Profile
Management Philosophy
Toyoda Automatic Loom Works, Ltd. (Toyoda) was established in 1926 by Sakichi Toyoda, world-classinventor and founding father of the Toyota Group. Toyoda, a core member of the Toyota Group, has evolved andgrown into a global company. Since its establishment, Toyoda has consistently emphasized research anddevelopment to create leading-edge products and services to meet customer needs. Toyoda has also striven tocontribute to the growth of industry and social prosperity.

Strengths
Toyoda’s commitment to technological innovation began with technologies cultivated through thedevelopment and manufacture of automatic looms that were Toyoda’s principal products in its early years. This
commitment has resulted in Toyoda’s present core businesses of automobile-related products (including
automobiles, engines and car air-conditioning compressors), forklifts and materials handling systems. As a central
member of the Toyota Group, Toyoda’s stable operating base encompasses automobile and engine production. In
addition, Toyoda has a high share of the global market for car air-conditioning compressors and counterbalanced
forklifts. In each segment, Toyoda is moving to expand its businesses and strengthen profitability.
In markets worldwide, Toyoda’s superior technologies are highly regarded. Toyoda’s commanding share of themarkets for counterbalanced forklifts and car air-conditioning compressors underscores the competitive
advantage provided by its outstanding technologies.

Strategic Vision
Toyoda is working to achieve growth through global business development based on production andmarketing strategies geared to specific markets worldwide and a commitment to technological advancement.
Toyoda’s management believes that its technological strength forms the basis of its competitiveness. For thisreason, Toyoda maintains a continuous search for technical excellence.
Expansion of existing operations and development of new businesses will facilitate Toyoda’s growth. Toyoda’sliquid crystal display (LCD) business, conducted jointly with Sony Corporation, and its production of plastic
package substrates for mounting integrated circuit (IC) chips, conducted jointly with Ibiden Co., Ltd., represent
Toyoda’s efforts to enter new fields.
Electronics businesses, such as Toyoda’s LCD operations, have the potential to generate strong growth, andToyoda intends to develop this strategic area aggressively.
Toyoda also views strategic mergers and acquisitions as an effective means of bolstering the competitive
strengths of its operations.

Cautionary Statement with Respect to Forward-Looking Statements
This annual report contains forward-looking statements regarding Toyoda’s plans, outlook, strategies and results for the future. All forward-looking statements
are based on management’s beliefs and judgments derived from the information available to Toyoda at the time of publication.
Certain risks and uncertainties could cause Toyoda’s actual results to differ materially from any projections presented in this report. These risks anduncertainties include, but are not limited to, the economic circumstances surrounding Toyoda’s businesses; competitive pressures; related laws and regulations;product development programs; and changes in exchange rates.

Financial Highlights
Toyoda Automatic Loom Works, Ltd. and its consolidated subsidiaries
Years ended March 31, 2000 and 1999

Thousands of
U.S. dollars

Millions of yen

2000

1999

% change

2000¥625,773¥558,876

12.0%$5,895,173

Operating income

28,867

24,81416.3

271,947

Net income

13,686

10,391

31.7

128,935

Net income: Primary

48.32

36.30

33.1

0.46

Diluted

43.18

32.62

32.4

0.41

16.00

16.00

–

0.15

Total assets¥685,914¥617,071

11.2%$6,461,746

Shareholders’ equity

316,293

301,158

5.0

2,979,681

FOR THE YEAR
Net sales

Per common share: (in yen or U.S. dollars)

Cash dividends
AT YEAR-END

Note: U.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥106.15 = U.S.$1, the exchange rate on March 31, 2000.

Net Sales

Net Income

Shareholders’ Equity(Years ended March 31)(Years ended March 31)(Years ended March 31)(¥ Billion)(¥ Billion)(¥ Billion)

800

20

400

600

15

300

400

10

200

200

5

100

0

96 97 98 99 00

0

96 97 98 99 00

0

96 97 98 99 00

Contents
To Our Shareholders..................................................................... 2

Consolidated Statements of Income ............................................ 24

At a Glance ..................................................................................... 6

Consolidated Statements of Shareholders’ Equity ...................... 25

Growth Strategy............................................................................. 8

Consolidated Statements of Cash Flows...................................... 26

Review of Operations.................................................................... 12

Notes to Consolidated Financial Statements............................... 27

Environmental Action Plan ............................................................ 15

Report of Independent Public Accountants................................. 37

Consolidated Five-Year Summary ................................................ 16

Directors and Corporate Auditors............................................... 38

Management’s Discussion and Analysis........................................ 17

Corporate Data ............................................................................. 39

Consolidated Balance Sheets ........................................................ 22

Investor Information ...................................................................... 40

TOYODA AUTOMATIC LOOM WORKS, LTD. 1

To Our Shareholders

Strong Performance
Readies Us for
the Twenty-First Century
Tadashi Ishikawa
Chisei Isogai

President

Chairman

At Toyoda Automatic Loom Works, Ltd. (Toyoda),

Akira Yokoi
Executive Vice Chairman

Strategies and Achievements

fiscal year 2000, ended March 31, 2000, was extremely
significant, not only because it was the first year for ourManagement Strategy

new management team under the leadership of newly

Toyoda has come a long way since it started business as aappointed President Tadashi Ishikawa, but also because we

textile machinery manufacturer over 70 years ago. We are

were able to lay a solid foundation for the future. Sales anddiversified, innovative and ready for the next 100 years.

earnings during the period increased substantially over the

Today our business is divided into three categories, each withprevious year. Consolidated net sales grew by 12 percent

a distinctive character and mission.

to ¥625.8 billion (U.S.$5,895.2 million), and operating
income improved by 16 percent to ¥28.9 billion

Category I – Automobiles and Engines: Contributing to the(U.S.$271.9 million).

Toyota Group, of which we are a member, through ourIn the past fiscal year, the Japanese economy showedcommitment to quality and technological innovation.

signs of gradual recovery, and the U.S. expansion continued.
In Europe, economic expansion was generally on track,

Category II – Car Air-Conditioning Compressors, Forklifts

while East Asia continued to recover from the currency andand Textile Machinery: Aggressively deploying ourfinancial crises of 1997.

technological strengths to design and develop products forWith this overall economic environment as a backdrop,

global markets.

we are pleased to report that our efforts met with success,with double-digit increases in sales and earnings over theCategory III – Electronics and Electronic Devices (including

previous fiscal year. Major factors behind the gains wereLCDs): Creating new sources for the company’s futurestrong sales of the popular Toyota Vitz (Yaris) automobile,

growth.

which we produce on behalf of Toyota Motor Corporation(TMC), and increased sales of car air-conditioning

In Category I, we are enhancing our manufacturing

compressors. We also believe that our company-wide

technology and quality control capabilities in order to play acommitment to meet sales and profit targets enabled us tolarger role in assembling automobiles and providing

achieve the past year’s strong performance.

automotive engines for TMC. This category is a driving force
for the further development of the Toyota Group.

Note: The exchange rate used for calculating all the dollar figures thatappear in this report is ¥106.15= U.S.$1.

2

TOYODA AUTOMATIC LOOM WORKS, LTD.

We are also strengthening our R&D and planning

Achievements

capabilities to play a more active part in productWe developed and introduced a number of significant new

development for Toyota vehicles and engines. We believe

products during fiscal 2000.

that the management of knowledge and the development of

The launch of the GENEO-B electric-powered

human resources, especially in the manufacturing andcounterbalanced forklift in the Japanese market in August

technical departments, are essential for enhancing these

1999 exemplifies our efforts to bring out new products

capabilities.

offering technological breakthroughs. The GENEO-B

In Category II, our basic policy is to penetrate markets

incorporates our new “System of Active Stability” (SAS),

worldwide by providing state-of-the-art products that satisfy

with improved performance features that include tip-overcustomer needs. We recognize that technologicalprevention. Our proprietary alternating current (AC) drive

advancement is the key determinant of competitiveness, andsystem has overcome the weaknesses typical of electric-

therefore put great emphasis on fostering superior

powered forklifts, putting the GENEO-B almost on a parengineering talent and strengthening our technology

with engine-powered models. Customer response hasdevelopment capabilities.

been positive. We began exporting the GENEO-B under

Category III requires advanced technology andcontinuous investment in equipment to maintain athe model name 7FB to Europe, Australia and Asian
countries in September 1999.

competitive advantage. In addition, it is essential to accurately

A new car air-conditioning compressor, the 6SEU12, isforecast market movements and to make prompt decisions

another innovative addition to our product lineup. Compact

based on those forecasts. Success in this business requires

and lightweight, the 6SEU 12 is a continuous variable

management to put production promptly on the right track,

displacement external signal-controlled compressor designed

improve yield rates, and move at high speed so as to recoup

to help reduce fuel consumption and improve acceleration.

investment as quickly as possible.

