THK Company Limited
28 May 2003
(Excerpt translation)
Consolidated Financial Statement for Fiscal 2002
May 19, 2003
Company name :THK CO., LTD. (Listed on TSE)
Code number : 6481
Head Office :3-11-6, Nishi-Gotanda, Shinagawa-ku, Tokyo
Contact :Kotaro Yoshihara, Director/General Manager, Corporate Strategy Department
Tel : 81-3-5434-0300
Date of board meeting for consolidated financial settlement : May 19, 2003
Adoption of USGAAP:Not applicable
I. Financial performance in the year ended March 31, 2003
(1) Operation results
Note: Yen are shown in millions.
(Unit:Millions of yen, yen, %)
FY2002 FY2001
Net sales 94,599 ( 5.9) 89,340 ( -36.3)
Operating income 4,893 ( 124.8) 2,176 ( -91.5)
Ordinary income 4,827 ( 88.8) 2,557 ( -90.5)
Net Income 1,891 ( 130.5) 820 ( -94.3)
Net Income per share 15.65 6.88
Diluted net income per share 15.12 -
Return on equity 1.8 0.8
Ordinary income to total assets 2.6 1.4
Ordinary income to net sales 5.1 2.9
Note:
1. Equity earnings of unconsolidated subsidiaries and affiliates
March 31, 2003:-12 million yen March 31, 2002:8 million yen
2. Average number of shares during the period ended (consolidated):
March 31, 2003:118,990,147 shares March 31, 2002:119,355,598 shares
3. Change in accounting policy: Not applicable
4. Figures in parentheses (net sales, operating income, ordinary income and net income) are the percentage changes from
the previous interim period.
(2) Consolidated Financial Position
(Unit:Millions of yen,%, Yen)
FY2002 FY2001
Total assets 193,197 179,705
Total shareholders: equity 102,478 103,748
Equity ratio 53.0 57.7
Total shareholders' equity per share 860.80 869.20
Note:Number of shares of common stock at the period ended (consolidated):
March 31, 2003: 119,015,152 shares March 31, 2002: 119,361,210 shares
(3) Consolidated Statements of Cash Flows
(Unit:Millions of yen)
FY2002 FY2001
Cash flows from operating activities 16,012 3,272
Cash flows from investing activities (3,909) (7,907)
Cash flows from financing activities 5,423 6,930
Cash and cash equivalents 72,533 55,007
(4) Scope of consolidation and application of equity method
The number of consolidated subsidiaries :13
The number of unconsolidated companies to which the equity method is applied :0
The number of affiliates to which the equity method is applied :1
(5) Change in scope of consolidation and application of equity method
Consolidation:New 0,Exclusion 0
Application of equity method:New 0,Exclusion 0
II. Forecast of financial performance for the six months to September 30, 2003 and the year ending
March 31, 2004
(Unit:Millions of yen)
For the six months to September For the year ended
30, 2003 March 31, 2004
Net sales 51,600 104,000
Operating income 4,300 9,000
Ordinary Income 4,300 8,900
Net Income 2,350 4,850
Reference: Forecast net income per share (for the year):Y 40.80 (calculated by the expected average number of stocks for
the year)
Caution: Forecast Statements
This document contains forecast statements based on the assumptions and beliefs of the Company:s management in light of
information currently available.
Such statements involve uncertainties and have risks of volatility that would result from the Company:s operations in
the future, as well as from changes in the domestic and international environments. Therefore, the Company cannot
guarantee the accuracy of such statements and wishes to caution readers that actual operational and financial results
may differ from such statements.
Consolidated Balance Sheets
As of March 31, 2002 and 2003
(Unit/Millions of yen, %)
FY2001 FY2002
Assets
Current assets:
Cash on hand and in banks 43,368 66,459
Accounts and notes receivable-trade 24,834 35,063
Short-term investments in securities 9,137 7,003
Inventories 26,431 23,747
Deferred tax assets 2,521 2,248
Short-term loans 4,214 260
Other current assets 6,575 1,213
Less: Allowance for bad debts -470 -383
Total current assets 116,612 64.9 135,613 70.2
Fixed assets:
Tangible fixed assets: 44,050 24.5 42,390 21.9
Buildings and structures 15,223 14,152
Machinery, equipment and vehicles 16,495 15,292
Land 10,253 10,258
Construction in progress 587 1,303
Other 1,491 1,384
Intangible fixed assets: 2,518 1.4 1,925 1.0
Investments and others: 16,505 9.2 13,249 6.9
Total fixed assets 63,074 35.1 57,566 29.8
Total deferred assets 19 0.0 16 0.0
Total assets 179,705 100.0 193,197 100.0
Consolidated Balance Sheets
As of March 31, 2002 and 2003
(Unit/Millions of yen, %)
FY2001 FY2002
Liabilities
Current liabilities:
Accounts and notes payable-trade 11,754 16,960
Short-term bank loans 6,551 3,305
Current portion of long-term debt 4,168 2,406
Current portion of bonds 8,000 3,443
Current portion of convertible bonds - 13,905
Corporate income taxes payable and others 108 1,668
Accrued bonus 1,149 1,243
Other current liabilities 4,247 5,216
Total current liabilities 35,980 20.0 48,149 24.9
Fix liabilities:
Bonds 18,488 15,000
Convertible bonds 13,905 -
Bond with subscription warrant - 23,000
Long-term debt 4,216 1,192
Allowance for retirement and severance benefits 1,345 1,483
Reserve for directors: and auditors: retirement benefits 1,512 1,193
Other 141 389
Total Fix liabilities 39,609 22.1 42,259 21.9
Total liabilities 75,590 42.1 90,409 46.8
Minority interest
Minority interest 366 0.2 309 0.2
Shareholders' equity:
Common stock 23,106 12.9 - -
Additional paid-in capital 30,962 17.2 - -
Consolidated surplus 48,585 27.0 - -
Valuation adjustment for marketable securities 45 0.0 - -
Foreign currency translation adjustment 1,053 0.6 - -
Treasury stock -3 -0.0 - -
Total shareholders' equity 103,748 57.7 - -
Common stock - - 23,106 12.0
Capital surplus - - 30,962 16.0
Earned surplus - - 48,686 25.2
Valuation adjustment for marketable securities - - -355 -0.2
Foreigncurrency translation adjustments - - 481 0.2
- - 102,881 53.2
Treasury stock - - -403 -0.2
Total shareholders' equity - - 102,478 53.0
Total liabilities, minority interests and shareholders: 179,705 100.0 193,197 100.0
equity
Consolidated Statements of Income
For the year ended March 31, 2002(FY2001) and 2003(FY2002)
(Unit/Millions of yen, %)
FY2001 FY 2002
Net sales 89,340 100.0 94,599 100.0
Cost of sales 63,293 70.8 66,646 70.5
