-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CfPsblaoX2xeqjb29wRlNQotPyrQL/GzJuLiJ4wKj7niWp54w2czVMtBZHOsYUDO OkSnot31upBZIPwobY0rgA== 0000947871-03-001483.txt : 20030630 0000947871-03-001483.hdr.sgml : 20030630 20030630135147 ACCESSION NUMBER: 0000947871-03-001483 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20030701 FILED AS OF DATE: 20030630 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADVANTEST CORP CENTRAL INDEX KEY: 0001158838 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15236 FILM NUMBER: 03763596 BUSINESS ADDRESS: STREET 1: SHINJUKU NS BUILDING 4-1 STREET 2: NISHI SHINJUKU 2 CHOME CITY: SHINJUKU TOKYO JAPAN STATE: M0 ZIP: 00000 MAIL ADDRESS: STREET 1: SHINJUKU NS BLDG 2-4-1 STREET 2: NISHI SHINJUKU CITY: SHINJUKU TOKYO JAPAN STATE: M0 ZIP: 00000 6-K 1 f6k_062703.txt REPORT OF FOREIGN ISSUER FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 For the month of June, 2003 Commission File Number 1-15236 Advantest Corporation --------------------- (Translation of Registrant's Name Into English) Shinjuku-NS Building -------------------- 4-1 Nishi-Shinjuku 2-chome -------------------------- Shinjuku-ku ----------- Tokyo 163-0880 -------------- Japan ----- (Address of Principal Executive Offices) 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 whether the registrant by furnishing the information contained in this Form 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):______ Materials Contained in this Report: 1. English translation of the Japanese-language Notice of Convocation for the 61st ordinary general meeting of shareholders. 2. English translation of the Japanese-language notice of resolutions adopted at the 61st ordinary general meeting of shareholders on June 27, 2003. 3. English translation of a press release dated June 27, 2003, announcing the terms of stock acquisition rights to be issued in connection with the grant of stock options. 4. English translation of the Japanese-language Business Report sent to the registrant's shareholders on June 27, 2003. 5. Executive summary of the Japanese-language Securities Report submitted to the Chief of the Kanto Financial Bureau of the Ministry of Finance of Japan on June 30, 2003. Japanese Securities Report for the fiscal year from April 1, 2002 through March 31, 2003 pursuant to Article 24, paragraph 1 of the Securities Exchange Act of Japan and submitted to the Chief of the Kanto Financial Bureau of the Ministry of Finance of Japan on June 30, 2003, consisting of 118 pages (including cover), which includes the following: I. Corporate information A. Corporate overview 1. Five-year history of changes in major business indices 2. History of the company and its associated companies 3. Overview of business 4. Associated companies 5. Employee information B. Business 1. Business results 2. Production, orders and sales 3. Management issues 4. Material contracts 5. Research and development C. Capital assets 1. Overview of capital expenditure 2. Important capital assets 3. Plans for new projects and disposition of projects D. Company information 1. Share information a. Total number of shares b. Stock acquisition rights c. Number of shares outstanding, changes in capital stock d. Shareholder information e. Major shareholders f. Voting rights g. Stock options 2. Share repurchases 3. Dividend policy 4. Changes in share price 5. Directors and corporate auditors E. Financial information 1. Consolidated financial information [ ] Consolidated financial statements for fiscal year 2001 [ ] Consolidated financial statements for fiscal year 2002 [ ] Others 2. Unconsolidated financial information [ ] Unconsolidated financial statements for fiscal years 2001 and 2002 [ ] Major Assets and Liabilities [ ] Others F. Share handling information G. Reference materials II. Information on guarantors (none) The registrant sent copies of the report to the following stock exchange: [ ] Tokyo Stock Exchange, Inc. 2 SIGNATURES 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, thereunto duly authorized. Advantest Corporation By: /s/ Hitoshi Owada ----------------------------------- Name: Hitoshi Owada Title: Director and Managing Executive Officer Date: June 30, 2003 EX-1 3 ex1_062703.txt CONVOCATION NOTICE Exhibit 1 (Translation) June 2, 2003 To Our Shareholders Toshio Maruyama President and COO ADVANTEST CORPORATION 32-1, Asahi-cho 1-chome, Nerima-ku, Tokyo CONVOCATION NOTICE OF THE 61ST ORDINARY GENERAL MEETING OF SHAREHOLDERS Dear Sirs and Madams: Notice is hereby given that the 61st ordinary general meeting of shareholders of ADVANTEST CORPORATION (the "Company") will be held as set forth below. Your attendance thereat is respectfully requested. If you are not able to attend the meeting, you may exercise your voting rights in writing by submitting the enclosed voting instructions. In such case, after examining the reference documents as set forth below, please indicate your intention to vote "for" or "against" each agenda item, then affix your seal to the voting instructions form and send the said form to us. 1. Date and time: June 27, 2003 (Friday) at 10:00 a.m. 2. Place: Main Conference Room of the Company 32-1, Asahi-cho 1-chome, Nerima-ku, Tokyo 3. Subject matters of the meeting: Matters to be reported: Matters concerning the business report, balance sheet and statement of income for the 61st Fiscal Year (from April 1, 2002 to March 31, 2003). Matters to be resolved: Agenda Item No. 1: Approval of the proposed appropriation of retained earnings for the 61st fiscal year Agenda Item No. 2 Repurchase of the Company's shares (An outline of this agenda item is set forth on page 25 of the "Reference Documents with respect to the Exercise of Voting Rights" below) Agenda Item No. 3: Amendment of part of the Articles of Incorporation (An outline of this agenda item is set forth on page 25 through 29 of the "Reference Documents with respect to the Exercise of Voting Rights" below) 1 Agenda Item No. 4: Election of seven directors Agenda Item No. 5: Election of two corporate auditors Agenda Item No. 6: Issuance of stock acquisition rights as stock options (An outline of this agenda item is set forth on page 32 through 35 of the "Referential Documents with respect to the Exercise of Voting Rights" below) Agenda Item No. 7: Payment of retirement bonuses to retiring directors ================================================================================ When attending the meeting on the date set forth above, please submit the voting instruction form enclosed herewith to the reception desk at the place of the meeting. We respectfully request that you attend the reception to be held for the shareholders and the management of the Company after the meeting of shareholders is over. 2 (Attachment) Business Report --------------- (April 1, 2002 through March 31, 2003) 1. Overview of Business (1) Results of Business (a) Business Conditions During the fiscal year, the world economy continued to experience falling stock prices and global deflation caused by stagnating growth in North America and Europe and the poor economy in Japan. These factors, together with the war on Iraq and the growing epidemic of Severe Acute Respiratory Syndrome (SARS), served to increase uncertainty for the coming future. In the electronics industry, notwithstanding certain signs of improvement, neither the semiconductor nor the tester market reached a true state of recovery as both Japanese and overseas telecommunication carriers and semiconductor manufacturers continued significant cuts in their capital expenditures in light of the reduced demand for telecommunications equipment caused by reduced global investment in telecommunication infrastructures and information technologies, sluggish personal computer sales and falling semiconductor prices. Despite the Company's efforts to tackle these market conditions through the timely introduction of new products and programs to increase customer satisfaction, orders and sales remained weak as customers continued to reduce their investment levels. In response to this challenging environment, the Company continued its efforts to step up structural reforms. The Company implemented a number of structural reforms aimed at improving profitability, including selectively focusing on certain businesses and renovation of business processes, a significant reduction of personnel and other expenses, which involved the reduction of headcount, and a reduction of capital expenditures. As a result of the above, as compared with the previous fiscal year, incoming orders increased by 49.6% to (Y)78.2 billion, net sales increased by 5.2% to (Y)76.6 billion, while ordinary loss was (Y)19 billion and net loss was (Y)11.4 billion, as the adverse results from the previous fiscal year continue. Overseas sales as a percentage of total sales were 52.9%, as compared to 53.1% in the previous fiscal year. Analyzing the Company's business by segment, the automated test equipment segment continued to see reduced capital expenditures by semiconductor manufacturers. However, despite the stagnating growth in personal computers and high-speed communication, demand for testers used in the manufacturing of digital consumer devices remained strong as DVD devices, digital cameras and other digital electronics recorded strong sales primarily in Japan, and the shift toward full-color screens and camera-equipped models generated significant replacement demand for mobile phones. In the memory tester market, flash memory testers recorded strong sales. In addition, DRAM testers received an increased level of inquiries as investments were being made in back-end manufacturing in response to the shift from synchronized DRAM to DDR-DRAM. For this market, the Company introduced the T5593 high-speed memory tester for next generation DDR memory chips and a new memory handler model within the M6500 series for high-speed DRAM. In the SoC (System-on-a-Chip) tester market, sales of the T6500 series SoC test systems were strong due to the expanded production of digital consumer electronics and DVD devices. In addition, due to the strong market for LCD driver ICs used in LCD displays, digital cameras and mobile phones, the T6300 series LCD driver test systems recorded strong sales in Japan, Korea and Taiwan. In response to the testing needs for increasingly complex SoC devices, the Company announced in July 2002 its proposal to establish a consortium, the "Semiconductor Test Consortium, Inc.", or STC, toward achieving a truly open test architecture. This consortium, responsible for setting and approving an OPENSTARTM standard, was formed in March 2003 and has officially begun working toward establishing a highly scalable and flexible industry standard for testers. 3 Through the adoption of the OPENSTAR(TM) standard, the Company will provide a group of products that can cover devices ranging from specialized, single purpose ones to general purpose ones. With respect to maintenance services, in order to drastically speed up the global distribution of maintenance parts, the Company worked with Federal Express to establish a system that cuts delivery time by more than half, to within 24 hours to Asia and within 48 hours to the United States and Europe. In October 2002, the Company transferred its software support operations to a subsidiary, Advantest Customer Engineering Corporation, to centralize its after-sales support services. This subsidiary, which was renamed Advantest Customer Support Corporation, provides strengthened comprehensive support solutions. As a result of the above, incoming orders in the automated test equipment segment, as compared with the previous fiscal year, increased by 82.9% to (Y)66.8 billion, while net sales of the segment increased by 22.9% to (Y)64.6 billion. Overseas sales as a percentage of total sales in the automated test equipment segment were 57.7%, as compared to 61.0% in the previous fiscal year. In the measuring instrument segment, the wireless communication market has generally been weak due to delays in the launch of IMT20001 services in North America and Europe. Meanwhile, spectrum analyzers for the wireless LAN market generated strong sales as the market for wireless LAN devices was relatively successful. For this market, the Company is introducing a number of measuring instruments based on its WMT2 platform, including a high-performance signal analyzer for next-generation mobile communication. The fiber optic communication market experienced a further decline due to the continuing curb on capital expenditures. For this market, the Company introduced a dispersion optical time-domain reflectometer and a laser diode test system that simultaneously tests both the basic and transmission characteristics of laser diodes. In connection with the termination of the distribution arrangement with Tektronix, Inc., the Company established Advantest America Measuring Solutions, Inc., a subsidiary to market and service the Company's measuring instruments in the United States. By establishing its own sales channel and performing its sales and maintenance activities directly, the Company intends to provide comprehensive services that respond timely to customer needs. As a result of the above, incoming orders in the measuring instrument segment, as compared with the previous fiscal year, decreased by 27.8% to (Y)11.3 billion, while net sales of the segment decreased by 40.8% to (Y)12.0 billion. Overseas sales as a percentage of total sales in the measuring instrument segment were 27.3%, as compared to 32.5% in the previous fiscal year. *1 "IMT2000" - International Mobile Telecommunications 2000. The third generation of digital mobile communication technology *2 WMT (Wizard of Module Test) is a common platform proprietarily developed by the Company to provide measuring instruments customized for specific applications through the addition of blocks and modules necessary for the specific type of testing. 4 (Sales Breakdown by Segment)
- ------------------------------------------------------------------------------------------------------------------------ Fiscal Year : : : Change from the previous : FY2001 : FY2002 : period Segment :---------------------------------------------------------------------------------------------------- : Amount Percentage : Amount Percentage : Amount Percentage :(in million yen) (%) :(in million yen) (%) : (in million yen) (%) - ------------------------------------------------------------------------------------------------------------------------ Automated Test 52,619 72.2 64,656 84.3 12,037 22.9 Equipment Measuring 20,038 27.8 12,030 15.7 (8,278) (40.8) Instrument Total 72,928 100.0 76,686 100.0 3,758 5.2 Export 38,714 53.1 40,570 52.9 1,856 4.8
5 (b) Challenges Ahead The global economy is in general experiencing growing uncertainty as consumption slows and unemployment levels rise throughout the world, in addition to concerns regarding the economic consequences of the war on Iraq and of the SARS epidemic. Despite some signs of recovery with respect to investments in the development and production of next generation or state-of-the-art technologies, participants in the electronics industry, including semiconductor and telecommunication equipment manufacturers, are in general continuing their curb on capital expenditures. As a result, demand is not expected to pick up until the second half of the upcoming fiscal year. As such, while the business conditions affecting the Company can be expected to recover somewhat beginning in the second half of the fiscal year, difficult challenges and uncertainties are expected to remain. In response to this environment, the Company will focus on improving profitability through efforts to expand sales by introducing new products, in addition to renovation of its business processes, including continued production restructuring, and significant cost-cutting measures. As part of its structural reform program, the Company will spin off and transfer its semiconductor test equipment manufacturing operations to Advanelectron Co., Ltd. on around July 1, 2003. In addition, the Company will cause Advantest Instruments Corporation to merge into Advanelectron Co., Ltd., which will be renamed Advantest Manufacturing, Inc. In addition, the Company is focused on improving operating results through establishing an operating structure that responds timely to market changes, promoting early development of key future technologies and providing timely customer solutions under the concept of "GETsolution".3 The Company began listing on the New York Stock Exchange in September 2001. The Company hopes this listing will facilitate its overseas business activities, particularly in the U.S., and will seek to strengthen its investor relations and disclosure efforts and increase public recognition of the Company. The Company launched in October 2001 a company-wide initiative called "Initiative 21." This initiative seeks to promote effective ideas and strategies at all levels of the Company, from the sales, development and manufacturing to maintenance and administrative divisions, in order to improve the Company's competitiveness. Through the efforts of each and every employee in accepting new challenges, the Company seeks to achieve further growth while fulfilling its social mission. This initiative will continue through 2004, the year that marks the Company's 50th anniversary. In order to strengthen its corporate governance and ensure timely response to rapid changes in the business environment, the Company plans to reorganize its Board of Directors and introduce an Executive Officer system. Specifically, the monitoring/supervisory and executive functions of the Board of Directors will be separated from each other and individually strengthened. The Board of Directors, as the highest decision-making organ, will be responsible for the formulation of group-wide business policies and strategies as well as the monitoring and supervision of operations. The number of directors will be significantly reduced to streamline and revitalize the Board meetings. At the same time, the Company will introduce an Executive Officer system. These Executive Officers will be delegated clearly defined authority to enable them to run operations speedily and efficiently and will have clearly defined responsibilities for running operations. In addition, the Company will appoint an additional outside corporate auditor to strengthen the auditing function of the Board of Corporate Auditors. We look forward to your continued support and guidance as shareholders. *3 GETsolution (Globally Enabled Total solution) is the Company's service-based business designed to provide a set of comprehensive solutions to issues ranging from the design to product delivery of semiconductors. 6 (c) Capital Expenditures The Company invested a total of (Y)2.6 billion as capital expenditures in FY2002 with a focus on new product development, manufacturing streamlining, power saving and expansion of manufacturing capacity. i) Significant capital expenditure projects completed in FY2002 Kitakyushu R&D Center Yahatahigashi-ku, Completed in June 2002 Kitakyushu-shi, Fukuoka Prefecture ii) As of March 31, 2003, the Company does not have any plans for significant capital expenditure projects. (d) Financing No significant financing activity took place in FY2002. (2) Historical Data on Business Results and Assets
