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THK Co Ltd (47WH)

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Wednesday 02 June, 2004

THK Co Ltd

Final Results

THK Company Limited
02 June 2004



                                                                    May 20, 2004

Consolidated Financial Review for the Year
Ended March 31, 2004


Company Name:
Head Office:                                                Tokyo Japan(Tel: +81-3-5434-0300)
URL:                                                        http://www.thk.com
Stock exchange listing:                                     Tokyo Stock Exchange 1ST Section
Code number:                                                6481
President and CEO:                                          Akihiro Teramachi
Director/General Manager of Corporate Strategy Department:  Kotaro Yoshihara
Date of the board meeting:                                  May 20, 2004
Application of U.S. GAAP:                                   None



1. Consolidated Financial Highlights (Unaudited)
Note: All figures are rounded down to nearest million yen.



(1)   Operating results
                                  Net sales            Operating income         Ordinary income
                              Millions of        %   Millions of          %   Millions of          %
                                      yen                    yen                      yen
Year ended 3/31/04                119,253     26.1        16,231      231.7        15,892      229.2
Year ended 3/31/03                 94,599      5.9         4,893      124.8         4,827       88.8


                                 Net income       Net income        Fully     Return on   Ordinary   Ordinary
                                                   per share  diluted net        equity  income to  income to
                                                               income per                    total      sales
                                                                    share                   assets
                         Millions of         %           Yen          Yen             %          %          %
                                 yen
Year ended 3/31/04             8,583     353.7         72.27        64.10           8.1        8.3       13.3
Year ended 3/31/03             1,891     130.5         15.65        15.12           1.8        2.6        5.1

Note:

1.  Profit/loss on equity method:  Year ended 3/31/04:   301million yen
                               Year ended 3/31/03:   (12) million yen
2.  Average number of shares of common stock (consolidated) issued:
                               Year ended 3/31/04:  118,090,965 shares
                               Year ended 3/31/03:  118,990,147 shares
3.  Change of accounting policy:  None
4.  Percentages for net sales, operating income, ordinary and net income
indicated changes from the previous term.

(2)   Financial position
                                 Total assets          Shareholders'       Equity ratio       Shareholders'
                                                          equity                           equity per share
                                 Millions of yen     Millions of yen                  %                 Yen
As of 3/31/04                            191,105             109,181               57.1              923.35
As of 3/31/03                            193,197             102,478               53.0              860.80



Note: Number of shares of common stock (consolidated) issued as of
                               March 31, 2004    118,190,473 shares
                               March 31, 2003    119,015,152 shares



(3)Consolidated cash flow position

                               Cash flow from     Cash flow from     Cash flow from       Cash and cash
                                 operating          Investing          financing       equivalents at the
                                 activities         activities         activities       end of the period
                                Millions of yen    Millions of yen    Millions of yen       Millions of yen

Year ended 3/31/04                       15,735            (3,681)           (27,132)                57,037
Year ended 3/31/03                       16,012            (3,909)              5,423                72,533



(4)Scope of consolidation and application of equity method
  Consolidated subsidiaries:                           14 companies
  Unconsolidated subsidiaries using the equity method:  0 company
  Affiliates using the equity method:                   2 companies
(5)Changes in scope of consolidation and application of equity method
  Consolidated companies:                  Additions: 1 company     Deletions: 0 company
  Companies using the equity method:       Additions: 1 company     Deletions: 0 company





2. Corporate estimates for the year ending March 31, 2005(4/1/04/-3/31/05)

                                                  Net sales             Ordinary income     Net income
                                                  Millions of yen       Millions of yen     Millions of yen
Six months ending 9/30/04                                  74,000                13,500               7,600
Year ending 3/31/05                                       142,000                24,000              13,600

For reference: Estimate of net income per share for the year ending March 31,
2005: 114.65 Yen

(By forecast average number of shares of common stock year of period)



                          Consolidated Balance Sheets
                                                                                      (Millions of yen)

                                                       As of March 31, 2003              As of March 31, 2004


Assets                                                                    %                                  %
Current assets
Cash on hand and in banks                                   66,459                           56,550
Notes and accounts receivable - trade                       35,063                           46,285
Short-term investments in securities                         7,003                              516
Inventories                                                 23,747                           23,108
Deferred tax assets                                          2,248                            2,667
Short-term loans                                               260                              173
Other                                                        1,213                            1,722
Less: Allowance for doubtful debts                           (383)                            (317)
Total current assets                                       135,613      70.2                130,706       68.4


Fixed assets
Tangible fixed assets
Buildings and structures                        27,405                           29,160
Accumulated depreciation                        13,252      14,152               14,214      14,946
Equipment and vehicles                          59,659                           62,314
Accumulated depreciation                        44,367      15,292               46,720      15,593
Land                                                        10,258                           10,168
Construction in progress                                     1,303                              726
Other                                            7,776                            8,474
   Accumulated depreciation                      6,391       1,384                6,927       1,546
Total tangible fixed assets                                 42,390      21.9                 42,982       22.5
Intangible fixed assets                                      1,925       1.0                  1,482        0.8
Investments and other
Long-term investments in securities                          8,511                            8,134
Deferred tax assets                                          2,134                            1,474
Other                                                        3,097                            6,750
Less: Allowance for doubtful debts                           (476)                            (425)
Total investments and others                                13,266       6.9                 15,933        8.3
Total fixed assets                                          57,583      29.8                 60,398       31.6


Deferred assets
Total deferred assets                                            0       0.0                      -          -
Total assets                                               193,197     100.0                191,105      100.0




                                                                                            (Millions of yen)

                                                          As of March 31, 2003             As of March 31, 2004


Liabilities                                                                 %                                 %
Current liabilities
Notes and accounts payable - trade                           16,960                           24,219
Short-term debt                                               3,305                                -
Current portion of long-term debt                             2,406                                -
Current portion of bonds                                      3,443                                -
Current portion of convertible bonds                         13,905                                -
Corporate income taxes payable and other                      1,668                            6,482
Accrued bonuses                                               1,243                            1,433
Other                                                         5,216                            8,182
Total current liabilities                                    48,149       24.9                40,318       21.1


Long-term liabilities
Bonds                                                        15,000                           15,000
Bonds with stock acquisition rights                          23,000                           23,000
Long-term debt                                                1,192                                -
Allowance for retirement and severance                        1,483                            1,631
benefits
Allowance for directors' and auditors'                        1,193                            1,315
retirement benefits
Other                                                           389                              300
Total long-term liabilities                                  42,259       21.9                41,247       21.6
Total liabilities                                            90,409       46.8                81,565       42.7
Minority interests
Minority interests                                              309        0.2                   357        0.2
Shareholders' equity
Common stock                                                 23,106       12.0                23,106       12.0
Capital reserve                                              30,962       16.0                30,962       16.2
Earned surplus                                               48,686       25.2                55,836       29.2
Valuation adjustment for marketable securities                (355)      (0.2)                   721        0.4
Foreign currency translation adjustments                        481        0.2                 (120)      (0.0)
                                                            102,881       53.2               110,506       57.8
Treasury stock                                                (403)      (0.2)               (1,324)      (0.7)
Total shareholders' equity                                  102,478       53.0               109,181       57.1
Total liabilities, minority interests, and                  193,197      100.0               191,105      100.0
shareholders' equity