Gross profit 26,046 29.2 27,953 29.5
Sales, general and administrative expenses 23,870 26.8 23,060 24.3
Operating income 2,176 2.4 4,893 5.2
Non-operating income: 1,869 2.1 1,226 1.3
Interest income 298 169
Dividend income 57 49
Foreign-exchange gain 801 351
Equity earnings of unconsolidated subsidiaries and 8 -
affiliates
Rent income 132 148
Other 571 507
Non-operating expenses: 1,487 1.6 1,291 1.4
Interest expenses 1,041 888
Bond expense 95 95
Other 350 308
Ordinary income 2,557 2.9 4,827 5.1
Extraordinary income 45 0.0 56 0.0
Gain on sales of property and equipment 45 56
Extraordinary loss 1,769 2.0 1,287 1.3
Loss on sales/disposal of property and equipment 198 459
Write-down of long-term investment in securities 875 510
Loss on liquidation of non-consolidated subsidiaries 466 -
Equity fluctuation loss 135 318
Other 93 -
Income before income taxes and other 833 0.9 3,596 3.8
Corporate income taxes, residence taxes and business taxes 268 1,179
Adjustment of corporate income taxes and other -253 593
Minority interest in income of consolidated subsidiaries -2 -0.0 -68 -0.0
Net income 820 0.9 1,891 2.0
Consolidated Statements of Retained Earnings
For the year ended March 31, 2002(FY2001) and 2003(FY2002)
(Unit/Millions of yen)
FY2001 FY2002
Consolidated retained earnings at beginning of period 49,615 -
Decrease in consolidated retained earnings: 1,850 -
Cash dividends 1,790 -
Bonuses to directors 60 -
(Bonuses to auditors) (8) -
Net income 820 -
Balance of consolidated retained earnings at end of 48,585 -
period
Balance of consolidated surplus at beginning of period - 30,962
Balance of consolidated surplus at end of period - 30,962
Increase in earned surplus - 48,585
Net Income - 1,891
Decrease in earned surplus
Cash dividends - 1,790
Balance of earned surplus at end of period - 48,686
Consolidated Statements of Cash Flows
For the year ended March 31, 2002(FY2001) and 2003(FY2002)
(Unit/Millions of yen)
FY2001 FY2002
Cash Flows from operating activities
Income before income tax and minority interests 833 3,596
Depreciation and amortization 6,164 6,163
Loss on sales or disposal of property and equipment 152 402
(Increase)/ Decrease in allowance for bad debts (128) (390)
Interest and dividend income (355) (218)
Interest expenses 1,041 888
Foreign exchange gain (loss) (135) (140)
Equity earnings of unconsolidated subsidiaries and affiliates (8) 12
Write-down of Long-term investment in securities 875 510
Loss on liquidation of non-consolidated subsidiaries 466 -
Equity fluctuation gain (loss) 135 318
(Increase)/ Decrease in accounts and notes receivables 22,138 (10,253)
(Increase)/ Decrease in inventories 4,697 2,502
Increase / (Decrease) in accounts and notes payable (15,976) 5,220
Other (1,285) 2,559
Subtotal 18,615 11,170
Interest income and dividend income received 374 220
Interest expenses paid (1,003) (902)
Income taxes paid (14,714) 5,524
Net cash provided by operating activities 3,272 16,012
Cash Flows from investing activities
Increase in time deposits due over three months (498) 468
Payments for purchases of short-term investments in securities (1,999) (1,199)
Proceeds from sales of short-term investments in securities 2,063 1,328
Payments for purchases of property, plants and equipment (9,225) (4,759)
Proceeds from sales of property, plants and equipment 194 148
Payments for purchases of long-term investments in securities (486) (9)
Proceeds from sales of long-term investments in securities 888 103
Increase in short-term loans (663) (335)
Collection of short-term loans receivable 1,818 345
Net cash provided by investing activities (7,907) (3,909)
Cash Flows from financing activities
Increase / (Decrease) in short-term bank loans (1,511) (2,887)
Borrowings of long-term debt 1,210 -
Repayments of long-term debt (6,037) (4,786)
Payments for issuances of bonds 15,000 22,904
Redemption of bonds - (8,000)
Cash dividends (1,790) (1,790)
Other 60 (17)
Net cash provided by (used for) financing activities 6,930 5,423
Effect of exchange-rate change on cash and cash equivalents 664 0
Net increase in cash and cash equivalents 2,959 17,526
Cash and cash equivalents at the beginning of the period 52,047 55,007
Cash and cash equivalents at the end of the period 55,007 72,533
Basis for Presenting Consolidated Financial Statements
1. Scope of Consolidation
(1) The consolidated subsidiaries: 13
THK(the Company)had 22 subsidiaries as of March 31, 2003. The consolidated financial statements include the accounts
of the Company and its 13 subsidiaries.
The 13 major subsidiaries, which have been consolidated with the Company, are as follows:
Talk System Co., Ltd., Beldex Corporation, THK Yasuda Co., Ltd., THK Holdings of America, L.L.C., THK America, Inc., THK
Manufacturing of America, Inc., THK Neturen America, L.L.C., THK Europe B.V., THK GmbH, THK Manufacturing of Europe
S.A.S., PGM Ballscrews Ltd., PGM Ballscrews Ireland Ltd., and THK TAIWAN CO., LTD.(THK and these consolidated
subsidiaries as the gCompaniesh)
Note: THK Neturen America, L.L.C. has been consolidated with the Companies since this fiscal year.
(2) The main non-consolidated subsidiary: Nihon Slide Kogyo Co., Ltd.
The accounts of the remaining nineunconsolidated subsidiaries, including Nihon Slide Kogyo Co., Ltd., are
insignificant, meaning that these accounts have not been consolidated with the Company since the consolidated assets,
net sales, net income and retained earnings of these companies, in the aggregate, are not significant in relation to
those of the Companies.
2. Accounting for Investments in non-consolidated Subsidiaries and Affiliates
(1) The equity method is applied only to the investments in Daito Seiki Co., Ltd.
The Company had four affiliates as of March 31, 2003. However, the equity method is applied only to the investments in
Daito Seiki Co., Ltd., since the investments in the unconsolidated subsidiaries and the remaining affiliates would not
have material effects on consolidated net income and retained earnings in the consolidated financial statements, had
they been accounted for using the equity method. Thus the investments in the unconsolidated subsidiaries and affiliates
are carried at cost or less.
