2004
ANNUAL REPORTFiscal year ended March 31, 2004

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Profile
Serving Advanced Technology

Company Philosophy
On the basis of “Creativity” and “Research and Development,”
JEOL positively challenges the world’s highest technology,
thus forever contributing to the progressin both Science and Human Society through its products.
Corporate History
Japan Electron Optics Laboratory Co., Ltd. established

Product Development History

1949
1956

JEM-1 electron microscope completed
JEM-5G electron microscope first exported to the CEA Saclay Atomic
Energy Research Institute, France; JNM-1, Japan’s first nuclear magnetic
resonance system, completed

Company name changed to JEOL Ltd.
JEOL listed on the Second Section of the Tokyo Stock Exchange

1961
1962

JXA-3 x-ray microanalyzer completed

1963

JMS-01 double-focusing mass spectrometer completed; JLC-01 general-purpose

JEOLCO(USA) INC. established as the first overseas subsidiary
automatic recording fluid chromatograph completed

JEOL listed on the First Section of the Tokyo Stock Exchange

1966

JSM-1 scanning electron microscope completed; JEM-1000 1000kV ultrahigh voltage
electron microscope completed

1967
1968
1970
1972
1974

JEBX-2A electron beam exposure instrument completed
JLC-5AH, world’s first fully automated amino acid analyzer, completed
Medical-use JTG-MA “Thermoviewer” infrared photography equipment completed
JCA-1KM “Clinalyzer” automated biochemical analyzer completed
JAMP-3 Auger micro probe, JIR-03F fourier transform infrared spectrometer,
and JESCA-2 photoelectron spectrometer diffraction system completed“Bright Plan 1000,” management plan for the JEOL group, announced

1976
1982
1983
1989
1990
1991
1993
1995
1996
1998
1999
2000

The new buiding completed JEOL TECHNICS LTD.

2001

“Tokyo Meeting,” first overseas marketing meeting, held

“JEOL 21” corporate management vision for the 21st century announced“BS EN ISO9001” obtained
Launch the JEOL Group web site (http://www.jeol.co.jp)“JEOL SPIRIT-1” mid-term management vision announced on JEOL’s 50th anniversary

JEPAS-1000 electron beam measuring instrument completed
JIBL-100 convergent ion beam equipment completed
JSTM-4000XV ultrahigh vacuum scanning tunnel microscope completed
JWS-7500 wafer process inspection system completed
JEIP-900F high-density reactive ion plating system completed
High-speed next-generation automated biochemical analyzer ‘‘Bio Majesty’’ completed
JBX-9000MV electron beam lithography system completed
JSM-6700F field emission scanning electron microscope completed
Wafer process monitor “i-Checker” completed
JSM-6500F field emission scanning electron microscope completed
Release of the JMS-T100LC (AccuTOF) time-of-flight mass spectrometer and the JNMECA series of nuclear magnetic resonance spectrometers
JEM-2500SE nano analysis transmission electron microscope, completed and unveiled at
Semicon Japan 2002

JEM-9310FIB focused ion beam system for specimen-preparation completed
YAMAGATA CREATIVE CO., LTD. established, and the New Datum Hall completed

2002

JBX-3030 series of electron beam lithography system completed

Obtained ISO14001 certification for environmental management system
The JEOL Group’s Environmental Statement announced

JSM-6460 and 6360 series of scanning electron microscopes completed
JPS-9200 photoelectron spectrometer completed

BEIJING CREATIVE TECHNOLOGY CO. LTD. established

2003

JEM2100F field-emission transmission electron microscope completed
JMS-800D mass spectrometer dedicated to dioxin analysis completed
Succeeded in developing a high-performance capacitor

New medium-term management plan for the JEOL Group: Focus Plan 2006 announced

2004

JEOL CREATIVE CO., LTD. merged
YMCC Tendo Factory completedContents

1 Profile
2 Financial Highlights
3 To Our Shareholders
7 Special Features
New Medium-term Management Plan
“Focus Plan 2006”

9 Research and Development
10 Environmental Activities
11 The JEOL Group Network
12 Board of Directors and Corporate Auditors

1

JEOL ANNUAL REPORT 2004

13 Five-year Summary
14 Financial Analysis
19 Consolidated Balance Sheets
21 Consolidated Statements of Operations
22 Consolidated Statements of Shareholders’ Equity
23 Consolidated Statements of Cash Flows
24 Notes to Consolidated Financial Statements
33 Independent Auditors’ Report
34 Corporate Outline

Disclaimer Regarding Forward-Looking Statements
The information contained in this annual report is given for thesole purpose of providing information regarding
the business performance of JEOL Ltd. during the fiscal year
ended March 31, 2004,
and is not intended to solicit investment in any securities issued
by the Company. Any statementswith respect to JEOL’s current plans, strategies and forecasts
are forward-looking statements
based upon information available as of March 31, 2004, andinvolve known and unknown risks and uncertainties.
Actual events and results may differ materially from thoseanticipated in these statements.

Financial Highlights
JEOL Ltd. and consolidated subsidiaries, for the years ended March 31, 2004 and 2003

Thousands of
U.S. dollars*Millions of yen

2004

2003

2004

¥87,097¥82,834$823,998

Operating income

2,068

546

19,564

Income (loss) before income taxes and minority interests

1,541

(967)

14,577

784

(951)

7,421

10.92

(13.85)0.10

324.88283.03

3.07

95,31093,135

901,70324,803

19,535

234,652

For the year:
Net sales

Net income (loss)
Per share data (in yen and U.S. dollars):
Net income (loss)
Total shareholders’ equity
At year-end:
Total assets
Total shareholders’ equity

Note: The U.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥105.7 to U.S.$1 (the approximate exchange rate at March 31, 2004).

Net sales

Operating income

Net income (loss)

Total shareholders’ equity

Millions of yen

Millions of yen

Millions of yen

Millions of yen

100,000

3,500

1,500

25,0001,000

20,000500

15,0000

10,000

-500

5,000

3,000
80,0002,500
60,000

2,000
1,500

40,0001,000
20,000500
0000 01 02 03 04

0-1,00000 01 02 03 04

00 01 02 03 04

00 01 02 03 04

JEOL ANNUAL REPORT 2004

2

To Our Shareholders

Terukazu Eto
Chairman & CEO,
Representative Director

Business Overview for Fiscal 2004
The JEOL Group’s consolidated net sales for the year
under review (fiscal year ended March 31, 2004) were
¥87.1 billion and net income of ¥784 million. On the whole,these results were in line with our projections forthe year.
By business segment, sales of the scientific instrument
sector showed a slight decline to ¥57.9 billion compared tothe previous fiscal year, while sales in the industrial
equipment sector increased to ¥29.2 billion.
In order to achieve a “V-shaped” rapid recovery in ourbusiness performance, the Company proactively engaged
in what we are calling the “JEOL Group Survival Program,”making efforts to ensure our sales and maintain the fair
product sales prices, as well as reduce various operating
costs. Regarding net sales, electron microscopes andelectron beam lithography systems met demands. As forthe sales prices, thanks to the strengthening of ourcompetitiveness, due in part to the development of new
products as well as our sophisticated response to theclients’ needs, we successfully curbed a downward trend insales prices. A recovery in sales prices eventuallycontributed to an increase in income.
The following warrants particular mention this year. Firstly
we centralized our purchase/procurement functions to JEOL
ACTIVE CO., LTD. to improve the efficiency of supply chain
operations and reduce the manufacturing time throughintegrated manufacturing. We also slimmed down inventory
to stop further increases.
Secondly, we reassessed the functions of our domestic
associated companies and consolidated such companies,
thereby aiming for more efficient Group management.
Specifically, through business transfer and reallocation
within the Group, we integrated JEOL HIGHTECH CO.,LTD., which conducts the inspection testing of electron
microscopes, with JEOL DATUM LTD. for businessexpansion, while also consolidating JEOL LIOSONIC CO.,3

JEOL ANNUAL REPORT 2004

Yoshiyasu Harada
President & COO,
Representative Director

LTD., which manufactures optical products, with JEOL
ENGINEERING CO., LTD. to enhance our development
capacity.
Further, we decided to merge JEOL CREATIVE CO.,LTD., specializing in the manufacturing of electron
microscopes, etc., with the Company (effective April 1,
2004).

Review of the “Bright Plan 1000”
In the “Bright Plan 1000,” we strived to restructure theGroup by setting financial targets of ¥100 billion forconsolidated net sales and ¥5 billion for consolidated
ordinary profit for fiscal 2004. We also implemented
fundamental management strategies, including promotion ofa market-oriented business operation; establishment of a¥100 billion sales service and production framework;
overhaul of upstream (development and design) divisions;promotion of collaboration and outsourcing, etc. As part of
the JBR* business process re-engineering program
launched in the previous fiscal year (fiscal 2003), we
promoted a four-pronged re-engineering process covering
sales, engineering design, production and management.
In fiscal 2003, the second year of the plan, however, the
JEOL Group restructuring did not suffice as changes in theexternal business climate resulted in a net loss for thefollowing term.
In fiscal 2004, though the Group made every possible
effort to improve its business performance, the financial
targets could not be met. Hence, these targets have been
reinstated in the new medium-term management plan.
New products in the industrial core market (“I-Core
market”), such as electron beam lithography systems formask/reticle equipment and clinical biochemistry analyzers
in medical equipment, sold well, in addition, products in thescientific core market (“S-Core market”) sold at good levels.
However, we realize that, for further expansion of l-Core*JBR: JEOL GROUP BUSINESS PROCESS RE-ENGINEERING COMMITTEE

Positioning of the medium-term
management planF o c u s P l a n 2 0 0 6 (from April 1, 2004 to March 31, 2007)
Building stable earnings structure capable of responding to the ¥100 billion market(in terms of sales) that fluctuates in sizeB r i g h t P l a n 1 0 0 0 (from April 1, 2001 to March 31, 2004)
Improving the corporate structure towards becoming a 21st century value-creating company,
expanding the operations and enhancing profitability

JEOL Group’s Management Vision JEOL SPIRIT-1 (from October 1999)
The “second founding era” – Twin Core / Triple Mission

Japan Electron Optics Laboratory Co., Ltd.
(established in 1949)

market, we need to continue to address such challenges asenhancing our marketing ability, expediting the developmentof new products to meet the market’s needs, and further
improving our production framework.

Our Core Competence
While the Japanese economy is in a recovery state,reflecting corporate trends to reduce the excess production
capacity and an improvement in productivity by thetechnological innovation, the market competition will remain
intense in this age of mega-competition. We are being put
to the test in our ability to grow the JEOL Group in such amarket climate.
The JEOL’s core competence is the key technology wehave developed in the more than five decades since we firstlaunched scientific instruments, including electron
microscopes, to the market. We have the world’s leadingstate-of-the-art technology for electron microscopes, with a
top share of the global market.
Moreover, we must extend our key technology in the
S-Core market further, centering on electron microscopes,
to the I-Core market. In other words, we must promoteenhancement in the quality, speed and efficiency of the I-Core
market in order to proactively meet the clients’ expectations.
Another strong core competence is our worldwide sales
and services network. Our knowledge and information
networks, as well as communications involving the latest
information, help us to deepen the coordination with theworld’s leading researchers, which in turn leads to thepromotion of cutting-edge products and the creation of newvalue.

Towards a stable earnings structure…
The new medium-term management plan “Focus Plan 2006”
Following the Group’s medium-term management plan
“Bright Plan 1000” which ended in March 2004, we haveformulated the new medium-term management plan,“Focus Plan 2006,” for the years April 2004 to March 2007.
The first medium-term management plan aiming at
realizing our Group’s management vision “SPIRIT-1” wasManufacturer of scientific instrument

the “Bright Plan 1000,” which was based on restructuring to
improve our corporate structure to become a 21st century
value-creating company, and expand operations toenhance profitability. Although we could not attain its
business targets, the framework for enhancing profitability
has already been put in place.
The new medium-term management plan “Focus Plan
2006” is a “focused” plan designed to adopt, rebuild andfurther develop the preceding plan’s strategy.
In order to achieve the targets set in the “Focus Plan 2006,”
it is necessary to proactively address challenges we arefacing, such as new market development in the S-Core
market, expansion of demand in the I-Core market,
strengthening competitiveness of our new products in the
global market efficient R&D and improvement in our total
cost structure.
We will develop our business strategies, especially
focusing on the five important areas of production, sales/
services, technology, alliances and organization/humanresources.
First, the improvement in production costs is an urgent
production strategy issue.
To facilitate the consolidation and simplification of
production processes, JEOL CREATIVE CO., LTD. (awholly-owned subsidiary involved in production) was
merged with the Company on April 1, 2004 to reinforce theproduction technology and production management
functions.
We have succeeded in steadily reducing the
manufacturing time for field emission scanning electron
microscopes, and we endeavor to do the same for otherproducts.
Technology transfers to YAMAGATA CREATIVE CO.,LTD. (YMCC) in Yamagata city in March 2002 areproceeding within the Tohoku region, and its production ofgeneral-purpose transmission electron microscopes has
moved into gear. Further, in February 2004, we began
construction of a new factory, YMCC Tendo Factory in
Tendo city, which started operations in June 2004 as a
production base for field emission scanning electron
microscopes. We intend to promote a highly efficient