In June 1999, we completed development and began

In order to achieve sustainable growth, we are also

production of a common rail type 2,000 cc direct injection

focusing on the following measures across all our businesses:

turbo diesel engine. It is already being installed on Toyota
Avensis models for European markets. In the future, we• Strengthening our overall technological capabilities for

anticipate that it will gain wider use, particularly on other• new product development.

Toyota models bound for Europe, and we have highhopes that it will become a mainstay of our diesel engine• Systematically improving productivity and lowering• production costs.
• Incorporating production cost reduction into the• engineering and design stages.

product line.
New products, such as those listed above, helped
support our outstanding gains for this period. Additionally,
the rigorous cost reduction measures as well as the value
analysis (VA) and value engineering (VE) approaches• Utilizing mergers and acquisitions to further increase

introduced at our domestic and overseas production bases• competitiveness.

made major contributions to the improvement in results.
As part of our strategic plan to strengthen textile
machinery operations, we acquired the water jet loom
business from Nissan Motor Co., Ltd. and Nissan Texsys

TOYODA AUTOMATIC LOOM WORKS, LTD. 3

To Our Shareholders

Co., Ltd. (Nissan Texsys) in April 1999. Production transfer

New Business Modelwas completed by the end of 1999, and in February 2000 weThroughout its long history, Toyoda has grown by constantly

began manufacturing the LW600 series water jet loom, aimproving upon its technology base. We now have diversified

product originally developed by Nissan Texsys which webusinesses, and each business area has its own core

improved further through our proprietary technology. This

technologies. The challenge is to transcend existing businessmerger has expanded our weaving machinery product range,

areas to integrate our proven technologies in various fields

which had been limited to air jet looms, and will boost ourand develop new technologies for next-generation products

medium-term textile machinery sales.

and enter new business domains.
At the same time, we will
introduce the concept of business

Management Challenges andmodels to each of our business units.

Business Model

As independent units, each of ourbusiness operations will analyze its

Management Challenges

business environment and develop

Competition has accelerated andappropriate market and productnow transcends national boundaries.

strategies, while evaluating the

We resolve to continue increasing

profitability and efficiency of capital

our value as a corporation throughdeployment. Through such businessspeedy decision-making and efficientmodels, each operational unit will

allocation of management resources

contribute to the steady expansion ofin order to generate continued

profits. We also intend to utilize IT toconsolidated growth and improve

speed up the management process

our market position. To compete

and to raise the productivity ofTadashi Ishikawa, President

and thrive in today’s global business,

indirect operations.

we will design and develop attractive products that meetmarket needs in a timely manner. At the same time, we willcontinuously improve product and service quality and lower

Medium-Term Management Strategy

manufacturing costs through the Toyota Production System(TPS), while reviewing our operating structure to increase

Our medium-term strategy, which is focused on ensuring

sales. We also realize the importance of improving work

growth in the next several years, can be summarized asprocesses by using state-of-the-art information technology

follows:(IT), as well as reducing fixed costs and further raisingcustomer satisfaction levels.
Rapid advances in IT have changed the way business is

Become a global leader in the forklift and car airconditioning compressor businesses

done. To take advantage of the opportunities these changes

Toyoda is the undisputed leader of the domestic forklift

present, we are implementing strategic initiatives andmarket and holds a substantial share of the global market,

structural changes that will help us grow further in theand we continue to strengthen this market position. We

twenty-first century.

made a significant step toward achieving this goal in June

4

TOYODA AUTOMATIC LOOM WORKS, LTD.

2000. Moving to complement our mainstay lineup ofemphasize developing environmentally friendly products andcounterbalanced forklifts, we acquired BT Industries AB ofrecycling technology. In addition, we have made obtaining

Sweden, which has a solid global presence in the warehouse

ISO14001 certification a company-wide priority.

equipment market. This move better positions us to

The most important aspect of our corporate mission is toprovide comprehensive materials handling solutions. In

create greater shareholder value. By boldly implementing theaddition, in late July we agreed with TMC to strengthen thestrategies outlined above, we will strive to maximize

forklift and materials handling systems businesses of bothshareholder value and satisfy the expectations of ourcompanies. The entire forklift and materials handlingcustomers, employees, business partners and thesystems businesses of TMC are to become part of Toyoda

communities we serve.

in April 2001, although the details are still being workedout.

We thank all of our shareholders, customers, partners,
and employees for your support and enthusiasm during the

We are a leading global manufacturer of car air-past year. As we navigate our changing markets, we willconditioning compressors. We are continuing to aggressively

continue to work to meet your needs and maintain yourdevelop new products that satisfy customers, thereby further

confidence.

strengthening our market position.
July 2000
Remain a stable supplier of Toyota automobiles andengines
As a core member of the Toyota Group, we will strive toincrease the value of Toyota automobiles by improving thequality and lowering the costs of our products. An importantrole for the engine division is the development of highperformance and environmentally friendly engines.

Chisei Isogai
Chairman

Become a successful LCD manufacturer
We have begun production of low-temperature polysilicon
TFT-LCDs, a product with outstanding growth potential. By
improving the manufacturing process through TPS and otherAkira Yokoi

methods, we will increase the profitability, quality andExecutive Vice Chairman

productivity of our LCD operations.
Increase corporate value
To remain globally competitive in our rapidly changing
markets, we are steadily implementing management

Tadashi Ishikawa

strategies designed to improve earnings. At the same time,

President

we recognize that an important part of our overall mission
consists of fulfilling our social responsibilities. For example, aspart of our concern for protecting the environment, we

TOYODA AUTOMATIC LOOM WORKS, LTD. 5

At a Glance
Since its establishment in 1926, Toyoda Automatic Loom Works, Ltd. has diversified its businesses andconsolidated its management bases.
Financial Segment

Business/Operation

Products

Vehicle (Automobile Assembly)

Passenger vehicles

EngineDiesel and gasoline engines

Car Air-Conditioning Compressor

Car air-conditioning compressors

Automobile Segment

Vitz (Yaris)

Others

1CD Engine

7SBU16 Compressor

FoundryFoundry parts for automobiles, etc.

Electronics

Electronic equipment for automobiles, etc.

Materials Handling Equipment Segment
Forklift (Industrial Equipment)

Counterbalanced forklifts
Skid steer loaders
Towing tractors, etc.

Materials Handling Systems

Automated storage and retrieval systems
Automatic guided vehicle systems, etc.

Textile Machinery

Spinning Machinery

Ring spinning frames
Roving frames, etc.

Weaving MachineryAir jet looms
Water jet looms
Sizers, etc.

ST-LCD

Low-temperature polysilicon TFT- LCDs

TIBC

Ball grid array-type plastic package
substrates for IC chipsets, etc.

GENEO-B (7FB)

Automated Storage andRetrieval System (Pallet type)Textile Machinery Segment

RX240 Ring
Spinning Frame
JAT610 Air Jet Loom

“Others” Segment
TFT-LCDs

Plastic Package Substrates

6

TOYODA AUTOMATIC LOOM WORKS, LTD.

