SHOWA Philosophy
−
Our Fundamental Beliefs
−
Respect for the individuals
Trust/Fairness/Independence
−
Our Corporate Principle
−
With the aim of becoming a global company
trusted by customers worldwide, we are
committed to making continuous innovations
to provide superior products of the best
technology and the highest quality to meet
users’ needs.
−
Code of Conduct
−
1.Let actions be driven by ideals and visions
2.Value time and ideas, and approach problems based
on fundamentals and principles
3.Place value on communications and understand the
situation of others
4.Maintain operational transparency and soundness
5.Always be aware of environmental preservation,
and make contributions to the community and society
Our Fundamental Beliefs
Corporate Culture
Our Corporate Principle
Our Corporate Principle
Our Corporate Principle
Our Corporate Principle
I would like to express my deepest condolences to everyone
affected by the recent Great East Japan Earthquake.
I pray from the bottom of my heart that the affected area will be
reconstructed as soon as possible.
I would like to express my gratitude to our shareholders for
your continued encouragement and support over the years.
I am pleased to present this summary of our consolidated
results in our 103rd fiscal year (from April 1, 2010 to March 31,
2011) and I would like to take this opportunity to say a few
words of greeting.
I was appointed President at the Board of Directors meeting
held on June 28, 2011. I hope you will support me as you
supported my predecessor Kazuto Iiyama.
Turning to our consolidated results in our 103rd fiscal year,
both net sales and net income improved from the previous
year, recovering to climb back into the black, but due to the
impact of the Great East Japan Earthquake and other factors in
Japan the final results were less than the forecasts we had
announced on January 31, 2011.
We have designated the next and 11th medium-term
management period of three years (from April 1, 2011 to March
31, 2014) the three years for consolidating our product
strength, production technology strength, production system
and management areas. We have stipulated the four basic
strategies below, and will meet the needs of users throughout
the world by developing our business from a global
perspective on the world stage.
1. “Build a framework that can survive long into the future”
2. “Build systems under which profits is generated through
bottom-line sales”
3. “Construction of management systems that can execute
our business strategies”
4. “Development of the human resources systems needed
to support Showa both domestic and overseas”
We foresee the tough business environment to continue going
forward but the Showa Group will unite to implement the basic
strategies for the 11th medium-term period and endeavor to
improve our corporate value.
Our hope is that our shareholders will continue in their
enduring support in the years to come.
July 2011
Message from the President
Review of Operations
Finacial and Operating Highlights
Net Sales
Ordinary Income
0 50,000 100,000 150,000 200,000 250,000 300,000
(Unit: Millions of yen) (Unit: Millions of yen)
(Unit: Millions of yen) (Unit: Yen)
,08 ,09 ,10
207,657
,1１
233,381
△4,000
0 4,000 8,000 120,000 160,000 200,000
,08 ,09 ,10
△616
△16,000 ,
08 ,09 ,10
△8,593
△113.11
△12,000
△8,000
△4,000
0 4,000 8,000 12,000 16,000
△160
△120
△80
△40 0 40 80 120 160
,11 1.62
0 ,
08 ,09 ,10
40,000 60,000 80,000 100,000 120,000
0 600 800 1,000 1,200 1,400
85,054
929.52 929.52
,11
82,753
Net Income Net Income
Net Assets Net Assets (Unit: Millions of yen)
Net Income per Share
Net Income per Share
Shareholder’s Equity per Share
Shareholder’s Equity per Share (Unit: Yen) 283,370
271,510
△1,137
14,254
,11
8,062
86.84
6,597
122
△11,609
△152.82
1,330.96
117,127
87,228
984.38 984.38
892.75 892.75
Net Assets /
Shareholder’ s Equity per Share
Net Income /
Rebuilding of the production infrastructure
Overview of the fiscal year
Consolidation of the motorcycle business and production at
the optimal locations
Transfer of the outbord marine engine business
Improvement of the production system for automobile
shock absorbers
Improvement of profitability
Review and implementation of internal and external
production
Continued development of cost reduction activities
Switch to outsource pipe-making line and press line (Saitama Plant)
Switch to outsource pipe-making and drawing lines (Asaba Plant)
Nagoya Plant
Saitama Plant
Laying the foundation for the
11th medium-term period of three years
Expanded application of core technologies
Strengthening of the development of new technologies
SHOWA REGIONAL CENTER (THAILAND) CO., LTD.
Research, development and market surveys of motorcycle shock absorbers designed for regional characteristics
Completed
Motorcycle shock absorbers (Rear cushions) Automobile shock absorbers (for customers in Nagoya and Western Japan)
Asaba Plant
Outbord marine engine components There was a recovery globally in economic conditions in this
fiscal year due to the effect of the economic stimulus packages
taken by each country. Japan had also begun a gradual
recovery but the momentum of the recovery weakened due to
the impact of the Great East Japan Earthquake that occurred
on March 11, 2011.