(2) Theunconsolidated subsidiaries and affiliatesare not accounted for by the equity method.
Theunconsolidated subsidiaries, including Nihon Slide Kogyo Co., Ltd., and affiliates, including Samick LMS Co., Ltd.,
are not accounted for by the equity method. These subsidiaries and affiliates are excluded from the equity method of
accounting due to their immaterial effect on the consolidated results.
3. Fiscal year of consolidated subsidiaries
THK Holdings of America, L.L.C., THK America, Inc., THK Manufacturing of America, Inc., THK Neturen America,
L.L.C.,THK Europe B.V., THK GmbH, THK Manufacturing of Europe S.A.S., PGM Ballscrews Ltd., PGM Ballscrews Ireland Ltd.
and THK TAIWAN CO., LTD. close their books of account for the period on December 31. Necessary adjustments are made in
order to consolidate financial statements for relevant transactions conducted during the period.
4. Summary of Significant Accounting Policies
(1) Evaluation of significant assets
A) Investments in securities
Other investments securities listed on stock exchanges are stated at fair market value as of the year-end balance-sheet
date, with the sale price computed via the moving-average method. Other investments securities unlisted are stated at
cost via the moving-average method.
B) Inventories
Company Name Asset Evaluation Method Evaluation Standard
Parent company (THK) Weighted average cost Cost basis
Talk System Co., Ltd. Weighted average cost Cost basis
Beldex Corporation Actual cost Cost basis
THK Yasuda Co., Ltd. Weighted average cost Cost basis
THK America, Inc. First-in first-out Lower of cost or market
THK Manufacturing of America, Inc. First-in first-out Lower of cost or market
THK Europe B.V. Moving average Lower of cost or market
THK Manufacturing of EuropeS.A.S. Weighted average cost Cost basis
THK GmbH Moving average Lower of cost or market
PGM Ballscrews Ltd. First-in first-out Lower of cost or market
PGM Ballscrews Ireland Ltd. First-in first-out Lower of cost or market
THK TAIWAN CO., LTD Moving average Lower of cost or market
(2) Depreciation and amortization
Depreciation of plants and equipment is computed in principal by using declining-balance method. However, depreciation
of property and buildings (excluding building fixtures) acquired after April 1, 1998, is computed using the
straight-line method.
The amortization of intangible assets is computed in principal via thestraight-line method, in accordance with the
Corporate Tax Law of Japan. However, software for internal use is amortized over its estimated useful life of five years
on a straight-line basis.
(3) Deferred charges
Bond-issuance expenses are recognized in total when incurred.
Bond discount is amortized over the outstanding period by using straight line method.
(4) Leases
Leases that transfer substantially all the risks and rewards of ownership of the assets are accounted for as capital
leases except that the leases that do not transfer ownership of assets at the end of term are accounted for operating
leases.
(5) Basis for recording significant allowances
1. Allowance for bad debts:
An allowance for bad debts is recorded, in amounts considered to be appropriate, based primary upon the Companies: past
credit loss experience and an evaluation of potential losses in the receivables outstanding.
2. Accrued bonus:
To prepare for bonus payments to employees, an amount allocable to the fiscal year under review, based on the estimated
amount of future payments is provided.
3. Allowance for retirement and severance benefits:
To prepare for retirement and severance benefits to employees, future benefit obligations less fair value of pension
assets at the fiscal year end are recorded as reserves for retirement and severance benefits. The unrecognized actuarial
differences are amortized equally on a straight line basis over the period with in average remaining years of service
(10 years) from the next year in which they arise.
4. Allowance for directors: and auditors: retirement benefits:
To prepare for retirement benefits to directors and auditors, an estimated amount of required payment at the interim
fiscal year end, based on internal rules for directors and auditors, is provided.
(6) Hedge Accounting
1. Method of hedge accounting:
Interest-swap transactions qualified the conditions for exceptional treatment, and those are treated as exceptional
treatment.
Currency-swap transactionsqualified the conditions for hedge accounting, and thoseare treated asassignment treatment.
2. Means of hedging and hedged items
Interest swaps: Interest fluctuating on borrowing.
Currency swaps: Money claims denominated in foreign currency.
3. Policy for hedge transactions:
Hedges related to interest are entered basically for the purpose of avoiding risks of market fluctuations in interest.
And hedges related to currencyare entered basically for the purpose of avoiding risks of exchange fluctuations.
4. Method of evaluating hedge effectiveness:
The evaluation of hedge effectiveness is omitted, since hedge accounting applies only to those interest-swaps that meet
the conditions for exceptional treatment.
Hedges related to currencyare evaluatedits effectiveness by comparing the total amount of market price change with the
means for hedging or the total amount of cash-flow changes.
(7) Other important items
Treatment of national and local consumption taxes: The tax-exclusion accounting method is applied.
5. Handling of Appropriation of Profit and other items
Consolidated Statements of Retained Earnings are calculated based on the profit appropriation specified during the
fiscal year.
6. Scope of Funds on Statements of Interim Consolidated Cash Flows
Cash and cash equivalents include deposits that easily withdrawn and converted to cash, along with short-term
investments maturing within three months of their acquisition that are not subject to significant price risk.
Notes
(Consolidated Balance Sheets)
FY 2001 FY2002
1. Shares of non-consolidated Y 6,039 million Y 4,843 million
subsidiaries and affiliates
2. Discounts on notes receivable Y 1,435 million Y - million
3. Liabilities for guarantee Y 401 million Y 302 million
(Consolidated Statements of Cash Flows)
1. The connection between cash and cash equivalents at end of the period and accounts of consolidated balance
sheets
FY 2001 FY2002
Cash on hand and in banks Y 43,368 million Y 66,459 million
Short-term investments in securities Y 9,137 million Y 7,003 million
Short-term loans Y 4,214 million Y 260 million
Total Y 56,720 million Y 73,724 million
Time deposits (over three months) -Y 498 million -Y 30 million
Short-term investments -Y 999 million -Y 899 million
in securities, except MMF
Short-term loans, except repurchase -Y 214 million -Y 260 million
agreement
Cash and cash equivalents Y 55,007 million Y 72,533 million
2. Significant non-capital transactions
FY 2001 FY2002
Conversion of convertible bonds
Increase in common stock by Y 30 million Y - million
conversion
Increase in additional paid-in Y 30 million Y - million
capital by conversion
Decrease in convertible bonds by Y 61 million Y - million
conversion
(Lease Transactions)
1. Pro forma information of leased property such as acquisition costs, accumulated depreciation, future minimum
lease payments that do not transfer ownership of the leased property to the lessee on has if capitalizedh basis as of
March 31, 2001 and 2002 were as follows:
(1) Acquisition costs, accumulated depreciation and net leased property at end of period
FY 2001 FY2002
Machinery and equipment Machinery and equipment
Acquisition costs Y 68 million Y 54 million
Accumulated depreciation Y 46 million Y 42 million
Net leased property Y 21 million Y 11 million
Other Other
Acquisition costs Y 3,141 million Y 2,901 million
Accumulated depreciation Y 1,410 million Y 932 million
Net leased property Y 1,731 million Y 1,969 million
Intangible fix assets Intangible fix assets
Acquisition costs Y 71 million Y 71 million
Accumulated amortization Y 19 million Y 33 million
Net leased property Y 52 million Y 38 million
Total Total
Acquisition costs Y 3,281 million Y 3,027 million
Accumulated depreciation Y 1,476 million Y 1,009 million
Net leased property Y 1,805 million Y 2,018 million
Note: The amounts of acquisition costs and future minimum lease payments under finance leases include the portion of
imputed interest expense.