JEOL ANNUAL REPORT 20044

Basic policies
for the Focus Plan 2006

Bright Plan 1000

Focus Plan 2006
Key businesses

Key measures for achieving
the targets set in the medium-term
management planCore restructuring
strategies

production of electron microscopes in operations in the
Tohoku region, which we firmly believe will contribute tocost reduction.
Important issues regarding our sales and services strategy
are to rebuild U.S. market strategy (our largest overseas
market) and sales expansion in the rapidly growing Asianmarkets particularly in China. We aim to step up sales ofmass spectrometers in the U.S., and will also jointly operate
the Australian subsidiary with JEOL ASIA PTE. LTD. in
Singapore. In China, we opened the Wuhan office in May
this year and intend to expand the Beijing office to enhance
its sales framework in future. With this strategy, we will
strive to expand into the frontier of the market forenvironmental analysis, as well as to expand sales ofelectron microscope products.
As part of the technology strategy, we developed 13 new
products in the fields of nano-technology, as well as
environment and biotechnology, in the fiscal year underreview and will make strenuous efforts to enable these new
products to penetrate the markets as early as possible.
While the strengthening of capacity for research anddevelopment is an important issue, we are seeking toconduct research and development more efficiently throughworldwide joint research and industry-academiagovernment collaboration.
We will develop state-of-the-art equipment in the
S-Core market through industry-academia-government
collaboration. Concurrently, in the I-Core market, we are
seeking to strengthen our capacity for technology anddevelopment to meet the diversified needs for mask
lithography equipment in the semiconductor field. In
addition, we are developing products to meet market
requirements for more diversification and lower prices for
direct lithography equipment in the I-Core market.
In the medical device sector, sales of clinical biochemistry
analyzers showed satisfactory results in the market for
medium-sized equipment. As we have launched smallersized analyzers since the second half of last year, we
expect full-fledged sales growth this year. In addition, we
intend to launch large-sized analyzers to the market, andthus a wide product range will be available. We are alsoplanning to enter the immunology equipment.
In environment technology, we developed a cutting-edge

5

JEOL ANNUAL REPORT 2004

quadrupole gas-chromatograph mass spectrometer and an
X-ray spectrometer, among other products. We are
improving the sales framework to increase sales of thesenew products in the environment-related market and areseeking an opportunity to expand their demand.
In regards to our alliance strategy, we will maintain aflexible approach with a close eye on the market situation,
including suitable sales networks that can meet the global
market’s needs, as well as alliances and joint development
to strengthen the competitiveness of our products.
As part of the organizational and human resource strategy,
we reorganized in April of this year related organizations,
including the sales headquarters and the technology
headquarters, as well as adopted uniform names. Thereby,
we will remove barriers to a common intra-company identity,
to reinforce the functions of respective organizations andstrive for organizational operations with clear responsibility
and authority. We will continue to conduct an organizational
restructuring and foster skilled human resources to further
enhance overall organizational strength.

Our Capacitor BusinessWith regard to the high-performance capacitor business that
we developed last October, we established a joint company,
Advanced Capacitor Technologies, Inc. in April 2004.
The new company will lead the development of thecapacitor section in the future. It will commercialize and sellcapacitors together with a group of companies having
excellent production technologies, and enable thistechnology to penetrate both the domestic and overseas
markets.
Since the establishment of said company, we have beenworking on the selection of a business partner after setting
our first target at the automobile market, including hybridcars. As a result, in June 2004, JEOL Ltd., Advanced
Capacitor Technologies, Inc. and Nissan Diesel Motor Co.,
Ltd. concluded a feasibility study agreement for mass
production with an aim of making a capacitor of large
capacity into a business. Having concluded a joint
development agreement for the early development ofpractical application technologies, the three companies
agreed of an alliance in the capacitor business.

Responding Scientific instrument market S-Coreto the market While the market is mature, nano-technology and biotechnology R&D is brisk.
Increase market share through better product differentiation vis-a-vis our competitors
Pioneering new markets focusing on Asian markets, especially China.

Industrial equipment market I-Core
Semiconductor equipment
As the market for our current products and equipment is a niche, we are seeking to introduce the fundamental
technology that we have cultivated in scientific instrument, to the wider industrial equipment.
Mask lithography equipment – enhancing technological capability to meet miniaturization requirements.
Direct lithography equipment – development of products to meet the market’s needs
for more diversification and lower prices.
Wafer inspection systems – enhancing product competitiveness and increasing market share of alliance products.
Electrodeposition equipment
Electron beam evaporation gun and plasma gun control and power supply – pioneering overseas markets.
Medical equipment
Sales expansion of clinical biochemical analyzers in the global market and marketing of immunology equipment.
– providing small- and large-sized equipment lines in addition to traditional medium-sized equipment(smaller ones were launched in fiscal 2004).

For mutual progress, the three companies will
collaboratively work to finalize the details of how to supply
sample products for practical application, as well as massproduce and form a management structure of the joint
business by the end of 2004. Concurrently, we areproceeding to select alliance partners by productapplication.

We aim to further cement our managementbase in the second founding era.
The Group is stepping up its effort to achieve the targets of
the “Focus Plan 2006.” On the other hand, in making astrategic decision on management, we recognize well thatthe ability to develop new products will directly affect the
future of the Group, and thus we seek to develop products
while eliminating every possible risk factor. As to risks
associated with the implementation of business activities,
we are seeking to further improve corporate governance,
legal compliance, quality, and environmental conservation.
We conduct corporate governance in the framework of theexisting directors and auditors, by clearly separating the
responsibilities of management and business operations
between the CEO and COO, respectively. Based on thissystem, we are going ahead with extensive corporate
restructuring. We will make decisions after thoroughdiscussions at the Company officers’ meetings (board of
directors’ and managing directors’ meetings), as well as
swiftly conduct business operations. In April 2004, the PMU(Profit Management Unit) system was reviewed so that a
director with the title of Managing Director or higher should
assume the head of PMU, which has clarified the
responsibility for business operations. As to groupmanagement, “JEOL Group Management Committee”
facilitates the sharing and dissemination of important Groupwide policies and basic strategies across the Group
companies.
With respect to legal compliance, we require a sharedawareness from top management down to the individual
staffers to thoroughly observe the legal compliance on acompany-wide basis for our policy: “Each individual should
comply with the laws, regulations, the company rules andthe code of conduct; and should conduct business activities

faithfully and ethically, while taking care not to go againstsocial conventions or behave in a manner not acceptable inthe society.” Moreover, we have not only prepared
Company Rules in line with the Group management policy,
but the Information Security Policy in view of the importanceof how information is handled (implemented in April 2004).
As part of the quality and environmental measures, we areconducting an ISO management system that integrated therequirements of both ISO 9001 and 14001 throughout thenine group companies, and we are also making efforts forcontinuous improvement of that system.
We give first priority to respond to the customers’ needs ascomprehensively and promptly as possible, placing theirsatisfaction above all. We are not only contributing toenvironmental conservation through such products as mass
and X-ray spectrometers, but also promoting thedevelopment of “environmentally-conscious products.” Also,
we set up the “WEEE&RoHS” (Waste Electrical andElectronic Equipment/Restriction on Hazardous Substances)
Committee in August 2003 to take all possible measures tocope with environmental regulations in the EU market.
Cementing our management base, we will use
management resources more effectively to enhance ourcorporate value. Further, we will strive to meet the
expectations of our shareholders and other stakeholders byattaching importance to cash flow and by doing our utmost
to raise ROE. Your continued understanding and patronage
is most appreciated.
July, 2004

Terukazu Eto
Chairman & CEO, Representative Director

Yoshiyasu Harada
President & COO, Representative Director

JEOL ANNUAL REPORT 2004

6

Focus P

Special Features

New Medium-term Management Plan

The JEOL Group formulated the new medium-term management plan “Focus Plan 2006” in March 2004, which follows“Bright Plan 1000”.
We took our missteps seriously in failing to accomplish the ultimate goals set in the “Bright Plan 1000,” and carefully
reviewed the strategies and measures taken. This new plan has been focused on what we should address during the
projected period from April 2004 to March 2007, as implied in the name itself.

Basic Policies

The new medium-term management plan “Focus Plan 2006” aims not only to rebuild,
improve and further promote the restructuring strategy that formed a core part of the“Bright Plan 1000,” but also to carry out “focused strategies” for production, sales andservices, and technologies. Its reinstated consolidated business targets are net salesof ¥100 billion and ordinary profit of ¥5 billion by the final fiscal year, ending March
2007.

Consolidated net sales
Business Targets

Consolidated ordinary profit

100
5

6

Basic

billion yen or morebillion yen or more

Millions of yen

Bright Plan1000

Earnings Projection

Consolidated
indicators

Non-consolidated
indicators

7

Focus Plan 2006

Fiscal 2004
ActualFiscal 2005
Forecast

Fiscal 2006
Forecast

Fiscal 2007
Forecast

Net sales

87,09788,00095,000100,000

Ordinary profit

1,638

1,800

3,500

5,000

Net income

784

800

1,600

2,500

Shareholders’ equity

24,80325,00026,10027,500Total assets

95,31092,00093,10094,700Shareholders’ equity ratio (%)

26.0

27.2

28.0

29.0

Return on equity (ROE)

3.5

3.2

6.1

9.1

Net sales

57,24054,00059,00063,000Ordinary profit

1,229

1,500

3,000

4,300

Net income

726

700

1,300

2,000

JEOL ANNUAL REPORT 2004(%)

lan 2006
an achievement of financial targets of the “Bright Plan 1000” as just a marker along the road
1 Consider
to making a further leap forward.
the restructuring strategy that formed a core part of the “Bright Plan 1000,” and further promote
2 Rebuild
its implementation.
down the focus to five strategies.
3 Narrow(Five strategies: production strategy, sales and services strategy, technology strategy,

Policies

alliance strategy and organization/human resources strategy)
Adopt the Twin Core strategy, and define three key business domains and intended product lines.
4 (Threekey business domains: IT and semiconductor, environmental and bio-technology, and medical)
to be a R&D-oriented company both in name and in practice, and strategically strengthen the
5 Aim
technology front.
6 Continue the customer-oriented strategy as a strategic hub, while clarifying our responsibility to the shareholders.
*Twin Core: Scientific Core, Industrial Core

3 Focuses
Focus on the restructuring strategy

1
2
3
4
5

Production strategy
Establishment of the production base in the Tohoku region

Sales and services strategy
Sales expansion in the U.S. and Chinese markets

Technology strategy
Strengthening of capacities for both R&D and production technologies

Alliance strategy
Enhancement of sales alliances and promotion of further collaboration

Organization and human resources strategy
Organizational reform and cultivation of skilled human resources

takeover of Twin Core strategy
Focus onand its extension

Focus on the “Practice and Trust” Plan

1

Four key measures to materialize the plan are as follows:

IT and semiconductor business(Electron beam lithography systems, electron beamsystems and ion beam systems)

2

Environmental and Bio-technology businesses

3

Medical business(Nuclear magnetic resonance systems and mass
spectrometers)(Clinical biochemical analyzers and immunology
equipment)

1
2
3
4

Clarification of corporate responsibility
Quantification of corporate management
efficiency
Quantification of the sales market
Strengthening of management by objective

JEOL ANNUAL REPORT 20048

Research and Development
Through close cooperation within the Group,
JEOL creates added value to respond to a broad spectrum of sectors.
The R&D activities in the JEOL Group are conducted through close cooperation between group companies.
Development of the fundamental and elemental technologies, which form the Group’s future, are handled by the Company
that is central to the respective R&D activity within the Group. Individual group companies develop various products,
leveraging their own production and service technology, their core competence. The accomplishment of the R&D activities bybusiness segment in the consolidated fiscal year under review is as follows, with R&D expenditures at ¥4,031 million.

Scientific Instruments
R&D expenditures for this segment were ¥2,845 million.
In the electron microscopes segment, we developed andlaunched the JEM-2100F, the next generation intelligent
transmission electron microscope for research in new materials andbiotechnology; and the JSM-7000F, a multi-purpose high-resolution
thermal emitter scanning electron microscope suitable for a variety
of materials, ranging from semiconductors to magnetic materials.
In the electron probe microanalyzer segment, we developed the
JXA-8500F, a highest grade field emission electron probe
microanalyzer that enables quick elemental analysis of
infinitesimally small parts and elements; and the JAMP-9500F, afield emission auger microprobe that has the world’s highest spatial
resolution as a scanning auger microscope.

Other products include the JSX-3202M, an X-ray spectrometer
which complies with the requirements of EU (European Union)
environmental regulations; and the JSX-3000, an energy dispersive
X-ray spectrometer with electron cooling type Si(Li) detector withoutliquid nitrogen. In mass spectrometer segment, we developed andlaunched the JMS-800D, a mass spectrometer for analyzing dioxin;
the JMS-T100CS, a Time-of-Flight (TOF) mass spectrometer thatenables unstable organic compounds to be analyzed; and the JMSK9, a high-sensitive quadrupole gas chromatograph that complies
with the Water Works Law to be enforced in Japan in 2004 for theenvironmental measuring market.

Industrial Equipment
The R&D expenditures for this segment totaled ¥1,186 million.
In semiconductor-related equipment, we developed the JWS3000, a high resolution wafer inspection system with auto-detectreview function that enables a yield rate in the process ofmanufacturing semiconductors no larger than 90nm nodes.