Electronics

OthersPercentage of Net Sales

FY 2000

The Automobile Segment, consisting of automobile
assembly, engines, car air-conditioning compressors, andelectronic components for automobiles, occupies adominant 68 percent share of Toyoda’s consolidated sales.
The automobile assembly business produces twomodels, the Vitz (exported to Europe as the Yaris) andthe Sprinter Carib (exported as the Corolla Wagon).
The Vitz (Yaris) is very popular in both the domestic
and European markets.
The engine business produces more than 10 types ofdiesel and gasoline engines for Toyota brand cars andthe forklift business. These engines include the C-type
and HZ-type diesel engines as well as the Y-type andE-type gasoline engines.
The car air-conditioning compressor businessdevelops and produces swash plate fixed displacement
type compressors, one-way swash plate variabledisplacement type compressors, scroll typecompressors and vane type compressors. These
products are supplied to the world’s major car
manufacturers.
The semiconductor and electronics business produces
various electronics components for automobiles including
on-vehicle enclosed type AC inverters andsemiconductors. In the past fiscal year, the Automobile
Segment recorded overall sales of ¥423.4 billion.

The Materials Handling Equipment Segment
encompasses the forklift and materials handling systems
businesses, which include automated storage andretrieval systems and automatic guided vehicle systems.
The core products of the forklift business are theengine-powered counterbalanced forklift GENEO(7 Series overseas), and the electric-poweredcounterbalanced forklift GENEO-B (7FB overseas).
With the acquisition of BT Industries AB of Sweden in

June 2000 and the slated transfer to Toyoda of all
forklift operations from Toyota Motor Corporation in
April 2001, Toyoda will consolidate its position as aleading global forklift manufacturer.
In fiscal 2000, forklift business sales accounted forapproximately 97 percent of the Materials Handling
Equipment Segment. Overall sales in this segment
totaled ¥149.1 billion.

Supported by the improving economies of Southeast
Asia, the recovery in sales of the JAT610 air jet loom
boosted the overall sales of the Textile Machinery
Segment, consisting of the spinning machinery andweaving machinery businesses, to ¥23.1 billion in fiscal
2000. The acquisition of the water jet loom businessfrom Nissan Texsys Co., Ltd., enabled Toyoda tolaunch the LW600 series water jet loom in February
2000. This product, a new type of water jet loom, isenhanced with the electronic technologies of Toyoda.

The “Others” Segment covers the electronics businessand although the scope of business is still small, it isexpected to grow quickly and become a strategic
operation.
Launched as a joint venture with Sony Corporation
on an equal ownership basis, ST Liquid Crystal Display
Corp. (ST-LCD) will form the core of the new businessarea. ST-LCD has begun production of low-temperaturepolysilicon TFT-LCDs, expected to become a next-

generation LCD. In addition, TIBC Corporation wasestablished as a joint venture with Ibiden Co., Ltd., andbegan production of ball grid array (BGA)-type plastic
package substrates that respond to high-function IC
chipsets in April 1999.
ST-LCD is an affiliate and thus its sales are notincluded in the consolidated sales because the figures
are accounted for under the equity method.

67.7%

23.8%

3.7%

4.8%

TOYODA AUTOMATIC LOOM WORKS, LTD. 7

Growth Strategy

The Source of Growth

Increasing Global Market Share with
Outstanding, Unrivaled Technologies
will be essential for forklifts in the future. Forklifts are
Toyoda, a leading globalclassified on the basis of their drive system into engine andmanufacturer of car airelectric-powered models. Toyoda is the only manufacturer
conditioning compressors,
to independently develop and manufacture engines
produced more than 10
dedicated to forklifts. Based on this strength, Toyoda has
million units during thedeveloped engines with high output and low fuelfiscal year ended March
consumption to reduce their impact on the environment.
2000. The compressors
On the other hand, growing environmental awareness has
Toyoda develops and
6SEU12
led to an increase in market demand for electric-powered
manufactures are distributed byCompressor
forklifts. Toyoda has therefore developed the GENEO-B
DENSO Corporation (DENSO) and are(7FB overseas), an electric-powered forklift that is the firstused not only by Toyota Motor Corporation (TMC) but
in the world to be equipped with a dedicated alternating
also by other leading automobile manufacturers worldwide.
current (AC) drive system as standard equipment.
As a result of its unsurpassed product development andIn the past, the conventional direct current (DC) drive
technologies, global automobile manufacturers continue tosystem could not deliver enough power for a forklift. In
use Toyoda’s products. Furthermore, Toyoda prepares fororder to overcome this problem, Toyoda has
the future by developing new products, thereby
independently developed a dedicated low
contributing to the innovative technology ofvoltage and large current semiconductor,
automobile manufacturers.
allowing forklifts with high output to operate
In the 1980s, Toyoda succeeded infor long hours on a single charge. As a result,developing a compact and lightweight tenToyoda has realized a system that othercylinder swash plate fixed displacement typeforklift manufacturers have found difficult tocompressor, which displays excellent
emulate.
reliability at high operating speeds. In the
To enhance safety, the engine-powered
1990s, as concerns about global
counterbalanced forklift GENEO (7 Series
environmental problems grew,
GENEO-B (7FB)
overseas), launched in 1998, was equipped
Toyoda developed a one-way swash platewith the “System of Active Stability” (SAS) and received
variable displacement type compressor that reduces thewide acclaim as the next-generation in forklift safety
burden on the engine, raises overall efficiency and lowers
technology. With an electronically controlled hydraulicfuel consumption. Furthermore, Toyoda developed andsystem, the SAS is an advanced safety system that enhancesmarketed a clutchless variable displacement typethe stability of the vehicle and prevents it from tipping over.
compressor offering excellent acceleration and low fuel
The GENEO-B won the Good Design Award in Japan,
consumption. These products were developed andand is attracting great interest throughout the world.
manufactured several years ahead of the competition,
As a result of these technologies, Toyoda captured a
indicating the competitive superiority of Toyoda in the
40 percent share of the Japanese forklift market for the
global marketplace. Toyoda is also moving ahead with thefirst time.
technological development of new refrigerants to replace
chlorofluorocarbons (CFCs).
The forklift and car air-conditioning compressor
businesses are aiming to capture an appreciable share of
global markets by leveraging their technologicalsuperiority. Toyoda leads the world in developing andproducing counterbalanced forklifts, with development
The AC controller developed
efforts focused on the environmental and safety needs thatfor the GENEO-B

8

TOYODA AUTOMATIC LOOM WORKS, LTD.

Global Development

Penetrating Global Markets by Analyzing
Market Characteristics and Developing
Optimum Strategies for Individual Markets
Toyoda analyzes market environments andcharacteristics throughout the world and establishes
production and development strategies for each businesssector, product and region. Furthermore, Toyoda plans,
develops and manufactures new products targeted at
global markets.
The car air-conditioning compressor business has
already captured a substantial share of the global
compressor market, and production exceeded 10 million
units during the year ended March 2000. Of these, 81
percent were produced in Japan and the rest in the UnitedStates. For many years, Toyoda’s compressor production
bases were located only in Japan and the United States.
With production beginning in Germany from April 2000,
however, Toyoda now has production bases in the threemain global markets of Japan, North America, and Europe.
By placing manufacturing operations close to customers,
Toyoda will be able to tailor its products swiftly to reflect
the needs of local markets and minimize foreign exchangerisks. Both overseas production bases — Michigan
Automotive Compressor, Inc. (MACI) in the UnitedStates, and TD Deutsche Klimakompressor GmbH(TDDK) in Europe — are managed through joint ventureswith DENSO Corporation.
In the last fiscal year, about 4.3 million compressors
were sold to major automobile manufacturers in Japan,
establishing Toyoda as the market leader. In North

America, 3.7 million compressors were sold to Japanese
automobile manufacturers for locally manufactured cars
as well as to major American automobile manufacturers.
Sales in North America focused on fixed displacement
type compressors, which have excellent reliability at highoperating speeds. In Europe, Toyoda sold 2.7 million
units, mostly variable displacement type compressors forluxury cars.
In the future, Toyoda plans to increase compressor
sales in North America and Europe, which Toyoda believes
have good prospects for expanded sales.
Because the number of air conditioning systems
installed in cars, particularly in the European market, is
expected to rise steadily, Toyoda anticipates that demandfor compressors will increase accordingly. Therefore,
Toyoda will strive to expand sales by developing and
expediting the availability of products that meet themarket’s needs. Products such as compact variabledisplacement type compressors will attract new customers
and open up new markets.
The forklift business is experiencing severe market
competition as mergers, acquisitions and alliances takeplace on a global scale. The markets of advanced countries
are mature, so the demand for materials handlingequipment is cyclical. The demand for forklifts tends toreflect capital investment decisions of customers, which inturn follow economic trends.

