device Group
(3) Equipment Group
Kyocera Group aims to achieve high profitability, to keep competitive advantages, and to grow businesses by cultivating new markets through our advanced technologies, both in our components business and equipment business. The following are highlights of management activities undertaken in fiscal 2005 to strengthen our competitiveness by pursuing synergistic effects within Kyocera Group in growing markets where future business opportunities are strongly expected.
Capital expenditures for fiscal 2005 totaled ¥63,176 million, an increase of ¥8,239 million, or 15.0% compared with fiscal 2004. The main focus was on construction of production lines for new products and streamlining of production processes to improve productivity in the Fine Ceramics Group, Electronic Device Group and Equipment Group.
All capital requirements for fiscal 2005 were financed from internal funds. Kyocera Corporation did not undertake any financings through issuance of bonds or notes.
In respect of the economic situation and business environment for the year ending March 31, 2006 (fiscal 2006), there are fears that the sharp rise in oil prices will have a profoundly negative effect on the world economy. Overseas, despite concerns over a slowdown in the European economy, both the Asian and U.S. economies are expected to continue expanding steadily. Although exchange rate trends against the Euro and U.S. dollar remain uncertain, moderate expansion is predicted for the Japanese economy. A gradual recovery is expected in production activities in the electronics industry in the first half, and a full-scale recovery from the second half of fiscal 2006. In the telecommunications and information equipment market, shipment volume of mobile phone handsets is forecast to increase steadily due to the rising popularity of high-performance handsets and the proliferation of low-priced handsets in newly developed markets. Meanwhile, stable growth is expected to continue in the markets for PCs and digital cameras. Shipment volume of DVD recorders and digital TVs is predicted to increase significantly. Global expansion of the alternative energy market, which includes solar energy, is also expected to continue.
Kyocera Group aims to improve profitability in this business environment by promoting its group-wide management policy of High-Value-Added Diversification to become a Creative Company that Continues to Grow in the 21st Century. For such purpose, in fiscal 2006, Kyocera Group will conduct new structural reforms in addition to the management measures undertaken previously, to further improve its performance.
By making the components and equipment businesses highly profitable, Kyocera Group seeks to achieve the target of a pre-tax profit ratio of over 15% in the medium to long term. Specific business developments aimed at accomplishing the aforementioned goals are as follows.
Kyocera Group intends to improve performance in the telecommunications equipment business and optical instruments business, which was sluggish in fiscal 2005.
Kyocera Group will aggressively pursue improvements in productivity through production process reforms implemented to date. In fiscal 2006, Kyocera Group will seek to strengthen and entrench a business basis that will drive business development in the future. Specifically, investment will be made strategically and aggressively into businesses focused on solar energy products, ceramic components for semiconductor and LCD fabrication equipment, organic packages and cutting tools to further improve profitability.
Certain of the statements made in this document are forward-looking statements (within the meaning of Section 21E of the U.S. Securities and Exchange Act of 1934), which are based on our current assumptions and beliefs in light of the information currently available to us. These forward-looking statements involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors include, but are not limited to: general economic conditions in our markets, which are primarily Japan, North America, Europe, and Asia, including in particular China; changes in exchange rates, particularly between the yen and the U.S. dollar and euro, respectively, in which we make significant sales; our ability to launch innovative products and otherwise meet the advancing technical requirements of our customers, particularly in the highly competitive markets for ceramics, semiconductor parts and electronic components; and the extent and pace of future growth or contraction in information technology-related markets around the world, including those for communications and personal computers; events that may impact negatively on our markets or supply chain, including terrorist acts and outbreaks of diseases; and the occurrence of natural disasters, such as earthquakes, in locations where our manufacturing and other key business facilities are located. Such risks, uncertainties and other factors may cause our actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. We undertake no obligation to publicly update any forward-looking statements included in this document.
Trend of performance and assets of Kyocera Corporation and its consolidated subsidiaries
Trend of performance and assets of Kyocera Corporation (Non-consolidated)
2. COMPANY OVERVIEW
Kyocera Group manufactures and sells a highly diversified range of products, including parts involving fine ceramic technologies and applied ceramic products, telecommunications equipment, information equipment and optical instruments, etc. The principal products are listed below:
(2) Business Combination
1. Material Subsidiaries (as of March 31, 2005)
Note: * means that such ownership is indirect through wholly owned subsidiaries of Kyocera Corporation.
2. Developments and Results of Business Combination
Kyocera Group includes 165 consolidated subsidiaries and 16 companies accounted for by the equity method.
With respect to results of business combinations in fiscal 2005, please refer to the description in 1. BUSINESS OUTLINE (1) Business Developments and Results of Kyocera Corporation and its Consolidated Subsidiaries above.
(3) Shares (as of March 31, 2005)
(One stock acquisition right will entitle the holder thereof to acquire 100 shares.)
2,187,800 shares of Common Stock of Kyocera Corporation
(resolved at the Ordinary General Shareholders Meeting on June 25, 2004)
(One stock acquisition right will entitle the holder thereof to acquire 100 shares.)
1,243,300 shares of Common Stock of Kyocera Corporation
The stock acquisition rights were issued without consideration to Directors, Corporate Auditors, Executive Officers and employees of Kyocera Corporation and its subsidiaries.