On the medical equipment front, we developed and launched the
JCA-BM6010 as a new sub-line in our automated clinicalbiochemistry analyzer BioMajesty series, which enables rapid
examination and has a smaller footprint while maintaining our
proprietary ultramicro analysis function.

Development of the High-performance Capacitor
In October 2003, we developed the high-performance capacitor
that significantly raised capacitor energy density.
We established a joint company, ADVANCED CAPACITORTECHNOLOGIES, INC. in April 2004 and have been going ahead
with feasibility studies for commercialization.

J
J

E

O

E

O

L

In June 2004, the Company and ADVANCED CAPACITORTECHNOLOGIES, INC. concluded a three-way alliance agreementwith Nissan Diesel Motor Co., Ltd. and are collaboratively making
efforts for its practical use with a target of an energy density of 15 to
30 Wh/kg for the hybrid vehicle market.

G

r

o

u

p

Domestic Subsidiaries
and Affiliated Companies:

L

Engineering Management Division

Overseas

JEOL TECHNICS LTD.

Advanced Technology Division

Boston Lab (JEOL USA)

Multi-purpose scanning electron microscopes,
Focused ion beam system for specimen-preparation, etc.

Application & Research Center

JEOL SYSTEM TECHNOLOGY CO., LTD.

Technical Division 1

Defect image filing system,
Laboratory information system, etc.

Electron microscopes, Electron probe microanalyzers (EPMA), etc.

Technical Division 2
Nuclear magnetic resonance system (NMR), Mass spectrometer (MS),Clinical biochemistry analyzers, etc.

JEOL ENGINEERING CO., LTD.
Energy dispersive X-ray spectrometer,
X-ray spectrometer, etc.

ADVANCED CAPACITOR TECHNOLOGIES, INC.

Technical Division 3
Electron beam lithography system, Wafer inspection system,
Electron beam evaporation gun and power supply, etc.

High-performance capacitor

System Development Division
Design & Engineering Division 1
Design & Engineering Division 2
Biotechnology

9

Nanotechnologies

JEOL ANNUAL REPORT 2004

Environmental issues

Medical

Semiconductors

Material analyses
and surface treatment

Environmental Activities
The JEOL Group engages in business activities with an awareness of its responsibility as a “global corporate citizen” forharmonious coexistence with customers, local residents, shareholders and government agencies to ultimately develop asuitable recycling-based society in the future. Based on the Company’s philosophy, the JEOL Group will conduct businessactivities that contribute to a better global environment by providing services for environmental measurement andproducts, such as analyzers.
In December 2002, JEOL obtained ISO 14001 certification. The Group is carrying out the ISO management system,
which it integrated with the already-obtained ISO 9001 certification, and is conducting environmental activities, such asenergy conservation, resource saving, reduction in waste, development of “environmentally-conscious products,” andprocess improvement.
The ISO Management Committee plays a central role in carrying out the ISO management system,
Promotion ofwhich combined ISO 9001 and ISO 14001. In order to meet the requirements of EU (European Union)
Environmental
Conservation Activities directives on Waste Electrical and Electronic Equipment (WEEE) and Restrictions on Hazardous
Substances (RoHS), the Group set up the WEEE&RoHS Committee to address this issue.

Green Procurement

We announced the “Green Environmental Statement” in October 2003, established the “Green
Procurement Guidelines” in November, and issued the guidelines for assessing chemical
substances during procurement of materials in December of the same year.
While soliciting suppliers’ and customers’ understanding for our policy for green procurement, weare endeavoring to promote green procurement.

Our Efforts toward a Reduction of Environmental Impact●

Product assessment
While we carried out a series of processes from formulation to implementation of the plan for developing “environmentally-conscious
products” based on environmental design criteria, we conducted environmental impact assessments of 12 existing models. We will
introduce a LCA (Life Cycle Assessment) method for products from the planning and design stage on a trial basis.

●

Lead-free
Based on the road map action plan to employ printed-circuit boards (PCB) using lead-free solder, we started using PCBs with lead-freesolder in our products. We intend to completely phase out the use of lead solder by 2005.

●

Energy conservation and resource saving
We aim to reduce power usage by 1% compared to a year earlier, and strive to optimize the running of production facilities and air
conditioning systems, as well as to save on electricity consumed mainly by office automation equipment. We will also cut paper usage
with a reduction target of 20% from the previous fiscal year.

●

Management of hazardous chemical substances
While we are trying to establish a method to identify and manage hazardous chemical substances regulated under WEEE&RoHS and
LCA, we will introduce and operate a database for environmental assistance to strictly manage such hazardous chemical substances.

●

Reduction in greenhouse gas emissions
We have set a target for a waste recovery rate of 97% based on the optimization of the handling of sulfur hexafluoride gas (SF6 gas)used as insulating-gas for high-voltage. To achieve this target, we will conduct a study on how to recover and treat such emitted gas bydesigning new models.

●

Reduction in waste
We are making efforts to sort and store waste according to the purpose of use. We will reclaim iron and aluminum from waste metal, andrecycle used paper, thereby aiming at attaining a recycling rate of more than 70%. Further, we are striving to increase the number of
products using reinforced cardboard cartons as packing materials (instead of wooden crates), as well as to reuse pieces of usedcardboard boxes as shock-absorbing buffer materials when packing our products.

The JEOL Group’s Environment-related Products
The JEOL Group offers a wide range of
instruments and equipment for measuring
and observing all components that may
impact the environment.
The Group is endeavoring to expand
its product lines of environment-related
equipment, including an X-ray
spectrometer, which plays an importantpart in the product test that met therequirements of WEEE & RoHS, a mass
spectrometer for analyzing tap water andfoods, a portable gas chromatograph thatis widely used for on-site measurement,
and an ICP mass spectrometer, which isindispensable for measuring trace metals.

Gas Chromatograph Mass Spectrometer
JMS-K9Energy Dispersive X-ray SpectrometerJSX-3000JEOL ANNUAL REPORT 2004

10

The JEOL Group Network
Worldwide Network
The Group’s main feature and advantage is that it has established a global sales and service network.
Since we exported the first electron microscope to the CEA Saclay Atomic Energy Research Institute in France in 1956,
we have been providing various kinds of JEOL products, including electron microscopes, to over 80 countries around theworld through an extensive network.
This network now functions as the entire JEOL Group’s infrastructure and is vital for communicating with the world’s
leading researchers, and also for directly exchanging valuable information with them.
To make this network that has given the JEOL Group quite a significant advantage even more effective, we havestrengthened the global support framework centering around JEOL DATUM LTD. In the production front, we intend to
improve productivity, curtail costs, and enhance quality by going ahead with developing and outsourcing production in the
Tohoku region, as well as reinforcing the production plant in Beijing, China.

Production

Corporate nameDomestic

JEOL TECHNICS LTD.

●

JEOL CREATIVE CO., LTD. *

●

Sales

Development& Design

Service

Purchase

Training
Others&●●JEOL DATUM LTD.

●●SATSUKI INDUSTRIES CO., LTD.
JEOL SYSTEM TECHNOLOGY CO., LTD.

●●

JEOL ENGINEERING CO., LTD.
JEOL ACTIVE CO., LTD.

●●

JAPAN LASER CORPORATIONTACHIBANA ELECTRONICS CO., LTD.

Notes:* JEOL CREATIVE CO., LTD.
was merged with JEOL Ltd.
on April 1, 2004.

●●●** ADVANCED CAPACITOR●●JEOL TECHNOSERVICE CO., LTD.
●YAMAGATA CREATIVE CO., LTD.
ADVANCED CAPACITOR TECHNOLOGIES, INC. **●TECHNOLOGIES, INC.
was established in April 2004.

No mark: Consolidated subsidiaries
Non-consolidated subsidiary
to which the equity method is applied●

YMCC (YAMAGATA CREATIVE CO., LTD.) Tendo Factory

ADVANCED CAPACITOR TECHNOLOGIES, INC.

AddressSize

YMCC (YAMAGATA CREATIVE CO., LTD.)
Tendo Factory

Overseas

Establishment April 1, 2004
1655 Daibutsu, Yamaguchi, Tendo-shi, Yamagata
Address
1-2, Musashino 3-chome, Akishima, Tokyo 196-8558,
site area :10,931m2
2
2
2
Japan (inside site of JEOL Ltd.)floor area :1,536m (manufacturing:1,326m , administration:210m )Capital
70 million yen
Products
manufacturing of field-emission scanning electron microscope
Shareholdings JEOL Ltd. (80.6 %), Nikko antfactory K,K. (16.1 %),(JSM-6700F, JSM-7000F, etc.)
The Diamond Capital Co., Ltd. (1.6 %) Vision Capital
Commencement June 24, 2004
Investment Partnership Fund No.1 (1.6 %)Representative Toru Usami
President and Representative Director
Main business Development, design, license administration,
manufacturing and sale of capacitor

LocationFoundation

CapitalJEOL USA, INC.

USA

1962

US$ 15,060 thousand

100%

JEOL (EUROPE) S.A.

France1964

EUR 720 thousand

99.6%

JEOL (U.K.) LTD.

U.K.

1968

Stg. £ 400 thousand100%

the Netherlands

1973

EUR 1,472 thousand

100%

JEOL (SKANDINAVISKA) A.B.

Sweden1973

S.Kr 3,160 thousand

100%

JEOL (GERMANY) GmbHGermany

1997

EUR 511 thousand

100%

JEOL (ITALIA) S.p.A.

Italy

1984

EUR 300 thousand

100%

JEOL ASIA PTE. LTD.

Singapore

1995

S.$ 350 thousand(JEOL DATUM 40%)JEOL (AUSTRALASIA) PTY. LTD.

Australia

1968

A.$ 500 thousand(JEOL ASIA 100%)JEOL DE MEXICO S.A. DE C.V.

Mexico1991

MXP 650 thousand(JEOL USA 100%)JEOL CANADA, INC.

Canada1993

C.$ 100 thousand(JEOL USA 100%)

Notes:JEOL (MALAYSIA) SDN BHD

Malaysia

1995

RM 300 thousand(JEOL ASIA 100%)JEOL KOREA LTD.

Korea

1994

Won 600,000 thousand(JEOL DATUM 12%)JEOL TAIWAN SEMICONDUCTORS LTD. *Taiwan1999

NT$ 7,000 thousand(JEOL DATUM 100%)

Beijing Creative Technology Co., Ltd.

China

2002

Yuan 330,000 thousand(JEOL CREATIVE 61%)

* Changed the company name fromJEOL DATUM TAIWAN LTD.
No mark: Consolidated subsidiaries
Non-consolidated subsidiaries towhich the equity method is applied
Equity-method affiliate

JEOL (EUROPE) B.V.

11

Equity ratio

Corporate name

JEOL ANNUAL REPORT 2004

60%

28%

Board of Directors and Corporate Auditors(As of June 29, 2004)

Chairman and CEO,
Representative Director

President and COO,
Representative Director

Terukazu Eto

Senior Managing
Directors

Yoshiyasu Harada

Azuma Ohtsuka

Yukihisa Ishida

Mitsuo Kaneko

Gon-emon Kurihara

Managing Directors

Takeaki Fuchimoto Toshikazu Honda

Naoki Date

Hiroshi Koyama

Norimasa Ishida

Directors

Masaki Saito

Fumiyasu Matsuura

Masashi Iwatsuki

Yoshinori Takaha

Mikio NaruseKazufumi AdachiStanding
Corporate Auditors

Corporate
Auditor

Ryoichi Fujiwara Reisuke Izumiyama

Hidetake Horikiri(Note) Mr. Hidetake Horikiri is the external corporate auditor of the Company, as stipulated under Article 18-1 of the Law
Concerning Special Measures under the Commercial Code with respect to Audit, etc. of Corporations (Kabushiki Kaisha).

JEOL ANNUAL REPORT 2004

12

Five-year Summary
JEOL Ltd. and consolidated subsidiaries, for the years ended March 31, 2004, 2003, 2002, 2001 and 2000.

Millions of yen

For the year:

2004

2003

2002

2001

2000

Net sales

87,097

82,834

82,69873,31670,526

Scientific instrument

57,93558,72157,05048,954

48,772

Industrial equipment

29,162

24,11325,64824,362

21,754

Selling, general and administrative expenses

24,62924,99324,981

23,46822,541

Operating income

2,068

546

3,417

1,596

1,947

Ordinary profit

1,638

45

2,585

2,106

1,714

Net income (loss)

784

(951)

1,159

818

662

Capital expenditures

3,366

2,157

3,889

2,010

2,200

Scientific instrument

2,077

1,485

2,547

1,292

1,479

Industrial equipment

1,163

662

1,323

704

694

Eliminations/Corporate

126

10

19

14

27

Depreciation expense

2,438

2,217

1,890

1,647

1,930

Research and development expenditures

4,031

4,235

5,019

5,109

4,457

Scientific instrument

2,845

2,901

3,118

3,341

3,189

Industrial equipment

1,186

1,334

1,901

1,768

1,268

Total assets

95,31093,13587,95384,60272,364

Total shareholders’ equity

24,803

19,535

20,861

18,417

18,214

Net income (loss)

10.92(13.85)

16.16

12.63

10.22

Total shareholders’ equity

324.88283.03306.21

284.22281.09

2.50

2.50

5.00

5.00

5.00

At year-end:

Per share data (yen):

Cash dividends

Value indicators:

13

Return on equity (%)

ROE

3.5

(4.7)

5.9

4.5

3.7

Return on assets (%)

ROA

0.8

(1.1)

1.3

1.0

0.9

JEOL ANNUAL REPORT 2004

Financial Analysis
management plan, the “Bright Plan 1000,” and also

Overview

strongly propelled the JEOL Group Survival Program forits business recovery.