- -------------------------------------------------------------------------------------------------------- FY1999 FY2000 FY2001 FY2002 - -------------------------------------------------------------------------------------------------------- Net sales (in million yen) 142,209 225,309 72,928 76,686 - -------------------------------------------------------------------------------------------------------- Net income (in million yen) 14,426 31,820 (19,265) (11,467) - -------------------------------------------------------------------------------------------------------- Net income per share (in yen) 144.82 319.08 (193.71) (116.49) - -------------------------------------------------------------------------------------------------------- Net assets (in million yen) 203,379 230,988 204,058 178,253 - -------------------------------------------------------------------------------------------------------- Total assets (in million yen) 299,555 354,357 258,544 235,456 - --------------------------------------------------------------------------------------------------------
Note 1: The calculation of net income per share was based on the average number of total shares outstanding during the relevant fiscal year. Note 2: Due to an amendment in the Commercial Code and the "Regulations Regarding Balance Sheets, Statements of Income, Business Reports and Supporting Schedules of Stock Corporations" that requires that treasury stock be presented in stockholders' equity as a deduction item, the number of shares held by the Company as treasury stock was deducted from the average number of total outstanding shares when calculating net income per share beginning in FY2001. Note 3: Beginning FY2002, the Company has adopted the "Accounting Standards Regarding Calculations of Earnings Per Share of the current net earnings" (ASB Statement No. 2) and "Guideline for Accounting Standards Regarding Calculations of Earnings Per Share of the current net earnings" (ASB Guideline No. 4). 7 2. Company Information (as of March 31, 2003) (1) Primary Areas of Business -------------------------------------------------------------------------- Segment Main Products -------------------------------------------------------------------------- Automated Test Equipment SoC (System-on-a-Chip) test systems, DFT test systems, Memory test systems, Flash memory test systems, RFIC test systems, Image sensor test systems, LCD driver test systems, Dynamic test handlers, Device interface units, Electronic beam lithography equipment. -------------------------------------------------------------------------- Measuring Instruments Digital multimeters, Digital thermometers, DC voltage/current generators, Electrometers, Spectrum analyzers, Network analyzers, Signal generators, Radio communication testers, Power meters, EMC test receivers, Optical power meters, Optical spectrum analyzers, OTDR, Optical wavelength meters, Laser diode test systems, Optical network analyzers, Optical chirp test sets, Polarization scramblers, Error rate test systems, Digital television/video testers, Measuring instrument peripherals. -------------------------------------------------------------------------- (2) Equity Stock (a) Total number of authorized shares 220,000,000 shares (b) Total number of issued shares 99,783,385 shares (c) Number of shareholders 38,816 8 (d) Major shareholders
- -------------------------------------------------------------------------------------------------------------------- Status of Ownership The Company's Interest in such Shareholder Name of Shareholder Number of Percentage in Number of Percentage in Shares (in Voting Rights Shares (in Voting Rights thousand shares) (%) thousand shares) (%) - -------------------------------------------------------------------------------------------------------------------- Mizuho Trust & Banking Co., Ltd. 16,023 16.33 -- -- (retirement benefit trust (Fujitsu account)) - -------------------------------------------------------------------------------------------------------------------- Japan Trustee Services Bank, Ltd. (trust 5,129 5.22 -- -- account) - -------------------------------------------------------------------------------------------------------------------- Fujitsu Limited 4,047 4.12 -- -- - -------------------------------------------------------------------------------------------------------------------- The Master Trust Bank of Japan, Ltd. 3,620 3.69 -- -- (trust account) - -------------------------------------------------------------------------------------------------------------------- UFJ Trust Bank Limited (trust account A) 3,607 3.67 -- -- - -------------------------------------------------------------------------------------------------------------------- The Chase Manhattan Bank N.A. London S.L 2,721 2.77 -- -- (omnibus account) - -------------------------------------------------------------------------------------------------------------------- State Street Bank and Trust Company 2,110 2.15 -- -- - -------------------------------------------------------------------------------------------------------------------- Mizuho Corporate Bank, Ltd. 2,108 2.14 -- -- - -------------------------------------------------------------------------------------------------------------------- Sompo Japan Insurance Inc. 1,956 1.99 360 0.03 - -------------------------------------------------------------------------------------------------------------------- Mitsui Asset Trust and Banking Company, 1,915 1.95 -- -- Limited (as investment trustee) - --------------------------------------------------------------------------------------------------------------------
(Notes) 1. Mizuho Trust & Banking Co., Ltd. holds the 16,023 thousand shares of common stock referred above as the trustee of a retirement benefit plan of Fujitsu Limited, and exercises its voting rights pursuant to instructions given by Fujitsu Limited. 2. The Company owns 125 shares (or 0.00% of all voting rights, which excludes preferred shares with no voting rights) of the common stock of UFJ Holdings, Inc., which is the holding company for UFJ Trust Back Limited. 3. The Company owns 1,031 shares (or 0.01% of all voting rights) of the common stock and 1,000 shares of preferred shares with no voting rights of Mizuho Financial Group, Inc., which is the holding company for Mizuho Corporate Bank, Ltd. 4. Sompo Japan Insurance Inc. was formed out of a merger between the Nissan Fire & Marine Insurance Co., Ltd. and the Yasuda Fire and Marine Insurance Company, Ltd. on July 1, 2002. 9 (3) Acquisition, Disposition and Holding of Treasury Stock (i) Acquisition Repurchase of shares pursuant to Article 3, Paragraph 4 of the Supplementary Provisions to the Law Amending Part of the Commercial Code, etc. (Law no.79 of 2001) Common stock 1,200,000 shares Aggregate cost of acquisition (Y)10,665,839 thousand Repurchase of shares constituting less than a trading unit Common stock 11,372 shares Aggregate cost of acquisition (Y)65,056 thousand (ii) Disposition Common stock -- shares Aggregate proceeds from disposition -- thousand (iii) Number of treasury stock as of end of period Common stock 1,537,026 shares (4) Employees
------------------------------------------------------------------------------------------- Number of Change from End of Average Years of Employees Previous Period Average Age Service ------------------------------------------------------------------------------------------- 1,607 (227) 35.94 11.34 -------------------------------------------------------------------------------------------
(Notes) 1. The employee numbers set forth above do not include employees seconded to affiliates. 2. The number of employees decreased by 12.4% from the end of the previous fiscal year due to a voluntary retirement program implemented as part of the Company's organizational reform efforts. 10 (5) Business Combinations (a) Significant Subsidiaries
- ----------------------------------------------------------------------------------------------------------------------------------- Name of Subsidiary Common Stock Percentage Principal Activities of Ownership - ----------------------------------------------------------------------------------------------------------------------------------- Advantest Laboratories Ltd. (Y)50 million 100% Research and development of measuring and testing technologies - ----------------------------------------------------------------------------------------------------------------------------------- Advantest Customer Support Corporation (Y)300 million 100% Maintenance service for the Company's products - ----------------------------------------------------------------------------------------------------------------------------------- Advanmechatec Co., Ltd. (Y)300 million 100% Manufacturing of the Company's products - ----------------------------------------------------------------------------------------------------------------------------------- Advantest Instruments Corporation (Y)100 million 100% Manufacturing of the Company's products - ----------------------------------------------------------------------------------------------------------------------------------- Advanmicrotec Co., Ltd. (Y)50 million 100% Manufacture of components used in the Company's products - ----------------------------------------------------------------------------------------------------------------------------------- Advanelectron Co., Ltd. (Y)50 million 100% Manufacturing of the Company's products - ----------------------------------------------------------------------------------------------------------------------------------- Advantest Finance Inc. (Y)1,000 million 100% Leasing of the Company's products - ----------------------------------------------------------------------------------------------------------------------------------- Advantest America Corporation US$43,000 100% Headquarters of North American (Holding Co.) thousand operations - ----------------------------------------------------------------------------------------------------------------------------------- Advantest America, Inc. US$42,000 100% Manufacturing and sales of the thousand Company's products - ----------------------------------------------------------------------------------------------------------------------------------- Advantest (Europe) GmbH 10,792 thousand 100% Headquarters of European Euros operations; sales of the Company's products - ----------------------------------------------------------------------------------------------------------------------------------- Advantest Asia Pte. Ltd. 15,300 thousand 100% Headquarters of Asian operations Singapore Dollars - ----------------------------------------------------------------------------------------------------------------------------------- Advantest Taiwan Inc. 560,000 thousand 100% Sales of the Company's products New Taiwan Dollars - ----------------------------------------------------------------------------------------------------------------------------------- Advantest (Singapore) Pte. Ltd. 500 thousand 100% Sales of the Company's products Singapore Dollars - -----------------------------------------------------------------------------------------------------------------------------------
(Note) Percentage of ownership includes indirectly held shares. (b) Business Combination Activities (i) Advantest Business Corporation terminated operation on June 30, 2002. (ii) Advantest America Measuring Solutions, Inc. started its operation from July 1, 2002 in the U.S. as a subsidiary to perform measuring instrument sales and support services. (iii) Advantest Customer Support Corporation was renamed from Advantest Customer Engineering Corporation on October 1, 2002. (iv) Advantest Shanghai Co., Ltd. was established on January 17, 2003 in China as a subsidiary to perform support services for automated test equipment and other the Company's products. (v) The Company sold its entire stake in Advantest AD Corporation on March 31, 2003. 11 (c) Results of Business Combination Activities The Company has 41 subsidiaries (including the 13 significant subsidiaries listed above) and 1 equity method affiliate. In FY2002, consolidated net sales was (Y)97.7 billion (up 2.6% from the previous fiscal year) and consolidated net loss was (Y)12.9 billion. (6) Significant Sales and Branch Offices
- ------------------------------------------------------------------------------------------------------ Category Name of Office Location - ------------------------------------------------------------------------------------------------------ Head Office, Head Office Shinjuku-ku, Tokyo Branch Office --------------------------------------------------------------------------------- and Sales Office Nerima Office Nerima-ku, Tokyo --------------------------------------------------------------------------------- Gyoda Office Gyoda-shi, Saitama --------------------------------------------------------------------------------- Western Japan Office Suita-shi, Osaka --------------------------------------------------------------------------------- Instrument Sales Department - Takatsu-ku, Kawasaki-shi, Kanagawa Communication Products --------------------------------------------------------------------------------- Government & Public Organizations Nerima-ku, Tokyo Sales Department --------------------------------------------------------------------------------- Sendai Sales Branch Aoba-ku, Sendai-shi, Miyagi --------------------------------------------------------------------------------- Tokyo Sales Branch Nerima-ku, Tokyo --------------------------------------------------------------------------------- Nagoya Sales Branch Chigusa-ku, Nagoya-shi, Aichi --------------------------------------------------------------------------------- Osaka Sales Branch Suita-shi, Osaka --------------------------------------------------------------------------------- ATE Department 1 Shinjuku-ku, Tokyo --------------------------------------------------------------------------------- ATE Department 2 Suita-shi, Osaka - ------------------------------------------------------------------------------------------------------ R&D Centers Gunma R&D Center Meiwa-machi, Ora-gun, Gunma --------------------------------------------------------------------------------- Otone R&D Center Otone-machi, Kitasaitama-gun, Saitama --------------------------------------------------------------------------------- Kitakyushu R&D Center Yahatahigashi-ku, Kitakyushu-shi, Fukuoka - ------------------------------------------------------------------------------------------------------ Laboratories Advantest Laboratories Aoba-ku, Sendai-shi, Miyagi - ------------------------------------------------------------------------------------------------------ Factories Gunma Factory Ora-machi, Ora-gun, Gunma --------------------------------------------------------------------------------- Gunma Factory 2 Ora-machi, Ora-gun, Gunma --------------------------------------------------------------------------------- Menuma Factory Menuma-machi, Osato-gun, Saitama - ------------------------------------------------------------------------------------------------------ Other EMC Center Meiwa-machi, Ora-gun, Gunma - ------------------------------------------------------------------------------------------------------
12 (7) Directors and Corporate Auditors
- ----------------------------------------------------------------------------------------------------------------------------------- Title Name Area of Responsibility - ----------------------------------------------------------------------------------------------------------------------------------- Chairman of the Board and CEO Hiroshi Oura - ----------------------------------------------------------------------------------------------------------------------------------- Vice Chairman of the Board Shinpei Takeshita - ----------------------------------------------------------------------------------------------------------------------------------- President and COO Toshio Maruyama - ----------------------------------------------------------------------------------------------------------------------------------- Senior Managing Director Kiyoshi Miyasaka In charge of Corporate Planning and Strategies; Senior Vice President, Strategic Business Initiatives - ----------------------------------------------------------------------------------------------------------------------------------- Senior Managing Director Shigeru Sugamori In charge of Service and Technology - ----------------------------------------------------------------------------------------------------------------------------------- Senior Managing Director Junji Nishiura In charge of Product - ----------------------------------------------------------------------------------------------------------------------------------- Managing Director Isao Kitaoka Senior Vice President, Instrument Sales and Marketing Group - ----------------------------------------------------------------------------------------------------------------------------------- Managing Director Hiroji Agata Senior Vice President, ATE Sales Group - ----------------------------------------------------------------------------------------------------------------------------------- Managing Director Kenichi Mitsuoka Senior Vice President, FA Business Group; General Manager, Handler Division - ----------------------------------------------------------------------------------------------------------------------------------- Managing Director Takashi Tokuno Senior Vice President, ATE Business Group - ----------------------------------------------------------------------------------------------------------------------------------- Managing Director Hitoshi Owada Senior Vice President, Administration and Finance Division - ----------------------------------------------------------------------------------------------------------------------------------- Managing Director Masakazu Ando In charge of Instrument Business - ----------------------------------------------------------------------------------------------------------------------------------- Board Director Jiro Katoh Vice President, Instrument Business Group; General Manager, Engineering Division - ----------------------------------------------------------------------------------------------------------------------------------- Board Director Tetsuo Aoki Vice President, Strategic Business Initiatives - ----------------------------------------------------------------------------------------------------------------------------------- Board Director Norihito Kotani Senior Vice President, Instrument Business Group; General Manager, Product Development Division; Senior Vice President, Technology Development Group - ----------------------------------------------------------------------------------------------------------------------------------- Board Director Takao Tadokoro General Manager, ATE Systems Engineering Division of the ATE Business Group - ----------------------------------------------------------------------------------------------------------------------------------- Board Director Hiroyasu Sawai Vice President, ATE Sales Group - ----------------------------------------------------------------------------------------------------------------------------------- Board Director Yuri Morita Vice President, Administration and Finance Division (in charge of legal, intellectual property and export control); Manager, General Affairs Department and Legal Department - ----------------------------------------------------------------------------------------------------------------------------------- Board Director Hiroshi Tsukahara Senior Vice President, DI Business Group; General Manager, DI Business Division - ----------------------------------------------------------------------------------------------------------------------------------- Board Director Masao Shimizu In charge of SoC Tester Product of ATE Business Group; General Manager, 1st SoC Tester Business Division - ----------------------------------------------------------------------------------------------------------------------------------- Corporate Standing Auditor Noboru Yamaguchi - ----------------------------------------------------------------------------------------------------------------------------------- Corporate Standing Auditor Tadahiko Hirano - ----------------------------------------------------------------------------------------------------------------------------------- Corporate Auditor Keizo Fukagawa Corporate Standing Auditor of Fujitsu Limited - -----------------------------------------------------------------------------------------------------------------------------------