Consolidated Statements of Income

                                                                                           (Millions of yen)

                                                     Year ended March 31, 2003        Year ended March 31, 2004
                                                                             %                                %
Net sales                                                      94,599    100.0                 119,253    100.0
Cost of sales                                                  66,646     70.5                  77,932     65.3
Gross profit                                                   27,953     29.5                  41,321     34.7
Sales, general, and administrative expenses
Packaging and transportation                        1,804                            2,073
Advertising and promotions                            882                              710
Provision for doubtful accounts                        10                               33
Salaries and allowances                             7,814                            8,732
Provision for employee bonuses                        422                              516
Retirement expenses                                   146                              148
Provision for directors' bonuses                       61                              121
Rental expenses                                     1,648                            1,694
Depreciation and amortization                         780                              603
 Research and development                           2,104                            2,520
 Other                                              7,384      23,060     24.3       7,935      25,090     21.0
Operating income                                                4,893      5.2                  16,231     13.6
  Non-operating income
Interest income                                       169                              121
Dividend income                                        49                               26
Foreign exchange gain                                 351                                -
Equity in earnings of unconsolidated                    -                              301
subsidiaries and affiliates
Rental income                                         148                              159
Others                                                507       1,226      1.3         461       1,070      0.9
Non-operating expenses
Interest expenses                                     888                              493
Bond issuance costs                                    95                                -
Foreign exchange loss                                   -                              580
Others                                                308       1,291      1.4         336       1,409      1.2
Ordinary income                                                 4,827      5.1                  15,892     13.3



                                                           
                                                                                          (Millions of yen)

                                                     Year ended March 31, 2003        Year ended March 31, 2004
Extraordinary income                                                        %                                 %
Gain on sales of property and equipment                56                               33
Gain on sales of investment securities                  -          56      0.0          35          68      0.1
Extraordinary loss
Loss on sales/disposals of property and               459                              320
equipment
Valuation loss on investment securities               510                                -
Loss on liquidation of related company                  -                               99
Loss on change in equity stake                        318                                -
Others                                                  -       1,287      1.3          19         439      0.4
Income before income taxes and other                            3,596      3.8                  15,520     13.0
 Corporate income taxes, inhabitants taxes,         1,179                            7,265
and enterprise taxes
Adjustment of corporate income taxes and              593       1,773      1.8       (338)       6,926      5.8
other
Minority interest in income (loss) of                            (68)    (0.0)                      10      0.0
consolidated subsidiaries
Net income                                                      1,891      2.0                   8,583      7.2




                  Consolidated Statements of Retained Earnings

                                                                                      (Millions of yen)

                                              Year ended March 31, 2003           Year ended March 31, 2004
Capital surplus
Consolidated capital surplus at                                  30,962                              30,962
beginning of the period
Consolidated capital surplus at                                  30,962                              30,962
end of the period
Earned surplus
Consolidated earned surplus at                                   48,585                              48,686
beginning of the period
Increase in earned surplus
 Net income                                     1,891                               8,583
Increase from accounting for                        -             1,891               378             8,962
investment in an affiliate by the
equity method
Decrease in earned surplus
Dividends                                       1,790                               1,782
Bonuses to directors                                -                                  30
(bonuses to auditors)                              (-)            1,790               (4)             1,812
Consolidated earned surplus at                                   48,686                              55,836
end of the period




Consolidated Statements of Cash Flows
                                                                                            (Yen Millions of yen)

                                                                              Year ended March  Year ended March
                                                                                      31, 2003          31, 2004
Cash flows from operating activities
Income before income tax and minority interests                                          3,596            15,520
Depreciation and amortization                                                            6,163             5,566
Loss on sales or disposal of property, and equipment                                       402               287
Increase (decrease) in provisions                                                        (390)               338
Interest and dividend income                                                             (218)             (147)
Interest expenses                                                                          888               493
Foreign exchange gain (loss)                                                             (140)               108
Equity in earnings of unconsolidated subsidiaries and affiliates                            12             (301)
Write-down of long-term investment in securities                                           510                -
 Loss on liquidation of unconsolidated subsidiaries                                          -               99
 Gain (loss) on change in equity stake                                                     318                -
 Decrease (increase) in notes and accounts receivable                                 (10,253)          (11,293)
 Decrease (increase) in inventories                                                      2,502               395
 Increase (decrease) in notes and accounts payable                                       5,220             7,337
 Other                                                                                   2,559                78
Subtotal                                                                                11,170            18,484
 Interest and dividend income received                                                     220               192
 Interest expenses paid                                                                 ( 902)             (495)
 Income taxes paid  or reclaimed .                                                       5,524           (2,446)
Net cash provided by operating activities                                               16,012            15,735
Cash flows from investing activities
Increase in time deposits due over three months                                            468                 -
Payments for purchases of short-term investments in securities                         (1,199)                 -
Proceeds from sales of short-term investments in securities                              1,328               907
Payments for purchases of property, plant, and equipment                               (4,759)           (5,105)
Proceeds from sales of property, plant, and equipment                                      148                81
Payments for purchases of long-term investment securities                                  (9)             (309)
Proceeds from sales of long-term investment securities                                     103             1,793
Increase in loans                                                                        (335)           (1,183)
Collection of loans                                                                        345               135
Net cash provided by investing activities                                              (3,909)           (3,681)
Cash flows from financing activities
Increase (decrease) in short-term debt                                                 (2,887)           (3,303)
Repayment of long-term debt                                                            (4,786)           (3,598)
Proceeds from issuance of bonds                                                         22,904                 -
Redemption of bonds                                                                    (8,000)          (17,334)
Cash dividends                                                                         (1,790)           (1,784)
Purchase of treasury stock                                                                (17)           (1,111)
Other                                                                                        -                 0
Net cash provided by financing activities                                                5,423          (27,132)
  Effect of exchange rate change on cash and cash equivalents                                0             (418)
Net increase in cash and cash equivalents                                               17,526          (15,496)
  Cash and cash equivalents at the beginning of the period                              55,007            72,533
  Cash and cash equivalents at the end of the period                                    72,533            57,037




             Basis for Presenting Consolidated Financial Statements

1.Scope of Consolidation

(1) Consolidated subsidiaries: 14
Names of consolidated subsidiaries:
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.,
THK FRANCE S.A.S., PGM Ballscrews Ltd, PGM Ballscrews Ireland Ltd, THK TAIWAN
CO. LTD.

(2) Main unconsolidated subsidiary:  Dalian THK Co., Ltd.

(3) Reason for excluding unconsolidated subsidiaries from the consolidation:
The unconsolidated subsidiaries are all small in size and their total assets,
sales, net income, (amount of corresponding to equity )and retained earnings
(excluding minority interest) do not have a significant impact on the
consolidated financial statements.

2.Use of the Equity Method

(1) Related companies to which equity accounting has been applied: 2
Names of related companies to which equity accounting has been applied:
Daito Seiki Co., Ltd.
Samick LMS Co., Ltd.