Major Manufacturing Bases Outside Japan

1

2

3

6
4
5

1. Michigan Automotive Compressor, Inc. (MACI)/Compressor
2. Toyota Industrial Equipment Mfg., Inc. (TIEM)/Forklift
3. Toyota Industrial Equipment S.A. (TIESA)/Forklift

4. Toyota Industry Kunshan Co., Ltd. (TIK)/Foundry
5. Kirloskar Toyoda Textile Machinery, Ltd. (KTTM)/Textile Machinery
6. TD Deutsche Klimakompressor GmbH (TDDK)/Compressor(As of March 31, 2000)

TOYODA AUTOMATIC LOOM WORKS, LTD. 9

Growth Strategy
Toyoda has established production bases in Japan,
North America and Europe to increase its presence inglobal markets. During the past fiscal year, Toyoda
manufactured about 64,000 forklifts worldwide. The
production base in the United States, Toyota Industrial
Equipment Mfg., Inc. (TIEM), is a joint venture with Toyota
Motor Corporation (TMC). In France, Toyota Industrial
Equipment S.A. (TIESA) is a joint venture with both TMC
and Manitou BF S.A. About 38,000 forklifts are
manufactured in Japan, 18,000 in the United States and
8,000 in Europe.
Toyoda holds a competitive advantage in the
manufacture of counterbalanced forklifts, enjoying asubstantial share of world markets. However, Toyoda’s

focus on counterbalanced forklifts has hindered thepenetration of markets for warehouse equipment. The
warehouse equipment market is large in North America
and is especially important in Europe. To expand its sharein the North American and European markets, Toyoda
acquired distinguished forklift manufacturer BT Industries
AB of Sweden in June 2000.
BT Industries has a competitive edge in warehouseequipment. Developing its business on a global scale, BT
Industries has established firm bases, particularly in Europe
and North America. Toyoda and BT Industries complement
each other in market and product lineup. With a view to
becoming the world’s leading forklift manufacturer, this is aperfect match of strategic importance.

Strengthening Toyoda’s Management Foundation

Accelerating Growth by Honing Production
Technologies for Automobiles and Engines
In the Automobile Segment,
the vehicle (automobile assembly)and engine businesses form
Toyoda’s foundation. As amember of the Toyota Group,
Toyoda is responsible forcontinuously improving quality
and reducing cost in thesebusinesses, as well as proposing
new areas to develop. Therefore,
these businesses play animportant role in expanding salesof the Toyota brand.
Assembly line for the Vitz (Yaris)
In the vehicle business, the Vitz
(exported to Europe as the Yaris) met with such anenthusiastic response that orders surpassed expectations. In
order to accommodate the increase in production of theVitz (Yaris), Toyoda raised the capacity of the production
line at the Nagakusa plant.
As a result, the annual production capacity of the Vitz
(Yaris) increased from 170,000 to 220,000 units and makes
a significant contribution to Toyota Motor Corporation’s(TMC’s) production plans.
Toyoda’s sophisticated production technologies thatenable efficient mixed production with the Sprinter Carib(exported as the Corolla Wagon), will be bolstered torespond quickly and flexibly to fluctuations in production

volume. In Toyoda’s role as a manufacturer of small cars
under the Toyota brand, Toyoda strives to enrichdevelopment functions further and reinforces its ability to
produce new models based on the same platform as that of
the small cars that Toyoda already assembles.
As a member of the Toyota Group, Toyoda works hardto build trust and a reputation as a highly efficient
automobile production base by using advanced information
technologies to effectively link all processes fromdevelopment to production.
In the engine business, Toyoda currently manufactures
more than 10 types of engines for automobiles and forklifts
at the Hekinan plant, an engine production base of the
Toyota Group.
The automobile engines Toyoda produces range from1,500 cc to 4,500 cc gasoline engines. Toyoda also

Computer simulated virtual factories (V-Comm)

10

TOYODA AUTOMATIC LOOM WORKS, LTD.

manufactures diesel engines with displacement volumes
from 2,000 cc to 4,200 cc, including direct injection types,
which are installed in a broad range of vehicles, including
passenger cars.
Toyoda also develops engines for forklifts, and iscurrently manufacturing 1,500 cc to 5,000 cc or larger
gasoline and diesel engines to power its forklifts. As theseengines were developed solely for our forklifts and Toyoda
is the only manufacturer to independently develop andmanufacture forklift engines, competitors find them very
difficult to imitate. This gives Toyoda a competitive edge inengines that deliver the performance forklifts require.
Another strength is Toyoda’s flexible production
technologies that allow the efficient manufacture of avariety of engines. Equipped with automatic guided vehicles,

Engine assembly line using automatic guided vehicle systems

Toyoda’s unique production line permits different types ofengines to be manufactured using the same assembly line.
Toyoda collaborates with TMC on a broad range ofdevelopment functions including design and evaluation. As a
supplier of engines to TMC, Toyoda’s engine business plays
an important role as the mainstay of its Automobile
Segment and contributes to the steady growth andexpanding sales of Toyoda.

New Businesses

A New Source of Growth

Low-temperaturepolysilicon thin filmtransistor liquid
crystal displays(Poly-Si TFT-LCDs)

To develop new businesses areas, Toyoda is focusing onelectronics. In 1997, Toyoda established ST Liquid Crystal
Display Corp. (ST-LCD), a joint venture with Sony
Corporation to manufacture low-temperature polysiliconthin film transistor LCD (poly-Si TFT-LCD)
panels. With Sony’s technical excellence andToyoda’s advantages in quality control andmanufacturing technology, Toyoda aims tobuild an optimal production system.
Toyoda completed one of theworld’s largest low-temperature poly-Si
TFT-LCD production plants and started productionin April 1999. The unique mass-production line
incorporating the Toyota Production System assures highquality and productivity. All poly-Si TFT-LCDs
manufactured by ST-LCD are sold to Sony Corporation
and used for Sony’s video cameras and other products.
Distinctive characteristics of the low-temperature polySi TFT-LCDs mass-produced by ST-LCD
include low electrical power
consumption, high definition, fast
response and compact size due to theunification of integrated circuits.
Because of its advantages over theprevailing amorphous silicon
TFT-LCD, the poly-Si TFT-LCD
is suited to small-sized digital
information devices. The poly-Si

TFT-LCD is expected to be used for personal digitalassistants (PDAs) and intelligent transport system (ITS)related equipment, for which demand is currently
increasing rapidly.
The LCD market is expanding, particularly for smallsized portable terminals. With outstanding characteristics,
low-temperature poly-Si TFT-LCDs are positioned to
become a next-generation LCD, and Toyoda expects themarket to grow rapidly in the future. At present,
comparatively few businesses are engaged in commercial
production of low-temperature poly-Si TFT-LCDs. As apioneer in these technologies, Toyoda is confident ST-LCD
will have a bright future.
Toyoda has also begun
manufacturing plastic
package substrates forvarious types of IC
chipsets. In a joint venturewith Ibiden Co., Ltd.
(Ibiden), Toyoda launched
TIBC Corporation, which
ST Liquid Crystal Display Corp.
producescompact,
lightweight ball grid array (BGA)-type plastic package
substrates that respond to high-function IC chipsets. The
plastic package substrates are distributed through Ibiden
to the world’s major semiconductor manufacturers foruse in electronic equipment such as PDAs, mobile phones
and personal computers.