(Note) 1. Changes in the appointment of board directors and corporate auditors during FY2002 (1) Changes adopted by the 60th General Meeting of Shareholders on June 27, 2002 None (2) Changes adopted by the Meeting of the Board of Directors on June 27, 2002 None 2. Significant changes in the area of responsibility or position of board directors subsequent to the end of FY2002 Effective May 1, 2003 President and COO Toshio Maruyama Director, Environmental Management Center Board Director Yuri Morita Vice President, Administration and Finance Division (in charge of 13 legal, intellectual property and export control); Manager, General Affairs Department and Legal Department; Deputy Director, Environmental Management Center 3. Among the corporate auditors set forth above, Keizo Fukagawa is an outside corporate auditor appointed pursuant to Article 18, Section 1 of the "Law Concerning Exceptions to the Commercial Code Relating to Audit, etc. of Stock Corporations." 14 (8) Description of stock acquisition rights issued under especially favorable terms to persons who are not shareholders On July 5, 2002, the Company issued stock options in the form of stock acquisition rights pursuant to a resolution of the Board of Directors dated June 27, 2002. 1. Number of stock acquisition rights issued 7,350 2. Class and total number of shares 735,000 shares of common stock underlying the stock acquisition (each stock acquisition right rights is exercisable for 100 shares) 3. Issuance price (Y)0 4. Subscription price to be paid upon (Y)8,148 per share exercise 5. Exercise period April 1, 2003 to March 31, 2007 6. Terms of exercise (a) A person to whom stock acquisition rights are allocated (a "rights holder") may not exercise its rights if: (i) the rights holder ceases to be a director, corporate auditor or employee of the Company or its domestic or overseas subsidiary before the expiration of the exercise period, and is not appointed or rehired as a director, corporate auditor, employee, advisor or irregular employee, except where the termination is due to the completion of his/her term of office or his/her reaching retirement age; (ii) the rights holder dies; (iii) the rights holder notifies the Company of his/her intention to waive the rights; (iv) the rights holder becomes an officer or employee of a company engaging in competing business, and is notified by the Company of the revocation of his/her rights; or (v) the rights holder violates the law or the agreement governing the granting of the stock acquisition rights, and is notified by the Company of the revocation of his/her rights. (b) The stock acquisition rights may not be inherited. (c) Each stock acquisition right may not be exercised in part. 7. Cancellation of stock acquisition rights (a) The Company may cancel, for no consideration, any stock acquisition right in the event that the general meeting of the shareholders resolves to approve (i) any merger agreement pursuant to which the Company shall cease to exist, or (ii) any share exchange agreement or share transfer pursuant to which the Company shall become a wholly-owned subsidiary of another company. (b) The Company may cancel, for no consideration, all or part of the stock acquisition rights of a rights holder to the extent that such stock acquisition rights are not exercisable due to the rights holder's failure to satisfy any of the conditions for exercise of stock acquisition rights. 8. Restriction on the transfer of stock acquisition rights Any transfer of stock acquisition rights shall require the approval of the Board of Directors. 9. Favorable terms related to the stock acquisition rights The stock acquisition rights were issued for no consideration to directors, corporate auditors and employees of the Company and its domestic and overseas subsidiaries. 10. Names of the persons to which stock acquisition rights were allocated and the number of rights allocated (titles are based on information current as of the time of allocation) (a) Directors of the Company
- ----------------------------------------------------------------------------------------------------------------- Class and total number of Name Number of stock shares underlying the stock acquisition rights acquisition rights - ----------------------------------------------------------------------------------------------------------------- Hiroshi Oura 350 35,000 shares of common stock - ----------------------------------------------------------------------------------------------------------------- Shinpei Takeshita 250 25,000 shares of common stock - ----------------------------------------------------------------------------------------------------------------- Toshio Maruyama 300 30,000 shares of common stock - ----------------------------------------------------------------------------------------------------------------- Kiyoshi Miyasaka, Shigeru Sugamori, 200 each 20,000 shares of common stock each Junji Nishiura - ----------------------------------------------------------------------------------------------------------------- Isao Kitaoka, Hiroji Agata, Kenichi 160 each 16,000 shares of common stock each
15
Mitsuoka, Takashi Tokuno, Hitoshi Owada, Masakazu Ando - ----------------------------------------------------------------------------------------------------------------- Jiro Katoh, Tetsuo Aoki, Norihito Kotani, 120 each 12,000 shares of common stock each Takao Tadokoro, Hiroyasu Sawai, Yuri Morita, Hiroshi Tsukahara, Masao Shimizu - -----------------------------------------------------------------------------------------------------------------
(b) Corporate auditors of the Company
- ----------------------------------------------------------------------------------------------------------------- Class and total number of Name Number of stock shares underlying the stock acquisition rights acquisition rights - ----------------------------------------------------------------------------------------------------------------- Noboru Yamaguchi, Tadahiko Hirano, 30 each 3,000 shares of common stock each Keizo Fukagawa - -----------------------------------------------------------------------------------------------------------------
(c) Directors of the Company's subsidiaries
- ----------------------------------------------------------------------------------------------------------------- Class and total number of Name Number of stock shares underlying the stock acquisition rights acquisition rights - ----------------------------------------------------------------------------------------------------------------- Young Hwan Kim, Sui Yoong Cheng, 100 each 10,000 shares of common stock each Nicholas Konidaris, Josef Schraetzenstaller - ----------------------------------------------------------------------------------------------------------------- Klaus Lutz, Robert Sauer 80 each 8,000 shares of common stock each - ----------------------------------------------------------------------------------------------------------------- Ping Nieh 50 5,000 shares of common stock - ----------------------------------------------------------------------------------------------------------------- Keishi Kaetsu, Mineo Kamiya, Katsusaburo 30 each 3,000 shares of common stock each Kawaguchi, Michiaki Chamoto, Shoji Niki, Hiromi Maruyama, Katsuaki Minami - ----------------------------------------------------------------------------------------------------------------- Kazuo Aoki, Kuniyasu Asada, Isamu Inaba, 10 each 1,000 shares of common stock each Hiroshi Eguchi, Toshimitsu Oya, Minoru Terashima - -----------------------------------------------------------------------------------------------------------------
(d) Corporate auditors of the Company's subsidiaries
- ----------------------------------------------------------------------------------------------------------------- Class and total number of Name Number of stock shares underlying the stock acquisition rights acquisition rights - ----------------------------------------------------------------------------------------------------------------- Toshikazu Imai 20 2,000 shares of common stock - -----------------------------------------------------------------------------------------------------------------
(e) Employees of the Company and its subsidiaries (the table below shows only the top 10 grantees)
- ----------------------------------------------------------------------------------------------------------------- Class and total number of Name Number of stock shares underlying the stock acquisition rights acquisition rights - ----------------------------------------------------------------------------------------------------------------- Michael Stichlmair 50 5,000 shares of common stock - ----------------------------------------------------------------------------------------------------------------- Hitoshi Ashida, Tomio Aso, Masao Araki, 30 each 3,000 shares of common stock each Hideaki Imada, Tomomichi Uemura, Shin'ichiro Umeda, Yoshio Endo, Tomoyuki Kawanabe, Akira Kintaka - -----------------------------------------------------------------------------------------------------------------
16 Balance Sheet (As of March 31, 2003)
(In million yen) - ----------------------------------------------------------------------------------------------------------------- Assets Liabilities - ----------------------------------------------------------------------------------------------------------------- Current assets 140,656 Current liabilities 21,754 Cash and deposits 56,949 Trade accounts payable 10,371 Trade notes receivable 901 Current installments of bonds 2,200 Accounts receivable 32,838 Other accounts payable 1,311 Finished goods 5,741 Income tax payable 28 Raw materials 6,350 Accrued expenses 5,218 Work in progress 15,007 Allowance for product warranty 1,658 Supplies 118 Other 965 Deferred tax assets 12,278 Other 10,468 Noncurrent liabilities 35,447 Bonds 24,500 Long-term borrowings 125 Noncurrent assets 94,799 Allowance for retirement benefits 8,510 Property, plant and equipment 44,399 Allowance for officers' retirement 1,426 benefits Buildings and improvements 18,780 Other 884 ---------------------------------------------------------- Structures 1,285 Total liabilities 57,202 ---------------------------------------------------------- Machinery and equipment 3,389 Stockholders' equity Vehicles and delivery equipment 0 ---------------------------------------------------------- Tools and furniture 2,678 Common stock 32,362 Land 18,133 Capital surplus 32,973 Construction in progress 131 Additional paid-in capital 32,973 Intangible fixed assets 3,990 Retained earnings 126,187 Software and other 3,990 Legal reserve 3,083 Investments and other assets 46,410 Reserve for losses in foreign investments 27,062 Investment securities 5,530 General reserve 106,880 Investments in subsidiaries 14,087 Undisposed deficit at end of year 10,837 Long-term loans receivable 51 (Net loss) (11,467) Net unrealized holding gains on equity (104) Deferred tax assets 24,999 securities etc. Net unrealized holding gains on other (104) Other 1,741 securities Treasury stock (13,165) ---------------------------------------------------------- Total stockholders' equity 178,253 - ----------------------------------------------------------------------------------------------------------------- Total assets 235,456 Total liabilities and stockholder's equity 235,456 - -----------------------------------------------------------------------------------------------------------------
(Note) All amounts above are truncated after the million. Beginning this fiscal year, the Company adopted the "Regulation for the Commercial Code" (Ministerial Ordinance of Ministry of Justice No.22, issued on March 29, 2002) for its financial statements, etc. 1. Short-term receivables from subsidiaries (Y)21,535 million 2. Short-term payables to subsidiaries (Y)3,860 million 3. Outstanding loan guarantees (Y)67 million 4. Accumulated depreciation on property, plant and equipment (Y)52,354 million 5. Assets pledged as collateral Property, plant and equipment (Y)415 million 6. In addition to the noncurrent assets on the balance sheet, the Company uses certain computer equipment under lease contracts. 7. Significant foreign currency-denominated assets Trade accounts receivable US$30,273 thousand Investment securities and investments in subsidiaries US$51,701 thousand 13,270 thousand Euros 8. The amount of outstanding warrants attached to bonds, class of equity issuable upon exercise of such warrants and their exercise prices are as set forth below:
Amount outstanding Class of equity issuable upon exercise Exercise price ------------------ -------------------------------------- -------------- Series 2 unsecured bonds (Y)110 million Common stock (Y)21,840.00
17
with warrants Series 3 unsecured bonds (Y)225 million Common stock (Y)14,018.00 with warrants
9. Details of stock acquisition rights are as follows: Issued on July 5, 2002
Number of stock acquisition rights issued 7,350 Class and total number of shares 735,000 shares of common stock (each stock underlying the stock acquisition rights acquisition right is exercisable for 100 shares) Issuance price (Y)0 Subscription price to be paid upon (Y)8,148 per share exercise
10. Net loss per share (Y)116.49 11. There was no increase in net assets within the definition of Article 290, Paragraph 1, Clause 6 of the Commercial Code. 18 Statement of Income (April 1, 2002 through March 31, 2003)
(In million yen) - -------------------------------------------------------------------------------------------------------------- Operating Operating income profit and loss Net sales 76,686 Operating expenses Cost of sales 49,163 Selling, general and 45,732 94,895 administrative expenses ------------------------------------------------------------------------- Ordinary profit Operating loss 18,209 and loss ---------------------------------------------------------------------------------------------- Non-operating income Interest and dividends income 1,902 Non-operating Other 2,404 4,307 profit and loss Non-operating expenses Interest expenses 474 Other 4,707 5,182 ---------------------------------------------------------------------------------------------- Ordinary loss 19,084 - -------------------------------------------------------------------------------------------------------------- Net loss before income taxes 19,084 - -------------------------------------------------------------------------------------------------------------- Income taxes - current 43 - -------------------------------------------------------------------------------------------------------------- Income taxes - deferred (7,659) - -------------------------------------------------------------------------------------------------------------- Net loss 11,467 - -------------------------------------------------------------------------------------------------------------- Retained earnings brought forward 2,595 - -------------------------------------------------------------------------------------------------------------- Interim dividends 1,965 - -------------------------------------------------------------------------------------------------------------- Undisposed deficit at end of year 10,837 - --------------------------------------------------------------------------------------------------------------
(Note) All amounts above are truncated after the million. Transactions with subsidiaries Sales (Y)31,898 million Purchases (Y)28,067 million Non-operating transactions (Y)3,975 million 19 Significant Accounting Policies 1. Valuation of securities (1) Investments in subsidiaries Stated at cost using the moving average method (2) Other securities (a) Securities with fair value Stated at fair value based on market prices at the end of the relevant period (unrealized holding gains and losses are accounted for as a component of stockholders' equity; cost of other securities sold is determined using the moving average method). (b) Securities not practicable to estimate fair value Stated at cost using the moving average method 2. Valuation of inventories (1) Finished goods Stated at cost using the periodic average method (2) Raw materials Stated at lower cost or market using the periodic average method (3) Work in progress Stated at cost using the periodic average method (4) Supplies Stated at cost using the specific identification method 3. Depreciation and amortization of noncurrent assets (1) Depreciation of plant, property and equipment Based on the declining balance method However, buildings (excluding attached improvements) acquired on or after April 1, 1998 are depreciated using the straight-line method. (2) Amortization of intangible fixed assets Based on the straight-line method However, software for internal use is amortized using the straight-line method over its estimated useful life of 5 years. 4. Translation of assets and liabilities denominated in foreign currencies into yen Receivables and payables denominated in foreign currencies are translated into yen at the spot exchange rate on the last day of the fiscal period, and any translation gains or loss are accounted for as profit or loss as the case may be. 5. Allowances (1) Allowance for doubtful accounts To prepare for credit losses on accounts receivable and loans, etc., an allowance equal to the estimated amount of uncollectible receivables is provided for general receivables based on a historical write-off ratio, and for bad receivables based on a case-by-case determination of collectibility. (2) Allowance for product warranty To reasonably account for repair costs covered under product warranty in the respective periods in which they arise, the allowance for a given year is provided in an amount determined based on the ratio of repair costs in that year to net sales in the preceding year. (3) Allowance for retirement benefits To provide for employee retirement benefits, an allowance for retirement benefits is provided in an amount determined based on the estimated retirement benefit obligations and pension assets at the end of the fiscal year. Past service liabilities are amortized on a straight-line basis over a fixed number of years (17 years) during the average remaining years of service of employees. 