(2) Future minimum lease payments under finance leases
FY 2001 FY2002
Due within one year Y 645 million Y 607 million
Due after one year Y 1,160 million Y 1,411 million
Total Y 1,805 million Y 2,018 million
Note: The amounts equivalent to acquisition costs and future minimum lease payments under finance leases include the
portion of imputed interest expense.
(3) Lease payments and implied depreciation
FY 2001 FY2002
Lease payments Y 697 million Y 666 million
Depreciation Y 697 million Y 666 million
(4) Depreciation
Depreciation is computed via the straight-line method.
2. Transactions of operating leases
Future minimum lease payments under operating leases
FY 2001 FY2002
Due within one year Y 652 million Y 710 million
Due after one year Y 2,343 million Y 1,839 million
Total Y 2,996 million Y 2,549 million
(Segment Information)
(1) Industry Segment Information
Given the fact that the sales, operating income and assets of the machinery parts segment amounted to more
than 90 percent of total sales, total operating income and total assets of the Company and consolidated subsidiaries, it
is not required that industry segment information be disclosed. The Company and consolidated subsidiaries are operating
in one industry segment that being the production and sales of linear motion systems.
(2) Geographical Segment Information
The net sales of the Companies for the year ended March 31,2002 and 2003 classified by geographic segments are
summarized as follows:
(The year ended March 31,2002) (Millions of yen)
Japan America Europe Asia Total Elimination Consolidated
and other or
corporate
assets
Net sales:
Customers 63,315 11,632 12,726 1,665 89,340 - 89,340
Inter-segment 11,396 190 129 - 11,716 (11,716) -
Total 74,711 11,822 12,856 1,665 101,056 (11,716) 89,340
Operating expenses 72,058 11,876 13,641 1,672 99,248 (12,084) 87,163
Operating income 2,653 -54 -785 -6 1,807 368 2,176
Total asset 154,624 16,218 13,530 1,241 185,616 (5,910) 179,705
Note:
1. Classification of countries and regions is based on level of geographical proximity.
2. The main countries and regions belonging to each classification are as follows:
A) America: United States, etc.
B) Europe: Germany, United Kingdom, the Netherlands, etc.
3. Asia and other: South Korea, Taiwan, etc.
(The year ended March 31, 2003) (Millions of yen)
Japan America Europe Asia Total Elimination Consolidated
and other or corporate
assets
Net sales:
Customers 71,059 10,732 10,981 1,825 94,599 - 94,599
Inter-segment 12,193 147 97 - 12,439 (12,439) -
Total 83,253 10,880 11,079 1,825 107,039 (12,439) 94,599
Operating expenses 76,434 11,502 12,848 1,758 102,543 (12,836) 89,706
Operating income 6,819 (622) (1,768) 67 4,495 397 4,893
Total asset 173,614 15,830 15,551 1,470 206,466 (13,269) 193,197
Note:
1. Classification of countries and regions is based on level of geographical proximity.
2. The main countries and regions belonging to each classification are as follows:
A) America: United States, etc.
B) Europe: Germany, United Kingdom, the Netherlands, etc.
3. Asia and other: South Korea, Taiwan, etc.
(3) Export Sales and Sales by Overseas Subsidiaries
The overseas sales of the Companies (referring to the amounts of exports made by Company plus sales by
overseas consolidated subsidiaries) for the year ended March 31, 2002 and 2003 are summarized as follows:
Millions of yen
The year ended March 31, 2002 (FY2001)
Asia and
America Europe Other Total
Overseas sales 11,629 12,863 5,203 29,695
Consolidated net sales 89,340
Overseas sales as a percentage of
consolidated net sales 13.0 % 14.4 % 5.8 % 33.2 %
The year ended March 31, 2003 (FY2002)
Asia and
America Europe Other Total
Overseas sales 10,775 10,780 7,764 29,319
Consolidated net sales 94,599
Overseas sales as a percentage of
consolidated net sales 11.4 % 11.4 % 8.2 % 31.0 %
Note:
1. Classification of countries and regions is based on level of geographical proximity.
2. The main countries and regions belonging to each classification are as follows:
A) America: United States, etc.
B) Europe: Germany, United Kingdom, the Netherlands, etc.
C) Asia and other: South Korea, Taiwan, etc.
3. Overseas sales are the sales in the countries or areas other than this country of theCompany and the
consolidated subsidiaries.