(2) Names of main unconsolidated subsidiaries and affiliates to which equity
accounting has not been applied:
Unconsolidated subsidiaries:
Dalian THK Co., Ltd.
Affiliates:
THK Insurance service Co.,Ltd.

(3)Reason for not applying equity accounting to unconsolidated subsidiaries and
affiliates:
Where the equity method has not been applied to unconsolidated subsidiaries and
affiliates, this is because the impact of the companies concerned on
consolidated net income (amount of corresponding to equity )and retained
earnings is small, and they have no importance in relation to the consolidation
as a whole.

3.Financial Years of Consolidated Subsidiaries
The following consolidated subsidiaries close their books of account on 31st
December:
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.,
THK FRANCE S.A.S., PGM Ballscrews Ltd, PGM Ballscrews Ireland Ltd, THK TAIWAN
CO. LTD.
Necessary adjustments are made in order to consolidate financial statements for
relevant transactions by March 31, 2004.

4.Summary of Significant Accounting Policies

(1)Evaluation of significant assets

1.Investments in securities
Other securities
Market prices available••••• •••••••••Fair market value at balance sheet date
(Valuation differences written directly against reserves.
Sale price calculated by moving average cost method.)
Market prices not available••••••• ••• Moving average cost method

2. Inventories

        Company Name                        Asset Evaluation Method           Evaluation Standard
Parent company (THK Co.,Ltd.)               Mainly weighted average               Cost basis
Talk System Co., Ltd.                       as above                              as above
Beldex Coporation.                          Mainly specific identified            as above
THK Yasuda Co. Ltd                          Mainly weighted average               as above
THK America Inc.                            First-in, first-out                   Lower of cost or market
THK Manufacturing of America Inc.           as above                              as above
THK Neturen America L.L.C.                  as above                              as above
THK Europe B.V.                             Moving average                        as above
THK Manufacturing of Europe S.A.S.          Mainly weighted average               Cost basis
THK FRANCE S.A.S.                           Moving average                        Lower of cost or market
THK GmbH                                    as above                              as above
PGM Ballscrews Ltd                          First-in, first-out                   as above
PGM Ballscrews Ireland Ltd                   as above                              as above
THK TAIWAN CO. LTD                          Moving average                        as above

(2)Depreciation and Amortization of Significant Depreciable Assets

1.Tangible fixed assets ••••••••••••••Tangible fixed assets at the parent
company and domestic consolidated subsidiaries are depreciated according to the
declining balance method, and at overseas consolidated subsidiaries according to
the straight line method or accelerated depreciation as determined in the
accounting standards of the country concerned.

However, for the parent company and domestic consolidated subsidiaries, utilize
the straight-line method to compute depreciation for buildings, excluding
fixtures to buildings, acquired on and after April 1, 1998.

Estimated useful lives of major properties are principally as follows:
Buildings and structures           5 - 50 years
Machinery, equipment, and vehicles 4 - 10 years

2.Intangible fixed assets •••••••••••••••The straight-line method is applied at
the parent company and domestic consolidated subsidiaries.
However, software for internal use is amortized over its estimated useful life
of 5 years by the straight line method.
Intangible fixed assets at overseas consolidated subsidiaries are depreciated
according to the declining balance method as determined in the accounting
standards of the country concerned.

(3)Treatment of Deferred Charges
Bond discounts and premiums •••••••••Bond discounts and premiums are amortized
according to the straight line method over the outstanding period.

(4)Treatment of Major Lease Transactions

Standard operating lease accounting is used, except in the case of finance lease
agreements where ownership of the leased asset is recognized to be transferred
to the lessee.

(5)Basis for Recording Major Allowances

1.Allowance for doubtful debts ••••••••••      In the case of the parent company
and domestic consolidated subsidiaries, an allowance for losses arising from
doubtful debts is recorded in amounts deemed appropriate based primarily on past
credit loss experience but also following consideration of specific risks in the
receivables outstanding.

2.Accrued bonuses••••••••••••••••••• An allowance is provided equal to the
estimated amount of the payment of bonuses to employees in respect of the
consolidated financial year under review.

3.Retirement and severance benefits••••To prepare for retirement and severance
benefits for employees, estimated future benefit obligations less fair value of
pension assets at the consolidated financial year end are recorded as the
reserve for retirement and severance benefits.  The difference arising from the
change in accounting standards is accounted for as expenses, and the actuarial
differences are divided equally over a fixed number of years (10 years) within
the average remaining years of service of employees and accounted for as
expenses, beginning from the consolidated financial year following the change.

4.Directors' retirement benefits•••••••• •••An allowance equal to the
estimated amount required at the financial year end is calculated according to
internal regulations.

(6)Hedge Accounting

1.Method of hedge accounting

Currency swap transactions meet the conditions for assignment treatment and are
accounted for accordingly.

2.Means of hedging and hedged items

(Means of hedging)                     (Hedged items)

Currency swap transactions •••••••••Foreign currency denominated debt

3.Hedging policy

Hedges related to interest rates are entered primarily with the aim of avoiding
the risk of market fluctuations in interest payable.  Hedges related to
currencies are entered with the aim of determining the cashflows associated with
the recovery of interest and principal of loans.

4.Method of evaluating effectiveness of hedges

Evaluation of the effectiveness of hedges is omitted because the same conditions
apply to the currency swap transactions and to the assets that are the subject
of those transactions, and movements in currencies and cashflows are assumed to
cancel one another out continuously over the life of the transactions.

(7)Other Matters Pertaining to the Presentation of Consolidated Financial
Statements

Consumption taxes •••••••••••••• Amounts are stated net of local and national
consumption taxes.

5.Handling of Appropriation of Profit and Similar Items

Consolidated Statements of Retained Earnings are prepared based on the
appropriations of profit made by consolidated companies in the consolidated
financial year.

6.Scope of Funds in Statements of Consolidated Cash Flows

Cash and cash equivalents include deposits that readily withdrawn and converted
to cash, along with short-term investments maturing within three months of their
acquisition not subject to risk of fluctuations in value.

Notes

(Consolidated balance sheets)
                                                                                        (Millions of Yen)

                                                           March 31, 2003               March 31, 2004
  1. Shares of unconsolidated subsidiaries and                      4,666                        4,404
     affiliates
  2. Liabilities guaranteed                                           302                          263



(Consolidated statements of cash flows)

1.Reconciliation between cash and cash equivalents at the financial year end and
the consolidated balance sheets.

                                                                                        (Millions of Yen)

                                                       March 31, 2003                   March 31, 2004
Cash on hand and in banks                                      66,459                          56,550
Short-term investments in securities                            7,003                             516
Total                                                          73,463                          57,067
Time deposits (over 3 months)                                    (30)                            (30)
Short-term investments in securities                            (899)                             (-)
(excluding MMF)
Cash and cash equivalents                                      72,533                          57,037




(Segment Information)

1.     Industry Segmental Information

Disclosure of industry segmental information is not required because the sales,
operating income and assets of the machinery parts segment amount to more than
90 percent of the total sales, total operating income and total assets
respectively of the parent company and consolidated subsidiaries.  The parent
company and its consolidated subsidiaries operate in one industry segment,
namely the production and sale of linear motion systems.