20 Any actuarial gains and losses are amortized on a straight-line basis over a fixed number of years (17 years) during the average remaining years of service of employees, and the amount is recorded in the fiscal year subsequent to its occurrence. (4) Allowance for officers' retirement benefits To provide for officers' retirement benefits, an allowance is provided for the aggregate amount payable at the end of the period pursuant to the Company's rules on officers' retirement benefits. This allowance is stipulated under Article 287-2 of the Commercial Code. 6. Accounting for lease transactions Finance lease transactions not involving a transfer of title to the lessee are accounted for in the same way as usual operating lease transactions. 7. Accounting for consumption taxes Consumption taxes are accounted using the net-of-tax method. (Changes in Accounting Policies) 1. Accounting treatment of treasury stock and reversal of legal reserve Beginning this fiscal year, the Company has adopted the "Accounting Standards for the Company's Own Shares and the Withdrawal of Legal Reserve" (ASB Statement No. 1). The adoption of this new standard had no material impact on the results of this fiscal year. 2. Accounting treatment of earnings per share Beginning this fiscal year, the Company has adopted the "Accounting Standards Regarding Calculations of Earnings Per Share of the current net earnings" (ASB Statement No. 2) and the "Guideline for Accounting Standards Regarding Calculations of Earnings Per Share of the current net earnings" (ASB Guideline No. 4). The adoption of this new standard had no material impact on the results of this fiscal year. 21 Proposed Appropriation of Retained Earnings (In yen) - -------------------------------------------------------------------------------- Item Amount - -------------------------------------------------------------------------------- Undisposed deficit 10,837,452,230 Reversal of voluntary reserve Reversal of general reserve 14,000,000,000 Total 3,162,547,770 Earnings will be appropriated as follows: Dividends ((Y)10 per share) 982,463,590 Earnings to be carried forward 2,180,084,180 - -------------------------------------------------------------------------------- (Note) On December 10, 2002, the Company paid interim dividends of (Y)20 per share (or (Y)1,965,114,580 in total) to its shareholders of record as of September 30, 2002. 22 Copy of Independent Auditor's Report - -------------------------------------------------------------------------------- Independent Auditor's Report May 9, 2003 To the Board of Directors of Advantest Corporation: Shin Nihon & Co. Shigenori Hanada ------------------------------- Daihyo Shain and Kanyo Shain Certified Public Account Mitsuo Cho ------------------------------- Kanyo Shain Certified Public Account We have audited the financial statements, which included the balance sheet, statement of income, the business report, the proposed appropriation of retained earnings and the supporting schedules of Advantest Corporation for its 61st fiscal year (April 1, 2002 through March 31, 2003) for the purpose of reporting under the provisions of Article 2 of the "Law Concerning Exceptions to the Commercial Code Relating to Audit, etc. of Stock Corporations." With respect to the aforementioned business report and the supporting schedules, our audit was limited to those matters based on the accounting records of the Company. The management of the Company was responsible for the preparation of these financial statements and the supporting schedules, and our responsibility shall be limited to the expression of an independent opinion regarding the financial statements and the supporting schedules. We conducted our audit in accordance with auditing standards generally accepted in Japan. The auditing standards require reasonable assurance that the financial statements and the supporting schedules do not contain any untrue representation of material fact. The audit was conducted based on an audit by testing, and included a review of the financial statements and the supporting schedules as a whole and an evaluation of the accounting policies adopted by the management, the application thereof, and the estimates prepared by the management. We believe that we have obtained a reasonable basis to form our opinion as a result of the audit. The auditing procedures also include those considered necessary for its subsidiaries. In our opinion, (1) the balance sheet and statement of income present properly the financial position and the results of operations of the Company in conformity with related regulations and the Articles of Incorporation of the Company; (2) the business report, as far as the accounting date included in such report are concerned, presents properly the status of the Company in conformity with the related regulations and the Articles of Incorporation of the Company; (3) the proposed appropriation of retained earnings has been prepared in conformity with the related regulations and the Articles of Incorporation of the Company; (4) the supporting schedules, as far as the accounting date included in such schedules are concerned, have been prepared in conformity with the provisions of the Commercial Code. We have no interest in the Company which should be disclosed pursuant to the provisions of the Certified Public Accountant Law. - -------------------------------------------------------------------------------- 23 Copy of Board of Corporate Auditors' Audit Report - -------------------------------------------------------------------------------- Audit Report This Audit Report was prepared by the Board of Corporate Auditors based on reports from each Corporate Auditor with respect to the method and results of audit concerning the performance by each Board Director of his respective duty during the 61st fiscal year (April 1, 2002 through March 31, 2003) of Advantest Corporation. We hereby report as follows. 1. Method of Audit Pursuant to the audit policies established by the Board of Corporate Auditors, each Corporate Auditor has attended meetings of the Board of Directors and other important meetings, posed questions to Board Directors on the state of business, reviewed important approval-granting documents, inspected the state of business and assets at the Head Office and other important branch offices, and reviewed the financial statements and the supporting schedules upon report from independent auditors. The Corporate Auditors have also sought reports from subsidiaries of the Company on their state of business, and performed on-site inspection of the state of business and assets of important subsidiaries whenever necessary. In the case of any engagement in competing transactions by a Board Director, transactions involving any conflict of interests between the Company and a Board Director, offering of advantage by the Company for no consideration, transactions at unusual terms with a subsidiary or shareholder, or the acquisition or disposition of treasury stock, the Corporate Auditors have, in addition to the method of audit described above, requested reports from the Board Directors and inspected such transactions in detail when necessary. 2. Result of Audit (1) The method and result of audit performed by Shin Nihon & Co., the independent auditor of the Company, are appropriate. (2) The business report of the Company accurately presents the financial conditions of the Company in conformity with applicable laws and regulations and the Articles of Incorporation of the Company. (3) In consideration of the financial position of the Company and other matters, the proposed appropriation of retained earnings plan presents fairly all matters required to be presented, and no irregularity was found that need to be pointed out. (4) The supporting schedules present fairly all matters required to be presented, and no material irregularity requiring disclosure was found. (5) No irregularity or violation of applicable laws or regulations or the Articles of Incorporation of the Company was found with respect to the activities of the Board Directors, including activities related to subsidiaries of the Company. In addition, no breach of fiduciary duty by any Board Directors was found with respect to engagements in competing transactions by a Board Director, transactions involving any conflict of interest between the Company and a Board Director, offering of advantage by the Company for no consideration, transactions at unusual terms with a subsidiary or shareholder, or the acquisition or disposition of treasury stock. May 16, 2003 Board of Corporate Auditors of Advantest Corporation Noboru Yamaguchi ------------------------------------------ Corporate Standing Auditor Tadahiko Hirano ------------------------------------------ Corporate Standing Auditor Keizo Fukagawa ------------------------------------------ Corporate Auditor (Note) Keizo Fukagawa is an outside corporate auditor appointed pursuant to Article 18, Section 1 of the "Law Concerning Exceptions to the Commercial Code Relating to Audit, etc. of Stock Corporations." 24 Reference Documents with respect to the Exercise of Voting Rights 1. Number of voting rights of all shareholders: 980,883 voting rights 2. Agenda Items and Reference Matters: Agenda Item No. 1: Approval of the proposed appropriation of retained earnings for the 61st fiscal year The details of the appropriation of retained earnings for this fiscal year are as described on page 22 of the attached document. The basic policy of the Company is to continue to provide stable dividends, while promoting the further growth and enhancement of corporate culture and seeking to strengthen management bases and improve business performance. Despite our efforts, the Company incurred a significant loss in this fiscal year due to stagnation in both orders accepted and sales, following broad cutbacks in capital investment by domestic and foreign semiconductor manufacturers, caused by global-scale downturn of share prices and deepening deflation. As a result, the Company proposes to pay as dividends for this fiscal year (Y)10 per share. Annual dividends for this fiscal year, including interim dividends (Y)20 per share), will be (Y)30 per share (a reduction by (Y)10 in comparison with the dividend for the previous fiscal year). No bonus for Directors and Corporate Auditors was incurred for this year. Agenda Item No. 2: Repurchase of the Company's shares In order to achieve a flexible capital structure that can respond to changes in business conditions, the Company proposes to repurchase up to 3,000,000 shares of its common stock, at a total purchase price of up to (Y)20 billion, pursuant to the provisions of Article 210 of the Commercial Code, from the conclusion of this ordinary general shareholders' meeting and until the conclusion of the next ordinary general shareholders' meeting. Agenda Item No. 3: Amendment of part of the Articles of Incorporation 1. Reason for amendment: (1) Following the extension of the statutory term of corporate auditors from three years to four years pursuant to the "Law Amending Part of the Commercial Code and the Law Concerning Exceptions to the Commercial Code Relating to Audit, etc. of Stock Corporations" (Law No. 149 of 2001) effective as of May 1, 2002, we propose that Article 27 (Term of Office of Corporate Auditors) of the present Articles of Incorporation be amended. (2) Following the implementation of the "Law Amending Part of the Commercial Code, etc." (Law No. 44 of 2002) effective as of April 1, 2003, which provides for the introduction of "invalidation of share certificates" and "additional share purchase for holders of shares constituting less than one full unit", we propose that a new Article 8 (Additional Share Purchase for Holders of Shares Constituting Less Than One Full Unit) be inserted, and the current Article 8 (Share Handling Regulations) and Article 9 (Transfer Agent) be amended. 25 In addition, following the reduction in quorum requirements for a special resolution of the shareholders' meeting, Paragraph 2 shall be newly added to Article 14 (Method of Resolution) in order to provide a shareholders' meeting more flexibility to adopt a special resolution. (3) Following the reformation of the Board of Directors of the Company and the introduction of an "Executive Officer System" at the Company, Article 16 (Number of Directors) of the current Articles of Incorporation shall be amended so that the maximum number of directors shall be reduced from 22 to 10, and Article 12 (Person Who Convenes Shareholders' Meetings, and Chairman) and Article 19 (Representative Directors and Directors with Management Positions) of the current Articles of Incorporation shall be amended in order to abolish management positions other than Chairman and Vice Chairman. (4) In addition to the foregoing, the Company will make other necessary amendments and renumber certain Articles to accommodate the insertion of a new Article. 2. Details of proposed amendments: The details of the proposed amendments are as follows:
(Changes are underlined.) - ------------------------------------------------------------------------------------------------------------------------- Present Article Proposed Amendment - ------------------------------------------------------------------------------------------------------------------------- (Newly introduced) Article 8. (Additional Share Purchase for Holders of Shares Constituting Less Than One Full Unit) A holder of shares of the Company (including a beneficial holder of shares of the Company, hereinafter each a "Shareholder") constituting less than one full unit may, in accordance with provisions of the Share Handling Regulations, demand that the Company sell to the Shareholder shares that will, together with shares held by the Shareholder, constitute one full unit. Article 8. (Share Handling Regulations) Article 9. (Share Handling Regulations) The registration of transfer of shares, the The registration of transfer of shares, the registration on the Beneficial Shareholders' Register registration on the Beneficial Shareholders' Register in writing or digitally, the purchase of shares in writing or digitally, the purchase of shares constituting less than one full unit and other matters constituting less than one full unit, the additional related to the handling of shares of the Company and purchase of shares to obtain one full unit and other fees therefor shall be governed by the Share Handling matters related to the handling of shares of the Regulations to be prescribed by the Board of Directors. Company and fees therefor shall be governed by the Share Handling Regulations to be prescribed by the Board of Directors. Article 9. (Transfer Agent) Article 10. (Transfer Agent) 1. The Company shall have a transfer agent for its 1. (Present provisions maintained) shares. 2. The transfer agent and its handling office shall be 2. (Present provisions maintained) appointed by a resolution of the Board of Directors and public notice thereof shall be given. 3. The Shareholders' Register and the Beneficial 3. The Shareholders' Register of the Company Shareholders' Register of the Company shall be (including the Beneficial Shareholders' Register
26
- ------------------------------------------------------------------------------------------------------------------------- Present Article Proposed Amendment - ------------------------------------------------------------------------------------------------------------------------- kept at the handling office of the transfer agent, of the Company, hereinafter the "Shareholders' and the registration of transfer of shares, the Register") and the Register for Lost Share registration on the Beneficial Shareholders' Register Certificates shall be kept at the handling office of registration on digitally, the purchase of shares the transfer agent, and the registration of transfer constituting less than one full unit, and other matters of shares, the registration on the Beneficial related to shares shall be handled by the transfer agent Shareholders' Register in writing or digitally, the and shall not be handled by the Company. purchase of shares constituting less than one full unit, the additional purchase of shares to obtain one full unit and other matters related to shares shall be handled by the transfer agent and shall not be handled by the Company. Article 10. (Record Date) Article 11. (Record Date) 1. The Company shall deem the shareholders and the 1. The Company shall deem the Shareholders last beneficial shareholders (hereinafter collectively called registered on the Shareholders' Register in writing "shareholders") last registered on the Shareholders' or digitally, as of March 31 of each year as those Register in writing or digitally and on the Beneficial Shareholders who are entitled to exercise their Shareholders' Register in writing or digitally, rights at the Ordinary General Meeting of respectively, as of March 31 of each year as those Shareholders concerning the relevant account shareholders who are entitled to exercise their rights settlement date. at the Ordinary General Meeting of Shareholders concerning the relevant account settlement date. 2. In addition to the case provided for in the 2. In addition to the case provided for in the preceding paragraph, whenever necessary, in accordance preceding paragraph, whenever necessary, in with a resolution of the Board of Directors and upon accordance with a resolution of the Board of giving prior public notice, the Company may deem the Directors and upon giving prior public notice, the shareholders or the registered pledgees last registered Company may deem the Shareholders or the registered on the Shareholder's Register and the Beneficial pledgees last registered on the Shareholder's Shareholder's Register in writing or digitally as those Register in writing or digitally as those shareholders or the registered pledgees who are entitled Shareholders or the registered pledgees who are to exercise their rights. entitled to exercise their rights. Article 11. (Convocation of General Shareholders Article 12. (Convocation of General Shareholders Meeting) Meeting) (Omitted) (Present provisions maintained) Article 12. (Person Who Convenes Shareholders' Article 13. (Person Who Convenes Shareholders' Meetings, and Chairman) Meetings, and Chairman) 1. General Meetings of Shareholders shall be convened 1. General Meetings of Shareholders shall be by the President in accordance with a resolution of the convened by a Representative Director previously Board of Directors. If the President is unable to determined by the Board of Directors in accordance convene a General Meeting of Shareholders, another with a resolution of the Board of Directors. If such director of the Company shall take his place in the Representative Director is unable to convene a order previously determined by the Board of Directors. General Meeting of Shareholders, another director of the Company shall take his place in the order previously determined by the Board of Directors. 2. The chairman at General Meetings of 2. The chairman at General Meetings of Shareholders shall be the President. If the Shareholders shall be a Representative Director
27