Ball grid array-type plastic package substrates

TOYODA AUTOMATIC LOOM WORKS, LTD. 11

Review of Operations

Automobile Segment
The Automobile Segment, made up of the vehicle, engine, car air-conditioning
compressor, foundry parts, and automotive electronics businesses, holds a dominant 68
percent portion of Toyoda’s consolidated sales.
Sales for the Automobile Segment during the fiscal year ended March 31, 2000, were¥423.4 billion, up 16 percent from the previous year.
Vitz (Yaris): Toyota’s 1,000 cc and 1,300 cc classglobal strategic cars, with advances in safety technology
and low fuel consumption, have been highly acclaimed
in both the domestic and European markets.

Vehicle Business
The vehicle business accounts for the largest portion of sales in the Automobile Segment.
Toyoda currently manufactures two Toyota brand models, the Vitz (exported to Europe as
the Yaris), Toyota’s global strategic small car, and the Sprinter Carib (exported as the
Corolla Wagon), a compact station wagon. These two models are manufactured underconsignment from Toyota Motor Corporation (TMC) and are all sold to TMC.
As a result of the sluggish domestic automobile market, the number of Sprinter Caribs(Corolla Wagons) sold in the past fiscal year fell 33 percent, compared to the previous year,
to 28,529 units. However, domestic and export sales of the Vitz (Yaris), which commenced
production in January 1999, grew to 224,100 units. Overall unit sales increased to 266,574
units, up 34 percent from the previous fiscal year.
Total sales reached ¥191.5 billion, up 37 percent from the previous fiscal year.
Note: Production of the Starlet, a 1,300 cc class car, was terminated in July 1999. The number ofStarlets sold during the past fiscal year was 13,945 units. The Vitz (Yaris) is the replacement
model for the Starlet.

1CD Engine: At Toyota, the common rail system
was adopted for the first time for the small-sized direct
injection diesel engine. The 2,000 cc engine delivers low
fuel consumption, yet with high power.

Engine Business
The major products in Toyoda’s engine business are diesel and gasoline engines for
Toyota brand automobiles and forklifts. All automobile engines are sold to TMC, andforklift engines are mounted in forklifts manufactured by Toyoda.
Total diesel engines sold during the fiscal year declined
15 percent, compared to the previous year, to 177,180
units. This result reflects a weak domestic automobile

Car Air-Conditioning
Compressor Unit Sales(Years ended March 31)

market and a 16 percent decline in shipments of C-type
diesel engines, a core product. These results were partly(Million Units)
12

offset by sales of 14,981 direct injection 1CD-type diesel
engines for Toyota’s Avensis, which is produced
exclusively for the European market.

9

Total gasoline engines sold during the fiscal year fell 7
percent, compared to the previous year, to 164,026 units.

6This result mainly reflects a drop in production of S-type
engines. However, sales of the new E-type engines for
7SBU16 Compressor: The displacement of aswash plate variable displacement type compressor isvaried to suit the state of the automobile, such as theload on the engine and cabin temperature, giving asmooth driving feeling. Variable displacement also
reduces fuel consumption.

The total number of engines sold during the past fiscal
year fell 11 percent to 341,206 units.
Car Air-Conditioning Compressor Business
The car air-conditioning compressor business hasdeveloped products serving the needs of customers in

12

TOYODA AUTOMATIC LOOM WORKS, LTD.

3small 1,500 cc passenger cars rose to 40,744 units.
0

96 97 98 99 00
Japan
North America
EuropeAsia and Oceania

each market globally and expanded sales in North America and Europe. Sales increased 12
percent, compared to the previous fiscal year, to ¥120.3 billion. All car air-conditioning
compressors manufactured by Toyoda are sold to major automobile manufacturers globally
through DENSO Corporation.
Sales of car air-conditioning compressors produced for the domestic market increased 9
percent, compared to the previous year, to 4.3 million units, due mainly to favorable minivehicle sales.
Car air-conditioning compressors also sold well overseas. Results in North America
reflect the acquisition of new orders and brisk automobile sales due to increased personal
spending. As a result, car air-conditioning compressor sales increased 10 percent, compared

10 S13 Compressor: A swash plate fixed
displacement type compressor highly acclaimed not only
for its high reliability but also for its light weight.

to the previous year, to 3.7 million units. In the North American markets, fixed displacement
type compressors, which have excellent reliability at high running speeds, have been received
favorably by customers.
The number of car air-conditioning compressors produced for the European markets
increased 17 percent, compared to the previous year, to 2.7 million units. This result reflects
an expansion in European markets due to increased use of car air-conditioners and theacquisition of new orders. In Europe, variable displacement type compressors for luxury
cars are regarded highly.
As a result, total sales rose 11 percent, compared to the previous fiscal year, to 10.8
million units.

Materials Handling Equipment Segment
The Materials Handling Equipment Segment encompasses the forklift business and the

GENEO-B (7FB): An electric-powered forklift
equipped with a dedicated AC drive system for forklifts
as standard equipment. With high basic performanceand operability, the GENEO-B shows the way forward forelectric-powered forklifts.

materials handling systems business, which includes automated storage and retrieval
systems and automatic guided vehicle systems. Forklift
business sales accounted for about 97 percent of the

Forklift Unit Sales

Materials Handling Equipment Segment in the past fiscal(Years ended March 31)

year. Total sales fell slightly to ¥149.1 billion, a drop of(Thousand Units)

1.5 percent from the previous year.

75

In the forklift business, demand in the United Statesmarket declined slightly, but on the whole, demand in the60

United States and Europe remained fairly strong. In Japan,
however, despite signs of recovery since autumn 1999,
sluggish investment caused demand to fall for the second

45

30

consecutive year.
Against this backdrop, the GENEO-B, an electric-

15

powered counterbalanced forklift with a 1.0- to 3.5-ton
capacity, was launched in the Japanese market in August0

96 97 98 99 00

1999 to strengthen Toyoda’s product range. As a result,the annual market share of Japanese forklift sales

Japan

GENEO (7 Series): The GENEO is an enginepowered forklift of 1.0- to 5.0-ton capacity. In addition
to basic materials handling performance, this highly
acclaimed forklift series is powered by an environmentallyfriendly engine dedicated for forklifts and assures safety
by adopting the state-of-the-art computerized safetycontrol system, “System of Active Stability” (SAS).

North America

surpassed 40 percent for the first time. This enabled theEuropeMaterials Handling Equipment Segment to reach its

Asia and Oceania

TOYODA AUTOMATIC LOOM WORKS, LTD. 13

Review of Operations

targeted sales volume in the domestic market, despite a drop in overall demand.
Launched in overseas markets during fiscal 2000, the 7 Series engine-poweredcounterbalanced forklift (GENEO in Japan) has sold well. Although sales volume fell slightly
compared to the previous year, it remained at a high level.
With the acquisition of BT Industries AB in June 2000, Toyoda expects to develop andexpand its forklift business in the future by creating synergy between regions, products and
BT Industries AB: A Swedish warehouseequipment and forklift manufacturer, BT Industries AB
became Toyoda’s subsidiary in June 2000. Together withthe warehouse equipment of BT Industries, Toyoda now
realizes a comprehensive lineup of materials handlingequipment.

sales. In addition, an agreement with Toyota Motor Corporation (TMC) in late July, willallow Toyoda to further strengthen its forklift and materials handling systems businesses.
Presently, TMC focuses on sales and marketing, and Toyoda develops and manufactures
forklifts. The new agreement when finalized is expected to transfer all forklift and related
operations to Toyoda. The transfer of these operations is slated for April 2001. This willconsolidate Toyoda’s position as a leading forklift manufacturer.
The materials handling systems business is responsible for the manufacture of automatedstorage and retrieval systems and automatic guided vehicles. As a result of sluggish
equipment investment in the private sector, sales remained at a low level during the fiscal
year under review.

