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THK Co Ltd (47WH)

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Wednesday 28 May, 2003

THK Co Ltd

Final Results

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.




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