Regarding the automobile market, in Japan demand cooled
down after the ending of preferential policies such as the car
replacement stimulus programs and there was the impact of
the Great East Japan Earthquake, but globally both production
and sales were higher than last year.
Given these conditions, the Showa Group determined that the
management challenges for the year under review, the final
year of the 10th medium-term management plan, had been
rebuilding of the production infrastructure, improvement of
profitability, and laying the foundation for the next and 11th
medium-term period of three years, and we have developed
our business with the aim of strengthening the fundamentals of
our company.
Consequently, the consolidated results were as follows.
Net sales ¥233,381 million
(up 12.4% year on year)
Operating income ¥8,895 million
(operating loss for the previous year
¥2,370 million)
Ordinary income ¥8,062 million
(ordinary loss for the previous year
Overview of the fiscal year
Net income ¥122 million
(net loss for the previous year
¥8,593 million)
Both net sales and net income improved from the previous
year, but due to the impact of the Great East Japan Earthquake
and other factors in Japan they were less than the forecasts we
had announced on January 31, 2011.
Taking our performance during the period and the uncertainty
of the outlook in the current business environment carefully into
account, Showa regrettably decided to hold back any year-end
dividend for the fiscal year.
Net Sales by Geographical Areas
Japan
91,103 million (39.1%)
North America
52,103 million (22.3%)
South America
21,229 million (9.1%)
Asia
40,929 million (17.5%)
China
20,786 million (8.9%)
Others
7,229 million (3.1%%)
Performance by Business Segments
The performance of each segment was as follows. The net
sales for each segment include internal net sales among
segments and the transfer balance. Furthermore, the operating
income or loss for each segment is the amount before
elimination of transactions among segments and elimination of
unrealized profit.
Japan
Sales of both automotive components and motorcycle
components increased and revenues increased due to effects
driven by the strong sales of our customers resulting from car
replacement stimulus programs and other factors in the first
half of the year.
As a result, net sales came to ¥125,258 million (up 8.5% year
on year) and operating income was ¥28 million (operating loss
for the previous year ¥3,637 million).
North America
Due to the increase in the sales of our customers caused by
the recovery of the market, sales of automotive components
increased and revenues increased in the United States and
Canada.
As a result, net sales came to ¥52,627 million (up 18.7% year
on year) and the operating loss was ¥101 million (operating
loss for the previous year ¥2,439 million).
South America
In Brazil, due to the large increase in the sales of our
customers caused by the recovery of the market, sales of
motorcycle components increased, and revenues increased.
As a result, net sales came to ¥21,229 million (up 26.0% year
on year) and operating income was ¥1,123 million (operating
loss for the previous year ¥864 million).
Asia
Due to the increase in the sales of our customers against the
background of the expansion of the automobile market in
Indonesia and Thailand, sales of both motorcycle components
and automotive components increased, and revenues
increased. In India sales of automotive components increased
due to the strong sales of our customers caused by the
expansion of the market there, and revenues increased.
As a result, net sales came to ¥41,359 million (up 26.9% year
on year) and operating income was ¥6,173 million (up 60.7%
year on year).
China
Due to the expansion of the automobile market, the sales of
our customers increased, so sales of automotive components
increased, and revenues increased.
As a result, net sales came to ¥24,370 million (up 9.8% year on
year) and operating income was ¥2,173 million (up 18.4% year
Overview of the fiscal year
Others
Net sales came to ¥7,717 million (down 2.4% year on year) and
the operating loss was ¥347 million (operating loss for the
previous year ¥1,001 million).
Turning to the outlook for our 104th fiscal year (from April 1,
2011 to March 31, 2012), the situation remains uncertain due to
the impact of the Great East Japan Earthquake on the
economy and the business environment of the Showa Group,
including production adjustments by our major customers and
other factors, but based on the production infrastructure we
rebuilt the previous year we will further strengthen the
fundamentals of our company so that profits can be generated
through bottom-line production as well. Furthermore, we will
make our management foundation solid by establishing a
strategy which adds the perspective of product and business
categories to our former business development approach
under which functional divisions and regions played the central
roles. Taking these approaches into account, we forecast
results for the next fiscal year as follows.
Net sales ¥223,000 million year on year
(down 4.4% year on year)
Operating income ¥5,200 million year on year
(down 41.5% year on year)
Ordinary income ¥6,200 million year on year
(down 23.1% year on year)
Net loss ¥900 million year on year
(year on year -)
(As of Revision made to our Business Performance Forecasts
announced on August 1,2011.)
The above forecasts are based on an average exchange rate of
¥81/US$ during the next fiscal year.