- ------------------------------------------------------------------------------------------------------------------------- Present Article Proposed Amendment - ------------------------------------------------------------------------------------------------------------------------- President is unable to act as chairman at any previously determined by the Board of Directors. If such General Meeting of Shareholders, another Representative Director is unable to act as chairman director of the Company shall take his place in the at any General Meeting of Shareholders, another order previously determined by the Board of director of the Company shall take his place in the Directors. order previously determined by the Board of Directors. Article 13. (Method of Resolution) Article 14. (Method of Resolution) Except as otherwise required by law and regulations (Present provisions maintained) or these Articles of Incorporation, resolutions of a General Meeting of Shareholders shall be adopted by the affirmative vote of a majority of the shares of voting stock represented in person or by proxy at the meeting. (Newly introduced) 2. Special resolutions of a General Meeting of Shareholders set forth in Article 343 of the Commercial Code shall be adopted by the affirmative vote of two-thirds of the shares of voting stock represented in person or by proxy at the meeting, and a quorum for the meeting shall consist of Shareholders holding at least one-third of all the shares of voting stock. Article 14. (Restriction on Voting by Proxy) Article 15. (Restriction on Voting by Proxy) 1. A shareholder may exercise his voting rights by 1. (Present provisions maintained) proxy, who need to be a shareholder with voting rights. 2. Such proxy shall present to the Company a document 2. Such Shareholder or proxy shall present to the evidencing his appointment as proxy for each General Company a document evidencing the proxy's appointment Meeting of Shareholders. as proxy for each General Meeting of Shareholders. Article 15. (Minutes of General Meeting of Article 16. (Minutes of General Meeting of Shareholders) Shareholders) (Omitted) (Present provisions maintained) Article 16. (Number of Directors) Article 17. (Number of Directors) The Company shall have not more than twenty-two (22) The Company shall have not more than ten (10) directors. directors. Article 17. (Election of Directors) Article 18. (Election of Directors) and and Article 18. (Term of Office of Director) Article 19. (Term of Office of Director) (Omitted) (Present Provisions maintained) Article 19. (Representative Directors and Directors Article 20. (Representative Directors and with Management Positions) Directors with Management Positions) 1. One or more directors who shall represent the 1. One or more directors who shall represent the Company shall be appointed as Representative Company shall be appointed as Representative Director by a resolution of the Board of Directors, Director by a resolution of the Board of Directors. and one of such directors shall be appointed as
28
- ------------------------------------------------------------------------------------------------------------------------- Present Article Proposed Amendment - ------------------------------------------------------------------------------------------------------------------------- Representative Director and President. 2. The Board of Directors may appoint one Chairman as 2. The Board of Directors may appoint a Chairman and well as one or more Vice Chairman, Vice President, a Vice Chairman by a resolution. Senior Managing Director, Managing Director by a resolution. Article 20. (Notice of the Board of Directors and Article 21. (Notice of the Board of Directors and Resolution) Resolution) through through Article 26. (Election of Corporate Auditors) Article 27. (Election of Corporate Auditors) (Omitted) (Present provisions maintained) Article 27. (Term of Office of Corporate Auditors) Article 28. (Term of Office of Corporate Auditors) 1. The term of office of a corporate auditor shall 1. The term of office of a corporate auditor shall expire at the close of the Ordinary General Meeting of expire at the close of the Ordinary General Meeting Shareholders to be held with respect to the last of Shareholders to be held with respect to the last business year ending within three (3) years subsequent business year ending within four (4) years subsequent to his assumption of office. to his assumption of office. 2. The term of office of a corporate auditor elected to 2. (Present provisions maintained) fill a vacancy shall be for the balance of the unexpired term of office of his predecessor. Article 28. (Corporate Standing Auditor) Article 29. (Corporate Standing Auditor) through through Article 33. (Business Year) Article 34. (Business Year) (Omitted) (Present provisions maintained) Article 34. (Dividends) Article 35. (Dividends) Dividends of the Company shall be paid to the Dividends of the Company shall be paid to the shareholders or registered pledgees last registered in Shareholders or registered pledgees last registered writing or digitally on the Shareholders' Register and in writing or digitally on the Shareholders' Register the Beneficial Shareholders' Register as of March 31, of as of March 31, of each year. each year. Article 35. (Interim Dividends) Article 36. (Interim Dividends) The Company may, by resolution of the Board of The Company may, by resolution of the Board of Directors, make such cash distribution as provided for Directors, make such cash distribution as provided in Article 293-5 of the Commercial Code (hereinafter for in Article 293-5 of the Commercial Code called "interim dividends") to the shareholders or (hereinafter called "interim dividends") to the registered pledgees last recorded on the Shareholders' Shareholders or registered pledgees last recorded on Register in writing or digitally and the Beneficial the Shareholders' Register in writing or digitally as Shareholders' Register in writing or digitally as of of September 30, of each year. September 30, of each year. Article 36. (Effective Period for Dividend Payment) Article 37. (Effective Period for Dividend Payment) (Omitted) (Present provisions maintained) - ---------------------------------------------------------------------------------------------------------------------
29 Agenda Item No. 4: Election of seven directors We would like you to elect new directors as the term of office of all twenty directors will expire upon the closing of this ordinary general meeting of shareholders. To further strengthen our corporate governance and ensure timely response to rapid changes in business and market environments, we will reorganize our management structure, including reorganization of our Board of Directors and introduction of an Executive Officer system. We will reduce the number of directors drastically to streamline and revitalize our Board of Directors meetings, and will appoint Executive Officers who are to focus on operations to establish speedy and efficient operation systems. We respectfully request that you elect seven new directors. Mr. Kenichi Mitsuoka, Mr. Takashi Tokuno, Mr. Jiro Katoh, Mr. Norihito Kotani, Mr. Takao Tadokoro, Mr. Hiroyasu Sawai, Mr. Yuri Morita, Mr. Hiroshi Tsukahara, and Mr. Masao Shimizu will resign from the office of director, and will be appointed to the office of Executive Officer at the Board of Directors meeting to be held after the closing of this ordinary general meeting of shareholders. The profile of the candidates is as follows:
- ----------------------------------------------------------------------------------------------------------------------------------- Name Brief Personal History Number of the (Date of Birth) (Appointment to other companies, if any) Company's shares owned - ----------------------------------------------------------------------------------------------------------------------------------- 1 April 1956 Joined Fuji Communication Apparatus Mfg. Co., 7,400 Ltd.(at present, Fujitsu Limited) June 1985 Board Director Hiroshi Oura June 1988 Managing Director (February 14, 1934) June 1989 Representative Director and President, Advantest Corporation June 2001 Chairman of the Board and CEO (present position) - ----------------------------------------------------------------------------------------------------------------------------------- March 1964 Joined Advantest Corporation June 1985 Board Director December 1990 Managing Director June 1995 Senior Managing Director Shinpei Takeshita June 1997 Representative Director and Executive Vice 2 (July 14, 1940) President 22,950 June 2001 Vice Chairman of the Board (present position) [Appointment to other companies] Representative Director and Chairman, Advanelectron Co., Ltd. - ----------------------------------------------------------------------------------------------------------------------------------- April 1973 Joined Advantest Corporation June 1989 Board Director June 1995 Managing Director 3 Toshio Maruyama June 1999 Senior Managing Director 2,669 (April 17, 1948) June 2001 President and COO (present position) May 2003 Director, Environmental Management Center (present position) - -----------------------------------------------------------------------------------------------------------------------------------
30
- ----------------------------------------------------------------------------------------------------------------------------------- Name Brief Personal History Number of the (Date of Birth) (Appointment to other companies, if any) Company's shares owned - ----------------------------------------------------------------------------------------------------------------------------------- April 1967 Joined Fuji Communication Apparatus Mfg. Co., Ltd. (at present, Fujitsu Limited) June 1997 Managing Director, Advantest Corporation Kiyoshi Miyasaka June 1999 Senior Managing Director (present position) 4 (January 18, 1945) June 2001 In charge of Corporate Planning and Strategies 1,700 (present position) October 2001 Senior Vice President, Strategic Business Initiatives (present position) - ----------------------------------------------------------------------------------------------------------------------------------- July 1970 Joined Advantest Corporation June 1993 Board Director 5 Junji Nishiura June 1997 Managing Director 3,968 (November 5, 1945) June 2001 Senior Managing Director (present position) In charge of Product (present position) - ----------------------------------------------------------------------------------------------------------------------------------- September 1972 Joined Advantest Corporation June 1993 Board Director 6 Hiroji Agata June 1999 Managing Director (present position) 2,073 (December 2, 1946) June 2001 Senior Vice President, ATE Sales Group (present position) - ----------------------------------------------------------------------------------------------------------------------------------- February 1970 Joined Advantest Corporation 1,443 7 Hitoshi Owada June 1997 Board Director (March 26, 1946) June 2000 Managing Director (present position) June 2001 Senior Vice President, Administration and Finance Division (present position) - -----------------------------------------------------------------------------------------------------------------------------------
Note: None of the candidates has any special interest in the Company. Agenda Item No. 5: Election of two corporate auditors Because, upon the closing of this ordinary general meeting of shareholders, Mr. Tadahiko Hirano will finish his term of office as the corporate auditor, we would like you to elect one new corporate auditor. Further, we would like to increase the number of outside auditors to strengthen our auditing functions. Thus, we would like you to elect two new corporate auditors. We have obtained consent of the Board of Corporate Auditors with respect to this Agenda Item. 31 The profile of the candidates is as follows:
- ----------------------------------------------------------------------------------------------------------------------------------- Name Brief Personal History Number of the (Date of Birth) (Appointment to other companies, if any) Company's shares owned - ----------------------------------------------------------------------------------------------------------------------------------- April 1964 Joined The Nippon Kangyo Bank, Limited 2,173 June 1991 Joined Advantest Corporation 1 Tadahiko Hirano June 1993 Board Director (November 8, 1939) June 1997 Managing Director June 1999 Adviser June 2000 Corporate Standing Auditor (present position) - ----------------------------------------------------------------------------------------------------------------------------------- April 1965 Joined Fuji Communication Apparatus Mfg. Co., 0 Ltd. (at present, Fujitsu Limited) June 1995 Board Director June 1999 Managing Director 2 Takashi Takaya April 2000 Senior Managing Director (February 18, 1942) April 2001 Representative Director and Corporate Senior Executive Vice President April 2003 Representative Director (present position) [Appointment to other companies] Representative Director and President, Fujitsu Capital Limited - -----------------------------------------------------------------------------------------------------------------------------------
Note 1: None of the candidates has any special interest in the Company. 2: Mr. Takashi Takaya is a candidate for outside corporate auditor under Article 18, Section 1 of the Law Concerning Exceptions to the Commercial Code Relating to Audit, etc. of Stock Corporations. Agenda Item No. 6: Issuance of stock acquisition rights as stock options Pursuant to Articles 280-20 and 280-21 of the Commercial Code, we request that you approve the issuance of stock acquisition rights on especially favorable terms as described below. 1. Reason for the issuance of stock acquisition rights on especially favorable terms The stock acquisition rights will be issued as stock options to directors, executive officers, corporate auditors and employees of the Company and its domestic and overseas subsidiaries to provide them an incentive towards better business performance and to retain and attract talented individuals. Due to the nature of the issue as stock option grants, subject to the following details, the stock acquisition rights will be issued for no consideration. The subscription price required to be paid upon exercise of the stock acquisition rights will be based on the market prices as of the time of issue of such stock acquisition rights. 2. Details of stock acquisition rights (1) Persons to whom stock acquisition rights will be allocated Directors, executive officers, corporate auditors and employees of the Company and its domestic and overseas subsidiaries, and overseas subsidiaries of the Company. The overseas subsidiaries will then allocate the same rights as the stock acquisition rights pursuant to 32 applicable local laws to directors, corporate auditors and employees of other overseas subsidiaries. (2) Class and total number of shares to be issued upon exercise of the stock acquisition rights Not exceeding 800,000 shares of common stock of the Company. The number of shares to be issued upon exercise of each stock acquisition right shall be 100 shares, provided, however, that when the subscription price per share is adjusted in accordance with (5) below, the number of such shares shall be adjusted according to the following formula. This adjustment is made only to the number of shares that have not yet been issued upon exercise of such stock acquisition right as of the time of such adjustment. Any fraction of a share that arises as a result of an adjustment will be rounded down to the nearest number of shares. Number of shares to be issued upon = Total subscription price exercise of each stock acquisition right ---------------------------- Subscription price per share When the number of shares to be issued upon exercise of each stock acquisition right is adjusted, the total number of shares to be issued upon exercise of the stock acquisition rights shall be adjusted to the number obtained by multiplying (i) the number of shares to be issued upon exercise of each stock acquisition right after adjustment by (ii) the number of stock acquisition rights that have not been exercised as of the time of such adjustment, plus the number of shares that have been issued upon exercise of stock acquisition rights. After the adjustment, the total number of shares to be issued upon exercise of the stock acquisition rights may exceed 800,000 shares. (3) Total number of stock acquisition rights to be issued Not exceeding 8,000. (4) Issue price of the stock acquisition rights No consideration shall be paid. (5) Total subscription price to be paid upon exercise of each stock acquisition right The total subscription price to be paid upon exercise of each stock acquisition right shall be determined on the day of issue of the stock acquisition rights by multiplying (i) the subscription price per share as determined in the following paragraph, by (ii) the number of shares to be issued upon exercise of each stock acquisition right as specified in (2) above (100 shares). The subscription price per share shall be 1.05 times the average closing price of the common stock of the Company in regular trading on the Tokyo Stock Exchange on each day of the month preceding the month of issue of the stock acquisition rights (excluding days on which there is no such closing price), rounded up to the nearest yen; provided, however, that if such amount is less than the closing price of the common stock of the Company on the day of issue of the stock acquisition rights (or, if there is no such closing price on the day of issue, the closing price on the immediately preceding day on which there was such closing price), the subscription price per share shall equal the closing price on such day. Notwithstanding the immediately preceding paragraph, with respect to stock acquisition rights to be issued after stock acquisition rights have been first issued based on a resolution of this general meeting of shareholders, the subscription price per share for such subsequent stock acquisition rights may be the subscription price per share for such first stock acquisition rights (or, if the adjustment set forth below is made, then the adjusted subscription price per share for such first stock acquisition rights); provided, however, that the subscription price per share (or the adjusted subscription price per share) for such first stock acquisition rights shall be not 33 less than the subscription price per share that is calculated with respect to such subsequent stock acquisition rights in accordance with the immediately preceding paragraph. If, subsequent to the issue of the stock acquisition rights, the Company splits or consolidates its common stock, or issues new shares or disposes of its treasury shares below market price, the subscription price per share shall be adjusted according to the following formula, rounded up to the nearest yen. Provided, however, that such an adjustment will not be triggered by issue of new shares or transfer of treasury stock upon exercise of any stock acquisition rights or warrants of the Company or in certain other circumstances. Furthermore, the subscription price per share may, to the extent necessary and reasonable, be adjusted in a way deemed appropriate by the Company, in the case of a capital reduction, merger or de-merger of the Company or certain other events. (a) Formula for adjustment in the case of share split or consolidation Subscription price per = Subscription price per x 1 share after adjustment share before adjustment ---------------------- Ratio of split / consolidation (b) Formula for adjustment in the case of issue of new shares or disposition of treasury stock below market price
Subscription Subscription Outstanding Number of new Subscription price per price per number of + shares to be price per share share after = share before x shares issued x to be issued adjustment adjustment ------------------------------------ Market price per share ---------------------------------------------------- Outstanding number of Number of new shares to shares + be issued