2.Geographic Segmental Information

Year ended March 31, 2003

                                                                                                  (Millions of yen)

                          Japan      America     Europe      Asia and      Total     Elimination   Consolidated
                                                              other                  or Corporate

Net sales
External 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
loss
Assets                   173,614      15,830      15,551        1,470     206,466      (13,269)        193,197

(Notes)

1.Classification of countries and regions is based on geographical proximity.

2.The main countries and areas belonging to each classification are as follows:

(1)America          United States etc.

(2)Europe           Germany, UK, Netherlands etc.

(3)Asia and other   South Korea, Taiwan etc.

3.The main corporate assets belonging to the Y15,879 million in the Elimination
or Corporate category are surplus funds being managed at the parent company
(time deposits and short-term loans) and funds invested for the long term
(investment securities and similar).


Year ended March 31, 2004
                                                                                                   (Millions of yen)

                          Japan       America      Europe     Asia and       Total     Elimination   Consolidated
                                                                Other                  or Corporate

Net sales
External customers        93,771        10,341      12,742       2,399       119,253            -        119,253
Inter-segment             12,654            53         117           -        12,824     (12,824)              - 
Total                    106,425        10,394      12,859       2,399       132,078     (12,824)        119,253

Operating expenses        89,727        10,608      13,665       2,347       116,348     (13,326)        103,022

Operating income/         16,698         (214)       (805)          51        15,729          501         16,231
loss

Assets                   180,711        13,316      17,768       1,734       213,531     (22,426)        191,105


(Notes)
1.Classification of countries and regions is based on geographical proximity.

2.The main countries and areas belonging to each classification are as follows:

(1)America          United States etc.

(2)Europe           Germany, UK, Netherlands etc.

(3)Asia and other         South Korea, Taiwan etc.

3.The main corporate assets belonging to the Y8,292 million in the Elimination
or Corporate category are surplus funds being managed at the parent company
(time deposits and short-term loans) and funds invested for the long term
(investment securities and similar).


3.Overseas Sales

Year ended March 31, 2003
                                                                                          (Millions of yen)

                                        America              Europe      Asia and other                Total
     Overseas sales                      10,775              10,780               7,764               29,319
     Consolidated net sales                                                                           94,599
     Overseas sales as a                 11.4 %              11.4 %               8.2 %               31.0 %
     percentage of
     consolidated net sales

(Notes)
1.Classification of countries and regions is based on geographical proximity.

2.The main countries and areas belonging to each classification are as follows:

 (1)America              United States etc.

 (2)Europe               Germany, UK, Netherlands etc. 

 (3)Asia and other       South Korea, Taiwan etc.

3.Overseas sales of the companies, meaning that the amount of exports made by
parent and sales made by the consolidated subsidiaries to customers.


Year ended March 31, 2004
                                                                                             (Millions of yen)

                                        America              Europe      Asia and other                Total
     Overseas sales                      10,436              12,739              10,734               33,910
     Consolidated net sales                                                                          119,253
     Overseas sales as a                   8.7%               10.7%                9.0%                28.4%
     percentage of
     consolidated net sales

(Notes)
1.Classification of countries and regions is based on geographical proximity.

2.The main countries and areas belonging to each classification are as follows:

  (1)America              United States etc.

  (2)Europe               Germany, UK, Netherlands etc.

  (3)Asia and other       South Korea, Taiwan etc.

3.Overseas sales of the companies, meaning that the amount of exports made by
  parent and sales made by the consolidated subsidiaries to customers.


(related party transaction)

Year ended March 31, 2003

1. Parent company, major corporate shareholders, and others

No relevant items.

2. Directors, major individual shareholders, and others
                                                                         
                                                                         
Category     Name      Address   Capital or      Activities or   Voting  
                                 Investment      Business        Equity                                       
                                                                 Owned or                                               
                                                                 Controlled 
                                  

Directors    Mr                                  Internal        None                  
and their    Shoji                               auditor of             
families     Namiki      -           -           company.                                     
                                                 President and                                                        
                                                 Representative                                               
                                                 Director of
                                                 Namiki
                                                 Seimitsu
                                                 Hoseki Co.
                                                 Ltd.

2. Directors, major individual shareholders, and others (Cont)



                                    Nature of
                                    Dealings      Transaction   Accounting   Balance
       Relationships                                            Item         at End
   Directorship   Operations                                                 of 
   and similar    and similar                                                Period

                                    Processing    Y millions                 Y Million                                  
        -             -             of company                  Notes                                                   
                                    products           3        and             1
                                    etc.                        accounts                                                
                                    (Note 1)                    payable
        
                                    




(Note) The amount stated above for dealings with Namiki Seimitsu Hoseki Co. Ltd,
of which the company's internal auditor Mr Shoji Namiki is President and
Representative Director, is net of consumption tax.

Dealing conditions and policy for determination of dealing conditions

(Note 1) The outsourcing of processing to Namiki Seimitsu Hoseki Co. Ltd was
determined under normal trading conditions, after obtaining estimates from other
processing companies and considering market prices.



3. Subsidiaries and similar.

No relevant items.



4. Sister companies and similar.

No relevant items.




The year ended March 31, 2004



1. Parent company, major corporate shareholders, and others.

No relevant items.


2. Directors, major individual shareholders, and others.

No relevant items.


3. Subsidiaries and similar.


Category     Name      Address      Capital or      Activities or   Voting  
                                    Investment      Business        Equity                                       
                                                                    Owned or                                            
                                    Y Million                       Controlled 

Affiliated   Daito     Shinagawaku  4,255           Manufacture    Direct  
company      seiki     Tokyo                        and sales of   33.44%         
             Co.,Ltd.                               industrial     Indirect      
                                                    machines       -


3. Subsidiaries and similar. (Contd)

                                    Nature of
                                    Dealings       Amount       Accounting    Balance
          Relationships                                         Item          at End
   Directorship     Operations                                                of 
   and similar      and similar                                               Period

                                                     Y million                Y million
                    Processing
                    of THK's         Processing 
   6 persons        product,         of THK's                     Note and
   (In              sales and        product         3,544        account     2,149
   THK's employee   purchase         etc                          payable
   in 5 persons)    of               (Note 1)
                    machine


(Note)  The amount for dealing with Daito seiki Co.,Ltd. is not include
consumption tax, however The balance at end of period include to consumption
tax.



Dealing conditions and policy for determination of dealing conditions



(Note 1) The terms and conditions applicable to the transactions have been
determined on the basis of arm's length and by reference to reasonable
market price level.



4. Sister companies and similar.

No relevant items.