For the time being we have deferred any decision about the
interim and year-end dividends for the next fiscal year. We will
make the decisions after carefully assessing the business
environment, including the medium- and long-term economic
Business forecast for the next fiscal year
environment and the impact of the Great East Japan
Earthquake and comprehensively taking into account our
performance, funds demand and the soundness of our
financial standing, and notify our shareholders of the decisions
quickly once they have been made.
The Showa Group has designated the 11th medium-term
period of three years from April 2011 the three years for
consolidating our product and, production technology
strength, production system and management areas, and we
will develop our business not only in Japan but from a global
perspective on the world stage with the following four points
The medium- to long-term management
strategies of the company
The 11th Medium-term Period Basic Strategies
Build a framework that will be effective
for 10 years
Build a framework that can survive long into the future
* A production infrastructure that can respond to environmental changes
Build systems under which profits is generated through bottom-line sales
* Product development that is integrated from development through to production and sales * Shifting to a cost structure under which
revenue is generated given the unit price/cost price are competitive in the market
Construction of management systems that can execute our business strategies
* Building management systems that can respond to environmental changes
* Company-wide development of CSR (corporate social responsibility) activities
Development of the human resources systems needed to support Showa both domestic and overseas
* Implementation of the Showa philosophy
* Building and implementation of an integrated education system
Basic strategies
1
2
3
Showa’s Technology
Shock Absorbers
Steering Systems
Gas Springs
Differential Gears
Shock absorbers are critical to an automobile’s character
because they make the auto comfortable to ride and affect
the attitude and stability of the automobile body. With their
superior performance and quality, Showa brand shock
absorbers have created satisfied customers around the
world. Showa has years of experience with strut modules and
is also working on suspension modules combined with
peripheral components.
The propeller shaft’s function is to transmit the driving force
of the engine to the wheel axis. The long cylindrical shaft
rotates at high speed. It must limit vibration and noise while
ensuring high durability. Showa supplies leading-edge
technologies, and our structural analysis enables a smaller
number of components and lighter weight. Further, we have
implemented friction welding to achieve high precision,
dynamic balance and ultra–strong parts connections.
The role of a differential mechanism is to absorb the difference
in rotation between the right and left wheels when an
automobile is cornering. These products must offer durability,
transmission efficiency and quiet
operation. Showa’s differential gears
are light in weight while exhibiting high
performance in automobiles from
subcompacts to SUVs.
Gas springs help to open and close front hoods and rear gates
by using gas reaction force. They come with speed-adjustment
devices that enable operators to open and
close the hood and trunk at optimal speed.
Showa develops a variety of products to
meet customers’ diverse needs. Of all automobile components, steering systems must provide
performance and reliability. The steering system is the
man/machine interface that transmits the driver’s steering
motion to the automobile and conveys information on running
conditions from the automobile to the driver. The term “power
steering system” refers to a component that assists steering and
provides drivers with comfortable maneuverability.
Power steering systems are classified into hydraulic power
steering systems (HPS), which use the engine’s power as a drive
source, and electric power steering systems (EPS), utilizing the
vehicle’s battery. Showa has a full line of power steering models.
devices that enable operators to open and
close the hood and trunk at optimal speed.
Showa develops a variety of products to
Showa’s Technology
Shock Absorbers
Drive Unit Products
Power trim and tilt units change the angle of outboard engines
and provide the following three functions. The trim function
provides good screw efficiency and steady cruising by adjusting
the angle of the outboard engine while running. The tilt function
enables owners to prevent outboard engine damage from
clinging shellfish by raising the engine above the water’s surface
when moored. When driftwood or other objects strike the
outboard engine while under way, shocks are absorbed, helping
to prevent damage to the outboard engine and boat.
For motorcycle and ATV drive unit products, Showa has
achieved lighter weights through analysis of functions, shapes,
and materials, while maintaining excellent durability,
transmission efficiency and quiet operation. Showa motorcycle shock absorbers are used extensively in
motorcycle races around the world. From racing machines to scooters, we use our technology and experience to meet a wide variety of performance needs.
Front Forks
The front fork is a key structural component of a motorcycle, holding the front wheel s e c u re l y a n d p ro v i d i n g t h e s t e e r i n g function. This vital part must be able to
closely follow road contours through smooth operation and steady damping force, while retaining high rigidity.
Rear Cushions
The rear cushion is attached to the rear fork directly or through a link. By controlling the attitude and energy absorption of the motorcycle body, the rear cushion helps the
rear wheel to follow road contours.