In the above formula, "outstanding number of shares" shall mean the total number of outstanding shares of the Company after deduction of shares held by the Company as treasury stock. In the case of disposition of treasury stock, "number of new shares to be issued" in the above formula shall be read as "number of treasury shares to be disposed of." (6) Exercise period of the stock acquisition rights Between April 1, 2004 and March 31, 2008 (4 years). The exercise period for stock acquisition rights that are issued during the foregoing period shall be a period between a day specified by the Board of Directors and March 31, 2008. (7) Conditions for exercise of stock acquisition rights (a) A person to whom stock acquisition rights are allocated (a "rights holder"), other than overseas subsidiaries of the Company, must be a director, executive officer, corporate auditor or employee of the Company or its domestic or overseas subsidiary at the time of exercise, except where there are reasons deemed reasonable by the Board of Directors, including the person ceasing to be a director, executive officer, corporate auditor or employee, due to the completion of his/her term of office or his/her reaching retirement age. (b) The stock acquisition rights may not be inherited. (c) Each stock acquisition right may not be exercised in part. (d) Other terms and conditions will be determined at a meeting of the Board of Directors subsequent to the Shareholders' Meeting. (8) Cancellation of stock acquisition rights 34 (a) The Company may cancel, for no consideration, any stock acquisition right in the event that the general meeting of the shareholders resolves to approve (i) any merger agreement pursuant to which the Company shall cease to exist, or (ii) any share exchange agreement or share transfer pursuant to which the Company shall become a wholly-owned subsidiary of another company. (b) The Company may cancel, for no consideration, all or part of the stock acquisition rights of a rights holder to the extent that such stock acquisition rights are not exercisable due to the rights holder's failure to satisfy any of the conditions for exercise of stock acquisition rights. (9) Restriction on the transfer of stock acquisition rights Any transfer of stock acquisition rights shall require the approval of the Board of Directors; provided, however, that transfer of stock acquisition rights to the Company shall not require any such approval. (10) Other details of the stock acquisition rights will be determined in a meeting of the Board of Directors subsequent to the Shareholders' Meeting. Agenda Item No. 7: Payment of retirement bonuses to retiring directors Mr. Shigeru Sugamori, Mr. Isao Kitaoka, Mr. Kenichi Mitsuoka, Mr. Takashi Tokuno, Mr. Masakazu Ando, Mr. Jiro Katoh, Mr. Tetsuo Aoki, Mr. Norihito Kotani, Mr. Takao Tadokoro, Mr. Hiroyasu Sawai, Mr. Yuri Morita, Mr. Hiroshi Tsukahara, and Mr. Masao Shimizu will finish their term of office as directors at the closing of this ordinary general meeting of shareholders. We would like to pay retirement bonuses to all of them to reward their contribution to the Company during their terms of office in accordance with the standards established by the Company and in an amount deemed reasonable. We respectfully propose that the details of such retirement bonuses, including the amount, time, and method of payment, be determined by the Board of Directors. A brief personal history of each retiring director is as follows: - -------------------------------------------------------------------------------- Name Brief Personal History - -------------------------------------------------------------------------------- Shigeru Sugamori June 1990 Board Director June 1996 Managing Director June 2001 Senior Managing Director (present position) - -------------------------------------------------------------------------------- Isao Kitaoka June 1993 Board Director June 1999 Managing Director (present position) - -------------------------------------------------------------------------------- Kenichi Mitsuoka June 1995 Board Director June 2000 Managing Director (present position) - -------------------------------------------------------------------------------- Takashi Tokuno June 1996 Board Director June 2000 Managing Director (present position) - -------------------------------------------------------------------------------- Masakazu Ando June 1997 Board Director June 2000 Managing Director (present position) - -------------------------------------------------------------------------------- Jiro Katoh June 1997 Board Director (present position) - -------------------------------------------------------------------------------- Tetsuo Aoki June 1997 Board Director (present position) - -------------------------------------------------------------------------------- Norihito Kotani June 1999 Board Director (present position) - -------------------------------------------------------------------------------- Takao Tadokoro June 1999 Board Director (present position) - -------------------------------------------------------------------------------- Hiroyasu Sawai June 1999 Board Director (present position) - -------------------------------------------------------------------------------- Yuri Morita June 2000 Board Director (present position) - -------------------------------------------------------------------------------- Hiroshi Tsukahara June 2001 Board Director (present position) - -------------------------------------------------------------------------------- Masao Shimizu June 2001 Board Director (present position) - -------------------------------------------------------------------------------- 35 EX-2 4 ex2_062703.txt NOTICE REGARDING RESOLUTIONS Exhibit 2 (Translation) June 27, 2003 To Our Shareholders Toshio Maruyama President and COO ADVANTEST CORPORATION 32-1, Asahi-cho 1-chome, Nerima-ku, Tokyo NOTICE REGARDING RESOLUTIONS MADE AT THE 61ST ORDINARY GENERAL MEETING OF SHAREHOLDERS ------------------------------------------------- Dear Sirs and Madams: Notice is hereby given that the following matters were presented and resolved at the 61st ordinary general meeting of shareholders of ADVANTEST CORPORATION (the "Company") which took place today. Matters reported: The business report, balance sheet and statement of income for the 61st Fiscal Year (from April 1, 2002 to March 31, 2003) A presentation on the above documents was given to the shareholders. Matters resolved: Agenda Item No.1: Approval of the proposed appropriation of retained earnings for the 61st fiscal year The shareholders resolved to approve, as originally proposed, to distribute a dividend of (Y)10 for each share. Agenda Item No. 2: Repurchase of the Company's shares The shareholders resolved to approve, as originally proposed, the repurchase by the Company of up to 3 million shares of common stock at an aggregate price not exceeding (Y)20 billion. Agenda Item No. 3: Amendment of part of the Articles of Incorporation The shareholders resolved to approve the agenda as originally proposed. Details of the amendment are set forth in the pages to follow. Agenda Item No. 4: Election of seven directors The shareholders resolved to approve, as originally proposed, the re-election of Mr. Hiroshi Oura, Mr. Shinpei Takeshita, Mr. Toshio Maruyama, Mr. Kiyoshi Miyasaka, Mr. Junji Nishiura, Mr. Hiroji Agata and Mr. Hitoshi Owada, each of whom has since assumed office. Agenda Item No. 5: Election of two corporate auditors The shareholders resolved to approve, as originally proposed, the re-election of Mr. Tadahiko Hirano and the election of Takashi Takaya, each of whom has since assumed office. 1 Agenda Item No. 6: Issuance of stock acquisition rights as stock options The shareholders resolved to approve, as originally proposed, the issuance of stock acquisition rights on especially favorable terms pursuant to Articles 280-20 and 280-21 of the Commercial Code, so as to provide an incentive to directors, executive officers, corporate auditors and employees of the Company and its domestic and overseas subsidiaries to improve performance and to retain and attract talented individuals. [Outline of the stock acquisition rights] (1) Persons to whom stock acquisition rights will be allocated Directors, executive officers, corporate auditors and employees of the Company and its domestic and overseas subsidiaries, and overseas subsidiaries of the Company. (2) Class and total number of shares to be issued upon exercise of the stock acquisition rights Not to exceeding 800,000 shares of common stock of the Company. The number of shares to be issued upon exercise of each stock acquisition right shall be 100 shares. (3) Total number of stock acquisition rights to be issued Not exceeding 8,000. (4) Issue price of the stock acquisition rights No consideration shall be paid. (5) Exercise period of the stock acquisition rights Between April 1, 2004 and March 31, 2008 (4 years). Agenda Item No. 7: Payment of retirement bonuses to retiring directors The shareholders resolved to approve, as originally proposed, the payment of retirement bonuses at amounts that are within reasonable limits determined in accordance with standards established by the Company to retiring directors Mr. Shigeru Sugamori, Mr. Isao Kitaoka, Mr. Kenichi Mitsuoka, Mr. Takashi Tokuno, Mr. Masakazu Ando, Mr. Jiro Katoh, Mr. Tetsuo Aoki, Mr. Norihito Kotani, Mr. Takao Tadokoro, Mr. Hiroyasu Sawai, Mr. Yuri Morita, Mr. Hiroshi Tsukahara and Mr. Masao Shimizu. Details of the retirement bonuses, including the amount, time, and method of payment, will be determined by the Board of Directors. 2 [For your reference] Details of the amendments to the Articles of Incorporation are as follows:
(Changes are underlined.) - ----------------------------------------------------------------------------------------------------------------------------- Before Amendment After Amendment - ----------------------------------------------------------------------------------------------------------------------------- (Newly introduced) Article 8. (Additional Share Purchase for Holders of Shares Constituting Less Than One Full Unit) A holder of shares of the Company (including a beneficial holder of shares of the Company, hereinafter each a "Shareholder") constituting less than one full unit may, in accordance with provisions of the Share Handling Regulations, demand that the Company sell to the Shareholder shares that will, together with shares held by the Shareholder, constitute one full unit. Article 8. (Share Handling Regulations) Article 9. (Share Handling Regulations) The registration of transfer of shares, the The registration of transfer of shares, the registration on the Beneficial Shareholders' Register in registration on the Beneficial Shareholders' Register writing or digitally, the purchase of shares in writing or digitally, the purchase of shares constituting less than one full unit and other matters constituting less than one full unit, the additional related to the handling of shares of the Company and purchase of shares to obtain one full unit and other fees therefor shall be governed by the Share Handling matters related to the handling of shares of the Regulations to be prescribed by the Board of Directors. Company and fees therefor shall be governed by the Share Handling Regulations to be prescribed by the Board of Directors. Article 9. (Transfer Agent) Article 10. (Transfer Agent) 1. The Company shall have a transfer agent for its 1. (Present provisions maintained) shares. 2. The transfer agent and its handling office shall be 2. (Present provisions maintained) appointed by a resolution of the Board of Directors and public notice thereof shall be given. 3. The Shareholders' Register and the Beneficial 3. The Shareholders' Register of the Company Shareholders' Register of the Company shall be kept at (including the Beneficial Shareholders' Register of the handling office of the transfer agent, and the the Company, hereinafter the "Shareholders' registration of transfer of shares, the registration on Register") and the Register for Lost Share the Beneficial Shareholders' Register in writing or Certificates shall be kept at the handling office of digitally, the purchase of shares constituting less than the transfer agent, and the registration of transfer one full unit, and other matters related to shares shall of shares, the registration on the Beneficial be handled by the transfer agent and shall not be Shareholders' Register in writing or digitally, the handled by the Company. purchase of shares constituting less than one full unit, the additional purchase of shares to obtain one full unit and other matters related to shares shall be handled by the transfer agent and shall not be handled by the Company. Article 10. (Record Date) Article 11. (Record Date)
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- ----------------------------------------------------------------------------------------------------------------------------- Before Amendment After Amendment - ----------------------------------------------------------------------------------------------------------------------------- 1. The Company shall deem the shareholders and the 1. The Company shall deem the Shareholders last beneficial shareholders (hereinafter collectively called registered on the Shareholders' Register in writing "shareholders") last registered on the Shareholders' or digitally, as of March 31 of each year as those Register in writing or digitally and on the Beneficial Shareholders who are entitled to exercise their Shareholders' Register in writing or digitally, rights at the Ordinary General Meeting of respectively, as of March 31 of each year as those Shareholders concerning the relevant account shareholders who are entitled to exercise their rights settlement date. at the Ordinary General Meeting of Shareholders concerning the relevant account settlement date. 2. In addition to the case provided for in the 2. In addition to the case provided for in the preceding paragraph, whenever necessary, in accordance preceding paragraph, whenever necessary, in with a resolution of the Board of Directors and upon accordance with a resolution of the Board of giving prior public notice, the Company may deem the Directors and upon giving prior public notice, the shareholders or the registered pledgees last registered Company may deem the Shareholders or the registered on the Shareholder's Register and the Beneficial pledgees last registered on the Shareholder's Shareholder's Register in writing or digitally as those Register in writing or digitally as those shareholders or the registered pledgees who are entitled Shareholders or the registered pledgees who are to exercise their rights. entitled to exercise their rights. Article 11. (Convocation of General Shareholders Article 12. (Convocation of General Shareholders Meeting) Meeting) (Omitted) (Present provisions maintained) Article 12. (Person Who Convenes Shareholders' Article 13. (Person Who Convenes Shareholders' Meetings, and Chairman) Meetings, and Chairman) 1. General Meetings of Shareholders shall be convened 1. General Meetings of Shareholders shall be by the President in accordance with a resolution of the convened by a Representative Director previously Board of Directors. If the President is unable to determined by the Board of Directors in accordance convene a General Meeting of Shareholders, another with a resolution of the Board of Directors. If such director of the Company shall take his place in the Representative Director is unable to convene a order previously determined by the Board of Directors. General Meeting of Shareholders, another director of the Company shall take his place in the order previously determined by the Board of Directors. 2. The chairman at General Meetings of Shareholders 2. The chairman at General Meetings of Shareholders shall be the President. If the President is unable to shall be a Representative Director previously act as chairman at any General Meeting of Shareholders, determined by the Board of Directors. If such another director of the Company shall take his place in Representative Director is unable to act as chairman the order previously determined by the Board of at any General Meeting of Shareholders, another Directors. director of the Company shall take his place in the order previously determined by the Board of Directors.
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- ----------------------------------------------------------------------------------------------------------------------------- Before Amendment After Amendment - ----------------------------------------------------------------------------------------------------------------------------- Article 13. (Method of Resolution) Article 14. (Method of Resolution) Except as otherwise required by law and regulations (Present provisions maintained) or these Articles of Incorporation, resolutions of a General Meeting of Shareholders shall be adopted by the affirmative vote of a majority of the shares of voting stock represented in person or by proxy at the meeting. (Newly introduced) 2. Special resolutions of a General Meeting of Shareholders set forth in Article 343 of the Commercial Code shall be adopted by the affirmative vote of two-thirds of the shares of voting stock represented in person or by proxy at the meeting, and a quorum for the meeting shall consist of Shareholders holding at least one-third of all the shares of voting stock. Article 14. (Restriction on Voting by Proxy) Article 15. (Restriction on Voting by Proxy) 1. A shareholder may exercise his voting rights by 1. (Present provisions maintained) proxy, who need to be a shareholder with voting rights. 2. Such proxy shall present to the Company a document 2. Such Shareholder or proxy shall present to the evidencing his appointment as proxy for each General Company a document evidencing the proxy's appointment Meeting of Shareholders. as proxy for each General Meeting of Shareholders. Article 15. (Minutes of General Meeting of Article 16. (Minutes of General Meeting of Shareholders) Shareholders) (Omitted) (Present provisions maintained) Article 16. (Number of Directors) Article 17. (Number of Directors) The Company shall have not more than twenty-two (22) The Company shall have not more than ten (10) directors. directors. Article 17. (Election of Directors) Article 18. (Election of Directors) and and Article 18. (Term of Office of Director) Article 19. (Term of Office of Director) (Omitted) (Present Provisions maintained) Article 19. (Representative Directors and Directors Article 20. (Representative Directors and with Management Positions) Directors with Management Positions) 1. One or more directors who shall represent the 1. One or more directors who shall represent the Company shall be appointed as Representative Director by Company shall be appointed as Representative Director a resolution of the Board of Directors, and one of such by a resolution of the Board of Directors. directors shall be appointed as Representative Director and President. 2. The Board of Directors may appoint one Chairman as 2. The Board of Directors may appoint a Chairman and well as one or more Vice Chairman, Vice President, a Vice Chairman by a resolution. Senior Managing Director, Managing Director by a resolution.