(Tax-effect accounting)
1. Reasons for the occurrence of deferred tax assets and deferred tax liabilities
FY 2001 FY2002
Loss carryforwards Y 1,222 million Y 411 million
Software Y 796 million Y 759 million
Allowance for directors: and auditor:s retirement Y 635 million Y 485 million
benefits
Write-down of long-term investment in securities Y 365 million Y 161 million
Allowance for retirement and severance benefits Y 365 million Y 465 million
Allowance for bad debt Y 581 million Y 474 million
Accrued bonus Y 271 million Y 408 million
Write-down of inventories Y 745 million Y 951 million
Inventories (Unrealized Profit) Y 842 million Y 690 million
Accrued enterprise tax Y - million Y 142 million
Other Y 960 million Y 916 million
Subtotal Y 6,786 million Y 5,867 million
Valuation allowance -Y 837 million -Y 976 million
Total deferred tax assets Y 5,949 million Y 4,891 million
FY 2001 FY2002
Accrued enterprise tax -Y 459 million Y - million
Allowance for special depreciation -Y 327 million -Y 238 million
Other -Y 221 million -Y 332 million
Total deferred tax liabilities -Y 1,007 million -Y 571 million
Net deferred tax assets Y 4,941 million Y 4,319 million
2. Reason for the difference between legal effective tax rate and corporate income tax rate after adoption of
tax-effect accounting
FY 2001 FY2002
Legal effective tax rate 42.1 % 42.1 %
(Adjustment)
Accounts not permanently counted in 5.6 % 1.6 %
to loss-Entertainment expenses,etc
Accounts not permanently counted in -2.5 % -0.6 %
to gain-dividend income,etc
Net loss of consolidated subsidiaries 50.2 % 25.6 %
Investments between consolidated -110.6 % -21.8 %
subsidiaries and unconsolidated companies to
which the equity method is applied
Equalization inhabitant taxes 7.0 % 1.7 %
The difference of legal effective tax rate between 9.3 % -0.7 %
Japan and overseas
Adjustment of decrease of deferred tax assets at - % 2.0 %
end of period calculated by the change of tax rate
Other 1.7 % -0.6 %
Corporate income tax rate after 2.8 % 49.3 %
adoption of tax-effect accounting
3. An amendment to the Local Tax Law, in which taxation of corporations by the size of their business will be added to
enterprise tax from April 2004, will affect legal effective tax rates used for calculating deferred tax assets and
deferred tax liabilities of the Company and its domestic consolidated subsidiaries. The post-amendment rate has been
applied to the portion of the temporary difference (arising from the difference in the new rate and that used at the end
of the year under review) that will disappear after April 1, 2004. As a result of the amendment, net deferred tax assets
(after deducting deferred tax liabilities) at fiscal year-end declined 70 million, and adjustment of enterprise taxes
increased the same amount.
(Investments in securities)
1. As of March 31, 2002and 2003, market value available in other investment securities is as follows:
Millions of yen
As of March 31,2002
Acquisition cost Carried amount gain (loss)
Carrying amount summing up to
Exceed acquisition cost:
Equities 366 542 176
Bonds - - -
Other 19 28 8
Subtotal 386 570 184
Carrying amount summing up does not exceed
acquisition cost:
Equities 2,738 2,232 -506
Bonds - - -
Other - - -
Subtotal 2,738 2,232 -506
Total 3,125 2,803 -321
Millions of yen
As of March 31,2003
Acquisition cost Carried amount gain (loss)
Carrying amount summing up to
Exceed acquisition cost:
Equities 313 375 61
Bonds - - -
Other 15 20 4
Subtotal 329 395 66
Carrying amount summing up does not exceed
acquisition cost:
Equities 2,291 1,773 -517
Bonds - - -
Other - - -
Subtotal 2,291 1,773 -517
Total 2,620 2,169 -451
Note:
For the year ended March 31, 2003,the company is treated as decrease treatment of 510 million yen about market value
available in other investment securities.
When the current price of investment security falls 50% or more to the acquisition cost, decrease treatment is carried
out. If the decrease rate of an investment security is less than 50% and 30% or more, it is judged synthetically whether
the decrease treatment is carried or not, by comparing the average price, financial conditions in the latest term-end
and past 2 periods, and monthly closing price for the past 24 months with the acquisition cost.
2. Other investment securities sold off in the market are as follows:
• The year ended March 31, 2002
Since the importance of the amount of total sales amount is scarce, a publication is omitted.
• The year ended March 31, 2003
Since the importance of the amount of total sales amount is scarce, a publication is omitted.
3. Market value not available in investment securities is as follows:
(Millions of yen)
As of March 31, 2002 As of March 31, 2003
Carried amount Carried amount
Other investment in securities
Money management funds 2,506 2,507
Free financial funds 3,811 3,309
Discount financial bonds 999 899
Commercial papers 999 -
Unlisted equities (excluding OTC equities) 175 175
Unlisted foreign bonds 1,500 1,500
Unlisted foreign equities 819 286
4. Of other investment securities with a due date, the amount of a redemption scheduled after the settling day are
as follows:
(Unit/Millions of yen)
• FY 2001
Due within one year within five years within ten years Due after more
after one year after five years than ten years
Bond
Public bonds - - - -
Corporate bonds - - - -
Other 2,000 - - -
Other - - - -
Total 2,000 - - -
• FY 2002
Due within one year within five years within ten years Due after more
after one year after five years than ten years
Bond
Public bonds - - - -
Corporate bonds - - - -
Other 900 - - -
Other - - - -
Total 900 - - -
(Retirement benefit)
1. Outline of the retirement benefit system the company employs
THK Co., Ltd.and consolidated subsidiaries use the lump sum retirement system and annuity retirement system as vested
benefit-type systems. Moreover, when the employee retires, our company occasionally pays surcharge retirement money.
2. Retirement-benefit debt
FY2001 FY2002
a. Retirement-benefit debt Y 3,802 million Y 4,139 million
b. Plan assets -Y 1,801 million -Y 1,887 million
c. Unreserved retirement-benefit debt Y 2,000 million Y 2,251 million
d. Difference in unrecognized -Y 654 million -Y 767 million
mathematical principle calculation
e. Allowance for retirement and Y 1,345 million Y 1,483 million
severance benefits
Note:In calculation of retirement-benefit debt, domestic consolidated subsidiaries have adopted the simple method, and
some abroad consolidated subsidiaries have adopted the regulation of the accounting standards of the country concerned.
3. Retirement-benefit costs
FY2001 FY2002
a. Service cost Y 302 million Y 335 million
b. Interest cost Y 91 million Y 89 million
c. Expected return on plan assets -Y 49 million -Y 8 million
d. Amortization of difference in change Y 25 million
of accounting standard
e. Recognized actuarial differences - Y 67 million
f. Retirement and severance benefit Y 370 million Y 483 million
expenses
Note: Retirement and severance benefit expenses of domestic consolidated subsidiaries and some consolidated
subsidiaries abroad are appropriated for service cost.
4. Basis of calculation Retirement benefit debt
FY2001 FY2002
a. Attributing method of projected Straight-line amortization Straight-line amortization
retirement and severance benefit standard for service period standard for service period
b. Discount rate for obligations 2.5% 2.5%
c. Expected rate of return on plan assets 3.0% 0.5%
d. Period of amortization of difference 10 years 10 years
in mathematical principle calculation
Note: It is supposed that it charges off, since following consolidated fiscal year, by the straight-line method within
the fixed years which the employees: average residual service period at the generating time.