Power Tilt and Trim Units
Current assets Assets
Cash and deposits
Notes and accounts receivable-trade Merchandise and finished goods Work in process
Raw materials and supplies Deferred tax assets Other
Allowance for doubtful accounts Total current assets
20,402 28,026 4,638 3,416 14,759 485 8,568 (97) Noncurrent assets
Property, plant and equipment Buildings, net
Machinery, equipment and vehicles, net Tools, furniture and fixtures, net Land
Lease assets, net Construction in progress
Total property, plant and equipment Intangible assets
Investments and other assets Investment securities Long-term loans receivable Deferred tax assets Other
Allowance for doubtful accounts Total investments and other assets
Total noncurrent assets
Total assets 158,340
Current liabilities Liabilities
Notes and accounts payable-trade Short-term loans payable
Accounts payable-other and accrued expenses Lease obligations
Income taxes payable Provision for product warranties Provision for bonuses Provision for directors' bonuses
Provision for loss on liquidation of subsidiaries and affiliates Other
Total current liabilities
25,077 16,158 7,130 124 1,001 1,244 2,701 − 28 2,602 Noncurrent liabilities
Long-term loans payable Lease obligations Deferred tax liabilities Provision for product warranties Provision for retirement benefits Provision for directors' retirement benefits Other
Total noncurrent liabilities
8,851 866 2,943 1,034 5,261 354 206
Total liabilities 75,586
Shareholders' equity Net assets Capital stock Capital surplus Retained earnings Treasury stock
Total shareholders' equity
12,698 13,455 49,906 (53)
Valuation and translation adjustments Valuation difference on available-for-sale securities Deferred gains or losses on hedges
Foreign currency translation adjustment Valuation and translation adjustments
4,176
−
(12,364)
...
Minority interests 14,933
Total net assets 82,753
Total liabilities and net assets 158,340
Following consolidated financical statements have been compiled from the consolidated financial statements prepared by the Company as required under the Financial Instruments and Exchange Law of Japan and, therefore have been prepared in conformity with accounting principles generally accepted in Japan, which are different in certain respects as to the application and disclosure requirements of International Financial Reporting Standards.
The translation of yen amounts into U.S. dollar amounts is included solely for the convenience and has been made, as a matter of arithmetic computation only, at the rate of ¥83.15 = U.S.$1.00, the exchange rate prevailing at 31st March, 2011.The translation should not be construed as a representation that yen amounts have been, could have been, or could in the future be, converted into U.S. dollars at the above or any other rate.
80,200 964,522 245,364 337,054 55,779 41,082 177,498 5,833 103,043 (1,167) ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 13,508 78,140 13,964 85,310 1,904,269 56,069 674,311 301,587 194,324 85,749 1,491 12,038 14,961 32,483 − 337 31,293 19,517 234,720 106,446 10,415 35,394 12,435 63,271 4,257 2,477 909,032 76,008 914,107 152,712 161,816 600,192 (637) (98,461) 50,222 − (148,695) ... 179,591 995,225 1,904,269 2011 14,651 32,342 5,079 4,096 16,424 430 9,061 (150) 18,002 38,380 1.940 10,004 104 2,137 70,570 775 11,088 166 183 2,540 (15) 167,247 26,495 15,085 8,793 33 1,216 1,253 2,456 47 2,776 2,393 12,436 85 3,115 902 4,655 405 41 82,193 12,698 13,455 49,784 (52) 4,494 (16) (9,750) 14,440 85,054 167,247 81,936 60,550 21,642 75,885 (5,272) 2010 2011
Millions of yen Thousands of U.S. dollars
... ... ... ... ... ... ...
Millions of yen
17,386 30,421 1,653 10,466 958 3,013 63,899 732 10,581 200 261 2,480 (16) (8,187) 209,092 365,857 19,880 125,869 11,521 36,236 768,479 8,803 127,252 2,405 3,139 29,826 (192) 162,453 939,747
Consolidated Financial Statement
Consolidated Balance Sheet (Unaudited)
Net sales
Overview of Assets, Liabilities and Net Assets
233,381
Non-operating income
Total non-operating income 2,051
Interest income Dividend income
Equity in earnings of affiliates Foreign exchange gains Subsidy Income Other ... 530 349 281 − 426 464 ...
Cost of sales 202,655
Gross profit 30,726
Selling, general and administrative expenses 21,831
Operating income(loss) 8,895
Income (loss) before income taxes 6,866
Income taxes-current 3,505
Income taxes-deferred 118
Total income taxes 3,624
Minority interests in income 3,119
Net income (loss) 122
Extraordinary loss
Loss on sales of noncurrent assets Loss on abandonment of noncurrent assets Impairment loss
Provision for product warranties
Provision for loss on liquidation of subsidiaries and affiliates Loss on disaster
Loss on adjustment for changes of accounting standard for asset retirement obligations Total extraordinary loss
... 112 530 111 148 − 354 68 ... Extraordinary income ... 59 70 ...