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- ----------------------------------------------------------------------------------------------------------------------------- Before Amendment After Amendment - ----------------------------------------------------------------------------------------------------------------------------- Article 20. (Notice of the Board of Directors and Article 21. (Notice of the Board of Directors and Resolution) Resolution) through through Article 26. (Election of Corporate Auditors) Article 27. (Election of Corporate Auditors) (Omitted) (Present provisions maintained) Article 27. (Term of Office of Corporate Auditors) Article 28. (Term of Office of Corporate Auditors) 1. The term of office of a corporate auditor shall 1. The term of office of a corporate auditor shall expire at the close of the Ordinary General Meeting of expire at the close of the Ordinary General Meeting Shareholders to be held with respect to the last of Shareholders to be held with respect to the last business year ending within three (3) years subsequent business year ending within four (4) years subsequent to his assumption of office. to his assumption of office. 2. The term of office of a corporate auditor elected to 2. (Present provisions maintained) fill a vacancy shall be for the balance of the unexpired term of office of his predecessor. Article 28. (Corporate Standing Auditor) Article 29. (Corporate Standing Auditor) through through Article 33. (Business Year) Article 34. (Business Year) (Omitted) (Present provisions maintained) Article 34. (Dividends) Article 35. (Dividends) Dividends of the Company shall be paid to the Dividends of the Company shall be paid to the shareholders or registered pledgees last registered in Shareholders or registered pledgees last registered writing or digitally on the Shareholders' Register and in writing or digitally on the Shareholders' Register the Beneficial Shareholders' Register as of March 31, of as of March 31, of each year. each year. Article 35. (Interim Dividends) Article 36. (Interim Dividends) The Company may, by resolution of the Board of The Company may, by resolution of the Board of Directors, make such cash distribution as provided for Directors, make such cash distribution as provided in Article 293-5 of the Commercial Code (hereinafter for in Article 293-5 of the Commercial Code called "interim dividends") to the shareholders or (hereinafter called "interim dividends") to the registered pledgees last recorded on the Shareholders' Shareholders or registered pledgees last recorded on Register in writing or digitally and the Beneficial the Shareholders' Register in writing or digitally as Shareholders' Register in writing or digitally as of of September 30, of each year. September 30, of each year. Article 36. (Effective Period for Dividend Payment) Article 37. (Effective Period for Dividend Payment) (Omitted) (Present provisions maintained)
6 At a meeting of the Board of Directors subsequent to the shareholders' meeting, the following persons were elected as chairmen, vice chairman and/or representative directors, each of whom has since assumed office: Chairman of the Board and CEO Hiroshi Oura Vice Chairman of the Board Shinpei Takeshita Representative Board Director Toshio Maruyama In addition, the following persons have been elected at the above Board meeting as executive officers, each of whom has since assumed office (an asterisk indicates an executive officer who also serves as a Director): *President and COO Toshio Maruyama *Senior Executive Officer Kiyoshi Miyasaka *Senior Executive Officer Junji Nishiura *Senior Executive Officer Hiroji Agata *Managing Executive Officer Hitoshi Owada Managing Executive Officer Kenichi Mitsuoka Managing Executive Officer Takashi Tokuno Managing Executive Officer Norihito Kotani Managing Executive Officer Yuri Morita Executive Officer Jiro Katoh Executive Officer Takao Tadokoro Executive Officer Hiroyasu Sawai Executive Officer Hiroshi Tsukahara Executive Officer Masao Shimizu Executive Officer Masao Araki Executive Officer Yoshiaki Furuse Executive Officer Yuichi Kurita Executive Officer Yoshiro Yagi Executive Officer Hideaki Imada 7 o The payment of dividends for the 61st Fiscal Year Dividends for the 61st Fiscal Year can be received by presenting the enclosed Notice of Postal Transfer at a nearby post office during the payment period (from June 30, 2003 to July 31, 2003). Shareholders who have elected to use bank transfer will find enclosed a Dividends Statement and Confirmation of Transfer Account. o A recorded broadcast of part of the shareholders' meeting (presentation of the Company's business results) will be available on the Company's website starting today. (URL http://www.advantest.co.jp/investors/investors-meeting/index.shtml) o An announcement of the Company's business results will be posted on the Company's website. (URL http://www.advantest.co.jp/j/ir/index.html) 8 EX-3 5 ex3_062703.txt STOCK ACQUISITION RIGHTS Exhibit 3 FOR IMMEDIATE RELEASE June 27, 2003 ADVANTEST CORPORATION (Toshio Maruyama, President and COO) (Stock Code Number: 6857, TSE first section) (Ticker Symbol: ATE, NYSE) CONTACT: Yuri Morita (Managing Executive Officer and Senior Vice President, Corporate Affairs Group) Phone: +81-(0)3-3342-7500 Advantest Issues Stock Option (Stock Acquisition Rights) Tokyo -June 27, 2003 - Advantest Corporation (the "Company") resolved at a meeting of its Board of Directors today to issue stock acquisition rights for stock options pursuant to Article 280 Paragraphs 20 and 21 of the Commercial Code and a shareholders resolution at the 61st annual general meeting of shareholders under the terms set forth below. 1. Date of issuance June 27, 2003 2. Number of stock acquisition rights issued 7,340 3. Issuance price No consideration shall be paid. 4. Class and total number of shares underlying 734,000 shares of Advantest the stock acquisition rights Corporation (each stock acquisition right shall be exercisable for 100 shares) 5. Total subscription price to be paid upon 516,000 Yen (5,160 Yen per exercise of each stock acquisition right share) 6. The total value of all shares (newly issued 3,787,440,000 Yen shares or treasury shares) issued or delivered upon the exercise of stock acquisition rights 7. Exercise period of the stock acquisition Between April 1, 2004 and rights March 31, 2008 8. The amount of the issuance price of the 2,580 Yen per share newly issued shares issued pursuant to the exercise of stock acquisition rights that will be incorporated into capital 9. The number of employees receiving stock Directors, executive acquisition rights officers, corporate auditors and employees of the Company and its domestic and overseas subsidiaries, totaling 184 1 For Reference (1) The date of the meeting of the Board of Directors May 20, 2003 setting the date for the annual general meeting of shareholders (2) Date of the resolution made pursuant to the annual June 27, 2003 general meeting of shareholders 2 EX-4 6 ex4_062703.txt BUSINESS REPORT Exhibit 4 [Advantest logo] Advantest Corporation Business Report for FY2002 (April 1, 2002 through March 31, 2003) [Cover graphics] To Our Shareholders - -------------------------------------------------------------------------------- Let us report on the business results of Advantest on a consolidated basis during the period of fiscal year 2002 (April 1, 2002 through March 31, 2003). During the fiscal year, the world economy continued to experience falling stock prices and global deflation caused by stagnating growth in North America and Europe and the poor economy in Japan. These factors served to increase uncertainty for the coming future. In the electronics industry, notwithstanding certain signs of improvement, neither the semiconductor nor the tester market reached a true state of recovery as both Japanese and overseas telecommunication carriers and semiconductor manufacturers continued significant cuts in their capital expenditures in light of the reduced demand for telecommunications equipment caused by restrained global investment in telecommunication infrastructures and information technologies, sluggish personal computer sales and falling semiconductor prices. Despite the Company's efforts to tackle these market conditions through the timely introduction of new products and programs to increase customer satisfaction, orders and sales remained weak as customers continued to restrain their investment levels. In response to this challenging environment, the Company continued its efforts to step up structural reforms. The Company implemented a number of structural reforms aimed at improving profitability, including selectively focusing on certain businesses and renovation of business processes, a significant reduction of personnel and other expenses, which involved the reduction of headcount, and a restraint of capital expenditures. As a result of the above, as compared with the previous fiscal year, incoming orders increased by 55.0% to (Y)101.4 billion, net sales increased by 2.6% to (Y)97.7 billion, while ordinary loss was (Y)18.6 billion and net loss was (Y)12.9 billion, as the adverse results from the previous fiscal year continue. Overseas sales as a percentage of total sales was 60.2%, as compared to 60.4% The global economy is in general experiencing growing uncertainty as consumption slows and unemployment levels rise throughout the world, in addition to concerns regarding the economic consequences of the war on Iraq and of the SARS epidemic. Despite some signs of recovery with respect to investments in the development and production of next generation or state-of-the-art technologies, participants in the electronics industry, including semiconductor and telecommunication equipment manufacturers, are in general continuing their curb on capital expenditures. As a result, demand is not expected to pick up until the second half of the upcoming fiscal year. As such, while the business conditions affecting the Company can be expected to recover somewhat beginning in the second half of the fiscal year, difficult challenges and uncertainties are expected to remain. In response to this environment, the Company will focus on improving profitability through efforts to expand sales by introducing new products, in addition to renovation of its business processes, including continued production restructuring, and significant cost-cutting measures. As part of its structural reform program, the Company will spin off and transfer its semiconductor test equipment manufacturing operations to Advanelectron Co., Ltd. on July 1, 2003. In addition, the Company will cause Advantest Instruments Corporation to merge into Advanelectron Co., Ltd., which will be renamed Advantest Manufacturing, Inc. In addition, the Company is focused on improving operating results through establishing an operating structure that responds timely to market changes, promoting early development of key future technologies and providing timely customer solutions under the concept of "GETsolution".1 The Company began listing on the New York Stock Exchange in September 2001. The Company hopes this listing will facilitate its overseas business activities, particularly in the U.S., and will seek to strengthen its investor relations and disclosure efforts and increase public recognition of the Company. The Company launched in October 2001 a company-wide initiative called "Initiative 21." This initiative seeks to promote effective ideas and strategies at all levels of the Company, from the sales, development and manufacturing to maintenance and administrative divisions, in order to improve the Company's competitiveness. Through the efforts of each and every employee in accepting new challenges, the Company seeks to achieve further growth while fulfilling its social mission. This initiative will continue through 2004, the year that marks the Company's 50th anniversary. In order to strengthen its corporate governance and ensure timely response to rapid changes in the business environment, the Company reorganized its Board of Directors and introduce the Executive Officer system. Specifically, the monitoring/supervisory and executive functions of the Board of Directors will be separated from each other and individually strengthened. The Board of Directors, as the highest decision-making organ, will be responsible for the formulation of group-wide business policies and strategies as well as the monitoring and supervision of operations. The number of directors will be significantly reduced to streamline and revitalize the Board meetings. At the same time, the Company introduced the Executive Officer system. These Executive Officers will be delegated clearly defined authority to enable them to run operations speedily and efficiently and would have clearly defined responsibilities for running operations. In addition, the Company appointed an additional outside corporate auditor to strengthen the auditing function of the Board of Corporate Auditors. We look forward to your continued support and guidance as shareholders. [Picture of Hiroshi Oura and Toshio Maruyama] Hiroshi Oura Toshio Maruyama (Chairman of the Board and CEO) (Representative Board Director, President of Corporate Executive Officers and COO) June 2003 *1 GETsolution (Globally Enabled Total solution) is the Company's service-based business designed to provide a set of comprehensive solutions to issues ranging from the design to product delivery of semiconductors. Business Results by Segment - -------------------------------------------------------------------------------- Automated Test Equipment Segment [Picture of the Memory test system T5593] The automated test equipment segment continued to see low levels of capital expenditures by semiconductor manufacturers. However, despite the stagnating growth in personal computers and high-speed communication, demand for testers used in the manufacturing of digital consumer devices remained strong as DVD devices, digital cameras and other digital electronics recorded strong sales primarily in Japan, and the shift toward full-color screens and camera-equipped models generated significant replacement demand for mobile phones. In the memory tester market, flash memory testers recorded strong sales. In addition, DRAM testers received an increased level of inquiries as investments were being made in back-end manufacturing in response to the shift from synchronized DRAM to DDR-DRAM. For this market, the Company introduced the T5593 high-speed memory tester for next generation DDR memory chips and a new memory handler model within the M6500 series for high-speed DRAM. [Picture of the VLSI test system T6575/6565/6535] In the SoC (System-on-a-Chip) tester market, sales of the T6500 series VLSI test systems were strong due to the expanded production of digital consumer electronics and DVD devices. In addition, due to the strong market for LCD driver ICs used in LCD displays, digital cameras and mobile phones, the T6300 series LCD driver test systems recorded strong sales in Japan, Korea and Taiwan. In response to the testing needs for increasingly complex SoC devices, the Company announced in July 2002 its proposal to establish a consortium, the "Semiconductor Test Consortium, Inc.", or STC, toward achieving a truly open test architecture. This consortium, responsible for setting and approving the OPENSTAR standard, was formed in March 2003 and has officially begun working toward establishing a highly scalable and flexible industry standard for testers. Through the adoption of the OPENSTAR standard, the Company will provide a group of products that can cover devices ranging from specialized, single purpose ones to general purpose ones. With respect to maintenance services, in order to drastically speed up the global distribution of maintenance parts, the Company worked with Federal Express to establish a system that cuts delivery time by more than half, to within 24 hours to customer in Japan. In October 2002, the Company transferred its software support operations to a subsidiary, Advantest Customer Engineering Corporation, to centralize its after-sales support services. This subsidiary, which was renamed Advantest Customer Support Corporation, provides strengthened comprehensive support solutions. As a result of the above, incoming orders in the automated test equipment segment, as compared with the previous fiscal year, increased by 82.2% to (Y)89.3 billion, while net sales of the segment increased by 14.4% to (Y)84.9 billion. Overseas sales as a percentage of total sales in the automated test equipment segment was 65.4%, as compared to 68.6% in the previous fiscal year. Measuring Instrument Segment [Picture of the RF component analyzer R3860] The wireless communication market has generally been weak due to delays in the launch of IMT20002 services in North America and Europe. Meanwhile, spectrum analyzers for the wireless LAN market generated strong sales as the market for wireless LAN devices was relatively successful. For this market, the Company is introducing a number of measuring instruments based on its WMT3 platform, including a high-performance signal analyzer for next-generation mobile communication. The fiber optic communication market experienced a further decline due to the continuing low levels of capital expenditures. For this market, the Company introduced a dispersion optical time-domain reflectometer and a laser diode test system that simultaneously tests both the basic and transmission characteristics of laser diodes. In connection with the termination of the distribution agreement with Tektronix, Inc., the Company established Advantest America Measuring Solutions, Inc., a subsidiary to market and service the Company's measuring instruments in the United States. By establishing its own sales channel and performing its sales and maintenance activities directly, the Company intends to provide comprehensive services that respond timely to customer needs. As a result of the above, incoming orders in the measuring instrument segment, as compared with the previous fiscal year, decreased by 26.0% to (Y)12.1 billion, while net sales of the segment decreased by 39.0% to (Y)12.8 billion. Overseas sales as a percentage of total sales in the measuring instrument segment was 25.8%, as compared to 31.3% in the previous fiscal year. *2 "IMT2000" - International Mobile Telecommunications 2000. The third generation of digital mobile communication technology *3 WMT (Wizard of Module Test) is a common platform proprietarily developed by the Company to provide measuring instruments customized for specific applications through the addition of blocks and modules necessary for the specific type of testing. Summary of Consolidated Results (U.S. GAAP) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FY1999 FY2000 FY2001 FY2002 - -------------------------------------------------------------------------------- (in millions of yen) Incoming orders 180,880 262,485 65,465 101,487 - -------------------------------------------------------------------------------- (in millions of yen) Net sales 158,578 276,512 95,244 97,740 Automated test equipment 135,728 241,499 74,206 84,910 Measuring instruments 22,850 35,013 21,038 12,830 Overseas portion of net 92,450 197,863 57,496 58,867 sales Operating income (loss) 34,802 84,905 (37,105) (16,743) Net income (loss) 20,905 53,121 (23,906) (12,994) - -------------------------------------------------------------------------------- (in yen) Net income per share 210.63 534.44 (240.38) (131.99) - -------------------------------------------------------------------------------- (in millions of yen) Total assets 320,892 407,431 307,562 281,224 Stockholders' equity 214,594 267,929 240,716 210,663 - -------------------------------------------------------------------------------- (in yen) Stockholders' equity per 2,159.51 2,695.15 2,420.28 2,144.23 share - -------------------------------------------------------------------------------- * "Net income (loss) per share" was calculated based on the average number of issued shares (excluding treasury stock) during the period. "Stockholders' equity per share" was calculated based on the number of issued shares (excluding treasury stock) as of the end of period. Beginning in FY2002, Advantest adopted U.S. GAAP for the preparation of its consolidated results. Numbers since FY2001 are also presented here using U.S. GAAP. [Charts illustrating information presented in the above table] Consolidated Financial Statements (U.S. GAAP)