(Excerpt translation)
Non-Consolidated Financial Statement for Fiscal 2002
May 20, 2003
Company name :THK CO., LTD. (Listed on TSE)
Code number : 6481
Head Office : 3-11-6 Nishi-Gotanda, Shinagawa-ku, Tokyo
Contact :Kotaro Yoshihara, Director General Manager, Corporate Strategy Department
Tel : 81-3-5434-0300
Date of board meeting for consolidated financial settlement : May 19, 2003
Interim cash dividends:applicable
Date of ordinary general meeting of shareholders : June 21, 2003
Adoption of Unit stock system:applicable(1unit 100 shares)
I. Financial performance for the year ended March 31, 2003
(1) Operation results
Note:Yen are shown in millions.
(Unit:Millions of yen, yen, %)
FY 2002 FY2001
Net sales 75,921(12.7) 67,344(-43.9)
Operating income 6,757(161.4) 2,584(-88.2)
Ordinary income 7,291(147.9) 2,940(-87.2)
Net income 4,277(1,002.9) 387(-96.8)
Net income per share 35.59 3.25
Diluted net income per share 34.11 -
Return on equity 4.4 0.4
Ordinary income to total assets 4.2 1.7
Ordinary income to net sales 9.6 4.4
Note:
1. Average number of shares during the period ended:
March 31, 2003:119,356,771 shares March 31, 2002:119,355,598 shares
2. Change in accounting policy: Not applicable
3. Figures in parentheses (net sales, operating income, ordinary income and net income) represent changes in percentages
from the previous period.
4. Diluted net income per share for the year ended March 31, 2002is not indicated in order that net income per share
may not decrease by calculation which adjusted the potential stocks of convertible bonds.
(2) Cash dividends (Unit:yen, millions of yen, %)
FY 2002 FY2001
Cash dividends per Annual 15.00 15.00
share Interim 7.50 7.50
Year-end 7.50 7.50
Total amount of cash dividends (annual) 1,790 1,790
Payout ratio 41.9 461.6
Payout on equity 1.8 1.9
(3) Finance position (Unit:Millions of yen, %, yen)
FY 2002 FY2001
Total assets 183,196 165,865
Total shareholders' equity 98,894 96,476
Equity ratio 54.0 58.2
Total shareholders' equity per share 828.36 808.27
Note: Number of shares of common stock at the period ended:
March 31, 2003: 119,350,553 shares March 31, 2002:119,361,210 shares
Number of shares of treasury stock at the period ended :
March 31, 2003:12,465 shares March 31, 2002:1,808shares
II. Forecast of financial performance for the year ending March 31, 2004
(Unit:Millions of yen, yen)
For the six month to For the year ending
September 30, 2003 March 31, 2004
Net sales 41,000 83,000
Operating income 4,400 9,000
Ordinary income 4,500 9,200
Net income 2,550 5,200
Cash dividends per share for Interim 7.50 Year end 7.50
the half-year
Cash dividends per share for - 15.00
the full year
Reference: Forecast net income per share (for the full year):Y 43.64 (calculated by the expected average number of
stock for the year)
Caution: Forecast Statements
This document contains forecast statements based on the assumptions and beliefs of the Company:s management in light of
information currently available.
Such statements involve uncertainties and have risks of volatility that would result from the Company:s operations in
the future, as well as from changes in the domestic and international environments. Therefore, the Company cannot
guarantee the accuracy of such statements and wishes to caution readers that actual operational and financial results
may differ from such statements.
Non-Consolidated Balance Sheets
As of March 31, 2002 and 2003
(Unit/ Millions of yen, %)
FY2001 FY2002
Assets
Current assets:
Cash on hand and in banks 39,101 58,726
Notes receivable-trade 9,042 13,698
Accounts receivable-trade 13,569 20,043
Short-term investments in securities 8,317 6,716
Finished goods 111 109
Merchandise 7,568 6,831
Raw materials 3,694 3,531
Work in process 4,255 3,394
Inventories-other 340 336
Advances 17 -
Prepaid expenses 171 136
Deferred tax assets 957 1,092
Short-term loans 4,000 -
Short-term loans on subsidiaries 1,891 4,279
Accrued corporate tax 5,023 -
Accounts receivable-other 203 192
Other 144 106
Less: Allowance for bad debts -205 -157
Total current assets 98,207 59.2 119,040 65.0
Fixed assets:
Tangible fixed assets: 33,245 20.0 30,969 16.9
Buildings 9,266 8,618
Structures 449 462
Machinery, equipment, and other 12,766 11,156
Vehicles 29 23
Implements, tools and furniture 1,069 1,013
Land 9,222 9,169
Construction in progress 440 525
Intangible fixed assets: 2,416 1.5 1,826 1.0
Patent 2,329 1,772
Software 32 0
Other 54 53
Investments and other: 31,976 19.3 31,359 17.1
Long-term investments in securities 4,426 3,807
Investment in share of subsidiaries 11,580 13,061
Investment in members equity 278 236
Investment in subsidiaries 5,506 5,506
Long-term loans 271 265
Long-term loans on subsidiaries 5,394 4,344
Claim in bankruptcy, reorganization claim and others 513 361
Long-term prepaid expenses 37 97
Deferred tax assets 2,365 2,028
Other 2,203 2,047
Less: Allowance for bad debts -601 -397
Total fixed assets 67,638 40.8 64,155 35.0
Deferred assets:
Bond discount 19 0
Total deferred assets 19 0.0 0 0.0
Total assets 165,865 100.0 183,196 100.0
Non-Consolidated Balance Sheets
As of March 31, 2002 and 2003
(Unit/ Millions of yen, %)
FY2001 FY2002
Liabilities
Current liabilities:
Notes payable 7,015 3,922
Accounts payable-trade 3,532 11,202
Short-term debt 3,990 1,605
Current portion of long-term debt 4,103 2,163
Current portion of bonds 8,000 3,000
Current portion of convertible bonds - 13,905
Accounts payable-other 372 639
Accrued expenses 1,707 2,808
Corporate income taxes payable and other 25 1,591
Consumption taxes payable and other - 128
Advance receipt 23 18
Deposits received 162 60
Accrued bonus 1,028 1,125
Accounts payable-equipment and other 815 461
Other 79 17
Total current liabilities 30,856 18.6 42,649 23.3
Non-current liabilities:
Bonds 18,000 15,000
Convertible bonds 13,905 -
Bond with subscription warrant - 23,000
Long-term debt 3,951 1,170
Allowance for retirement and severance benefits 1,147 1,279
Allowance for directors: and auditors: retirement benefits 1,512 1,193
Other 16 8
Total non-current liabilities 38,532 23.2 41,651 22.7
Total liabilities 69,389 41.8 84,301 46.0
Shareholders' equity:
Common stock 23,106 13.9 - -
Additional paid-in capital 30,962 18.7 - -
Earned reserve 1,958 1.2 - -
Surplus 40,640 24.5 - -
Voluntary reserve 39,298 -