Ordinary income (loss) 8,062
Non-operating expenses
Interest expense Foreign exchange losses Others
Total non-operating expenses
... 769 1,733 380 ... 2,806,747 24,666 6,374 4,197 3,379 − 5,123 5,580 ... 2,437,222 369,525 262,550 106,975 82,574 42,153 1,419 43,584 37,511 1,467 1,325 15,935 1,347 6,374 1,335 1,780 − 4,257 818 ... 130 1,563 710 842 ... 96,957 2,884 34,684 9,248 20,842 4,570 ...
Consolidated total assets at the end of the fiscal year totaled ¥158,340 million, down ¥8,907 million year on year. The major factors affecting each item are described as follows.
(Current assets)
Current assets at the end of the fiscal year totaled ¥80,200 million, down ¥1,736 million year on year. This was mainly due to a decrease in notes and accounts receivable-trade and inventory assets, though cash and deposits increased.
(Noncurrent assets)
Noncurrent assets at the end of the fiscal year totaled ¥78,140 million, down ¥7,170 million year on year. This was mainly due to a decrease in machinery, equipment and vehicles.
(Current liabilities)
Current liabilities at the end of the fiscal year totaled ¥56,069 million, down ¥4,481 million year on year. This was mainly due to a decrease in our provision for loss on liquidation of subsidiaries and affiliates.
(Noncurrent liabilities)
Noncurrent liabilities at the end of the fiscal year totaled ¥19,517 million, down ¥2,125 million year on year. This was mainly due to a decrease in long-term loans payable.
(Net assets)
Net assets at the end of the fiscal year totaled ¥82,753 million, down ¥2,300 million year on year. This was mainly due to a decrease in foreign currency translation adjustment.
2011 2011
Millions of yen
...
Refund of income taxes −
207,657 2,712 424 165 234 993 454 439 187,816 19,841 22,212 (2,370) (5,939) 2,699 (433) 1,176 1,477 (8,593) 39 347 1,809 358 2,776 − − 8 ー (616) 876 ー 81 5,331 8 958 2010 (1,089) −
Income before minority interests − 3,242 38,990
... ... ...
Millions of yen Thousands of U.S. dollars
Gain on sales of noncurrent assets
Reversal of provision for loss on liquidation of subsidiaries and affiliates Total extraordinary income
Consolidated Financial Statement
Consolidated Statements of Income (Unaudited)
Net cash provided by (used in) operating activities
Income (loss) before income taxes Depreciation and amortization Impairment loss
Increase (decrease) in allowance for doubtful accounts Increase (decrease) in provision for product warranties Increase (decrease) in provision for directors' bonuses Increase (decrease) in provision for retirement benefits Increase (decrease) in provision for loss on liquidation of subsidiaries and affiliates Interest and dividends income
Interest expenses
Foreign exchange losses (gains) Equity in (earnings) losses of affiliates Subsidy Income
Loss (gain) on sales and retirement of property, plant and equipment Decrease (increase) in notes and accounts receivable-trade Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade Loss on adjustment for changes of accounting standard for asset retirement obligations Loss on disaster
Other, net Subtotal
Interest and dividends income received Interest expenses paid
Proceeds from subsidy Income taxes paid Income taxes refund
Net cash provided by (used in) operating activities
... 6,866 10,120 111 (43) 212 − 632 (2,748) (879) 769 194 (281) (426) 582 3,758 1,033 (1,887) 68 354 (342) 18,097 851 (777) 432 (3,424) 1,377 ...
Net cash provided by (used in) investing activities
(10,340) (2,208) 2,407 (7,634) 174 (109) (8,920) 6,140 (190)
Net cash provided by (used in) financing activities
(6,572)
Net increase (decrease) in short-term loans payable Proceeds from long-term loans payable
Payments from long-term loans payable Cash dividends paid
Cash dividends paid to minority shareholders Proceeds from sale and leaseback
Other, net
Net cash provided by (used in) financing activities
... (2,855) 3,234 (6,167) (1) (1,693) 1,006 (96) ...