- ---------------------------------------------------------------------------------------------------- o Balance Sheets - ---------------------------------------------------------------------------------------------------- FY2001 FY2002 (as of March 31, 2002) (as of March 31, 2003) - ---------------------------------------------------------------------------------------------------- (in millions of Yen) (Assets) Current assets 211,623 182,015 Cash and cash equivalents 105,932 87,338 Trade accounts receivables, less allowance 33,196 42,921 for doubtful accounts Inventories 52,888 34,995 Deferred tax assets 16,507 14,158 Other current assets 3,100 2,603 Investment securities 8,244 6,928 Property, plant and equipment 58,488 55,431 Deferred tax assets 19,475 29,215 Intangible assets 6,897 5,291 Other assets 2,835 2,344 - ---------------------------------------------------------------------------------------------------- Total assets 307,562 281,244 - ---------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------- (Liabilities) (in millions of Yen) Current liabilities 23,232 28,398 Current installments of long term debt 302 2,357 Trade accounts payable 4,442 10,787 Accrued expenses 15,497 10,909 Other current liabilities 2,991 4,345 Long-term debt, excluding current installments 27,002 24,645 Accrued pension and severance cost 13,540 14,219 Other long-term liabilities 2,796 2,987 Total liabilities 66,570 70,249 - ---------------------------------------------------------------------------------------------------- (Minority interests) Minority interests 276 312 - ---------------------------------------------------------------------------------------------------- (Stockholders' equity) Common Stock 32,363 32,363 Capital surplus 32,973 32,973 Retained earnings 178,998 162,547 Accumulated other comprehensive income (loss) (1,184) (4,055) Treasury stock (2,434) (13,165) Total stockholders' equity 240,716 210,663 - ---------------------------------------------------------------------------------------------------- Total liabilities and stockholders' equity 307,562 281,224 - ----------------------------------------------------------------------------------------------------
o Capital expenditures, Depreciation and amortization - -------------------------------------------------------------------------------- FY2001 FY2002 - -------------------------------------------------------------------------------- (in millions of Yen) Capital expenditures 14,458 7,564 Depreciation and amortization 11,289 10,942 - -------------------------------------------------------------------------------- o Statements of Income - -------------------------------------------------------------------------------- FY2001 FY2002 - -------------------------------------------------------------------------------- (in millions of Yen) Net sales 95,244 97,740 - -------------------------------------------------------------------------------- Cost of sales 76,713 56,551 Research and development expenses 26,674 23,615 Selling, general and administrative 28,962 34,317 expenses Operating income (loss) (37,105) (16,743) - -------------------------------------------------------------------------------- Other income (expense) (1,375) (1,945) Income (loss) before income taxes (38,480) (18,688) - -------------------------------------------------------------------------------- Income taxes (14,574) (5,694) Net income (loss) (23,906) (12,994) - -------------------------------------------------------------------------------- o Statements of Cash Flows - -------------------------------------------------------------------------------- FY2001 FY2002 - -------------------------------------------------------------------------------- (in millions of Yen) Cash flows from operating activities 9,009 4,967 Cash flows from investing activities (18,573) (8,419) Cash flows from financing activities (9,463) (14,488) Net effect of exchange rate changes on cash and cash equivalents 1,417 (654) - -------------------------------------------------------------------------------- Net change in cash and cash equivalents (17,610) (18,594) - -------------------------------------------------------------------------------- Cash and cash equivalents at beginning of year 123,542 105,932 - -------------------------------------------------------------------------------- Cash and cash equivalents at end of year 105,932 87,338 - -------------------------------------------------------------------------------- o Consolidated Subsidiaries - -------------------------------------------------------------------------------- 41 subsidiaries (21 in Japan and 20 overseas) - -------------------------------------------------------------------------------- Advantest Laboratories Ltd. Advantest Customer Support Corporation Advanmechatec Co., Ltd. Advantest Instruments Corporation Advanmicrotech Co., Ltd. Advanelectron Co., Ltd. Advantest Finance, Inc. Advantest America Corporation (Holding Co.) Advantest America, Inc. Advantest (Europe) GmbH Advantest Asia Pte. Ltd. Advantest Taiwan Inc. Advantest (Singapore) Pte. Ltd. and 28 others - -------------------------------------------------------------------------------- Equity method company (1 in Japan) Summary of Unconsolidated Results
- ------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------- FY1999 FY2000 FY2001 FY2002 - ------------------------------------------------------------------------------------------- (in millions of Yen) Incoming orders 152,304 221,146 52,267 78,217 - ------------------------------------------------------------------------------------------- (in millions of Yen) Net sales 142,209 225,309 72,928 76,686 Automated test equipment 119,267 191,060 52,619 64,656 Measuring instruments 22,942 34,249 20,308 12,030 Export portion of net sales 76,970 154,813 38,714 40,570 Operating income (loss) 23,584 47,802 (39,098) (18,209) Net income (loss) 14,426 31,820 (19,265) (11,467) - ------------------------------------------------------------------------------------------- (in Yen) Net income (loss) per share 144.82 319.08 (193.71) (116.49) - ------------------------------------------------------------------------------------------- (in Yen) Dividends per share 37.00 50.00 40.00 30.00 - ------------------------------------------------------------------------------------------- (in millions of Yen) Total assets 299,555 354,357 258,544 235,456 Stockholders' equity 203,379 230,988 204,058 178,253 - ------------------------------------------------------------------------------------------- (in Yen) Stockholders' equity per share 2,039.57 2,316.01 2,051.71 1,814.36 - -------------------------------------------------------------------------------------------
* "Net income (loss) per share" was calculated based on the average number of issued shares during the period. Treasury stock was excluded from such number beginning in FY2001. "Stockholders' equity per share" was calculated based on the number of issued shares as of the end of period. Treasury stock was excluded from such number beginning in FY2001. Beginning FY2002, the Company has adopted the "Accounting Standards Regarding Calculations of Earnings Per Share of the current net earnings" and "Guideline for Accounting Standards Regarding Calculations of Earnings Per Share of the current net earnings". [Charts illustrating the information presented in the above table] Unconsolidated Financial Statements - -------------------------------------------------------------------------------- o Balance Sheets - -------------------------------------------------------------------------------- FY2001 FY2002 (as of March 31, 2002) (as of March 31, 2003) - -------------------------------------------------------------------------------- (in millions of Yen) (Assets) Current assets 167,079 140,656 Cash and deposits 80,198 56,949 Trade accounts receivables 20,187 33,740 Inventories 37,135 27,218 Other 29,557 22,747 Noncurrent assets 91,464 94,799 Property, plant and equipment 47,797 44,399 Buildings and structures 20,929 20,066 Machinery and equipment 3,951 3,389 Land 17,916 18,133 Other 5,000 2,810 Intangible fixed assets 5,946 3,990 Investments and other assets 37,721 46,410 Investment securities 6,321 5,530 Investment in subsidiaries 14,307 14,087 Other 17,092 26,792 - -------------------------------------------------------------------------------- Total assets 258,544 235,456 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (in millions of Yen) (Liabilities) Current liabilities 17,817 21,754 Trade accounts payable 3,996 10,371 Current installments of bonds - 2,200 Other 13,820 9,182 Noncurrent liabilities 36,668 35,447 Bonds 26,700 24,500 Long-term borrowings 168 125 Allowance for retirement benefits 7,778 8,510 Other 2,021 2,311 Total liabilities 54,485 57,202 - -------------------------------------------------------------------------------- (Stockholders' equity) Common Stock 32,362 32,362 Capital surplus - 32,973 Retained earnings - 126,187 Legal reserve 36,056 - Other retained earnings 138,029 - Net unrealized holding gains on 44 (104) other securities etc. Treasury stock (2,434) (13,165) Total stockholders' equity 204,058 178,253 - -------------------------------------------------------------------------------- Total liabilities and 258,544 235,456 stockholders' equity - -------------------------------------------------------------------------------- * In accordance with amendments to regulations under the Commercial Code of Japan, certain reclassifications have been made under stockholders' equity. o Capital expenditures, Depreciation and amortization - -------------------------------------------------------------------------------- FY2001 FY2002 - -------------------------------------------------------------------------------- (in millions of Yen) Capital expenditures 9,416 2,601 Depreciation and amortization 7,206 6,598 - -------------------------------------------------------------------------------- o Statements of Income - -------------------------------------------------------------------------------- FY2001 FY2002 - -------------------------------------------------------------------------------- (in millions of Yen) Net sales 72,928 76,686 - -------------------------------------------------------------------------------- Cost of sales 65,437 49,163 Selling, general and administrative 46,590 45,732 expenses Operating income (loss) (39,098) (18,209) - -------------------------------------------------------------------------------- Non-operating income 8,250 4,307 Non-operating expenses 4,462 5,182 Ordinary income (loss) (35,310) (19,084) - -------------------------------------------------------------------------------- Income (loss) before income taxes (35,310) (19,084) - -------------------------------------------------------------------------------- Income taxes 106 43 Income taxes - deferred (16,151) (7,659) Net income (loss) (19,265) (11,467) - -------------------------------------------------------------------------------- Retained earnings brought forward 8,339 2,595 Interim dividends 2,486 (1,965) Undisposed deficit at end of year (13,412) (10,837) - -------------------------------------------------------------------------------- o Appropriation of Retained Earnings - -------------------------------------------------------------------------------- (in millions of Yen) Undisposed deficit 10,837 Reversal of voluntary reserve Reversal of general reserve 14,000 Total 3,162 Earnings will be appropriated as follows: 982 Dividends ((Y)10 per share) Earnings to be carried forward 2,180 - -------------------------------------------------------------------------------- * On December 10,2002, the Company paid interim dividends of (Y)20 per share to its stockholders. Domestic (Japan) Operations - -------------------------------------------------------------------------------- [Picture of Head Office] (Shinjyuku-ku, Tokyo) [Map of Branch Offices and Service station in Japan] [Map of Branch Offices and subsidiaries around Tokyo] [Picture of Nerima Office (Registered Office)] (Nerima-ku, Tokyo) [Picture of Western Japan Office] (Suita-shi, Osaka) [Picture of Gunma R&D Center] (Ora-gun, Gunma) [Picture of Kitakyusyu R&D Center] (Kitakyusyu-shi, Fukuoka) [Picture of Gyoda Office] (Gyoda-shi, Saitama) [Picture of Otone R&D Center] (Kitasaitama-gun, Saitama) [Picture of Gunma Factory] (Ora-gun, Gunma) [Picture of Gunma Factory2] (Ora-gun, Gunma) [Picture of Advantest Laboratories] (Sendai-shi, Miyagi) [Picture of Menuma Factory] (Osato-gun, Saitama) 1 Advantest Finance Inc. (Shinjyuku-ku, Tokyo) 2 Advanelectron Co., Ltd. (Osato-gun, Saitama) 3 Advantest Instruments Corporation (Ora-gun, Gunma) 4 Advantest Tokyo Systems Co., Ltd. (Nerima-ku, Tokyo) 5 Advanmechatec Co., Ltd. (Kitasaitama-gun, Saitama) 6 Advantest DI Corporation (Kitasaitama-gun, Saitama) 7 Advantest Customer Support Corporation (Gyoda-shi, Saitama) 8 Advanmicrotec Co., Ltd. (Gyoda-shi, Saitama) 9 Advanfacilities Co., Ltd. (Gyoda-shi, Saitama) 10 Advantest Technical Information Service Corporation (Gyoda-shi, Saitama) 11 Advantest Analysis Laboratory Ltd. (Gyoda-shi, Saitama) 12 Advantest Staff Resource Corporation (Gyoda-shi, Saitama) 13 Advantest Media Service Corporation (Gyoda-shi, Saitama) 14 Advantest Academy (Gyoda-shi, Saitama) 15 Advantest RF Technology Corporation (Gyoda-shi, Saitama) 16 Advansoft Development Corporation (Ora-gun, Gunma) 17 Advantest Logistics Corporation (Ora-gun, Gunma) Advantest Laboratories Ltd. (Sendai-shi, Miyagi) Advantest Tohoku Systems Co., Ltd. (Sendai-shi, Miyagi) Advantest Kansai Systems Co., Ltd. (Suita-shi, Osaka) Advantest Kyusyu Systems Co., Ltd. (Kitakyusyu-shi, Fukuoka) June, 2003 Worldwide Operations - -------------------------------------------------------------------------------- [Map of Advantest Group in the World] Europe [Picture of Advantest (Europe) GmbH] Head Office (Munich, Germany) Italy Branch (Milan, Italy) France Branch (Meylan, France) UK Branch (East kilbride, Scotland) Dresden Office (Dresden, Germany) Portugal Office (Vila du Conde, Portugal) Advantest Europe R&D S.A.R.L. (Courtaboeuf, France) Worldwide Partners Rohde & Schwarz GmbH & Co.KG (Munich, Germany) Asia [Picture of Advantest Asia Pte. Ltd.] (Singapore) Advantest (Singapore) Pte. Ltd. (Singapore) Advantest (Malaysia) Sdn. Bhd. (Subang Jaya, Malaysia) Advantest Engineering (M) Sdn. Bhd. (Penang, Malaysia) Advantest Philippines, Inc. (Muntinlupa, Philippines) Advantest Korea Co., Ltd. Head Office (Seoul, Korea) Technical Center (Cheonan, Korea) Cheonan Factory (Cheonan, Korea) Advantest Taiwan Inc. Head Office (Hsinchu, Taiwan) Kaohsiung Office (Kaohsiung, Taiwan) Advantest Taiwan Engineering Inc. Head Office (Hsinchu, Taiwan) Kaohsiung Office (Kaohsiung, Taiwan) Advantest (Suzhou) Co., Ltd. Head Office (Suzhou, China) Shanghai Branch Office (Shanghai, China) Beijing Branch Office (Beijing, China) Advantest Shanghai Co., Ltd. (Shanghai, China) America [Picture of Advantest America Corporation] (Santa Clala, CA) Advantest America, Inc. Head Office (Santa Clala, CA) Chicago Office (Buffalo Glove, IL) Burlington Office (Williston, VT) Austin Office (Austin, TX) Richmond Office (Mechanicsville, VA) Boise Office (Boise, ID) Folsom Office (Folsom, CA) Allentown Office (Allentown, PA) Advantest America R&D Center, Inc. (Santa Clala, CA) Advantest Test Engineering Corporation (Santa Clala, CA) Advantest America Design Center, Inc. (Portland, OR) Advantest America Measuring Solutions, Inc. (Edison, NJ) June, 2003 Corporate Overview - -------------------------------------------------------------------------------- Registered name ADVANTEST CORPORATION Registered office 1-32-1 Asahi-cho, Nerima-ku, Tokyo Head office Shinjuku NS Building 2-4-1 Nishi-Shinjuku, Shinjuku-ku Tokyo, JAPAN 163-0880 (03) 3342-7500 Date registered December 2, 1954 Number of employees 3,519 (consolidated) (as of March 31, 2003) 1,607 (unconsolidated) * Employee numbers above do not include temporary employees Listed stock exchanges Tokyo Stock Exchange, First Section (Code: 6857) New York Stock Exchange (Ticker Symbol: ATE) Directors, Corporate Auditors and Executive Officers (as of June 27, 2003) - -------------------------------------------------------------------------------- Chairman of the Board and CEO Hiroshi Oura Vice Chairman of the Board Shinpei Takeshita Representative Board Director Toshio Maruyama Director Kiyoshi Miyasaka Director Junji Nishiura Director Hiroji Agata Director Hitoshi Owada Standing Corporate Auditor Noboru Yamaguchi Standing Corporate Auditor Tadahiko Hirano Corporate Auditor Keizo Fukagawa Corporate Auditor Takashi Takaya President of Corporate Toshio Maruyama Executive Officers and COO Senior Executive Officer Kiyoshi Miyasaka Senior Executive Officer Junji Nishiura Senior Executive Officer Hiroji Agata Managing Executive Officer Hitoshi Owada Managing Executive Officer Kenichi Mitsuoka Managing Executive Officer Takashi Tokuno Managing Executive Officer Norihito Kotani Managing Executive Officer Yuri Morita Executive Officer Jiro Katoh Executive Officer Takao Tadokoro Executive Officer Hiroyasu Sawai Executive Officer Hiroshi Tsukahara Executive Officer Masao Shimizu Executive Officer Masao Araki Executive Officer Yoshiaki Furuse Executive Officer Yuichi Kurita Executive Officer Yoshiro Yagi Executive Officer Hideaki Imada Major Shareholders (as of March 31, 2003) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Name of shareholder Number of shares Percentage in (in thousands) voting rights - -------------------------------------------------------------------------------- Mizuho Trust & Banking Co., Ltd. 16,023 16.33% (retirement benefit trust (Fujitsu account)) Japan Trustee Services Bank, Ltd. (trust account) 5,129 5.22 Fujitsu Limited 4,047 4.12 The Master Trust Bank of Japan, Ltd. (trust account) 3,620 3.69 UFJ Trust Bank Limited (trust account A) 3,607 3.67 The Chase Manhattan Bank N.A. London S.L. (omnibus account) 2,721 2.77 State Street Bank and Trust Company 2,110 2.15 Mizuho Corporate Bank, Ltd. 2,108 2.14 Sompo Japan Insurance Inc. 1,956 1.99 Mitsui Asset Trust and Banking Company, Limited (as investment trustee) 1,915 1.95 *Mizuho Trust & Banking Co., Ltd. holds the 16,023 thousand shares of common stock referred above as the trustee of a retirement benefit plan of Fujitsu Limited, and exercises its voting rights pursuant to instructions given by Fujitsu Limited. Share Data (as of March 31, 2003) - -------------------------------------------------------------------------------- Total number of authorized shares-------------------------------220,000,000 Total number of issued shares-----------------------------------99,783,385 Number of shareholders------------------------------------------38,816 Category breakdown of shareholders Category Number of Number of shares Percentage shareholders (in thousands) - -------------------------------------------------------------------------------- Financial institutions and securities firms 207 54,021 54.1% Foreign nationals and entities 424 24,417 24.5 Other individual investors 37,657 12,049 12.1 Other corporate investors 528 9,294 9.3 Guide to Common Stock - -------------------------------------------------------------------------------- End of fiscal year March 31 of each year General meeting of shareholders June of each year Record date for determining March 31 of each year (in the case of eligibility to receive dividends interim dividends, if paid, September payment 30) Newspaper for public notices Nihon Keizai Shimbun Web site to view Advantest's balance sheets and income statements; http://www.advantest.co.jp/j/ir/index.html Transfer Agent for Common Stock (Share handling agent) Tokyo Securities Transfer Agent Co., Ltd. New Maru Building 7th floor 1-5-1 Marunouchi, Chiyoda-ku Tokyo, JAPAN 100-0005 (03) 3212-4611 (Share handling offices) Offices or agents of the above share handling agent Number of shares per unit 100 shares Requests for Repurchase by Advantest of Shares Constituting Less Than A Full Unit/ Requests to Purchase Additional Shares from Advantest to Constitute a Full Unit Any such requests shall be made to the transfer agent stated above. However, requests to purchase additional shares from Advantest are temporarily suspended during the 12 business days before, and including, March 31 and September 30 of each year. The Company may establish other periods in which the handling of requests to purchase additional shares from Advantest will be temporarily suspended. Registration of Loss of Share Certificates In case of loss of share certificates, shareholders may perform the procedures for registration of lost share certificates through the transfer agent state above. Upon registration of loss of share certificate, the serial number and other information of the lost share certificates will be available for public viewing on the registry of lost share certificates. In the event that no objection against such registration is filed within one year, or that the registration is not cancelled by the shareholder within one year, such share certificate shall be cancelled and the shareholder may have a new share certificate reissued. The fee for registering the loss of share certificates is (Y)10,000 in addition to (Y)500 per lost share certificate. Inquiries related to the above shall be directed to the above transfer agent. [Advantest logo] -----END PRIVACY-ENHANCED MESSAGE-----