Unappropriated retained earnings 1,342 -
Valuation adjustment for marketable securities -187 -0.1 - -
Treasury stocks -3 -0.0 - -
Total shareholders' equity 96,476 58.2 - -
Common stock - - 23,106 12.6
Capital surplus - - 30,962 16.9
Surplus - - 45,086 24.6
Earned reserve - 1,958
Voluntary reserve - 37,426
Unappropriated retained earnings - 5,701
Valuation adjustment for marketable securities - - -239 -0.1
Treasury stocks - - -20 -0.0
Total shareholders' equity - - 98,894 54.0
Total liabilities and shareholders' Equity 165,865 100.0 183.196 100.0
Non-Consolidated Statements of Income
For the years ended March 31, 2002(FY2001) and 2003(FY2002)
(Unit/ Millions of yen, %)
FY 2001 FY2002
Net sales 67,344 100.0 75,921 100.0
Cost of sales 49,981 74.2 55,304 72.8
Gross profit 17,363 25.8 20,617 27.2
Sales, general and administrative expenses 14,778 22.0 13,859 18.3
Operating income 2,584 3.8 6,757 8.9
Non-operating income: 1,499 2.3 1,415 1.9
Interest income 150 138
Interest income (securities) 0 1
Dividend income 73 62
Foreign exchange gain 765 448
Rent income 200 385
Other income 309 378
Non-operating expenses: 1,143 1.7 881 1.2
Interest expenses 383 138
Bond interest 333 421
Bond expense 95 95
Other 330 226
Ordinary income 2,940 4.4 7,291 9.6
Extraordinary income 44 0.0 76 0.1
Gain on sales of property and equipment 37 32
Gain on sales of stocks of subsidiaries 7 -
Other - 43
Extraordinary loss 2,962 4.4 1,173 1.5
Loss on sales and disposal of property and equipment 189 453
Loss on long-term investments in securities 813 510
Loss on sales of stocks of subsidiaries - 44
Loss on investment in share of subsidiaries 1,401 165
Loss on liquidation of affiliates 466 -
Other 91 -
Income before income taxes and other 23 0.0 6,194 8.2
Corporate income taxes, Inhabitant taxes and business 80 1,677
taxes
Adjustment of corporate income taxes and other -444 -0.5 239 2.6
Net income 387 0.5 4,277 5.6
Unappropriated retained earnings carried over from 1,849 2,318
previous year
Interim cash dividend 895 895
Unappropriated retained earnings at the period 1,342 5,701
Proposed Appropriationof Retained Earnings
For the year ended March 31, 2002 and 2003
Note:
1. Payment of interim cash dividend of 895 million yen(JPY 7.50 pershare) is made on December 11, 2001.
2. Payment of interim cash dividend of 895 million yen (JPY 7.50 pershare) is made on December 10, 2002.
3.Cash dividends shall not be paid on the share of the Company:s treasury stock.
4. Reserve for dividends include 4 million yen and reserve for deferred taxes on lands as transferred accordance with
change of tax rate.
FY 2001 FY2002
Unappropriated retained earnings for the year 1,342 5,701
Reversal of allowance for special depreciation 105 110
Reversal of allowance for redemption of treasury 5,000 -
stock
Total 6,448 5,812
To be appropriated as follows:
Cash dividends 895 895
Bonuses to officers - 30
(Bonuses to Auditors) ( -) ( 4)
Allowance for special depreciation 34 7
Reserve for deferred taxes on lands - 0
Reserve for dividends 200 200
General reserve 3,000 3,000
Unappropriated retained earnings carried forward to 2,318 1,679
the next year
Basis for Presenting Non-Consolidated Financial Statements
1.Evaluation of significant assets
A) Investments in securities
Other investments listed on stock exchanges are stated at fair market value as of the year-end balance-sheet date, with
the sale price computed via the moving-average method. Other investments unlisted are stated at cost via the
moving-average method.
B) Inventories
Company Name Asset Evaluation Method Evaluation Standard
Finished goods Weighted average Cost basis
Purchase First-in first-out Cost basis
Raw material Weighted average Cost basis
Work in process Weighted average Cost basis
Supplies Last purchase Cost basis
2. Depreciation and amortization
Depreciationofplantandequipment is computed in principal by the declining-balance method. However, depreciation of
buildings (excluding building fixtures) acquired after April 1, 1998, is computed using the straight-line method.
The amortization of intangible assets is computed in principal via the straight-line method. However, software for
internal use is amortized over its estimated useful life of five years on a straight-line basis.
3. Deferred charges
Bond-issuance expenses are recognized in total when incurred.
Bond discount is amortized over the outstanding period using by straight-line method.
4. Basis for recording allowances
1. Allowance for bad debts:
An allowance for bad debts is recorded, in amounts considered to be appropriate, based primary upon the company:s past
credit loss experience and an evaluation of potential losses in the receivables outstanding.
2. Accrued bonus:
To prepare for bonus payment to employees, amount allocable to the fiscal year under review of the estimated amount of
future payments is provided.
3. Allowance for retirement and severance benefits:
To prepare for retirement and severance benefits to employees, future benefit obligations less fair value of pension
assets at the fiscal year end are recorded as reserve for retirement and severance benefits. The difference arising from
the change in accounting standards in total is accounted for as expenses and the actuarial differences are equally
divided over a certain number of years (10 years) within the period of average remaining years of service of employees
and accounted for as expenses.
4. Allowance for directors: and auditors: retirement benefits:
To prepare for retirement benefits to directors and auditors, an estimated amount of required payment at the interim
fiscal year end based on internal rules for directors is provided.
5. Leases
The operating-lease accounting method, except lease agreements that stipulate the transfer of ownership of leased
property to the lessee, is accounted for financial leases.
6. Hedge Accounting
A. Method of hedge accounting:
Interest-swap transactions qualified the conditions for exceptional treatment, and those are treated as exceptional
treatment.
Currency-swap transactionsqualified the requirements for hedge accounting, and thoseare treated asassignment treatment.
B. Means of hedging and hedged items
Interest swaps: Interest fluctuating on borrowing.
Currency swaps: Money claims denominated in foreign currency.