Cash and Cash Equivalents at End of Year 12,846
Effect of exchange rate change on cash and cash equivalents 752
Net increase (decrease) in cash and cash equivalents 396
Cash and Cash Equivalents at Beginning of Year 12,449
82,574 121,708 1,335 (517) 2,550 − 7,601 (33,049) (10,571) 9,248 2,333 (3,379) (5,123) 6,999 45,195 12,423 (22,694) 818 4,257 (4,113) 217,643 10,235 (9,345) 5,195 (41,179) 16,560 ... ... ... ... (124,354) (26,554) 28,948 (91,810) 2,093 (1,311) (107,276) 73,842 (2,285) (79,038) (34,336) 38,894 (74,167) (12) (20,361) 12,099 (1,155) ... 154,492 9,044 4,762 149,717 2011 2011
Millions of yen Thousands of U.S. dollars
(5,939) 11,239 1,809 4 (44) (17) 988 2,766 (590) 876 (165) (234) (454) 378 (3,607) 3,140 4,738 − − 1,368 16,268 801 (816) 498 (2,185) 480 ... (8,846) (1,397) 2,347 (9,776) 98 (87) − − (31) 1,193 (2,745) 7,048 (1,389) (534) (1,161) − (24) ... 12,449 (151) 7,242 5,206 ... 2010
Millions of yen
16,557 199,122
15,047
Payments into time deposits
Proceeds from withdrawal of time deposits Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment Purchase of investment securities
Payments for short term investment Proceeds from short term investment Other, net
Net cash provided by (used in) investing activities
Consolidated Financial Statement
Consolidated Statements of Cash Flows (Unaudited)
Consolidated Statement of Changes in Net Assets (Unaudited)
Year ended 31st March 2010 and 2011
Consolidated Financial Statement
Capital stock
Balance at the end of previous period Changes of items during the period Total changes of items during the period Balance at the end of current period
Capital surplus
Retained earnings
Balance at the end of previous period Changes of items during the period Dividends from surplus Net income (loss)
Total changes of items during the period
Balance at the end of current period
Treasury stock
Balance at the end of previous period Changes of items during the period Purchase of treasury stock
Total changes of items during the period
Balance at the end of previous period
Total shareholders' equity
12,698 − 12,698 49,784 − 122 122 49,906 (52) 0 0 (53) 75,885 − 122 0 122 76,008 ... ... ... ... ... ... ... ... ... ... Shareholders' equity 152,712 − 152,712 598,725 − 1,467 1,467 600,192 (625) 0 0 (637) 912,628 − 1,467 0 1,467 914,107 ... ... ... ... ... 2011 2011
Millions of yen
12,698 − 12,698 58,908 △531 △8,593 △9,124 49,784 (52) 0 0 (52) 85,010 (531) (8,593) 0 (9,125) 75,885 ... ... ... ... ... 2010
Millions of yen Thousands of U.S. dollars
Balance at the end of previous period Changes of items during the period Total changes of items during the period
Balance at the end of current period
13,455
−
13,455
Balance at the end of current period Changes of items during the period Dividends from surplus Net income (loss)
Purchase of treasury stock
Total changes of items during the period
Balance at the end of current period
13,455 − 13,455 161,816 − 161,816
Overview of Cash Flow
Consolidated cash and cash equivalents (hereafter, “cash") at the end of the fiscal year totaled ¥12,846 million, up ¥396 million year on year, due to an increase in income before income taxes, though our provision for loss on liquidation of subsidiaries and affiliates decreased and there was an increase in expenditure on the repayment of long-term loans payable. An overview of cash flow for the fiscal year and the major factors involved are described below.
(Net cash provided by (used in) operating activities)
Cash earned from operations totaled ¥16,557 million, up ¥1,510 million year on year. This was mainly due to an increase in income before income taxes, though there was a decrease in our
provision for loss on liquidation of subsidiaries and affiliates.
(Net cash provided by (used in) investing activities) Cash used for investment activities totaled ¥10,340 million, up ¥1,494 million year on year. This was mainly due to an increase in fund management due to short-term investments, though there was a decrease in expenditure on the acquisition of tangible noncurrent assets.
Consolidated Financial Statement
Valuation difference on available-for-sale securities
Balance at the end of previous period Changes of items during the period
Net changes of items other than shareholders' equity Total changes of items during the period
Balance at the end of current period
Deferred gains or losses on hedges
Balance at the end of previous period Changes of items during the period
Net changes of items other than shareholders' equity Total changes of items during the period
Balance at the end of current period 4,494 (318) (318) 4,176 (16) 16 16 − (9,750) (2,614) (2,614) (12,364) (5,272) (2,915) (2,915) (8,187) 14,440 492 492 14,933 85,054 − 122 0 (2,423) (2,300) 82,753 ... ... ... ...
Foreign currency translation adjustment
Balance at the end of previous period Changes of items during the period
Net changes of items other than shareholders' equity Total changes of items during the period
Balance at the end of current period
... ...
Valuation and translation adjustments 2011
Total valuation and translation adjustments
Minority interests
Balance at the end of previous period Changes of items during the period
Net changes of items other than shareholders' equity Total changes of items during the period
Balance at the end of current period
... ...
Balance at the end of previous period Changes of items during the period
Net changes of items other than shareholders' equity Total changes of items during the period
Balance at the end of current period
... ...