 (Tax-effect accounting)



1.        Significant components of deferred tax assets and liabilities

                                                                                    (Millions of yen)
                                                         March 31, 2003                March 31, 2004
Deferred tax assets
Inventory valuation                                                951                          1,039
Software                                                           759                            685
Allowance for retirement and severance benefits                    465                            575
Allowance for employee bonuses                                     408                            570
Enterprise tax payable                                             142                            557
Allowance for directors' and auditor's                             485                            535
retirement bonuses
Unrealized profit on inventory                                     690                            441
Allowance for doubtful debts                                       474                            408
Operating loss carry forwards                                      411                            218
Valuation loss on investment securities                            161                             90
Other                                                              916                            892
Subtotal                                                         5,867                          6,016
Valuation-type allowances                                        (976)                          (884)
Total deferred tax assets                                        4,891                          5,131

Deferred tax liabilities
Unrealized loss on marketable securities                          (12)                          (492)
Insurance reserve                                                (162)                          (219)
Allowance for special                                            (238)                          (187)
depreciation
Other                                                            (157)                          (184)
Total deferred tax liabilities                                   (571)                        (1,083)
Net deferred tax assets                                          4,319                          4,048




2. Reason for the difference between legal effective tax rate and corporate
income tax rate after adoption of tax-effect accounting


                                                                                                    (%)
                                                          March 31, 2003                 March 31, 2004
Legal effective tax rate                                           42.1                            42.1
(Adjustments)
Entertainment expenses and                                          1.6                             0.3
similar expenses
permanently not tax allowable
Dividends receivable and similar income                           (0.6)                             0.0
permanently not taxable
Net income of consolidated subsidiaries                            25.6                             2.6
Investments in consolidated subsidiaries and                     (21.8)                             0.1
equity-method companies
Equity in earnings of unconsolidated subsidiaries                   0.1                           (0.8)
and affiliates
Inhabitants tax equalization                                        1.7                             0.4
Difference between Japanese legal                                 (0.7)                             0.6
effective tax rate
and overseas tax rates
Adjustment to the decrease in deferred tax                          2.0                             0.7
assets
owing to the change in the tax rate
Other                                                             (0.6)                           (1.4)
Corporate income tax rate after the adoption                       49.3                            44.6
of tax-effect accounting



3. Following an amendment of the Local Tax Law (Law 9 2003), the calculation of
deferred tax assets and deferred tax liabilities for the previous financial year
will apply the pre-amendment tax rate to deferred items planned to disappear by
March 31, 2004, and the post-amendment tax rate to deferred items planned to
disappear after April 1, 2004.  Owing to this change in tax rates, the amount
stated for the previous financial year's deferred tax assets (net of
deferred tax liabilities) will decrease by Y70 million, and the previous
financial year's adjustment to corporate income taxes recorded as an
expense will increase by the same amount.




(Investments in securities)



1. Other investment securities with market price available

                                                                                           (Millions of yen)

                                                March 31, 2003                              March 31, 2004
                                 Acquisition     Carried     Difference  Acquisition  Carried amount  Difference
                                    cost         amount                      cost
Aggregate carrying value
exceeds aggregate
acquisition cost
(1)Equities                           313           375           61        2,356          3,538        1,182
(2)Bonds                                -             -            -            -              -            -
(3)Other                               15            20            4            9             11            1
         Subtotal                     329           395           66        2,366          3,549        1,183


Aggregate carrying value
does not exceed aggregate
acquisition cost
(1)Equities                         2,291         1,773        (517)            4              4          (0)
(2)Bonds                                -             -            -            -              -            -
(3)Other                                -             -            -            -              -            -
         Subtotal                   2,291         1,773        (517)            4              4          (0)
           Total                    2,620         2,169        (451)        2,370          3,554        1,183




(Note) In addition to the above, differences pertaining to the market price of
the group's share of investment in an investment partnership are included in the
consolidated balance sheets under valuation adjustment for marketable
securities. The amounts recorded for the current consolidated financial year and
last consolidated financial year, both net tax effects, are Y27 million and Y24
million respectively.



For the year ended March 31, 2003, the company booked a reduction in value of Y
510 million yen in other investment securities for which a market price was
available. It is the company's policy to write down the carrying amount of
individual securities whose market price has fallen to 50% or less of their
acquisition cost. For securities which have fallen to between 70% and 50% of
their acquisition cost, the company makes a judgment on whether to write down
the carrying amount, by considering the acquisition cost in the light of the
security's average month-end closing price for the last 24 months, and financial
conditions in the two most recent periods.



2. Other investment securities sold in the period



Year ended March 31, 2003.

Disclosure is omitted because of the insignificance of profits and losses.



Year ended March 31, 2004.

Disclosure is omitted because of the insignificance of profits and losses.



3. Main holdings of securities for which no market price is available

                                                                                            (Millions of yen)

                                                               March 31, 2003                  March 31, 2004
                                                               Carried amount                  Carried amount
Other investment securities
Money management funds                                                   2,507                             -
Free financial funds                                                     3,309                             -
Financial discount bonds                                                   899                             -
Unlisted equities (excluding OTC)                                          175                           175
Unlisted foreign bonds                                                   1,500                             -
Unlisted foreign investments                                               286                           516



4. Redemption schedule for other investment securities with repayment dates
after the balance sheet date.



Year ended March 31, 2003

                                                                                         (Millions of yen)

                               Within 1 year       1 to 5 years        5 to 10 years        Over 10 years
Bonds
Government and                            -                 -                   -                     -
municipal bonds
Corporate bonds                           -                 -                   -                     -
Other bonds                             900                 -                   -                     -
Other                                     -                 -                   -                     -
           Total                        900                 -                   -                     -



Year ended March 31, 2004



No relevant items






(Retirement benefits)



1. Outline of the company's retirement benefit system

The company, its domestic consolidated subsidiaries, and certain of its overseas
consolidated subsidiaries provide defined benefit retirement plans in the form
of a lump sum system and a qualified pension plan.  The company also
occasionally pays supplementary retirement money in the case of retirement or
severance.  Apart from the overseas consolidated subsidiaries for which the
above applies, the other overseas consolidated subsidiaries mainly have defined
contribution systems.



2. Retirement benefit liabilities

                                                                                    (millions of yen)

                                                             March 31, 2003           March 31, 2004

Retirement benefit liabilities (Note)                                 4,139                    4,525
Less: Pension assets                                                (1,887)                  (2,396)
Unreserved retirement benefit liabilities                             2,251                    2,128
Difference arising from unrecognized calculation                      (767)                    (496)
Allowance for retirement and severance benefits                       1,483                    1,631



(Note) Whereas domestic consolidated subsidiaries have adopted a simple method
for estimating retirement benefit liabilities, some overseas consolidated
subsidiaries employ a method determined by the accounting standards of the
country concerned.



3. Retirement benefit costs
                                                                                    (million of yen)

                                                  Year end March 31, 2003   Year end March 31, 2004

Service costs (Note)                                                  335                       337
Interest costs                                                         89                        97
Expected return on plan assets                                        (8)                       (9)
Recognized actuarial differences                                       67                        86
Retirement benefit costs                                              483                       511



(Note) The retirement benefit costs for domestic consolidated subsidiaries and
some overseas consolidated subsidiaries are included in service costs above.



4. Basis for the calculation of retirement benefit liabilities


                                                       March 31, 2003                    March 31, 2004

Method of distribution of expected              Straight-line amortization        Straight-line amortization
retirement and severance benefits

Discount rate for obligations                                 2.5 %                             2.5%

Expected rate of return on plan assets                        0.5 %                             0.5%

Period of amortization of actuarial difference             10 Years                         10 Years

(Note)





(Note) The actuarial difference is amortized by the straight-line method over a
fixed number of years which is shorter than the employees' average remaining
period of service at the time the difference was recognized, starting in the
consolidated fiscal year following the one in which the difference was
recognized.