During the fiscal year under review, while the deflationary

JEOL reviewed the production function and domestic

trend still remains, the Japanese economy saw a brighter
business confidence because concerns over a financial

consolidated affiliated companies. By doing so, itcrisis gradually receded, stock prices rose, external

centralized purchase/procurement functions, built thedemands grew steadily, corporate earnings generallypurchase system from a global viewpoint, and enhanced

increased, and private capital investment expanded.

productivity by shortening production processes throughOn the other hand, the world economy developed

an integrated production framework. Also, JEOL madefavorably although the U.S. economy was somewhat

efforts to develop new products earlier to meet theclouded by the uncertain future outlook caused by themarket’s needs, and conduct global sales initiatives to

Iraq War. In Asian countries, economies were in an

ensure orders and sales revenues, as well as to maintain

expansionary trend at large, with China showing aappropriate sales prices of products.
Further, JEOL put the “Integrated Accounting System”

continuously high growth in its economy. In Europe,
however, the economy lacked dynamism on the whole

into full operation for raising the efficiency of groupand ended in a mild recovery.

management and operations, thereby facilitating
business improvement and drastically reducing various

In the scientific instrument and industrial equipment

expenses.

markets in which JEOL is active, research on advanced

As a result, consolidated net sales for the year totaled

technologies such as nano-technology andbiotechnology continued to be facilitated while capital¥87,097 million, a 5.1% increase from ¥82,834 million in

investment in the electric and chemical industries

the previous year.
With respect to profits/losses, ordinary profit wasincreased because of the expansion of the digitalconsumer electronics market, and a global recovery in¥1,638 million (boosted from ¥45 million in the previous

demand for personal computers.

year) and net income for the term amounted to ¥784
million (as against a net loss of ¥951 million in the

In such circumstances, JEOL continued to proceed

previous year).

with the restructuring and the JBR operational process
reform of the last year of the Group’s medium-term

Sales by geographical segments/Overseas sales ratio
Millions of yen

Japan

North America and Latin America

Overseas sales ratio（％）

Other

40.8
100,000
34.6
30.3
80,000
5,302
60,000

40

8,537

9,293

14,91914,10812,53655,30655,45859,24259,433

9,885
30

5,322

9,918

40.5

37.1

13,39863,81420

40,00010

20,000

0

0

00

01

02

03

04

(Note) The primary countries and regions included in geographic classifications outside Japan are as follows:
1 North America and Latin America : U.S.A, Canada and Mexico
2 Other : Europe, Southeast Asia and Australia

JEOL ANNUAL REPORT 2004

14

Segment Information

As a result, sales of the scientific instrument segment
reduced to ¥57,935 million, down 1.3% from the previous(Segment information by industry)year.

Scientific Instrument
JEOL met both domestic and overseas demands for

Industrial Equipment

electron microscopes in the broad fields ranging fromIn semiconductor-related products, a cutting-edge

development of materials and basic research on medical

mask/reticle lithography device that meets the diversified

science and biology to various tests, evaluations andcustomer requirements for electron beam lithography

analyses. In the transmission electron microscopes

systems grew its sales both in the domestic andsector, the new product, the next generation intelligent

overseas markets, and JEOL responded to demand fortransmission electron microscope, took root in the

direct lithography equipment as well. Also, demand formarket, and sales of current products including ultrahighwafer inspection systems picked up.

resolution electron microscopes grew. In scanning

In regards to optical films and coating products, sales

electron microscope products, sales of field emissionof electron beam evaporation guns and power supplies

scanning electron microscopes, high-power general-

increased further, both products expanded their sales as

purpose scanning electron microscopes, and analytical

expected in plasma-display-panel products.

scanning electron microscopes developed satisfactorily.

In medical equipment, JEOL launched new products

Meanwhile, in the nuclear magnetic resonance system

for the small-sized equipment market from the latter half

sector, JEOL set on developing the world’s best high-of the year, in addition to its sales expansion in themagnetic-field system, while making efforts to secure

medium-sized equipment market, thereby expanding its

demand for current products. In mass spectrometerproduct lineup. In the home market, JEOL strived to

products, although JEOL brought to the market new

ensure demand for its current products and clinicalproducts of high-throughput mass spectrometers

biochemistry analyzers for diabetes analysis. In the

dedicated to dioxin analysis and quadrupole gas

overseas market, JEOL also expanded exports to thechromatograph-mass spectrometers for theEuropean market (OEM basis) and U.S. market, whileenvironmental measurement market, sales in thispushing its upper models in such markets.

segment inevitably decreased due to weak demand fordioxin-related instruments.

As a result, sales for this segment were ¥29,162 million,
a 20.9% increase from the previous year.

Main Products

Sales

Scientific Instrument

Millions of yen<Electron-Optic Instruments>
Transmission electron microscope (TEM), Scanning electron
microscope (SEM), Analytical electron microscope, Electronprobe microanalyzer (EPMA), Auger microprobe (AES),
Photoelectron spectrometer (XPS), Scanning probe
microscope (SPM), and focused ion beam system forspecimen-preparation<Analytical Instruments>
Nuclear magnetic resonance system (NMR), Electron spinresonance spectrometer (ESR), Mass spectrometer (MS),Time-of-flight mass spectrometer (TOFMS), Fourier transform
infrared spectrometer, Raman spectrometer, X-ray
diffractmeter, and Portable gas chromatograph60,00050,000JEOL ANNUAL REPORT 2004

58,721

57,93502

03

04

48,772 48,954

40,00030,00020,00010,0000

15

57,05000

01

(Segment information by geographical region)

from the previous year to ¥13,398 million.

Japan
In the scientific instrument sector, both transmission

Other regions

electron microscopes and scanning electron

In the Asian market, JEOL ensured sales centering on

microscopes showed steady sales growth. However,electron microscopes, which developed favorably. In

sales of both electron probe microanalyzers andEurope, electron beam lithography systems and wafer

scanning probe microscopes fell below those of theinspection systems contributed to higher sales, withprevious year, with rather weak sales of masssales growing in French and German markets.
As a result, sales in the above markets totaled ¥9,885

spectrometers dedicated to dioxin analysis reflecting
tough market conditions in respect to dioxin-related

million, up 6.4% from the previous year.

instruments.
Regarding the industrial equipment segment, sales ofelectron beam lithography systems in the semiconductor-

Cost of Sales, SG&A Expenses,
and Operating Income

related products grew, and sales of electron beam
evaporation gun and power supplies in optic thin-film

The Group’s cost of sales for the fiscal year under review

equipment products showed satisfactory growth. In theincreased 5.4% from the previous year, to ¥60,400 million.
Since the above increase was slightly higher than the

medical sector, sales of clinical biochemistry analyzers
stayed level with a year earlier.
As a result, sales in Japan were ¥63,814 million, up

increase in net sales of 5.1%, the cost of sales ratio rose
by 0.1 percentage points, year on year, to 69.3%.
Gross profit on sales amounted to ¥26,697 million, a7.4% from the previous year.

4.5% rise from the previous year. Selling general andNorth America and Latin America

administrative (SG&A) expenses decreased 1.5%, year

In the United States, high-tech companies and otheron year, to ¥24,629 million, and thus the ratio of SG&A

enterprises increased their capital investments. In such

expenses to sales improved by 1.8 percentage points toan economic environment, JEOL tried strenuously to sell

28.3%. Research and development expenses included intransmission electron microscopes and high-power

SG&A expenses amounted to ¥4,031 million, which

general-purpose scanning electron microscopes as wellcorresponded to 4.6% of the group’s net sales.
As a result, operating income jumped to ¥2,068 million,

as to expand its sales of electron beam lithographysystems. However, sales of such products fell short ofa 278.7% increase compared to the previous year. The

previous figures.

ratio of operating income to sales improved to 2.4%,

As a result, sales in the above markets dipped by 5.0%

thanks mainly to an improvement in product sales prices.

Main Products

Sales

Industrial Equipment

Millions of yen<Semiconductor-related Equipment>
Electron beam lithography system, Wafer inspection system,
Fine process inspection system, Wafer surface particle
analyzer, and wafer surface analyzer<Optical Thin-Film Formation Equipment>
Electron beam evaporation gun and power supply, High-powerelectron beam gun, High density reactive ion plating system,
Built-in plasma gun and plasma gun control power supply, andHigh-frequency generator for thermal plasma

29,16230,00025,00024,36225,64801

02

24,11321,75420,00015,00010,000<Medical Equipment>
Clinical biochemistry analyzer, Laboratory automation system,
Laboratory information system, and Automated fecal occult
blood analyzer

5,000

0

00

03

04

JEOL ANNUAL REPORT 2004

16

Other Income (Expence)and Net Income

Financial Position

JEOL again posted other expenses of ¥527 million for theyear, which was a considerable improvement over theprevious year’s ¥1,513 million deficit and was the resultof an increase in revenue from aceptance research anddevelopment, as well as a decrease in extraordinary
losses.
Income before income taxes and minority interests was¥1,541 million. Net income was ¥784 million, with net
income per share at ¥10.92.

Operating income/Operating income to net sales
Millionsof yenOperating income
Operating income to net sales

Total assets were ¥95,310 million as of March 31, 2004,
an increase of ¥2,175 million from the previous fiscal
year-end.
Current assets slid to ¥73,258 million as of March 31,
2004, down ¥173 million from a year ago, due mainly to
reduced accounts receivable and inventories.
Property, plant and equipment increased by ¥363
million to ¥11,685 million, owing to an increase in tools,
furniture and fixtures.
Investments and other assets also were up ¥1,985
million to ¥10,367 million because of an increase ofinvestment securities, which reflected the recovery of thestock market. Meanwhile, current liabilities were ¥53,608
million as of March 31, 2004, down ¥2,082 million fromthe previous fiscal year-end, due chiefly to a fall in tradenotes and trade accounts payable. Long-term liabilities
were ¥16,818 million, down ¥1,027 million, owing to an
acceleration in conversion of convertible bonds toshares.
Shareholders’ equity increased by ¥5,268 million to¥24,803 million because of an increase in common stockand capital surplus.
The shareholders’ equity ratio rose from the previous
year’s 21.0% to 26.0%, and return on equity (ROE) was
3.5%.

R&D expenditures/
R&D expenditures to net sales(%)

Millionsof yen

6,000

6

6,000

5,000

5

5,000

R&D expenditures
R&D expenditures to net sales

4.1

4,000

4

(%)

5,109 5,019
4,457

4,235

4,000

Net income (loss) per share

4,031

yen

12

20

10

16

8

12

6

8
4

12.63

3,417
3,000

2.8

3

2.4
2,068

2.2
2,000

1,947
1,596

1,000

0

17

0.7
546
00

01

02

03

3,000

6.3

7.0
6.1

5.1

16.16

10.92

10.22

4.6

2

2,000

4

1

1,000

2

0

0

0
- 15

04

JEOL ANNUAL REPORT 2004

00

01

02

03

04

0

00

01

02

13.85
03

04

Fund Procurement

OutlookDuring the fiscal year, JEOL raised funds of ¥4,000
million by using a part of the commitment loan facility
agreement of ¥6,000 million established by financial
institutions.

Looking at the year ahead, a full-fledged economic
recovery led by domestic demand is expected because
private capital investments are in an upward trend andconsumer spending is picking up. Yet, at the same time,
uncertain factors, such as the future development of theunstable Iraqi situation, foreign exchange fluctuations, oilprices and material prices, will keep the Japanese
economy in a state that is difficult to predict with any
certainty.
Against this backdrop, the JEOL Group will proactively
carry out various measures to achieve the targets set in
the new medium-term management plan “Focus Plan
2006” and will make every effort to improve its businessperformance.
As to fiscal year ending March 2005, we areforecasting consolidated net sales of ¥88,000 million (up1.0% from this term), consolidated ordinary profit of¥1,800 million (a 9.9% increase from this term), and net
income of ¥800 million (a 2.0% gain from this term).

Cash Flows
Cash flows from operating activities showed a new inflowof ¥4,898 million, as compared with a net outflow of¥2,189 million in the previous year. This is primarily
because income before income taxes and minority
interests increased, and both trade notes and accounts
receivables and inventories decreased, during the year.
Cash flows from investing activities once again had anet outflow of ¥3,304 million, in comparison with a net
outflow of ¥2,204 million in the previous year, due mainly
to payment for purchases of property, plant andequipment.
Cash flows from financing activities saw a net inflow of¥3,962 million, compared to the previous year’s net inflowof ¥2,796 million, chiefly owing to fund procurement
through short-term bank loans and sale & installment
buyback contracts.
As a result, cash and cash equivalents surged 94.6%
to ¥11,185 million at the end of this fiscal year, from¥5,749 million the previous year.

