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 In fiscal 2011, ended March 31, 2012, the Japanese economy was impacted by electricity supply shortages sparked by the Great East Japan Earthquake and tsunami of March 11, 2011. Other factors included major flooding in Thailand, which caused economic activity to stagnate temporarily. These events were followed by restoration of the supply chain, which led to signs of moderate recovery in production activities. Overall conditions remained difficult, however, due mainly to the sovereign debt crisis in Europe, the appreciation of the yen, and surging oil prices.Facing these challenges, the JRC Group took a proactive approach to its sales activities. However, consolidated net sales declined 7.3% year-on-year, to 99,871 million yen, due to decreases in sales of its three business segments: Marine Electronics Equipment, Communications Equipment, and Solutions and Specialized Equipment. On the earnings side, we posted an operating loss of 2,790 million yen (compared with operating income of 1,551 million yen in the previous year) and an ordinary loss of 2,839 million yen (compared with ordinary income of 1,133 million yen in the previous year), due largely to the considerable decline in net sales and the strong yen. For the year, we reported extraordinary income, including a gain on sale of property, plant and equipment of 1,175 million yen and a gain on sale of investment securities of 890 million yen. We also posted extraordinary losses, including an impairment loss of 653 million yen. As a result, the net loss for the year was 1,844 million yen (compared with net income of 1,921 million yen in the previous year). The JRC Group regards the return of profits to shareholders as a top priority. Our basic policy is to provide stable and continuous dividends to shareholders based on long-term perspectives while adapting to the earnings environment of the respective fiscal year and taking into account our business performance and reinforcement of our financial position. In the year under review, however, we faced a persistently uncertain economic outlook and predictions that the operating environment for the Group will remain difficult. Accordingly, we decided with regret to forgo payment of dividends, in order to advance our operations and undertake drastic business structural reforms aimed at achieving a performance recovery. Seeking to generate increases in sales and profits, the JRC Group will concentrate and expand managerial resources with a focus on private-sector demand and overseas business. As a unified group, we will also promote overseas production and procurement to achieve a cost structure able to withstand intense price competition in the global market. Through reductions in fixed costs and improvements in productivity, meanwhile, we will build a robust earnings structure. In addition, we will focus on tapping new markets, such as the environment and energy, by generating synergies among Group companies and promoting collaboration with other companies. Going forward, the JRC Group will demonstrate its role as a leading global entity in wireless communications technologies. To this end, we will continue pursuing R&D initiatives and developing new technologies and products, while at the same time striving to enhance both corporate and shareholder value.
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