                                                                    May 20, 2004

Non-Consolidated Financial Review for the Year
Ended March 31, 2004





Company Name:
Head Office:                                                Tokyo, Japan (Tel:  +81-03-5434-0300)
URL:                                                        http://www.thk.co.jp/
Stock exchange listing:                                     Tokyo Stock Exchange 1st Section
Code number:                                                6481
President and CEO:                                          Akihiro Teramachi
Director/General Manager of Corporate Strategy Department:  Kotaro Yoshihara
Date of the board meeting:                                  May 20, 2004
Date of the ordinary general meeting of shareholders:       June 26, 2004
Interim cash dividends:                                     Yes
Adoption of Unit stock system:                              Yes (1unit 100 shares)



1. Non-Consolidated Financial Highlights (Unaudited)

Note: All figures are rounded down to the nearest million yen.



(1) Operating results
                                  Net sales              Operating income           Ordinary income

                             Millions of yen     %     Millions of yen     %        Millions of yen   %

Year ended 3/31/04               97,740        28.7          16,186      139.5          16,099      120.8

Year ended 3/31/03               75,921        12.7           6,757      161.4           7,291      147.9




                           Net income                       Fully diluted   Return on   Ordinary      Ordinary
                                                Net         net income      equity      income to     income to
                                                income      per share                   total         sales
                                                per share                               assets

                     Millions of yen    %         Yen           Yen           %             %            %

Year ended 3/31/04        8,831      106.5       74.18         65.81         8.6           8.8         16.5

Year ended 3/31/03        4,277          -       35.59         34.11         4.4           4.2          9.6




Notes:

1.       Change of accounting policy: None

2.       Average number of shares of common stock issued (non-consolidated)

Year ended 3/31/04:   118,387,267 shares

Year ended 3/31/03:   119,356,771 shares

3.       Regarding net sales, operating income, ordinary income and net income,
percent indications show

percentage changes from the same period of the previous year.



(2) Cash dividends
                                 Annual dividends per share       Total dividends  Payout ratio    Annual dividends
                                                                  paid                             to shareholders'
                                         Interim     F.Y. end     (full year)                      equity

                                  Yen        Yen          Yen     Millions of yen            %                   %
                                                                                                       
      Year ended 3/31/04        15.00        7.5          7.5              1,775         20.2                 1.7

      Year ended 3/31/03        15.00        7.5          7.5              1,790         41.9                 1.8






(3) Financial position
                             Total assets         Total shareholders'       Equity ratio      Shareholder's 
                                                  equity                                      equity per share

                             Millions of yen      Millions of yen                                         Yen

Year ended 3/31/04                   181,983               105,760                  58.1                893,23
Year ended 3/31/03                   183,196                98,894                  54.0                828.36



Notes:

1.       Net number of shares issued and outstanding at the end of the fiscal
year (non-consolidated)

     March 31, 2004:       118,346,697 shares
     March 31, 2003:       119,350,553 shares.

2.       The number of treasury stock as of :

     March 31, 2004:         1,016,321 shares
     March 31, 2003:            12,465 shares.





2. Projections of Non-Consolidated Results for the Fiscal Year ending March 31, 2005

                              Net sales         Ordinary income     Net income    Annual cash dividends per share
                                                                                   Interim    F.Y. end

                              Million of yen    Million of yen   Million of yen        Yen         Yen       Yen

Six months ending 9/30/04             61,000            12,500            7,200       7.50           -         -
Year ending 3/31/05                  115,000            22,000           12,700          -        7.50     15.00



*Forward-Looking Statements:

This release contains forward-looking statements that are based on management's
estimates, assumptions and projections at the time of release. Some factors,
which include, but are not limited to, the risks and uncertainty associated with
the worldwide economy, competitive activity and currency fluctuation, could
cause actual results to differ materially from expectations.



Note to the Financial Information:

This is summarized and translated financial information that the Company posted
to the Tokyo Stock Exchange in accordance with their rules that governs the
disclosure of financial information.

The Company maintains an Internet website at www.thk.co.jp. The Company makes
available free of charge on the website its financial information in Japanese
language. Those information translated in English language will be disclosed as
soon as reasonably practicable after disclosing materials in Japanese language.



                        Non-Consolidated Balance Sheets      
                                                                                         (Millions of yen)

                                                    As of March 31, 2003            As of March 31, 2004


(Assets)                                                                    %                                %
Current assets
Cash on hand and in banks                                      58,726                          49,298
Notes receivable - trade                                       13,698                          17,100
Accounts receivable - trade                                    20,043                          26,865
Short-term investments in securities                            6,716                       -
Merchandise                                                       109                              93
Finished goods                                                  6,831                           6,710
Raw materials                                                   3,531                           3,909
Work in process                                                 3,394                           3,225
Inventories - other                                               336                             312
Prepaid expenses                                                  136                             157
Deferred tax assets                                             1,092                           1,670
Short-term loans                                            -                              40
Short-term loans to related companies                           4,279                           7,451
Accounts receivable - other                                       192                           1,144
Other                                                             106                             118
Less: Allowance for doubtful debts                              (157)                           (134)
Total current assets                                          119,040     65.0                117,963     64.8


Fixed assets
Tangible fixed assets
Buildings                                          19,875                          20,300
Accumulated depreciation                           11,257       8,618              11,918       8,382
Structures                                          1,435                           1,480
Accumulated depreciation                              972         462               1,014         466
Machinery, equipment, and other                    51,610                          53,509
Accumulated depreciation                           40,453      11,156              42,270      11,238
Vehicles                                              227                             243
Accumulated depreciation                              203          23                 208          34
Implements, tools and furniture                     6,691                           7,342
Accumulated depreciation                            5,678       1,013               6,224       1,118
Land                                                            9,169                           9,094
Construction in progress                                          525                             455
Total tangible fixed assets                                    30,969     16.9                 30,790     16.9



                                                                                        (Millions of yen)

                                             As of March 31, 2003                As of March 31, 2004

Intangible fixed assets                                                %                                    %
Patent                                                    1,772                              1,278
Software                                                      0                                 18
 Other                                                       53                                 60
Total intangible fixed assets                             1,826       1.0                    1,357        0.7
Investments and other
Long-term investments in securities                       3,807                              3,721
 Investments in shares of related                        13,061                             12,069
companies
 Investments in equity                                      236                                164
 Investments in related companies                         5,506                              7,777
 Long-term loans                                            265                                259
 Long-term loans to related companies                     4,344                              4,319
 Claims in bankruptcy,                                      361                                400
reorganization, and others
 Long-term prepaid expenses                                  97                                 59
 Deferred tax assets                                      2,028                              1,430
Other                                                     2,047                              2,366
Less: Allowance for doubtful debts                        (397)                              (696)
Total investments and others                             31,359      17.1                   31,871       17.6
Total fixed assets                                       64,155      35.0                   64,019       35.2
Deferred assets
Bond discounts                                                0                                  -
Total deferred assets                                         0       0.0                        -          -
Total assets                                            183,196     100.0                  181,983      100.0