Textile Machinery Segment
The Textile Machinery Segment consists mainly of the spinning machinery and weaving
LW600 Series Water Jet Loom: A water jetloom that uses the force of water to insert the weftthrough the warp running lengthwise on the loom. The
machine was launched in February 2000. Not only is it
capable of weaving cloth of high quality, but it has
excellent durability and low running costs, making it anefficient, high-speed weaving machine.

machinery businesses. Sales in this segment increased 22 percent over the previous fiscal
year to ¥23.1 billion. This result reflects improvement, albeit spotty, in the businessconditions of Southeast Asia.
In the weaving machinery business, orders from Korea and Taiwan for the JAT610 air jet
loom, the core product of this business, increased, reflecting signs of economic recovery inthese markets. As a result, the number of weaving machines sold increased 2,296 units to4,416 units and sales increased 72 percent, compared to the previous fiscal year, to ¥17.2
billion. In April 1999, the textile machinery business acquired the water jet loom businessfrom Nissan Texsys Co., Ltd. and a new type of water jet loom, the LW600 series, waslaunched in February 2000. Toyoda has taken measures to attract new customers as well as
to promote repeat sales.
In the spinning machinery business, carefully planned sales activities were conducted forprospective customers in leading Asian markets. However, a plunge in demand in Indonesia
and Thailand caused sales of the RX 240 ring spinning frame and the FL 100 roving frame todrop. As a result, sales of the spinning machinery business fell to ¥5.9 billion, down 34
percent from the previous fiscal year.
In the Textile Machinery Segment, Toyoda continues to promote rationalization

RX240 Ring Spinning Frame: By utilizing a
new mechanical design featuring Toyoda’s proprietaryspinning geometry, positive lifting, and an easy-to-usefunction panel, the RX240 provides superior quality,
productivity and operability with simplified maintenance.

14

TOYODA AUTOMATIC LOOM WORKS, LTD.

measures to enhance productivity, and is working to lower costs and strengthen its productline and profitability.

Environmental Action Plan

Fundamental Philosophy
The importance of businesses and individuals in preserving the global environment is increasing.
Toyoda’s fundamental corporate philosophy is to provide safe, high-quality products while
helping to make society prosperous and the world a comfortable place in which to live. In linewith this philosophy, the following four-point policy was established as Toyoda’s Environmental
Plan* to reduce, in a variety of areas, the environmental impact of Toyoda’s activities.
1. Develop and offer clean products with a low environmental impact.
2. Promote manufacturing activities that aim at zero emission. This includes Toyoda’s
measures to prevent global warming, reduce the release of harmful chemical substances
controlled by Japan’s Pollutant Release and Transfer Register (PRTR) into the environment,
and reduce emissions of volatile organic compounds (VOCs). Accordingly, Toyoda hasestablished the following goals:● Reduce carbon dioxide emissions 5 percent by 2005 and 10 percent by 2010 from 1999
levels. In addition, by 2005, reduce harmful chemical substances controlled by PRTR by 50
percent from 1998 levels.
● By 2005, reduce VOCs from paint lines to 50 percent of 1998 levels.
● By 2003, reduce waste and conserve resources, aiming to achieve zero emission oflandfill waste from major domestic plants.
3. Expand environmental management systems.
4. As a corporate citizen, actively participate in public environmental activities.

Toyoda is promoting the acquisition of
ISO 14001 certification as a part of its group-wide
environmental management system.

*Note: Toyoda established its Environmental Plan in March 1993 and in August 2000 this Plan wascomprehensively revised. These revisions clarify Toyoda’s environmental policy until 2005.

Management System
Toyoda has established an Environment Committee to manage environmental issues. This
committee systematically addresses all environmental issues at the highest management level. In
addition, Toyoda has arranged environmental policies for each division and formed environment
committees for each plant. In this way, Toyoda is responding to a myriad of environmental issues.
Primary Environmental Measures
Based on Toyoda’s Environmental Plan, Toyoda established targets to reduce carbon dioxide
emissions, waste, and energy consumption.
In addition, along with aggressive efforts to reduce the weight of each product and improveenergy efficiency, Toyoda is selecting and designing materials appropriate for recycling.

The atrium of Toyoda’s Hekinan plant symbolizes the
harmonious coexistence of people and the environment.

International Environmental Standards
To ensure that Toyoda’s group-wide environmental management system is open andtransparent, Toyoda is promoting the acquisition of ISO 14001 certification. By the end of fiscal
1999, six major plants in Japan had acquired this certification, and two of six overseas plants had
acquired certification.
Communication
First published in 1999 to widely proclaim its environmental measures, Toyoda’s environmental
reports introduce a broad range of Toyoda’s activities. In addition, Toyoda is involved in a wide
range of activities, including periodic exchanges of information between manufacturing plants andthe communities in which they are located, regional events to raise awareness of environmental
protection, and support for volunteer activities related to environmental preservation.

TOYODA AUTOMATIC LOOM WORKS, LTD. 15

Consolidated Five-Year Summary
Toyoda Automatic Loom Works, Ltd. and its consolidated subsidiaries
Years ended March 31

Millions of yen

2000

1999

1998

1997

1996

¥ 625,773¥ 558,876¥ 572,698¥530,851¥476,084

Operating income

28,867

24,81432,72932,67519,926

Income before income taxes

27,162

23,172

33,202

31,157

21,560Net income

13,686

10,391

20,491

17,931

13,549Total assets¥ 685,914¥ 617,071¥ 593,004

556,291¥454,503

Shareholders’ equity

316,293

301,158

304,097

281,154

267,145

Common stock

40,17840,17840,13331,45831,322

Shares outstanding at year-end (thousands)

283,296283,296287,752

282,233

282,083

Depreciation and amortization of intangibles¥ 42,752¥ 34,380¥ 27,958¥ 28,043¥ 27,240

Capital expenditures

44,74660,46862,00735,40829,629Research and development expenses

18,77019,691

23,112

23,231

24,06272.33¥ 63.55¥ 48.03

Net sales

Per common share: (yen)Net income: Primary

¥

48.32

¥

36.30

¥

Diluted

43.18

32.62

63.48

55.20

47.13

Shareholders’ equity

1,116.62

1,063.05

1,056.81

996.18947.04

16.00

16.00

16.00

16.00

13.00

Return on equity (ROE) (%)

4.43

3.43

7.00

6.54

5.18

Return on assets (ROA) (%)

2.10

1.72

3.57

3.55

3.07

Return on sales (ROS) (%)

2.19

1.86

3.58

3.38

2.85

Debt / equity ratio (%)

60.50

51.59

37.49

45.95

20.40

Interest coverage (times)

14.5

16.4

17.6

13.0

8.7

EBITDA (millions of yen)

64,681

51,03355,21255,54844,83013,132

12,797

11,23910,73810,806

Cash dividends
Indices:Number of employees

Notes: 1. The differences of the accounting methods for fiscal 1999 and fiscal 2000 are described in Notes to Consolidated Financial Statements.
2. Net income per share, ROE and ROA are computed based on the average number of shares, shareholders’ equity and total assets, respectively,
during each period.
3. Debt / equity ratio = Interest-bearing debt / Shareholders’ equity
4. Interest coverage = (Operating income + Interest and dividend income) / Interest expenses
5. EBITDA = Income before income taxes + Interest expenses – Interest and dividend income + Depreciation and amortization of intangibles

16

TOYODA AUTOMATIC LOOM WORKS, LTD.

Management’s Discussion and Analysis
The following Management’s Discussion and Analysis is based on current information known tomanagement as of June 29, 2000.

FINANCE
Toyoda’s financial policy is to secure adequate financing and liquidity for its operations and to maintainhealthy balance sheets.
Toyoda’s basic financial policy is that retained earnings and long-term debt should meet long-term
fund requirements such as capital expenditures. Toyoda uses short-term bank loans to fund a portionof its working capital requirements. However, working capital requirements, which are necessary on an
ongoing basis, are raised by long-term debt. Bonds, including convertible bonds, are the main source oflong-term debt, and during the fiscal year ended March 31, 2000, the sixth and seventh issuances ofbonds without collateral provided ¥15,000 million respectively, totaling ¥30,000 million. In addition,loans from Toyoda meet most of the fund requirements of its subsidiaries and affiliates mainly to reduce
their interest expenses and ensure the efficient use of funds.
Toyoda’s financial condition remained sound. Cash and cash equivalents, other liquid assets such as
short-term investments, free cash flows and fund raising from financial institutions provide adequate
funds for the working capital required to expand existing businesses and develop new projects as well
as for future capital expenditures.