Shareholders’ equity ratio/Return on equity%

Shareholders’ equity ratio
Return on equity

Capital expenditures

26.0

25.2
21.8

4,000

3,889

23.7

3,366
21.0
3,000

20

2,438

15
2,000
10
5

Depreciation expense

Millions of yen

30
25

Capital expenditures/Depreciation expense

3.7

4.5

5.9

2,200
1,930 2,010
1,647

2,157 2,217
1,890

3.5
1,000

0

4.7

-5
00

01

02

03

04

0

00

01

02

03

04

JEOL ANNUAL REPORT 2004

18

Consolidated Balance Sheets
JEOL Ltd. and Consolidated Subsidiaries
March 31, 2004 and 2003

Thousands of U.S. Dollars(Note 1)Millions of Yen

ASSETS

2004

2003

2004

CURRENT ASSETS:¥11,185¥ 5,749$105,822

70

126

660

Trade notes

3,477

2,474

32,899Trade accounts

21,674

26,344205,050

Unconsolidated subsidiaries and associated companies

641

577

6,065

Other

317

171

2,994

Allowance for doubtful receivables

(101)

(139)

(950)

Inventories (Note 4)

33,09934,614313,138

Deferred tax assets (Note 9)

1,702

1,904

16,102

Prepaid expenses and other current assets (Note 3)

1,194

1,611

11,29473,25873,431

693,074

Land

1,302

1,344

12,315

Buildings and structures

14,453

14,327

136,740

Machinery and equipment

3,605

3,806

34,110Tools, furniture and fixtures

12,446

10,620117,751

188

416

1,774

31,99430,513

302,690(20,309)(19,191)(192,138)

11,685

11,322

110,552

5,087

2,602

48,125

239

241

2,256

747

621

7,071

6

77

53

Deferred tax assets (Note 9)

2,563

3,273

24,251Other assets

1,725

1,568

16,321

10,367

8,382

98,077¥95,310¥93,135$901,703

Cash and cash equivalents
Time deposits
Receivables:

Total current assets

PROPERTY, PLANT AND EQUIPMENT (Note 6):

Construction in progress
Total
Accumulated depreciation
Net property, plant and equipment

INVESTMENTS AND OTHER ASSETS:
Investment securities (Notes 3 and 6)
Investments in unconsolidated subsidiaries andassociated companies
SoftwareBond issue costs

Total investments and other assets
TOTAL
See notes to consolidated financial statements.

19

JEOL ANNUAL REPORT 2004

Thousands of U.S. Dollars(Note 1)Millions of Yen

LIABILITIES AND SHAREHOLDERS’ EQUITY

2004

2003

2004

CURRENT LIABILITIES:
Short-term bank loans (Note 6)¥19,583¥17,306$185,269

1,149

1,168

10,872

Trade notes

9,423

12,397

89,153

Trade accounts

9,546

10,48290,312Current portion of long-term bank loans (Note 6)
Payables (Notes 5 and 6):

Unconsolidated subsidiaries and associated companies
Other

371

162

3,506

2,126

1,967

20,116

Income taxes payable

423

342

3,999

Advances received

6,675

6,919

63,151

Accrued bonuses to employees

1,621

2,253

15,332Other current liabilities (Notes 6 and 9)

2,691

2,694

25,46453,60855,690507,174

Bonds (Note 6)

2,000

2,000

18,921

Convertible bonds (Note 6)

1,336

4,627

12,640Long-term bank loans (Note 6)

5,312

5,013

50,254

Liability for employees’ retirement benefits (Note 7)

5,970

5,427

56,479

719

642

6,806

48

71

454

Total current liabilities
LONG-TERM LIABILITIES:

Retirement allowances for directors and corporate
auditors (Note 7)
Negative goodwill
Other long-term liabilities (Notes 6 and 9)
Total long-term liabilities
MINORITY INTERESTS

1,433

65

13,561

16,818

17,845

159,115

81

65

762

CONTINGENT LIABILITIES (Note 14)
SHAREHOLDERS’ EQUITY (Notes 8 and 16):
Common stock—authorized, 136,080,000 shares;
issued, 76,383,459 shares in 2004 and69,037,494 shares in 2003

6,072

4,427

57,445

Capital surplus

5,678

4,032

53,723Retained earnings

12,637

11,853

119,558

Unrealized gain on available-for-sale securities

1,678

137

15,873Foreign currency translation adjustments
Total(1,234)(904)(11,683)

24,831

19,545234,916

(28)

(10)

(264)

Treasury stock—at cost, 38,345 shares in 2004 and17,930 shares in 2003
Total shareholders’ equity
TOTAL

24,803

19,535

234,652¥95,310¥93,135$901,703

JEOL ANNUAL REPORT 2004

20

Consolidated Statements of Operations
JEOL Ltd. and Consolidated Subsidiaries
Years Ended March 31, 2004 and 2003

Thousands of U.S. Dollars(Note 1)Millions of Yen
2004

2003

2004

NET SALES (Note 11)¥87,097¥82,834$823,998

COST OF SALES (Note 11)60,40057,295

571,425

26,69725,539252,573

24,62924,993233,009

2,068

546

19,564

Interest and dividend income

68

82

643

Revenue from acceptance of research and development

330

145

3,118

Insurance revenue

59

166

558

Interest expense

(406)

(394)

(3,838)

4

(134)

43

(261)

(264)

(2,465)Gross profit
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES(Notes 10 and 11)
Operating income
OTHER INCOME (EXPENSES):

Foreign exchange gain (loss)—net
Loss on sales of trade accounts
Loss on disposals of inventories

(44)

(19)

(417)

Loss on sales and disposals of property, plant and equipment—net

(114)

(146)

(1,077)

(1)

(409)

(13)

Loss on devaluation of investment securities
Charge for customer claim(348)

Cumulative effect of accounting change for retirement
benefits to directors and corporate auditors (Note 7)(128)

Equity in earnings of unconsolidated subsidiaries and associated companies
Other—net
Other expenses—net
INCOME (LOSS) BEFORE INCOME TAXES AND MINORITY INTERESTS

15

37

143

(177)

(101)

(1,682)(527)(1,513)(4,987)

1,541

(967)

14,577

INCOME TAXES (Note 9):
Current

649

583

6,143

Deferred

90

(612)

846

739

(29)

6,989

18

13

167

Total income taxes
MINORITY INTERESTS IN NET INCOME
NET INCOME (LOSS)

¥

784

¥

(951)

Yen

$

7,421

U.S. Dollars

2004

2003

¥ 10.92¥ (13.85)

2004

PER SHARE OF COMMON STOCK (Notes 2. p and 15):
Basic net income (loss)
Diluted net income

10.15

Cash dividends applicable to the year

2.50

See notes to consolidated financial statements.

21

JEOL ANNUAL REPORT 2004

$

0.10
0.10

2.50

0.02

Consolidated Statements of Shareholders’ Equity
JEOL Ltd. and Consolidated Subsidiaries
Years Ended March 31, 2004 and 2003

Thousands

Millions of Yen

IssuedNumber of
Shares ofCommon Stock

CommonStockCapitalSurplus68,136¥4,174¥3,780

BALANCE, APRIL 1, 2002

Net loss

Retained
Earnings

Unrealized
Gain onAvailable-for-sale
Securities

Foreign
Currency
Translation
Adjustments

TreasuryStock¥13,256¥ 383¥ (727)

¥ (5)

(951)

Cash dividends paid:
Final for prior year, ¥2.5 per share(170)

Interim for current year, ¥2.5 per share(173)

Bonuses to directors and corporate auditors(109)

Increase in treasury stock—net (11,009 shares)(5)

Conversion of convertible bonds

901

253

252

Net decrease in unrealized gain on available-for-sale securities(246)

Net increase in foreign currency translation adjustments
BALANCE, MARCH 31, 2003

(177)
69,037

4,427

4,032

Net income

11,853

137

(904)

784

Increase in treasury stock—net (20,415 shares)(18)

Conversion of convertible bonds

7,346

1,645

1,646

Net increase in unrealized gain on available-for-sale securities

1,541

Net increase in foreign currency translation adjustments
BALANCE, MARCH 31, 2004

(10)

(330)
76,383¥6,072¥5,678¥12,637¥1,678¥(1,234)¥(28)

Foreign
Currency
Translation
Adjustments

TreasuryStock$ (8,550)$ (99)

Thousands of U.S. Dollars (Note 1)

BALANCE, MARCH 31, 2003

CommonStockCapitalSurplusRetained
Earnings

Unrealized
Gain onAvailable-for-sale
Securities$41,878$38,155$112,137$ 1,290

Net income

7,421

Increase in treasury stock—net (20,415 shares)
Conversion of convertible bonds(165)
15,567

15,568Net increase in unrealized gain on available-for-sale securities

14,583

Net increase in foreign currency translation adjustments
BALANCE, MARCH 31, 2004

(3,133)$57,445$53,723$119,558$15,873$(11,683)$(264)

See notes to consolidated financial statements.

JEOL ANNUAL REPORT 200422

Consolidated Statements of Cash FlowsJEOL Ltd. and Consolidated Subsidiaries
Years Ended March 31, 2004 and 2003

Thousands of U.S. Dollars(Note 1)Millions of Yen
2004

OPERATING ACTIVITIES:
Income (loss) before income taxes and minority interests
Adjustments for:
Income taxes—paidDepreciation and amortization
Decrease in provision for accrued bonuses to employees
Loss on disposals of inventories
Loss on sales and disposals of property, plant and equipment—net
Loss on devaluation of investment securities
Equity in earnings of unconsolidated subsidiaries and associated companies
Changes in assets and liabilities—net:
Decrease (increase) in trade notes and accounts receivable
Decrease (increase) in inventories(Decrease) increase in trade notes and accounts payable(Decrease) increase in trade notes and accounts payable related tosales of trade accounts by consolidated subsidiaries (Note 5)
Decrease in advances received
Increase in liability for retirement benefits
Increase in retirement allowance for directors andcorporate auditors
Other—net
Total adjustments
Net cash provided by (used in) operating activities
INVESTING ACTIVITIES:
Decrease (increase) in time deposits—net
Payment for purchases of investment securities
Proceeds from sales of property, plant and equipment
Payment for purchases of property, plant and equipment
Payment for purchases of intangible assets
Other—net
Net cash used in investing activities
FINANCING ACTIVITIES:
Increase in short-term bank loans—net
Proceeds from long-term bank loans
Repayments of long-term bank loans
Proceeds from bonds issuanceCash dividends paid
Proceeds from an agreement of sale and installment buyback
Payment for an agreement of sale and installment buyback
Other—net
Net cash provided by financing activities
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS
ON CASH AND CASH EQUIVALENTS
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS, END OF YEARNONCASH INVESTING AND FINANCING ACTIVITIES:Convertible bonds converted into common stock andcapital surplus
See notes to consolidated financial statements.
23

JEOL ANNUAL REPORT 2004

2003

2004

¥ 1,541¥ (967)$ 14,577

(385)
2,438
(632)
44
114
1
(15)

(1,254)
2,217
(25)
19
146
409
(37)

(3,649)23,062(5,977)
417
1,077
13
(143)

2,870
1,152
(1,361)(3,110)(4,438)
4,776

27,155
10,901(12,877)(1,776)
(184)
543

917
(796)
868

(16,806)(1,740)
5,145

78
470
3,357
4,898

92
(1,006)(1,222)(2,189)736
4,445
31,75946,336

68
(152)
108
(2,971)(315)(42)(3,304)(72)643(1,439)1,021(28,110)(2,980)(394)(31,259)

2,415
1,566
(1,162)45(1,915)(80)(182)(2,204)

2,493
1,511
(2,837)
1,983
(348)

22,85014,822(10,995)

(6)
2,796

(26)
12,299(1,196)(265)
37,489

(120)
5,436
5,749
¥11,18533(1,564)
7,313¥5,749(1,135)51,431
54,391$105,822¥ 3,291¥ 505$ 31,135

(3)
1,300
(126)
(28)
3,962

Notes to Consolidated Financial Statements
JEOL Ltd. and Consolidated Subsidiaries
Years Ended March 31, 2004 and 2003

1. BASIS OF PRESENTING CONSOLIDATEDFINANCIAL STATEMENTS
The accompanying consolidated financial statements havebeen prepared in accordance with the provisions set forth in
the Japanese Securities and Exchange Law and its related
accounting regulations, and in conformity with accounting
principles generally accepted in Japan, which are different incertain respects as to application and disclosure requirementsof International Financial Reporting Standards.
In preparing these consolidated financial statements, certain
reclassifications and rearrangements have been made to theconsolidated financial statements issued domestically in orderto present them in a form which is more familiar to readers
outside Japan. In addition, certain reclassifications have been
made in the 2003 consolidated financial statements toconform to the classifications used in 2004.
The consolidated financial statements are stated in Japaneseyen, the currency of the country in which JEOL Ltd. (the“Company”) is incorporated and operates. The translations ofJapanese yen amounts into U.S. dollar amounts are included
solely for the convenience of readers outside Japan and havebeen made at the rate of ¥105.7 to $1, the rate of exchange at
March 31, 2004. Such translations should not be construed as
representations that the Japanese yen amounts could be
converted into U.S. dollars at that or any other rate.
2. SUMMARY OF SIGNIFICANTACCOUNTING POLICIESa. Consolidation
The consolidated financial statements as of March 31, 2004
include the accounts of the Company and its 20 (21 in2003) significant subsidiaries (together, the “Companies”).
Consolidation of the remaining subsidiaries would not havea material effect on the accompanying consolidated
financial statements. Under the control or influence
concept, those companies in which the Company, directly
or indirectly, is able to exercise control over operations are
fully consolidated, and those companies over which theCompanies have the ability to exercise significant influence
are accounted for by the equity method.
JEOL LIOSONIC CO., LTD. is excluded fromconsolidation for liquidation as of June 2, 2003.