                                                                                       (Millions of yen)

                                                    As of March 31, 2003             As of March 31, 2004


(Liabilities)                                                                %                                %
Current liabilities
Notes payable - trade                                           3,922                            5,176
Accounts payable - trade                                       11,202                           15,937
Short-term debt                                                 1,605                                -
Current portion of long-term debt                               2,163                                -
Current portion of bonds                                        3,000                                -
Current portion of convertible bonds                           13,905                                -
Accounts payable - other                                          639                            1,209
Accrued expenses                                                2,808                            3,833
Corporate income taxes payable and other                        1,591                            6,307
Consumption taxes payable and other                               128                              374
Advanced receipts                                                  18                               45
Deposits received                                                  60                              162
Accrued bonuses                                                 1,125                            1,346
Notes payable - equipment and other                               461                              942
Other                                                              17                              139
Total current liabilities                                      42,649     23.3                  35,476     19.5
Long-term liabilities
Bonds                                                          15,000                           15,000
Bonds with stock acquisition rights                            23,000                           23,000
Long-term debt                                                  1,170                                -
Allowance for retirement and severance                          1,279                            1,428
benefits
Allowance for directors' and auditor's                          1,193                            1,315
retirement benefits
Other                                                               8                                3
Total long-term liabilities                                    41,651     22.7                  40,747     22.4
Total liabilities                                              84,301     46.0                  76,223     41.9
Shareholders 'equity
Common stock                                                   23,106     12.6                  23,106     12.7
Additional paid-in capital
Capital reserve                                                30,962                           30,962
Total additional paid-in capital                               30,962     16.9                  30,962     17.0
Surplus
Earned reserves                                                 1,958                            1,958
Voluntary reserves
Reserve fund for special depreciation                 412                             308
Reserve for deferred taxes on land                     14                              14
Reserves for dividends                              1,000                           1,200
Other reserves                                     36,000      37,426              39,000       40,523
Unappropriated retained earnings                                5,701                            9,623
Total surplus                                                  45,086     24.6                  52,105     28.6
Valuation adjustment for marketable securities                  (239)    (0.1)                     718      0.4
Treasury stock                                                   (20)    (0.0)                 (1,132)    (0.6)
Total shareholders' equity                                     98,894     54.0                 105,760     58.1
Total liabilities and shareholders'                           183,196    100.0                 181,983    100.0
equity



                     Non-Consolidated Statements of Income

                                                                                            (Millions of yen)

                                                  Year ended March 31, 2003       Year ended March 31, 2004
Net sales                                                                     %                              %
Products                                             74,032                          95,271
Merchandise                                           1,889       75,921  100.0       2,469      97,740  100.0
Cost of sales
Opening stock, products                               7,568                           6,831
Opening stock, merchandise                              111                             109
Cost of production                                   52,116                          62,481
Merchandise purchased                                 1,596                           1,770
Suspense accounts                                       856                           1,385
Total                                                62,248                          72,579
Suspense accounts allocated                               2                               5
Closing stock, products                               6,831                           6,710
Closing stock, merchandise                              109       55,304   72.8          93      65,770   67.3
Gross profit                                                      20,617   27.2                  31,970   32.7
Sales, general, and administrative expenses
Packaging and transportation                          1,001                           1,211
Advertising and promotions                              525                             442
Provision for doubtful debts                              -                             292
Salaries and allowances                               4,062                           4,536
Provision for employee bonuses                          398                             490
Retirement expenses                                     134                             143
Provision for directors' bonuses                         61                             121
Rental expenses                                       1,227                           1,287
Depreciation and amortization                           501                             342
Research and development                              2,090                           2,513
Fees expenses                                           286                             335
Software development                                    335                             415
Subcontracting                                          723                           1,026
Other                                                 2,509       13,859   18.3       2,625      15,784   16.1
Operating income                                                   6,757    8.9                  16,186   16.6


                                                                                            (Millions of yen)

                                                      Year ended March 31, 2003        Year ended March 31, 2004
Non-operating income                                                          %                                %
Interest income                                        138                              183
Interest income (securities)                             1                                -
Dividend income                                         62                               67
Foreign exchange gain                                  448                                -
Rental income                                          385                              325
Other                                                  378       1,415      1.9         305         882      0.9
 Non-operating expenses
Interest expenses                                      138                                9
Bond interest                                          421                              197
Bond issuance costs                                     95                                -
Foreign exchange losses                                  -                              518
Other                                                  226         881      1.2         243         969      1.0
Ordinary income                                                  7,291      9.6                  16,099     16.5
Extraordinary income
Gain on sales of property and equipment                 32                               58
Gain on sales of investment securities                   -                               35
Other                                                   43          76      0.1           -          94      0.1
Extraordinary loss
Loss on disposals of property and equipment            453                              195
Valuation loss on investment securities                510                                -
Loss on sales of affiliate company stock                44                                -
Valuation loss on investment in affiliate              165                                -
company
Loss on liquidation of affiliate company                 -                               99
Loss on forgiveness of related party debt                -                              563
Other                                                    -       1,173      1.5          19         877      0.9
Income before income taxes and other                             6,194      8.2                  15,316     15.7
Corporate income taxes, inhabitants taxes, and       1,677                            7,130
enterprise taxes
Adjustment of corporate income taxes and other         239       1,916      2.6       (645)       6,484      6.6
Net income                                                       4,277      5.6                   8,831      9.0
Unappropriated retained earnings brought                         2,318                            1,679
forward
Interim dividend                                                   895                              887
Unappropriated retained earnings at end of                       5,701                            9,623
period




Proposed Appropriation of Retained Earnings

                                                                                            (Millions of yen)

                                                    Year ended March 31, 2003        Year ended March 31, 2004

Unappropriated retained earnings at beginning of                        5,701                            9,623
period
Reversal of retained earnings reserves
Reversal of reserve fund for special depreciation            110          110             101              101
Total                                                                   5,812                            9,724
Appropriation of retained earnings
Dividends                                                    895                          887
Bonuses to directors                                          30                           50
(bonuses to auditors)                                        (4)                          (7)
Retained earnings reserve
Reserve fund for special depreciation                          7                           39
Reserve for deferred taxes on land                             0                            -
Reserve for dividends                                        200                          200
General reserve                                            3,000        4,132           7,000            8,177
Unappropriated retained earnings carried forward                        1,679                            1,547




Notes.

1. Payment of interim dividends of Y895 million (Y7.50 per share) was made on
9th December 2002.

2. Payment of interim dividends of Y887 million (Y7.50 per share) was made on
8th December 2003.

3. Cash dividends are not paid in respect of treasury stock held by the company.

4. Reserve for dividends include Y4 million and reserve for deferred taxes on
lands as transferred accordance with change of tax rate.


Summary of Significant Accounting Policies



1. Valuation of significant assets

(1) Investments in securities

Shares in subsidiaries and affiliates                  Moving average cost method

Other securities

      With market prices available                     Fair market prices at balance sheet date
                                                       (Net unrealized gains/losses on the securities are 
                                                       reported as a separate item in the shareholders equity 
                                                       section. Cost of securities
                                                       calculated by moving average cost method.)