ASSETS, LIABILITIES AND SHAREHOLDERS’ EQUITY
Total assets at the end of fiscal 2000 increased by ¥68,843 million, or 11.2 percent from the previous
year, to ¥685,914 million. This mainly reflected increases in cash and cash equivalents, investment

Total Assets,
Shareholders’ Equity andShareholders’ Equity Ratio(Years ended March 31)

securities and receivables – trade, and newly accounted deferred tax assets.
Current assets increased by ¥39,524 million, or 25.4 percent from the previous year, to ¥195,289(¥ Billion)

(%)

800

million. This was mainly due to increases in cash and cash equivalents which accrued from the issuancesof bonds without collateral and in receivables – trade. Short-term investments decreased due to a shift

60
600

from time deposits to negotiable certificates of deposit. Receivables – trade increased by ¥9,966
million, or 17.6 percent, to ¥66,459 million, mainly reflecting an increase in sales in the Automobile

40
400

Segment. Inventories increased by ¥2,955 million, or 10.8 percent, to ¥30,215 million and the inventory
turnover period reached 16.8 days compared to 16.1 days in the previous year.

20

Investments and other assets increased by ¥23,580 million, or 11.9 percent from the previous year,200

to ¥221,226 million. This was attributable to purchases of additional shares in the Toyota Group0companies, purchases of bonds and an increase in loans made for ST Liquid Crystal Display Corp. (STLCD) and to newly accounted deferred tax assets.
Property, plant and equipment decreased by ¥190 million, or 0.1 percent from the previous year,0

96 97 98 99 00
Total Assets
Shareholders’ Equity
Shareholders’ Equity Ratioto ¥258,706 million. This reflected that depreciation, along with capital expenditures, exceeded¥60,000 million in fiscal 1998 and fiscal 1999 respectively, and capital expenditures during fiscal 2000
were held at almost the same level.

TOYODA AUTOMATIC LOOM WORKS, LTD. 17

Management’s Discussion and Analysis
The total of current liabilities and long-term liabilities at the end of the year increased by ¥52,178

Cash Flows(Years ended March 31)

million, or 17.6 percent from the previous year, to ¥349,302 million. This was due to increases in long-(¥ Billion)

term debt, payables – trade, and short-term bank loans, and to newly accounted deferred tax liabilities.

1,000

In current liabilities, an increase in payables – trade was attributable to an increase in the purchaseamount of raw materials, supplies and subcontractors’ expenses in March 2000. An increase in short-

500

term bank loans was due to additions of newly consolidated subsidiaries. In addition, a decrease inpayables – other was due to a reduction in the purchase amount of plant and equipment.

0

In long-term liabilities, long-term debt at the end of the year increased by ¥32,454 million, or 21.8
percent from the previous year, to ¥181,072 million, mainly due to the sixth and seventh issuances of(500)

bonds without collateral of ¥15,000 million respectively, totaling ¥30,000 million. Shareholders’ equity
increased by ¥15,135 million, or 5.0 percent, to ¥316,293 million reflecting an increase in retained(1,000)

97

98

99

00

Net Cash Provided by Operating Activities
Net Cash Used in Investing Activities
Net Cash Provided by (Used in)
Financing Activities

Depreciation andAmortization of Intangibles(Years ended March 31)

earnings accompanying appropriation of income during the year. Shareholders’ equity per share basedon the number of shares outstanding at the end of the year stood at ¥1,162.62, compared to¥1,063.05 for the previous year.

CASH FLOWS(¥ Billion)

During the fiscal year ended March 31, 2000, net cash provided by operating activities was ¥68,058

60

million, an increase of ¥23,920 million, or 54.2 percent compared to the previous year. Net cash used
in investing activities was ¥67,187 million, a decrease of ¥29,040 million, or 30.2 percent. Net cash
40

provided by financing activities increased by ¥3,132 million, or 12.9 percent, to ¥27,500 million.
Despite the adverse effects of translation difference, cash and cash equivalents at end of year increasedby ¥27,377 million, or 54.8 percent compared to the previous year, to ¥77,332 million.

20

The increase in net cash provided by operating activities during the year principally reflected
increases in income before income taxes, payables – trade, and depreciation and amortization of0

96 97 98 99 00

intangibles exceeding increases in receivables – trade and inventories. The increases in receivables –trade, inventories and payables – trade were mainly due to sales increases in the Automobile Segment,

Automobile
Materials Handling Equipment
Textile Machinery*
Othersbacked by the strong performance of the Vitz (Yaris) and car air-conditioning compressors.
Depreciation and amortization of intangibles during the year increased by ¥8,372 million, or 24.4
percent from the previous year, to ¥42,752 million, affected by capital expenditures exceeding ¥60,000

Capital Expenditures

million in fiscal 1998 and fiscal 1999, respectively.

(Years ended March 31)(¥ Billion)
60

In net cash used in investing activities during the year, payments for purchases of property, plantand equipment decreased by ¥25,625 million, or 33.0 percent from the previous year, to ¥52,082
million. Capital expenditures decreased by ¥15,722 million, or 26.0 percent, to ¥44,746 million. The
breakdown of capital expenditures during the year were ¥33,058 million, a decrease of ¥14,577 million,
or 30.6 percent, in the Automobile Segment, with most of the sum invested in production equipment

40

for car air-conditioning compressors; ¥5,426 million, a decrease of ¥6,265 million, or 53.6 percent, inthe Materials Handling Equipment Segment; and ¥1,042 million, an increase of ¥379 million, or 57.2
percent, in the Textile Machinery Segment. Payments for purchases of investment securities decreased20by ¥10,661 million, or 39.8 percent, to ¥16,101 million, consisting mainly of additional purchases ofshares in the Toyota Group companies, such as DENSO Corporation, accounting for approximately 60
096 97 98 99 00
Automobile
Materials Handling Equipment
Textile Machinery*
Otherspercent, and purchases of bonds approximately 25 percent. Payments for loans made during the year
increased by ¥4,523 million, or 75.6 percent, to ¥10,503 million, of which loans to ST-LCD accounted*Note: From fiscal 1999 the Textile Machinery Segment was separated from the “Others” Segment.

18

TOYODA AUTOMATIC LOOM WORKS, LTD.

for approximately 60 percent. Payments for acquisition of business for water jet looms from Nissan
Texsys Co., Ltd. of ¥1,498 million were also accounted for during the year.
Net cash provided by financing activities during the year included a decrease in proceeds fromissuances of bonds by ¥10,242 million, or 25.5 percent from the previous year, to ¥29,849 million.
Retirements of shares, which totaled ¥9,999 million in fiscal 1998 and ¥9,225 million in fiscal 1999, was
not accounted for in fiscal 2000. Toyoda paid cash dividends of ¥4,863 million during the year.

OVERVIEW OF PERFORMANCE
Foreign Exchange Fluctuations and Basic Countermeasures
The average exchange rate of the yen to the U.S. dollar (TTB) during the fiscal year ended March 31,
2000 was ¥111.62, an appreciation of ¥16.63, or 13.0 percent over the previous year.

