HIDEC Systems Co, Ltd. (President: Minoru Hirasawa; Head Office: Ibaraki, Hitachi City; hereinafter "HIDEC"), consolidated subsidiary of Hitachi Cable, Ltd. (President and Representative Director: Seiji Hara; Head Office: Tokyo, Chiyoda-ku; hereinafter "Hitachi Cable"), has developed and launched sales of an integrated financial accounting system that significantly improves the efficiency of groupwide financial-related practices and processes.

In April 2002, this accounting system was implemented at all consolidated subsidiaries and affiliates of the Hitachi Cable Group, thereby integrating business practices, improving procedures and processes, and reducing both accounting work and the number of employees needed to complete it. Moreover, our financing capabilities have improved due to fund pooling (and netting) and the implementation of a cash management system that unifies the management of funds across the Group.

Drawing on the knowledge and experience gained from implementing this integrated accounting system, HIDEC will begin providing optimized IT solutions to customers outside the Hitachi Cable Group.

1.Outline of the Integrated Financial Accounting System

The integrated financial accounting system is based on a centralized data processing "integrated accounting server" that functions as a hub between two business groups, one upstream and the other downstream. The upstream group handles data related to accounts receivable and payable, deposits and withdrawals, payroll, and other items. The downstream group can access information generated by the upstream group via the centralized data processing server to run electronic bookkeeping and indirect budget management systems. In this way, the integrated financial accounting system supports virtually every aspect of the accounting process. (Please refer to the chart on page three.)

In addition to making information from each transaction immediately available to both upstream and downstream groups, the integrated accounting system significantly improves consolidated accounting practices by ensuring that information from transactions between companies in the same group is available simultaneously so that intergroup debts and credits coincide.

This system does more than just link upstream systems to downstream systems via a centralized server; it also enables a public utilities payment system and an indirect budget management system, both of which can be customized to provide optimized financial accounting tailored to customer needs. HIDEC has submitted patent applications for three business models centered on this system.

2.Primary Product Characteristics

(1) Upstream Financial Processing Systems

1. Public Utilities Payment System (Automatic utilities payment and bank transfers)
This system enables automatic bank transfers for the payment of electricity, gas, water, and telephone bills, while also facilitating automatic transfers to all departments in the same corporate group. By helping companies analyze payment processes and review contracts, the public utilities payment system will reduce overall costs.

2 .Payroll System (Payroll accounting)
As this payroll software can be adapted to the specific requirements of each company's accounting system, a single outsourcing company can provide accounting services for an entire corporate group. The system is designed to produce a comprehensive payroll report with a wide range of applications in such areas as human resources management, year-end tax adjustments, certificates of income and withholding of tax, and deductions for social insurance premiums.

(2) Integrated Data Processing

The integrated accounting server, which integrates data processing, can sort and process large volumes of data quickly and provide the information needed to settle accounts for intergroup transactions. The server also helps create balance sheets, profit and loss statements, and trial balance sheets in a timely manner, and its high-speed search function locates information quickly, thereby accelerating task performance and increasing efficiency.

(3) Downstream Applications

1 .Indirect Costs Budget Management System
This system has a detail-oriented search and storage function, making it easy to determine the precise number of, for example, pencils, screws, or any other items in stock or check aggregate data for each client. In addition, by altering the order in which items are displayed or sorted, data output can be adjusted to meet the requirements of an unlimited number of applications.

2.Electronic Approval / Budget Management / Fixed-Asset Systems (Web version)
The electronic approval system enables documents related to capital investment and other expenses to be submitted and approved electronically. In addition to helping companies manage budgets for each electronic signature granted, the system can be used to manage fixed assets for completed facilities. Moreover, the system helps reduce inventory time by tracking bar codes on machine nameplates and accelerates the calculation of amortization accounts by centralizing the management of completed facilities.

3.Electronic Bookkeeping
General ledgers, indirect cost invoices, consumption tax information, and other paper-based documents can be digitized and stored on CDs, thereby conserving storage space and reducing paper dependency. In addition, the system is compatible with the National Tax Administration Agency's electronic ledger requirements for tax audits.

Drawing on the knowledge and experience gained through the implementation of these systems throughout the Hitachi Cable Group, HIDEC will conduct a PR campaign to publicize the advantages and applications of these systems in an effort to generate sales of 500 million yen during fiscal 2004.

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  Chart of Integrated Accounting System

Primary Advantages of Integrated Financial Accounting System

25% reduction in finance-related staff
Reduction in bank transfer costs
Lower phone bills
Reduced paper use due to electronic storage
Reduction in labor associated with consolidated accounting (70% to 40% decrease in work time; less work on settlement date)
Reduced workload for monthly settlements (system also enables daily settlements