      With market prices not available  Moving average cost method

(2) Inventories

Products/ Finished goods                               Weighted average cost method
Merchandise                                            First-in,first-out cost method
Raw materials                                          Weighted average cost method
Work in process                                        Weighted average cost method
Supplies                                               Last purchase price cost method




2.Depreciation and amortization

(1) Tangible fixed assets                              Declining-balance method
                                                       However depreciation of buildings purchased after 
                                                       April 1 1998 (excluding metallic fixtures) is computed
                                                       using the straight line method.
                                                       Estimated useful lives are principally as follows:
                                                          Buildings and structures            5 - 50 years
                                                          Machinery and equipment             10 years
                                                          Vehicles                            4 - 6 years
                                                          Tools and implements                2 - 10 years

(2) Intangible fixed assets                            Straight line method
                                                       However software for internal use is amortized over its
                                                       estimated useful life of 5 years by the straight line method.

(3) Long term prepaid expenses                         Straight line method



3.Deferred charges

Bond discounts or premiums                             Amortized according to the straight line method over the
                                                       lifetime of the bond.



4.Basis for recording allowances

(1) Bad debts                                          An allowance for losses arising from bad debts is 
                                                       recorded in amounts deemed appropriate based 
                                                       primarily on past credit loss experience for receivables 
                                                       which are deemed to be uncollectible with a high 
                                                       possibility, estimated amount will be recognized after           
                                                       considering the collectivity of receivables respectively.

(2) Accrued bonuses                                    An allowance is provided equal to the estimated amount 
                                                       of the payment of bonuses to employees in respect of the         
                                                       financial year under review.

(3) Retirement and severance benefits                  To prepare for retirement and severance benefits for 
                                                       employees, estimated future benefit obligations less 
                                                       fair value of pension assets at the financial year end 
                                                       are recorded as the reserve for retirement and 
                                                       severance benefits.  The difference arising from the change in   
                                                       accounting standards is accounted for as expenses, and the       
                                                       actuarial differences are divided equally over a fixed number of 
                                                       years (10 years) within the average remaining years of service of
                                                       employees and accounted for as expenses.

(4) Directors' retirement benefits                     An allowance equal to the estimated amount required at the       
                                                       financial year end is calculated according to internal           
                                                       regulations.



5.Lease transactions

Standard operating lease accounting is used, except in the case of finance lease
agreements where ownership of the leased asset is recognized to be transferred
to the lessee.



6.Hedge accounting

(1) Method of hedge accounting

Currency swap transactions meet the conditions for assignment treatment and are
accounted for accordingly.

(2) Means of hedging and hedged items

(Means of hedging)                (Hedged items)

Currency swap transactions        Foreign currency denominated debt

(3) Hedging policy

Hedges related to currencies are entered with the aim of determining the
cashflows associated with the recovery of interest and principal of loans.



(4) Method of evaluating effectiveness of hedges

Evaluation of the effectiveness of hedges is omitted because the same conditions
apply to the currency swap transactions and to the assets that are the subject
of those transactions, and movements in currencies and cashflows are assumed to
cancel one another out continuously over the life of the transactions.



7.Local and national consumption taxes

Amounts are stated net of consumption taxes.

Notes



(Non-Consolidated Balance Sheets)

                                                               Year ended                 Year ended
                                                              March 31,2003              March 31,2004


  1. Accumulated depreciation on property, plant, and        58,565 Y million            61,636 Y million
     equipment

  2. Advance depreciation of national tangible fixed            150 Y million               150 Y million
     assets

  3. Assets presented as collateral
     Marketable securities                                      899 Y million                 - Y million
     Tangible fixed assets                                   14,723 Y million                 - Y million
     Long-term investments in securities                        377 Y million                 - Y million

  4. Liabilities guaranteed
     Liabilities guaranteed                                   1,891 Y million             1,880 Y million
     Guarantee agreements, etc                                  500 Y million                 - Y million

  5. Shares
             Shares authorized                              465,877 1,000 shares        465,877 1,000 shares
             Shares in issue                                119,363 1,000 shares        119,363 1,000 shares

  6. Treasury stock held                                           12,465 Shares            1,016,321 Shares





(Marketable securities)

Previous Financial Year (March 31, 2003)
Shares in subsidiaries and affiliates with market prices available.

                                                                                      (Millions of yen)

                                         Carried amount           Market value            Difference
Shares in affiliates                             1,085                   822                  (263)





Current Financial Year (March 31, 2004)
Shares in subsidiaries and affiliates with market prices available.

                                         Carried amount           Market value           Difference
Shares in affiliates                             1,374                 2,776                 1,402


(Tax-effect accounting)



1. Reason for the occurrence of deferred tax assets and deferred tax liabilities

                                                                                        (Millions of Yen)

                                                     Previous Financial Year         Current Financial Year
                                                        (March 31, 2003)                (March 31, 2004)
(Deferred tax assets)

Software                                                        712                            648

Allowance for employee bonuses                                  393                            547

Accrued enterprise tax                                          141                            545

Allowance for directors'                                        485                            535
and auditors' retirement benefits

Allowance for retirement                                        418                            522
and severance benefits

Loss on inventories                                             451                            441

Allowance for doubtful debt                                     219                            294

Loss on investment                                              161                             90
securities

Other                                                           596                            412

Deferred tax assets subtotal                                  3,580                          4,038

(Deferred tax liabilities)

Unrealized gain on                                             (11)                          (492)
investment

Securities

Allowance for special                                         (215)                          (169)
depreciation

Other                                                         (230)                          (274)

Deferred tax liabilities subtotal                             (458)                          (937)

Net deferred tax assets                                       3,121                          3,101



2. Reconciliation of the statutory tax rate to effective tax rate was follows.

                                                                                                   (%)
                                                     Previous Financial Year          Current Financial Year
                                                        (March 31, 2003)                (March 31, 2004)
                                                          
Legal effective tax rate                                       42.1                                 -
(Adjustments)
Entertainment expenses and similar expenses                     0.9                                 -
permanently not tax allowable
Dividends receivable and similar income                       (0.3)                                 -
permanently not taxable
Investments in affiliates and subsidiaries                   (13.5)                                 -
Inhabitants tax equalization                                    0.9
Adjustment to the decrease in deferred tax assets               1.1                                 -
owing to the change in the tax rate
Other                                                           0.3                                 -
Corporate income tax rate after the adoption of              (30.9)                                 -
tax-effect accounting

Note:

Disclosure for the current financial year is omitted because the difference
between the legal effective tax rate and the post- tax-effect accounting
corporate income tax rate is less than 5/100 of the legal effective tax rate.



3. Following an amendment of the Local Tax Law (Law 9 2003), the calculation of
deferred tax assets and deferred tax liabilities for the previous financial year
will apply the pre-amendment tax rate to deferred items planned to disappear by
March 31 2004, and the post-amendment tax rate to deferred items planned to
disappear after April 1 2004.  Owing to this change in tax rates, the amount
stated for the previous financial year's deferred tax assets (net of deferred
tax liabilities) will decrease by Y70 million, and the previous financial year's
adjustment to corporate income taxes booked as an expense will increase by the
same amount.






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