All significant intercompany balances and transactions havebeen eliminated in consolidation. All material unrealized
profit included in assets resulting from transactions within
the Companies is eliminated.

b. Cash Equivalents
Cash equivalents are short-term investments that are readily
convertible into cash and that are exposed to insignificant
risk of changes in value.
Cash equivalents include time deposits and certificate ofdeposits, all of which mature or become due within threemonths of the date of acquisition.

c. Inventories
Inventories are stated at mainly cost substantiallydetermined by the moving-average method and lastpurchased price method.
Inventories of consolidated foreign subsidiaries are stated at
the lower of cost or market, mainly determined by the
specific identification method.

d. Investment Securities
All securities are classified as available-for-sale securities andare reported at fair value, with unrealized gain and losses,
net of applicable taxes, reported in a separate component ofshareholders’ equity. The cost of securities sold isdetermined based on the moving-average method.
Non-marketable available-for-sale securities are stated atcost determined by the moving-average method. For otherthan temporary declines in fair value, investment securities
are reduced to net realizable value by a charge to income.

e. Property, Plant and Equipment
Property, plant and equipment are stated at cost.
Depreciation of property, plant and equipment of theCompany and its consolidated domestic subsidiaries iscomputed by the declining-balance method over theestimated useful lives of the assets, while the straight-line
method is principally applied to the property, plant andequipment of consolidated foreign subsidiaries. The range
of useful lives is from 7 to 65 years for buildings andstructures and from 2 to 15 years for tools, furniture andfixtures.

f. Software
Investments in 6 unconsolidated subsidiaries and 2
associated companies are accounted for by the equity
method.
Negative goodwill represents the excess of the fair valueof the net assets of the acquired subsidiaries at the date ofacquisition over their cost.
Negative goodwill is credited to income using the straightline method over 5 years, with the exception of minor
amounts which are credited to income when incurred.

Development costs related on software for sale are deferred
and amortized in proportion to the actual sales volume ofsoftware sold during the current year to the estimated total
sales volume. Software development costs for internal use
are deferred at cost less accumulated amortization, which is
calculated by the straight-line method over the estimateduseful lives (5 years).

g. Bond Issue Costs
Bond issue costs are amortized by the straight-line method
over 3 years.

JEOL ANNUAL REPORT 200424

h. Retirement and Pension Plans
Employees of the Company and certain consolidated
subsidiaries who retire at or after the age of 60 are entitledto approximately 50% of their benefits in the form of anannuity. The funds for the annuity payments are entrusted
to an outside trustee.
Effective April 1, 2000, the Company and consolidated
domestic subsidiaries adopted a new accounting standard
for employees’ retirement benefits and accounted for theliability for retirement benefits based on the projected
benefit obligations and plan assets at the balance sheet date.
For the transitional obligation of ¥6,981 million ($66,049
thousand) in April 2000, the Company contributed certain
available-for-sale securities with a fair value of ¥3,601
million ($34,064 thousand) to the employees’ retirement
benefits trust for the Company’s non-contributory pension
plans, and recognized a non-cash gain of ¥3,201 million($30,280 thousand). The securities held in this trust are
qualified as plan assets. The remaining transitional
obligation of ¥3,380 million ($31,985 thousand) is being
amortized over 15 years.
Retirement allowances for directors and corporate auditorsof the Company and its domestic consolidated subsidiaries
are recorded to state the liability at the amount that would
be required if all directors and corporate auditors retired at
the balance sheet date.

i. Research and Development Costs
Research and development costs are charged to income
as incurred.

j. Leases
All leases except for finance leases that deem to transfer
ownership of the leased property to lessee, are accounted for
as operating leases. Under Japanese accounting standards forleases, finance leases that deem to transfer ownership of theleased property to the lessee are to be capitalized, whileother finance leases are permitted to be accounted for as
operating lease transactions if certain “as if capitalized”
information is disclosed in the notes to the lessee’s
financial statements.

k. Income Taxes
The provision for income taxes is computed based on thepretax income included in the consolidated statements ofoperations. The asset and liability approach is used torecognize deferred tax assets and liabilities for the expected
future tax consequences of temporary differences between
the carrying amounts and the tax bases of assets andliabilities. Deferred taxes are measured by applying currently
enacted tax laws to the temporary differences.

m.Foreign Currency Transactions
All short-term and long-term monetary receivables andpayables denominated in foreign currencies are translated
into Japanese yen at the exchange rates at the balance
sheet date. The foreign exchange gains and losses fromtranslation are recognized in the consolidated statements ofoperations to the extent that they are not hedged by forward
exchange contracts.

n. Foreign Currency Financial Statements
The balance sheet accounts of the consolidated foreignsubsidiaries are translated into Japanese yen at the current
exchange rate as of the balance sheet date except forshareholders’ equity, which is translated at the historicalrate.
Differences arising from such translation are shown as“Foreign currency translation adjustments” in a separate
component of shareholders’ equity.
Revenue and expense accounts of consolidated foreignsubsidiaries are translated into yen at the average exchange
rate.

o. Derivatives and Hedging Activities
The Companies use derivative financial instruments tomanage their exposures to fluctuations in foreign exchange
and interest rates. Foreign exchange forward contracts andinterest rate swaps are utilized by the Companies to reduce
foreign currency exchange and interest rate risks. The
Companies do not enter into derivatives for trading or
speculative purposes.
Gains or losses on derivatives used for hedging purposes, if
qualified for hedge accounting because of a high correlationand effectiveness between the hedging instruments and thehedged items, are deferred until maturity of the hedgedtransactions.
Forward contracts applied to forecasted (or committed)
transactions are also measured at their fair value, but theunrealized gains/losses are deferred until the underlying
transactions are completed.
The interest rate swaps which qualify for hedge accounting
and meet specific matching criteria are not remeasured atmarket value, but the differential paid or received under theswap agreements are recognized and included in interest
expense.

p. Per Share Information
Basic net income per share is computed by dividing net
income available to common shareholders by the weightedaverage number of common shares outstanding forthe period.

l. Appropriations of Retained Earnings
Appropriations of retained earnings at each years end arereflected in the financial statements for the following year
upon shareholders’ approval.

25

JEOL ANNUAL REPORT 2004

Diluted net income per share reflects the potential dilutionthat could occur if securities were converted into common
stock. Diluted net income per share of common stockassumes full conversion of the outstanding convertible
bonds at the beginning of the year with an applicableadjustment for related interest expense, net of tax.

The carrying amounts and aggregate fair values of current andinvestment securities at March 31, 2004 and 2003, were as
follows:

Cash dividends per share presented in the accompanying
consolidated statements of operations are dividends
applicable to the respective years including dividends
to be paid after the end of the year.

March 31, 2004

Millions of Yen
Cost

Securities classified asavailable-for-sale:
Equity securities¥2,448

Unrealized Unrealized
Gains
Losses¥2,583

Fair
Value

¥20

¥5,011

q. New Accounting Pronouncements
In August 2002, the Business Accounting Council issued
a Statement of Opinion, “Accounting for Impairmentof Fixed Assets,” and in October 2003 the AccountingStandards Board of Japan (“ASB”) issued ASB Guidance
No. 6, “Guidance for Accounting Standard for Impairmentof Fixed Assets.” These new pronouncements are effective
for fiscal years beginning on or after April 1, 2005 withearly adoption permitted for fiscal years ending on or after
March 31, 2004.

Millions of yen
March 31, 2003
Cost

Securities classified asavailable-for-sale:
Equity securities
Corporate bonds¥2,296
2

The Company is currently in the process of assessing theeffects of adoption of these pronouncements.

¥447

Cost

Securities classified asavailable-for-sale:
Equity securities

Unrealized Unrealized
Gains
Losses$23,157 $24,440$186 $47,411

Millions of Yen

Available-for-sale—Equity securities
Total

Thousands of
U.S. Dollars

2004

2003

2004

¥76
¥76

¥77
¥77

$714
$714

4. INVENTORIESMillions of Yen

Thousands of
U.S. Dollars

Millions of Yen
2003

¥
¥

¥5,01176¥5,087

Fair
Value

Carrying Amount2004

Non-current:
Marketable equity securities
Non-marketable securities
Total¥2,5252

Available-for-sale securities whose fair value was not readily
determinable as of March 31, 2004 and 2003 were as follows:

Investment securities as of March 31, 2004 and 2003,
consisted of the following:

2004

¥218

Inventories at March 31, 2004 and 2003, consisted of thefollowing:

3. INVESTMENT SECURITIESCurrent—Corporate bonds
Total

Fair
Value

Thousands of U.S. Dollars
March 31, 2004

The new accounting standard requires an entity to review
its long-lived assets for impairment whenever events orchanges in circumstances indicate that the carrying amountof an asset or asset group may not be recoverable. An
impairment loss would be recognized if the carrying
amount of an asset or asset group exceeds the sum of theundiscounted future cash flows expected to result fromthe continued use and eventual disposition of the asset or
asset group. The impairment loss would be measured
as the amount by which the carrying amount of the asset
exceeds its recoverable amount, which is the higher of the
discounted cash flows from the continued use and eventual
disposition of the asset or the net selling price at disposition.

Unrealized Unrealized
Gains
Losses2004

2
2¥2,52577¥2,602$47,411714$48,125

Merchandise¥ 431
Finished products
16,704Work in process
13,313
Raw materials and supplies
2,651
Total
¥33,099

Thousands of
U.S. Dollars

2003

¥

244
16,526
14,7693,075¥34,614

2004

$

4,078
158,037
125,947
25,076$313,138

5. PAYABLES
Payables (trade notes and trade accounts) of the Company
which were sold to the third party (finance company) byconsolidated subsidiaries for financing are reported as“Payables (trade notes and trade accounts)” in the
consolidated balance sheets, if the due dates of settlement havenot come as of balance sheet date.
The amount of the above was ¥2,000 million ($18,921

JEOL ANNUAL REPORT 200426

thousand) and ¥3,776 million at March 31, 2004 and 2003,
respectively.
(Decrease) increase in those payables is reported as “(Decrease)increase in trade notes and accounts payable related to sales oftrade accounts by consolidated subsidiaries” in the
consolidated statements of cash flows.
6. SHORT-TERM BANK LOANS AND
LONG-TERM DEBT
Short-term bank loans at March 31, 2004 and 2003, consistedof notes to banks and bank overdrafts. The weighted averageannual interest rates for the short-term bank loans as of March
31, 2004 and 2003, were 2.3% and 2.1%, respectively.
Long-term debt at March 31, 2004 and 2003, consisted of thefollowing:
Millions of Yen
2004

Unsecured 0.54% yen
bonds, due 2008
¥2,000Unsecured zero coupon yen
convertible bonds, due 2006
1,336
Loans from banks, due seriallyto 2008 withinterest rates ranging from
1.70% to 3.48%(2004 and 2003):
Collateralized
3,455
Unsecured
3,006
Unsecured long-term payable,
due serially to 2008 withinterest rate 1.85%
1,174
Lease obligation
61
11,032
Total
Less current portion(1,415)Long-term debt,
less current portion¥9,617

2003

Thousands of
U.S. Dollars¥ 2,000$18,921

4,627

12,640

3,059
3,122

32,68728,44012,808(1,168)

11,103
579
104,370(13,388)¥11,640$90,982

Millions of Yen

Thousands of
U.S. Dollars¥ 1,415
4,853
1,419
2,874
471
¥11,032$ 13,388
45,916
13,422
27,187
4,457$104,370

The carrying amounts of assets pledged as collateral for shortterm bank loans of ¥6,735 million ($63,718 thousand),current portion of long-term bank loans of ¥310 million($2,932 thousand), long-term bank loans of ¥3,145 million($29,754 thousand) and deposit received accounts which were
included in other current liabilities of ¥40 million($381 thousand) and included in other long-term liabilitiesof ¥282 million ($2,667 thousand) at March 31, 2004, wereas follows:Land
Buildings and structures—net of accumulated depreciation
Machinery and equipment—net of accumulated depreciation
Investment securities
Total

Millions of Yen

Thousands of
U.S. Dollars¥ 637$ 6,027

3,059

28,93413
4,211¥7,920125
39,840$74,926

In addition to the above loan balance, in order to raiseliquidity, the Company entered into a committed loan facility
agreement, aggregated amount of ¥6,000 million ($56,764
thousand), with a syndicate of six Japanese banks arranged by
The Bank of Tokyo-Mitsubishi, Ltd. The Company must
maintain net assets in excess of ¥13,813 million ($130,681
thousand) as of every year-end and interim closing date.
7. RETIREMENT AND PENSION PLANS

Under certain conditions, the unsecured zero coupon yen
convertible bonds may be redeemed prior to maturity in wholeat the option of the Company at prices ranging from 101.75%
to 100% of the principal amount.
Unsecured zero coupon yen convertible bonds outstanding at
March 31, 2004, were convertible into 2,982,142 shares ofcommon stock of the Company. The conversion price of theunsecured zero coupon yen convertible bonds is subject toadjustments to reflect stock splits and certain other events.