Total net assets
Balance at the end of previous period Changes of items during the period Dividends from surplus
Net income (loss) Purchase of treasury stock
Net changes of items other than shareholders' equity Total changes of items during the period
Balance at the end of current period ... ... 54,047 (3,824) (3,824) 50,222 (192) 192 192 − (117,258) (31,437) (31,437) (148,695) (63,403) (35,057) (35,057) (98,461) 173,662 5,917 5,917 179,591 1,022,898 − 1,467 0 (29,140) (27,661) 995,225 ... ... ... 2011 ... ... ... Millions of yen
2,978 1,516 1,516 4,494 (43) 27 27 (16) (13,163) 3,413 3,413 (750) (10,229) 4,957 4,957 (5,272) 12,446 1,993 1,993 14,440 87,228 (531) (8,593) 0 6,951 (2,174) 85,054 ... ... ... 2010 ... ... ...
Millions of yen Thousands of U.S. dollars
Consolidated Statement of Changes in Net Assets (Unaudited)
Topics
On April 2011 SHOWA Corporation resolved to convert
MACHINO AUTO-PARTS CO., LTD. (Vietnam), an affiliate of
SHOWA Corporation, into a full subsidiary by receiving capital
transfers from the other stakeholders in the company. This
decision was made in order to implement mobile management
with ownership stakes* and management systems suited to the
company’ s business operations, and also taking into account
the fact that the Vietnamese motorcycle market is expected to
grow in future. We are aiming to strengthen our
competitiveness in the
growing Asian motorcycle
market. We plan to
change the name of the
company to SHOWA
AUTO-PARTS VIETNAM
CO., LTD.
1.
An affiliate in Vietnam converted
into a full subsidiary
In March 2011 an opening ceremony was held at SHANGHAI
SHOWA AUTOo PARTS CO., LTD. (China) in commemoration
of the completion of plant consolidation. Last year, as a part of
our efforts to build an optimal production system, unit dampers
were consolidated at this plant from AMERICAN SHOWA INC.
(the United States) and the Saitama Plant, and gas springs
from the Nagoya Plant. We have now completed large-scale
adjustments inside the plant that took approximately one year
and were necessitated by the expansion of operations,
including changes to the layout that took into consideration
safety and the environment and aimed to improve productivity.
Going forward, we
are aiming to
improve our profit
fundamentals even
further.
2.
Shanghai Showa launches with a new
production system
The Tochigi 4-Wheel Development Center in the town of Haga,
Haga District, Tochigi Prefecture, which recorded IX on
Modified Mercalli intensity scale in the Great East Japan
Earthquake on March 11, suffered major damage in the
earthquake including damage to its walls, ceilings and
equipment. Fortunately none of the employees were hurt.
As the result of our diligent restoration work, we were able to
secure a safe working space by about the end of March and
resumed development operations. Now the center has largely
been restored to its condition before the disaster.
3.
State of restoration of the 4-Wheel
Development Center, Tochigi
The 3rd floor cafeteria in building B which was severely damaged
* Ownership stakes : SHOWA Corporation (70%),
ASIAN HONDA MOTOR CO., LTD. (10%), PETRO VIETNAM MACHINERY-TECHNOLOGY JOINT STOCK COMPANY (10%)
and ITOCHU Corporation (10%)
After completion of restoration work on May 9
Location Hanoi Vietnam
Capital US$6,000,000
Site area 49,647m2
Building area 26,281m2
No. of employees 1,974 (including five representatives of SHOWA Corporation)
Major products Motorcycle shock absorbers Automobile shock absorbers Power steering
0 2,000 4,000 6,000 8,000
2010
2009
2008 7,655
6,923 7,889
■Net Sales
(million yen)
■Ordinary Income
0 200 400 600 800 1,000 1,200
2010
2009
2008 843
817
1,105
13.83%
(7,223)
Individuals / others
31.70%
(40)
Financial institutions
0.93%
(35)
Securities Traders
37.65%
(117)
Other corporations
15.89%
(131)
Foreign Investors
Overview of Shares
Total number of authorized shares
180,000,000 shares
Total number of issued shares
76,020,019 shares
Number of shareholders
7,546
Share Distribution by Shareholders
Name of shareholder
Honda Motor Co., Ltd.