C. Policy for hedge transactions:
Hedges related to interest are entered basically for the purpose of avoiding risks of market fluctuations in interest.
And hedges related to currencyare entered basically for the purpose of avoiding risks of exchange fluctuations.
D. Method of evaluating hedge effectiveness:
The evaluation of hedge effectiveness is omitted, since hedge accounting applies only to those interest-swaps that meet
the conditions for exceptional treatment.
7. Treatment of national and local consumption taxes
Tax-exclusion accounting method is applied.
Notes
(Non-Consolidated Balance Sheets)
FY 2001 FY2002
1. Discounts on notes receivable Y 1,435 million Y - million
2.Accumulated depreciation of property, Y 57,142 million Y 58,565 million
plants and equipment
3.Advanced depreciation by national Y 150 million Y 150 million
subsidy
4. Security-presented assets
Short-term investments in securities Y999 million Y899 million
Property, plants and equipment Y 15,797 million Y 14,723 million
Long-term investments in securities Y 798 million Y 377 million
5.Liabilities for guarantee, etc.
Liabilities for guarantee Y 2,693 million Y 1,891 million
Guarantee engagement, etc. Y 610 million Y 500 million
6.Increase in shares of common stock 22 thousand shares - thousand shares
(Conversion of convertible bonds)
Issued shares 22 thousand shares - thousand shares
Issue price Y2,717 Y-
Amount of recapitalization Y1,359 Y-
(Lease Transactions)
1. Pro forma information of leased property such as acquisition costs, accumulated depreciation, future minimum lease
payments that do not transfer ownership of the leased property to the lessee on has if capitalizedh basis as of March
31, 2001 and 2002 were as follows:
(1) Acquisition costs, accumulated depreciation and net leased property at end of period
FY 2001 FY2002
Machinery and equipment Machinery and equipment
Acquisition costs Y 54 million Y 54 million
Accumulated depreciation Y 35 million Y 42 million
Net leased property Y 19 million Y 11 million
Other Other
Acquisition costs Y 2,979 million Y 2,784 million
Accumulated depreciation Y 1,321 million Y 860 million
Net leased property Y 1,657 million Y 1,923 million
Software Software
Acquisition costs Y 37 million Y 37 million
Accumulated depreciation Y 8 million Y 16 million
Net leased property Y 29 million Y 21 million
Total Total
Acquisition costs Y 3,071 million Y 2,876 million
Accumulated depreciation Y 1,365 million Y 919 million
Net leased property Y 1,706 million Y 1,957 million
Note: The amounts of acquisition costs and future minimum lease payments under finance leases include the portion of
imputed interest expense.
(2) Future minimum lease payments under finance leases
FY 2001 FY2002
Due within one year Y 607 million Y 576 million
Due after one year Y 1,098 million Y 1,380 million
Total Y 1,706 million Y 1,957 million
Note: The amounts equivalent to acquisition costs and future minimum lease payments under finance leases include the
portion of imputed interest expense.
(3) Lease payments and implied depreciation
FY 2001 FY2002
Lease payments Y 649 million Y 629 million
Depreciation Y 649 million Y 629 million
(4) Depreciation
Depreciation is computed using the straight-line method.
2. Operating lease transactions
Future minimum lease payments under operating lease
FY 2001 FY2002
Due within one year Y 2 million Y 2 million
Due after one year Y 6 million Y 4 million
Total Y 9 million Y 6 million
(Investments in securities)
1. At March 31, 2003, market value in subsidiaries stocks and affiliatesare as follows:
Classification Millions of yen
As of March 31,2002
Carried amount Market value Net unrealized
gain (loss)
Stocks of subsidiaries - - -
Stocks of affiliates 1,229 1,255 25
Total 1,229 1,255 25
2. At March 31, 2002, market value in subsidiaries stocks and affiliatesare as follows:
Classification Millions of yen
As of March 31,2003
Carried amount Market value Net unrealized
gain (loss)
Stocks of subsidiaries - - -
Stocks of affiliates 1,085 822 -263
Total 1,085 822 -263
(Tax-effect accounting)
1. Reason for the occurrence of deferred tax assets and deferred tax liabilities
FY 2001 FY2002
Software Y 795 million Y 712 million
Allowance for directors: and auditor:s retirement Y 635 million Y 485 million
benefits
Write-down of inventories Y 94 million Y 451 million
Allowance for retirement and severance benefits Y 331 million Y 418 million
Accrued bonus Y 264 million Y 393 million
Allowance for bad debt Y 310 million Y 219 million
Write-down of long-term investment in securities Y 365 million Y 161 million
Amount of loss carried forward Y 914 million Y - million
Accrued enterprise tax Y - million Y 141 million
Other Y 574 million Y 596 million
Total deferred tax assets Subtotal Y 4,286 million Y 3,580 million
FY 2001 FY2002
Allowance for special depreciation -Y 299 million -Y 215 million
Accrued enterprise tax -Y 454 million Y - million
Other -Y 208 million -Y 242 million
Total deferred tax liabilities -Y 962 million -Y 458 million
Net deferred tax assets Y 3,323 million Y 3,121 million
2. Reason for the difference between legal effective tax rate and corporate income tax rate afteradoption of tax-effect
accounting
FY 2001 FY2002
Legal effective tax rate 42.1 % 42.1 %
(Adjustment)
Accounts not permanently counted in 192.0 % 0.9 %
to loss-Entertainment expenses,etc
Accounts not permanently counted in - 89.8 % - 0.3 %
to gain-dividend income,etc
Investments between consolidated -2,028.1 % -13.5 %
subsidiaries unconsolidated companies to
which the equity method is applied
Equalization inhabitant tax 232.8 % 0.9 %
Adjustment of decrease of deferred tax assets at -% 1.1 %
end of period calculated due to the change of tax
rate
Other 95.8 % - 0.3%
Corporate income tax rate after -1,555.2 % 30.9 %
adoption of tax-effect accounting
3. An amendment to the Local Tax Law, in which taxation of corporations by the size of their business will be added to
enterprise tax from April 2004, will affect legal effective tax rates used for calculating deferred tax assets and
deferred tax liabilities of the Company and its domestic consolidated subsidiaries. The post-amendment rate has been
applied to the portion of the temporary difference (arising from the difference in the new rate and that used at the end
of the year under review) that will disappear after April 1, 2004. As a result of the amendment, net deferred tax assets
(after deducting deferred tax liabilities) at fiscal year-end declined 70 million, and an adjustment of corporate taxes
increased the same amount.
This information is provided by RNS
The company news service from the London Stock Exchange