JEOL ANNUAL REPORT 2004

Year Ending March 31
2005
2006
2007
2008
2009
Total

2004

The unsecured zero coupon yen convertible bonds areconvertible into common stocks on or after August 7, 2001
and up to including September 16, 2005. The conversion
price was revised from ¥560 per share into ¥448 per share.

27

Annual maturities of long-term debt as of March 31, 2004 forthe next five years were as follows:

The Company and its certain consolidated subsidiaries haveseverance payment plans for employees, directors andcorporate auditors.
Under most circumstances, employees terminating theiremployment are entitled to retirement benefits determinedbased on the rate of pay at the time of termination, years ofservice and certain other factors. Such retirement benefits
are made in the form of a lump-sum severance payment fromthe Company or from certain consolidated subsidiaries andannuity payments from a trustee. Employees are entitledto larger payments if the termination is involuntary, by
retirement at the mandatory retirement age, by death, orby voluntary retirement at certain specific ages prior to the
mandatory retirement age.

The liability for employees’ retirement benefits at March 31,
2004 and 2003, consisted of the following:
Millions of Yen
2004

Projected benefit obligation
Fair value of plan assets
Unrecognized actuarial loss
Unrecognized transitional obligation
Benefits paid
Net liability

2003

Thousands of
U.S. Dollars
2004¥(17,608) ¥(17,281) $(166,585)
6,472
5,720
61,231
3,459
4,032
32,723
2,474
2,698
23,404(767)(596)(7,252)¥ (5,970) ¥ (5,427) $ (56,479)

The components of net periodic retirement benefit costs forthe years ended March 31, 2004 and 2003 were as follows:
Millions of Yen

Service cost
Interest cost
Expected return on plan assets
Recognized actuarial loss
Amortization of transitional obligation
Net periodic retirement
benefit costs

Thousands of
U.S. Dollars

2004

2003

2004

¥ 837
398
(180)
373
224

¥ 826
456
(226)
246
225

$ 7,915
3,767(1,703)
3,525
2,128

¥1,652¥1,527$15,632

The above service cost does not include additional retirement
payment of ¥65 million ($617 thousand).
Assumptions used for the years ended March 31, 2004 and2003 were set forth as follows:
Discount rate
Expected rate of return on plan assets
Recognition period of actuarial gain/loss
Amortization period of transitional obligation

2004

2003

2.5%
4.0%
12 years
15 years

2.5%
5.0%
12 years
15 years

Retirement allowances for directors and corporate auditors arepaid subject to approval of the shareholders in accordancewith the Japanese Commercial Code (the “Code”).
Effective April 1, 2000, the Company changed its accounting
method to record a liability for its unfunded retirement
allowance plan covering all of its directors and corporate
auditors. The amount of the cumulative effect is being
amortized using the straight-line method over three years.
The annual provisions for retirement allowances for directors
and corporate auditors for the years ended March 31, 2004
and 2003 were ¥719 million ($6,806 thousand) and ¥642
million, respectively.
8. SHAREHOLDERS’ EQUITY
Japanese companies are subject to the Code to which various
amendments became effective from October 1, 2001.
The Code was revised whereby common stock par value waseliminated resulting in all shares being recorded with no parvalue and at least 50% of the issue price of new shares isrequired to be recorded as common stock, and the remaining
net proceeds as additional paid-in capital, which is included incapital surplus. The Code permits Japanese companies, upon
approval of the Board of Directors, to issue shares to existing
shareholders without consideration as a stock split. Suchissuance of shares generally does not give rise to changes
within the shareholders’ accounts.
The revised Code also provides that an amount at least equal
to 10% of the aggregate amount of cash dividends and certain
other appropriations of retained earnings associated with cash
outlays applicable to each period shall be appropriated as alegal reserve (a component of retained earnings) until suchreserve and additional paid-in capital equals 25% of common
stock. The amount of total additional paid-in capital and legal
reserve that exceeds 25% of the common stock may beavailable for dividends by resolution of the shareholders. In
addition, the Code permits the transfer of a portion of
additional paid-in capital and legal reserve to the common
stock by resolution of the Board of Directors.
The revised Code eliminated restrictions on the repurchaseand use of treasury stock allowing Japanese companies torepurchase treasury stock by a resolution of the shareholders at
the general shareholders meeting and dispose of such treasury
stock by resolution of the Board of Directors. The repurchasedamount of treasury stock cannot exceed the amount available
for future dividend plus amount of common stock, additional
paid-in capital or legal reserve to be reduced in the case wheresuch reduction was resolved at the general shareholders
meeting. The Company was authorized to repurchase up to
3,000,000 shares of the Company’s common stock (aggregate
amount of ¥1,100 million) at the general shareholders meeting
held on June 27, 2003. Under this program, the Company did
not repurchase any treasury stock.
The amount of retained earnings available for dividends under
the Code was ¥9,756 million ($92,296 thousand) as of March
31, 2004, based on the amount recorded in the parent
company’s general books of account. In addition to theprovision that requires an appropriation for a legal reserve inconnection with the cash payment, the Code imposes certain
limitations on the amount of retained earnings available fordividends.
Dividends are approved by the shareholders at a meeting held
subsequent to the fiscal year to which the dividends areapplicable. Semiannual interim dividends may also be paid
upon resolution of the Board of Directors, subject to certain
limitations imposed by the Code.
During the year ended March 31, 2004, zero coupon yen
convertible bonds in the amount of ¥3,291 million ($31,135
thousand) were converted into 7,345,965 shares of theCompany’s common stock; resulting in an increase in capitalstock of ¥1,645 million ($15,567 thousand) and an increase incapital surplus of ¥1,646 million ($15,568 thousand).

JEOL ANNUAL REPORT 2004

28

9. INCOME TAXES

134
Deferred tax assets–Current
Net deferred tax liabilities–Current ¥ (41)

The Company and its domestic subsidiaries are subject toJapanese national and local income taxes which, in theaggregate, resulted in a normal effective statutory tax rate of
approximately 42.1% for the years ended March 31, 2004 and2003.
On March 31, 2003, a tax reform law concerning enterprise
tax was enacted in Japan which changed the normal effective
statutory tax rate from approximately 42.1% to 40.7%,
effective for years beginning on or after April 1, 2004. The
effect on deferred income taxes in the consolidated statementsof operations for the year ended March 31, 2004 was increaseof ¥31 million ($289 thousand). The deferred tax assets andliabilities which will be realized on or after April 1, 2004 aremeasured at the effective tax rate of 40.7% and 40.5% as ofMarch 31, 2004 and 2003, respectively.
The tax effects of significant temporary differences and tax loss
carryforwards which resulted in deferred tax assets andliabilities at March 31, 2004 and 2003, were as follows:
Millions of Yen

Deferred tax assets–Current:
Accrued bonuses to employees
Research and development costAccrued enterprise taxes
Unrealized intercompany
profits of inventories
Tax loss carryforwards
Other
Less valuation allowance
Total
Deferred tax liabilities–Current
Net deferred tax assets–Current
Deferred tax assets-Non-current:
Amortization of deferred charges
Amortization of software
Loss on devaluation of software
Loss on devaluation of investment securities
Liability for employees’ retirement benefits
Loss on trust fund contributed
Gain on securities contributed
to employees’ retirement
Retirement allowances for directors
and corporate auditors
Other
Less valuation allowance
Total
Deferred tax liabilities–Non-current
Net deferred tax assets–Non-current

Thousands of
U.S. Dollars

2004

2003

2004

¥ 659
312
37

¥ 782
290
24

$ 6,238
2,955
346

447

4,222

1,836

402
127
434
(4)
2,055

17,368(134)¥1,702(151)¥1,904(1,266)$16,102

381

¥ 123
942
48
272
1,856

¥ 123
933
162
270
1,335
162

3,607

$ 1,171
8,908
456
2,577
17,555

Deferred tax liabilities–Non-current:
Unrealized gain on availablefor-sale securities
Undistributed earnings ofassociated companies
Other
Total

151
1,267
¥ (43) $ (386)¥ (885)¥ (93) $ (8,376)

(109)
(98)
(1,092)

(99)
(128)
(320)

1,087
Deferred tax assets–Non-current
Net deferred tax liabilities–Non-current ¥(5)284
10,283¥ (36) $ (52)A reconciliation between the normal effective statutory tax
rates and the actual effective tax rates reflected in theaccompanying consolidated statements of operations for theyears ended March 31, 2004 and 2003, was as follows:
Normal effective statutory tax rate
Expenses not deductible forincome tax purposes
Capitation of local inhabitant tax
Unrealized intercompany profits
Difference in normal tax rates offoreign subsidiaries
Effect of tax rate reduction
Other–net
Actual effective tax rate

2004

2003

42.1%

42.1%

5.6
2.1
0.9

(9.1)
(2.5)
(22.1)

(2.5)
1.2
(1.5)
47.9%

3.2
(11.8)
3.2
3.0%

At March 31, 2004, certain subsidiaries had tax loss
carryforwards aggregating approximately ¥290 million($2,740 thousand) which were available to be offset against
taxable income of such subsidiaries in future years.
The tax loss carryforwards, if not utilized, will expire as
follows:
Year Ending March 31
20082009 and thereafter
Total

Millions of Yen

293
297
(181)
3,650

260
221
(42)
3,557

2,773
2,806
(1,712)
34,534(1,087)¥2,563(284)¥3,273(10,283)$24,251

29

JEOL ANNUAL REPORT 2004

¥ (47)
(147)
(194)

$ 752
1,988
$2,74010. RESEARCH AND DEVELOPMENT COSTS
Research and development costs charged to income were
¥4,031 million ($38,134 thousand) and ¥4,235 million forthe years ended March 31, 2004 and 2003, respectively.

133¥ (53)(122)(175)

Thousands of
U.S. Dollars

¥ 80
210
¥290

11. RELATED PARTY TRANSACTIONSTransactions with unconsolidated subsidiaries and associatedcompanies for the years ended March 31, 2004 and 2003,
were as follows:
Millions of Yen

Deferred tax liabilities–Current:
Deferred gain on sale of property
Other
Total

(1,028)(931)(10,335)$ (499)(1,154)(1,653)

Sales
Purchases
Selling, general and administrative expenses

Thousands of
U.S. Dollars

2004

2003

2004

¥2,144624
173¥2,747178
229$20,278
5,903
1,638

12. LEASES

Depreciation expense and interest expense, which are notreflected in the accompanying consolidated statements ofoperations, were computed by the declining-balance method
and the interest method, respectively.

The Companies lease certain machinery, computerequipment, office space and other assets.
Total rental expenses, primarily for lease agreements for officespace which were cancelable at the option of the Company or
upon expiration, for the years ended March 31, 2004 and2003, were ¥1,974 million ($18,677 thousand) and ¥1,960
million, respectively, including ¥479 million ($4,536
thousand) and ¥417 million of lease payments underfinance leases.
Pro forma information of leased property such as acquisition
cost, accumulated depreciation, obligation under finance lease,depreciation expense, interest expense of finance leases that do
not transfer ownership of the leased property to the lessee on
an “as if capitalized” basis for the years ended March 31, 2004
and 2003 was as follows:Year Ended March 31, 2004
Millions of Yen
Buildings Machinery Tools,
and Furniture andandStructures Equipment Fixtures Software

¥7
2
¥5

Acquisition cost
Accumulated depreciation
Net leased property

¥99
80
¥19

Total

¥725 ¥1,301 ¥2,132
485
796 1,363¥240 ¥ 505 ¥ 769

Thousands of U.S. Dollars
Buildings Machinery Tools,
andand Furniture andStructures Equipment Fixtures Software

Acquisition cost
Accumulated depreciation
Net leased property

$64
15
$49

Total

$938 $6,861 $12,305 $20,168
753 4,592 7,529 12,889$185 $2,269 $ 4,776 $ 7,279

Year Ended March 31, 2003
Millions of yen

Acquisition cost
Accumulated depreciation
Net leased property

Machinery
Tools,
andFurniture andEquipment Fixtures
SoftwareTotal¥93 ¥1,034 ¥1,163
70
757
540
¥23 ¥ 277 ¥ 623¥2,2901,367¥ 923

Obligations under finance leases:
Millions of Yen

Due within one year
Due after one year
Total

Thousands of
U.S. Dollars

2004

2003

2004

¥ 417
794
¥1,211¥ 409
856¥1,265$ 3,9427,514$11,456

The minimum rental commitments under noncancelable
operating leases at March 31, 2004 and 2003 were as follows:
Millions of Yen