Japan Trustee Service Bank Ltd. (Trust Account)
The Master Trust Bank of Japan, Ltd. (Trust Account)
THE BANK OF NEW YORK, TREATY JASDEC ACCOUNT Japan Trustee Service Bank Ltd. (Trust 9G Account)
Showa Corporation Business Partner’s Shareholding Association
The Bank of Tokyo-Mitsubishi UFJ, Ltd. CBNY DFA INTL SMALL CAP VALUE PORTFOLIO RBC Dexia Investor Services Bank Account Luxembourg Non-Resident Domestic Rate Trust & Custody Services Bank, Ltd. (Securities Investment Trust Account)
Overview of Major Shareholders
Showa’s Stock Price (03’/4=100)
Showa’s Stock Price Nikkei Average
Shares held (shares)
Investment ratio (%)
25,447,856
7,624,500
3,303,400
2,277,800
2,067,800
1,787,460
1,721,480
1,364,900
1,320,230
1,166,700
33.47
10.03
4.35
3.00
2.72
2.35
2.26
1.80
1.74
1.53
Board of Directors and Corporate Auditors
As of 28rd June 2011
President Yoichi Hojo Executive Vice President Kenshi Hirai Executive Managing Director Akira Kadoya Managing Directors Atsushi Izumina
Hajime Hirata Mitsutaka Sugino Takeshi Nagao
Directors Teru Oda Akira Wada Toyotaka Itagaki Yuetsu Sato Nobuyuki Sugiyama Kenichi Ono Masami Matsuo Masaharu Sobue
Auditors Tetsurou Aoyama (statutory) Tetsuo Nishikiori (statutory)※ Masahiko Sano※
Tsuneo Mizusawa※
※indicates outside corporate auditor.
Outlook of Consolidated Business Performance
As of 31st March 2011
‘05/4 7 10 ‘06/1 4 7 10 ‘07/1 4 7 10 ‘08/1 4 7 10 ‘09/1 4 7 10 ‘10/1 4 7 10 ‘11/1 4 7 0
SHOWA KYUSHU CORPORATION
Honda Cars SAITAMAKITA
Automotive Parts R&D Center (Saitama)
Nagoya Plant
Asaba Plant
Corporate Head Office Manufacturing Plants
Domestic Subsidiaries & Affiliates
R&D Facilities Hadano Plant
Gotemba Plants (No.1 / No.2)
Motorcycle Parts R&D Center (Asaba)
Automotive Parts R&D Center (Tochigi)
Corporate Head Office / Saitama Plant
SHOWA SEIKO CO., LTD.
Manufacturing Plants
Overview of Business
The SHOWA Group consists of our company, 16 subsidiaries and three affiliates, and our main businesses are the manufacture and sale of automotive parts.
Corporate Head Office, Plants and R&D Facilities
Corporate Head Office 1-14-1, Fujiwara-cho, Gyoda, Saitama
Plants Saitama Plant (Gyoda, Saitama), Hadano Plant (Hadano, Kanagawa),
Gotemba Plant (Gotemba, Shizuoka),
Asaba Plant (Fukuroi, Shizuoka),
Nagoya Plant (Kasugai, Aichi)
R&D Facilities Automotive Parts R&D Centers (Haga, Tochigi / Gyoda, Saitama)
Motorcycle Parts R&D Center (Fukuroi, Shizuoka)
SHOWA’s Global Network
As of 31st March 2011
Overview of Subsidiaries and Affiliates
Consolidated Subsidiaries SHOWA KYUSHU CORPORATION SHOWA SEIKO CO., LTD.
Honda Cars SAITAMAKITA SHOWA CANADA INC. AMERICAN SHOWA, INC. SHOWA EUROPE, S.A. NISSIN SHOWA UK LTD.
SHOWA AUTOPARTS (THAILAND) CO., LTD. P.T. SHOWA INDONESIA MANUFACTURING SUMMIT SHOWA MANUFACTURING CO., LTD. SHOWA INDUSTRIA E COMERICO LTDA. SHANGHAI SHOWA AUTO PARTS CO., LTD. SHOWA INDIA PVT. LTD.
SHOWA DO BRAZIL LTDA.
GUANGZHOU SHOWA AUTOPARTS CO., LTD.
Equity Method Affiliates CHENGDU NINGJIANG SHOWA AUTOPARTS CO.,LTD KAIFA INDUSTRY CO., LTD
MUNJAL SHOWA LTD.
SHOWA’s Global Network
As of 31st March 2011
Overseas
North America
China Europe
Japan
Southeast Asia
South America
SHOWA CANADA INC.
SHANGHAI SHOWA AUTO PARTS CO.,LTD. GUANGZHOU SHOWA AUTOPARTS CO.,LTD. WUHAN PLANT
CHENGDU NINGJIANG SHOWA AUTOPARTS CO.,LTD.
MUNJAL SHOWA LTD.
AMERICAN SHOWA, INC. Los Angeles Office
SHOWA DO BRAZIL LTDA.
SHOWA INDUSTRIA E COMERCIO LTDA. NISSIN SHOWA UK LTD.
SHOWA EUROPE, S.A.
SHOWA INDIA PVT. LTD.
SUMMIT SHOWA MANUFACTURING CO.,LTD. SHOWA AUTOPARTS (THAILAND) CO., LTD.
P.T. SHOWA INDONESIA MANUFACTURING
KAIFA INDUSTRY CO.,LTD. GUANGZHOU SHOWA AUTOPARTS CO.,LTD.