Directors of Kyocera Corporation
Corporate Auditors of Kyocera Corporation
Employees of Kyocera Corporation, Directors, Corporate Auditors and employees of the subsidiaries (within the 10 highest tiers of seniority)
Breakdown of stock acquisition rights allocated to employees of Kyocera Corporation, or Directors, Corporate Auditors or employees of subsidiaries
Employees of Kyocera Corporation and its Consolidated Subsidiaries
Employees of Kyocera Corporation (Non-consolidated)
(5) Principal Offices and Plants, etc. (as of March 31, 2005)
Head office : 6 Takeda Tobadono-cho, Fushimi-ku, Kyoto Japan
(6) Directors and Corporate Auditors of Kyocera Corporation (as of March 31, 2005)
(7) Remuneration of Accounting Auditor
3. SIGNIFICANT EVENTS OCCURRING SUBSEQUENT TO FISCAL 2005 WITH REGARD TO BUSINESS SITUATION OF KYOCERA CORPORATION AND ITS CONSOLIDATED SUBSIDIARIES
There have been no significant events since the end of fiscal 2005.
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Cash Flows (For Reference Only)
Basis of preparation of consolidated financial statements
The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America pursuant to the provision of paragraph 1 of Article 179 of the Enforcement Regulations for the Commercial Code of Japan. Certain disclosures required under principles generally accepted in the United States of America are omitted pursuant to the same provision.
Finished goods and work in process are mainly stated at the lower cost or market, the cost being determined by the average method. Other inventories are mainly stated at the lower cost or market, the cost being determined by the first-in, first-out method.
Kyocera has adopted Statement of Financial Accounting Standards No.115, Accounting for Certain Investments in Debt and Equity Securities.
Held-to-maturity securities are recorded at amortized cost.
Available-for-sale securities are recorded at fair value, with unrealized gains and losses excluded from income and recorded in other comprehensive income, net of tax.
Depreciation is computed at rates based on the estimated useful lives of assets using the declining balance method.
Non-Consolidated Balance Sheets
Non-Consolidated Statements of Income
Summary of Significant Accounting Policies
5. Consumption tax withheld upon sale and consumption tax paid for purchases of goods and services are not included in the respective revenue and cost or expense items in the accompanying statement of income.
Notes to Balance Sheet:
Notes to Statement of Income:
Proposed Appropriation of Retained Earnings
Report of Independent Auditors
May 9, 2005
To the Board of Directors
We have audited, pursuant to Article 2-1 of the Special Law of the Commercial Code Concerning the Audit, etc. of Stock Corporations (Kabusiki-Kaisya) of Japan, the balance sheet, statement of income, business report (limited to the accounting figures included therein), proposal for appropriation of retained earnings (hereinafter referred to as the financial statements) and supplementary schedules (limited to the accounting figures included therein) of Kyocera Corporation (hereinafter referred to as the Company) for the 51st fiscal year from April 1, 2004 to March 31, 2005. The portion of the business report and supplementary schedules subject to our audit are those derived from the accounting books and records of the Company. These financial statements and supplementary schedules are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements and supplementary schedules.
Except as explained in the following paragraph, we conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and supplementary schedules are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and supplementary schedules. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and supplementary schedules. We believe that our audits provide a reasonable basis for our opinion.
We have not completed our audit procedures regarding consolidated accounting figures included in (1) Business Developments and Results of Kyocera Corporation and its Consolidated Subsidiaries, (2) Capital Expenditures by Kyocera Corporation and its Consolidated Subsidiaries and (5) Trend of Performance and Assets of Kyocera Corporation and its Consolidated Subsidiaries of Section 1 Business outline in the business report. However, as of the date of our audit report, we performed limited procedures including analytical procedures to the consolidated trial balance and financial information of subsidiaries and affiliates accounted for by equity method in accordance with Statement of Japanese Institution of Certified Public Accountants No.40.
As a result of our audit, it is our opinion that:
We have no interest in or relationship with the Company which is required to be disclosed pursuant to the provisions of the Certified Public Accountant Law of Japan.
Notice to Readers: The original financial statements and supplementary schedules are written in Japanese.
The Board of Corporate Auditors, having received a report from each Corporate Auditor on the method and results of his audit on the performance of duties of Directors during the 51st fiscal period from April 1, 2004 to March 31, 2005, hereby reports the results of audit, after examination and discussion, as follows:
1. Outline of Audit Methods by the Corporate Auditors
In accordance with audit standards, audit policy, audit plan, etc. established by the Board of Corporate Auditors, each Corporate Auditor has attended the meeting of the Board of Directors and other important meetings of the Company, received reports on the operations of the Company from Directors and the Companys internal audit department, etc., reviewed important documents including those approved by executives, examined the condition of business and assets at the head office and other major business offices, received reports of condition from subsidiaries and examined the condition of business and assets of important subsidiaries when deemed necessary. Each Corporate Auditor has also monitored accounting auditors independence, received reports and explanations from them, and conducted examinations of financial statements and supplementary schedules.
With respect to the Directors engagement in competitive transactions, transactions involving conflict of interest between the Company and the Directors, profit-sharing by the Company without compensation, unusual transactions between the Company and its subsidiaries or shareholders, acquisition and disposition by the Company of its own shares, etc., each Corporate Auditor has requested Directors, and others reports when deemed necessary and conducted examinations in detail, in addition to the audit methods mentioned above.
2. Results of Audit
May 12, 2005