Due within one year
Due after one year
Total

Thousands of
U.S. Dollars

2004

2003

2004

¥217
197
¥414

¥220
263
¥483

$2,0501,867$3,917

13. DERIVATIVESThe Companies enter into derivative financial instruments(“derivatives”), including foreign currency forward contracts
and foreign currency denominated loans, to hedge foreignexchange risk associated with certain assets and liabilities
denominated in foreign currencies. The Companies also enter
into interest rate swap agreements as a means of managing
their interest rate exposure.
It is the Companies’ policy to use derivatives only for the
purpose of reducing market risks associated with assets andliabilities. The Companies do not hold or issue derivatives for
trading purposes.
Derivatives are subject to market risk. Market risk isthe exposure created by potential fluctuations in market
conditions, including foreign exchange rates and interest rates.
Because the counterparties to those derivatives are limited tomajor international financial institutions, the Companies do
not anticipate any losses arising from credit risk.
The basic policies for the use of derivatives are approved by
the Board of Directors and the execution and control ofderivatives are controlled by the Financial Department.
Foreign currency forward contracts and interest rate swaps
which qualified for hedge accounting for the years ended
March 31, 2004 and 2003, are excluded from the disclosureof market value information.
Quantitative information is not disclosed because allderivatives qualify for hedge accounting at March 31, 2004
and 2003.
14. CONTINGENT LIABILITIES

Depreciation expense and interest expense under financeleases:Millions of Yen

Depreciation expense
Interest expense
Total

Thousands of
U.S. Dollars

2004

2003

2004

¥485
33
¥518

¥435
29
¥464

$4,593310$4,903At March 31, 2004, the Companies had the following
contingent liabilities:
Millions of Yen

Guarantees of bank loans of unconsolidated subsidiary
Guarantees of advance received of
unconsolidated subsidiary

Thousands of
U.S. Dollars¥150$1,419100946

JEOL ANNUAL REPORT 200430

15. NET INCOME (LOSS) PER SHARE

a. Sales and Operating Income
Thousands of U.S. Dollars

Reconciliation of the differences between basic and diluted net
income per share (“EPS”) for the years ended March 31, 2004
and 2003 was as follows:Year Ended March 31, 2004

Basic EPS–Net income available
to common shareholders
Effect of dilutive securities–
Convertible bonds
Diluted EPS–Net income
for computation

Millionsof YenThousandsof Shares

Net
Income(Loss)

Weightedaverage
SharesU.S.Dollars

Yen

EPS

¥784 71,842¥10.92

$0.10

5,433

Sales to customers
Intersegment sales
Total sales
Operating expenses
Operating income

Industrial
Equipment

Eliminations/
Corporate$548,105 $275,893

Consolidated$823,998

548,105 275,893
823,998
528,358 251,046 $ 25,030 804,434$ 19,747 $ 24,847 $(25,030)$ 19,564

b. Total Assets, Depreciation and Capital
Expenditures
Thousands of U.S. Dollars¥784 77,275¥10.15

2004

$0.10

Year Ended March 31, 2003

Basic EPS–Net loss available
to common shareholders ¥(951) 68,670

2004
Scientific
Instrument

Scientific
Instrument

Industrial
Equipment

Eliminations/
Corporate

Consolidated

Total assets$485,170 $259,670 $156,863 $901,703
14,1888,362
512 23,062
Depreciation
Capital expenditures
19,648 11,009
1,189 31,846¥(13.85)

Diluted EPS is not disclosed because it was net loss in 2003.

a. Sales and Operating Income
Millions of Yen

16. SUBSEQUENT EVENT

2003

The following appropriation of retained earnings at March 31,
2004, was approved at the Company’s shareholders meeting
held on June 29, 2004:
Millions of Yen

Year-end cash dividends,¥2.5 ($0.02) per share

Thousands of
U.S. Dollars¥ 191

Scientific
Instrument

Sales to customers
Intersegment sales
Total sales
Operating expenses
Operating income

Industrial
Equipment

Eliminations/
Corporate¥58,721 ¥24,113

Consolidated¥82,834

58,721 24,113
82,834
58,122 21,311 ¥ 2,855 82,288¥ 599 ¥ 2,802 ¥(2,855) ¥ 546$ 1,806b. Total Assets, Depreciation and Capital
Expenditures

17. SEGMENT INFORMATION

Millions of Yen

Information about operations in different industry segments,
geographic segments and sales to foreign customers of theCompany and consolidated subsidiaries for the years ended
March 31, 2004 and 2003, was as follows:(1) Industry Segments
a. Sales and Operating Income
2004

Sales to customers
Intersegment sales
Total sales
Operating expenses
Operating income

Industrial
Equipment

Eliminations/
Corporate¥57,935 ¥29,162

Consolidated¥87,097

57,935 29,162
87,09755,848 26,535 ¥ 2,646 85,029¥ 2,087 ¥ 2,627 ¥(2,646) ¥ 2,068

b. Total Assets, Depreciation and Capital
Expenditures
Millions of Yen
2004
Scientific
Instrument

Total assets
Depreciation
Capital expenditures

31

Industrial
Equipment

Eliminations/
Corporate

Consolidated¥51,283 ¥27,447 ¥16,580 ¥95,310
1,500
884
54
2,438
2,077
1,163
126
3,366

JEOL ANNUAL REPORT 2004

Total assets
Depreciation
Capital expenditures

Industrial
Equipment¥58,597 ¥25,818
1,538
652
1,485
662

Eliminations/
Corporate

Consolidated¥8,720 ¥93,135
27
2,217
10
2,157

Note:

Millions of Yen
Scientific
Instrument

2003
Scientific
Instrument

The Companies primarily engage in the manufacture andsale of products in two major segments, grouped on thebasis of similarities in the type, nature and market of the
products. The two segments, namely, scientific instrument
and industrial equipment, consist of the following main
products:
Scientific instrument: Electron Microscopes, NMR
Spectrometers, Mass
Spectrometers, etc.
Industrial equipment: Electron Beam Lithography
System, Wafer Inspection
Systems, High Frequency Plasma
Generators, Clinalyzers, etc.

(2) Geographical Segments
The geographical segments of the Company and its
consolidated subsidiaries for the years ended March 31, 2004
and 2003 were summarized as follows:
Millions of Yen
2004
North America
Eliminations/Japan Latin America Other Corporate Consolidated

Sales to customers
Interarea transfer
Total sales
Operating expenses
Operating income
Total assets¥63,814
11,74675,56071,091¥ 4,469¥65,863¥13,398700
14,098
14,233¥ (135)¥ 9,678¥9,885¥87,097716 ¥(13,162)
10,601 (13,162) 87,097
10,401 (10,696) 85,029¥ 200 ¥ (2,466) ¥ 2,068¥5,212 ¥ 14,557 ¥95,310

Thousands of U.S. Dollars

2004
North America
Latin America

Overseas sales (A)Consolidated sales (B)(A)/(B)

Other

Total

$154,550 $179,561 $334,111
823,998
18.7%
21.8%
40.5%
Millions of Yen
2003
North America
Latin America

Overseas sales (A)Consolidated sales (B)(A)/(B)

Other

Total

¥16,670¥17,102

20.1%

20.7%

¥33,772
82,834
40.8%

Note:

2004
Eliminations/North America
Japan Latin America Other Corporate Consolidated

Sales to customers
Interarea transfer
Total sales
Operating expenses
Operating income
Total assets

Thousands of U.S. Dollars$603,730 $126,755 $93,513$823,998
111,1216,627 6,776 $(124,524)
714,851 133,382 100,289 (124,524) 823,998
672,576 134,654 98,397 (101,193) 804,434$ 42,275 $ (1,272) $ 1,892 $ (23,331) $ 19,564$623,113 $ 91,563 $49,304 $ 137,723 $901,703

The Company and subsidiaries are summarized in thesesegments by geographic area and the countries where thecustomers are located. The segment consisted of thefollowing countries:
North America, Latin America:
U.S.A., Canada and Mexico
Other:
Europe, Southeast Asia and Australia

Millions of Yen
2003
North America
Eliminations/Japan Latin America Other Corporate Consolidated

Sales to customers
Interarea transfer
Total sales
Operating expenses
Operating income
Total assets¥59,433
11,04170,47467,605¥ 2,869¥70,437¥14,108 ¥9,293¥82,834994
466 ¥(12,501)
15,102 9,759 (12,501) 82,834
14,993 9,531(9,841) 82,288¥ 109 ¥ 228 ¥ (2,660) ¥ 546¥10,790 ¥6,295 ¥ 5,613 ¥93,135

Note:Each area primarily refers to the following countries:
North America, Latin America:
U.S.A., Canada and Mexico
Other:
Europe, Southeast Asia and Australia(3) Sales to Foreign Customers
The sales to foreign customers of the Company andsubsidiaries for the years ended March 31, 2004 and 2003
were summarized as follows:
Millions of Yen
2004
North America
Latin America

Overseas sales (A)Consolidated sales (B)(A)/(B)

Other

Total

¥16,336¥18,979

18.7%

21.8%

¥35,315
87,09740.5%

JEOL ANNUAL REPORT 2004

32

INDEPENDENT AUDITORS’ REPORT33

JEOL ANNUAL REPORT 2004

Corporate Outline(As of March 31, 2004)

Corporate Name:JEOL Ltd.

Address:

1-2, Musashino 3-chome, Akishima, Tokyo 196-8558, Japan
TEL: +81-42-543-1111 FAX: +81-42-546-3353

Establishment:

May 30, 1949

Capital:¥6,072 million

Number of Employees:

Consolidated 3,086 Non-consolidated 1,226

Stock Information:

Authorized shares: 136,080,000
Issued shares: 76,383,459
Unit Number: 1,000 shares per unit
Number of Shareholders: 13,207

Head Officeand Branch Offices:

Overseas Subsidiaries
and Affiliated Companies:

Head Office: FactoryTokyo Office
Tokyo Branch Office
Sapporo Branch OfficeSendai Branch Office
Tsukuba Branch Office
Yokohama Branch Office
Nagoya Branch OfficeOsaka Branch OfficeKansai Application Research Center
Hiroshima Branch OfficeTakamatsu Branch Office
Fukuoka Branch Office

Domestic Subsidiaries JEOL TECHNICS LTD.
and Affiliated Companies: JEOL CREATIVE CO., LTD.
JEOL CREATIVE CO., LTD. merged with JEOL Ltd. as of April 1, 2004.

JEOL DATUM LTD.
SATSUKI INDUSTRIES CO., LTD.
JEOL SYSTEM TECHNOLOGY CO., LTD.
JEOL ENGINEERING CO., LTD.
JEOL ACTIVE CO., LTD.
JAPAN LASER CORPORATIONTACHIBANA ELECTRONICS CO., LTD.
JEOL TECHNOSERVICE CO., LTD.
YAMAGATA CREATIVE CO., LTD.

JEOL USA, INC. [USA]11 Dearborn Road, Peabody, MA. 01960, USA
TEL. (978) 535-5900

JEOL (EUROPE) S. A. [France]

Espace Claude Monet, 78290 Croissy-sur-Seine, France
TEL. (1) 3015-3737

JEOL (U.K.) LTD. [U.K.]

JEOL House, Silver Court, Watchmead, Welwyn Garden City, Herts AL7 1LT, U.K.
TEL. 01707-377117

JEOL (EUROPE) B. V. [the Netherlands]

Tupolevlaan 28-A, 1119 NZ Schiphol-Rijk, the Netherlands
TEL. (20) 6533088

JEOL (SKANDINAVISKA) AB [Sweden]

Hammarbacken 6A 191 49 Sollentuna, Sweden
TEL. (08) 282800

JEOL (GERMANY) GmbH [Germany]

Oskar-Von-Miller-Strasse 1, 85386 Eching, Germany
TEL. (08165) 77346

JEOL (ITALIA) S.p.A. [Italy]

Centro Direzionale Ripamonti Via Dei Tulipani, 1, 20090 Pieve, Emanuele (MI), Italy
TEL. (39) 2-9041431

JEOL ASIA PTE. LTD. [Singapore]

29 International Business Park #03-02A Acer Building, Tower B, Singapore 609928
TEL. (65) 5659989

JEOL (AUSTRALASIA) PTY. LTD. [Australia] Unit 9, 750-752 Pittwater Road, Brookvale, N.S.W. 2100, Australia
TEL. (02) 9905-8255

JEOL DE MEXICO S.A. DE C.V. [Mexico]

Av. Amsterdam #46 DEPS. 402 Col Hipodromo, Mexico 06100, Mexico D.F
TEL. (5) 211 0672

JEOL CANADA, INC. [Canada]5757 Cavendish Boulevard, Suite 504, Montreal, Quebec H4W 2W8, Canada
TEL. (514) 482-6427

JEOL (MALAYSIA) SDN BHD [Malaysia]

205, Block A, Mezzanine Floor, Kelana Business Center 97, Jalan SS 7/2, Kelana Jaya, 47301 Petaling Jaya, Selangor, Malaysia
TEL. (3) 582-7722

JEOL KOREA LTD. [Korea]

Sunmin Building 218-16, Nonhyun-Dong, Gangnam-Gu, Seoul 135-010, Korea
TEL. (02) 511-5501

JEOL DATUM TAIWAN LTD. [Taiwan]

6F-4, No.346, Pei-Ta Road, Hsin-Chu City300, Taiwan, R.O.C.
TEL. (886) 3-523-8490

Beijing Creative Technology Co., Ltd. [China] No.75 DAWUJISI CHAOYANG QU BEIJING CHINA
TEL. (010) 6737-7132

JEOL ANNUAL REPORT 2004

34

Serving Advanced Technology
1-2, Musashino 3-chome Akishima, Tokyo 196-8558, Japan
TEL: +81-42-543-1111 FAX: +81-42-546-3353
URL http://www.jeol.co.jp/