Net Sales, Overseas Sales
and Overseas Sales Ratio(Years ended March 31)(¥ Billion)

Overseas sales during the year increased by ¥13,255 million, or 7.4 percent from the previous year,

(%)

800

to ¥191,992 million. The ratio to total sales was 30.7 percent; both the amount and the ratio of30

overseas sales are increasing due to the rapid development of globalization. Toyoda therefore plans to600

minimize adverse effects of foreign exchange fluctuations on its financial results by establishing exchange
20

forward contracts and foreign currency option contracts in order to hedge fluctuation risk related to400

the export and import of materials, parts and products. Toyoda also seeks to localize materials and10parts procurement as well as to move production closer to overseas markets in order to reduce200

inventories and costs.
00Operating Performance

96 97 98 99 00
Net Sales
Overseas Sales
Overseas Sales Ratio

The Japanese economy began to recover slowly in the latter half of the fiscal year, with industrial
production activities and capital expenditures improving despite restrained personal consumption in the
difficult employment conditions. Overseas economies generally held steady, sustained by continuing
strength in the U.S. economy and the recovery of domestic demand in the European economy.
Against this background, Toyoda has met customers’ expectations, remained committed to quality
as a top priority, developed various attractive products, aggressively conducted sales promotions, andreduced costs throughout Toyoda, thus developing its strength.
As a result, net sales during the year increased by 12.0 percent from the previous year, andoperating income increased 16.3 percent. The increase in net sales was attributable mainly to increases

R&D Expenses andR&D Expenses to
Net Sales Ratio(Years ended March 31)

in the production of the Vitz (Yaris) and car air-conditioning compressors. The increase in operating
income was accomplished by cost reduction and improved productivity, in addition to the increase in(¥ Billion)

(%)

30

net sales, despite the increase in depreciation and the impact of foreign exchange fluctuations.
4

Net Sales

20

Reflecting the aforementioned factors, net sales during the year increased by ¥66,897 million, or 12.0
percent from the previous year, to ¥625,773 million.

2
10

Cost of Sales, and Selling, General and Administrative Expenses
Cost of sales increased by ¥61,765 million, or 12.5 percent, to ¥557,554 million from the previous

0

year, principally reflecting increases in manufacturing costs along with rises in production to meet strong
demand for products in the Automobile Segment. In addition, the ratio of cost of sales to net sales

0

96 97 98 99 00
R&D Expenses
R&D Expenses to Net Sales Ratio

TOYODA AUTOMATIC LOOM WORKS, LTD. 19

Management’s Discussion and Analysis
slightly increased from 88.7 percent during the previous year to 89.1 percent. Selling, general andOperating Income andOperating Marginadministrative expenses increased by ¥1,079 million from the previous year, to ¥39,352 million; the(Years ended March 31)(¥ Billion)(%)

ratio to net sales slightly decreased from 6.8 percent to 6.3 percent. Research and development
expenses during the year totaled ¥24,062 million, an increase of ¥831 million, or 3.6 percent compared40

to the previous year, with the ratio to net sales standing at 3.8 percent. These expenses consisted
6

mainly of ¥14,949 million for the Automobile Segment, ¥7,238 million for the Materials Handling

30

Equipment Segment and ¥656 million for the Textile Machinery Segment.
4
20

Operating Income
210Operating income during the year increased by ¥4,053 million, or 16.3 percent from the previous year,to ¥28,867 million, reflecting the aforementioned factors. The operating margin slightly increased from00

96 97 98 99 00
Operating Income
Operating Margin

4.4 percent during the previous year to 4.6 percent.
Other Income and Expenses
Other expenses, net, totaled ¥1,705 million, compared to ¥1,642 million for the previous year. Thiswas principally due to increases in income from sales of securities, despite increases in loss fromNet Income, ROS and ROE(Years ended March 31)(¥ Billion)

disposal of property, plant and equipment and equity in net loss of affiliates. Equity in net loss of affiliates
increased from ¥3,763 million in fiscal 1999 to ¥5,036 million in fiscal 2000, reflecting sharp increases in(%)

depreciation of ST-LCD associated with the start of commercial operations.

6

Income before Income Taxes

20

15

Income before income taxes increased by ¥3,990 million, or 17.2 percent from the previous year, to4¥27,162 million.

2

Income Taxes and Deferred Tax Benefit

10

5

Net of income taxes and deferred tax benefit increased by ¥679 million, or 5.7 percent from the00

96 97 98 99 00
Net Income
ROS
ROE

previous year, to ¥12,583 million. The ratio of income taxes to income before income taxes (theeffective rate of income taxes) decreased from 51.4 percent during the previous year to 46.3 percent,mainly due to the reduction in the rate of income taxes in Japan and to the adoption of tax effectaccounting.
Net Income

Net Income per Share(Years ended March 31)(¥)

Net income increased by ¥3,295 million, or 31.7 percent from the previous year, to ¥13,686 million,
partly influenced by tax effect accounting, which became applicable during the year. The ratio of net
income to net sales, return on sales (ROS), increased from 1.86 percent to 2.19 percent. The ratio of80

net income to shareholders’ equity (using the average of such amounts at fiscal 1999 end and fiscal
2000 end), return on equity (ROE), increased from 3.43 percent to 4.43 percent. Primary net income

60

per share (EPS) and diluted net income per share increased from ¥36.30 and ¥32.62 in fiscal 1999 to¥48.32 and ¥43.18 in fiscal 2000, respectively.

40

20

0

96 97 98 99 00
Primary
Diluted

20

TOYODA AUTOMATIC LOOM WORKS, LTD.

DIVIDEND POLICY
Based on remaining competitive, increasing corporate value and maintaining stable dividends, Toyoda
will continue to meet its shareholders’ expectations when considering factors such as performance anddividend payout ratio. Toyoda will utilize retained earnings for research, development and investment
to ensure growth, strength and the aggressive promotion of business in order to secure returns toshareholders.
In accordance with the resolution at the General Meeting of Shareholders held on June 29, 2000,
Toyoda determined that cash dividends payable for shareholders as of the end of the year would be ¥8
per share. Since another ¥8 per share has already been paid as semi-annual dividends, annual dividends
will be ¥16 per share, for a dividend payout ratio of 26.4 percent.

THE YEAR 2000 (Y2K) PROBLEM
Since 1996, Toyoda has recognized the year 2000 (Y2K) problem as an important managerial issue interms of maintaining continuity of operations and relations with its customers and suppliers. Toyoda
took broad measures to ensure the Y2K compliance of its internal information systems, equipment andproducts. After the new year, Toyoda has continued to monitor the latest developments in relation to
the Y2K problem through its channels for customers and internal communications network.
Fortunately, no problem has occurred which could seriously affect its customers, operations, or
consolidated financial condition.

EMPLOYEE PENSION PLAN
Starting in the fiscal year ending March 31, 2001, a new method of accounting for retirement benefits,
which will employ an approach similar to that of IAS, will be applied to Toyoda. In accordance with the
new method, Toyoda has calculated the present value of its projected benefit obligations (including
lump-sum severance payment obligations) as of April 1, 2000 to be ¥62.0 billion. The aggregate market
value of Toyoda’s pension assets as of that date was ¥23.0 billion, and the amount of accrued
severance benefit reserved on the same date was ¥19.6 billion. As a result, Toyoda’s aggregate funding
shortfall as of that date was ¥19.4 billion.
At present, Toyoda plans to amortize the entire amount of the funding shortfall in the first six
months of fiscal 2001. Also, prior to September 30, 2000, Toyoda plans to contribute certain of its
investment securities that have valuation profit into an employee retirement benefit trust, to beaccounted for as pension assets. It is not possible at this time to ascertain the exact amount of thoseinvestment securities, because of fluctuations in stock prices. Toyoda will recognize amortization
expenses for the first six months of fiscal 2001 in an amount equal to the entire funding shortfall as ofApril 1, 2000, but will, for the same period, realize gain on disposition of investment securities that arecontributed as pension assets. Toyoda currently estimates that it will recognize an extraordinary loss of¥4.5 billion after taking into account the aforementioned gain for the first six months of fiscal 2001.
Toyoda plans to continue the present employee pension plan, but it recognizes the amendment or
modification of the plan, such as adoption of a defined contribution plan (Japanese version of 401(k)), asa theme which it should examine.

TOYODA AUTOMATIC LOOM WORKS, LTD. 21

Consolidated Balance Sheets
Toyoda Automatic Loom Works, Ltd. and its consolidated subsidiaries
As of March 31, 2000 and 1999

Thousands of
U.S. dollars(Note 1)Millions of yen

ASSETS
Current Assets:
Cash and cash equivalents (Notes 2(c) and 4(c))
Short-term investments (Note 4(c))
Receivables – Trade
Inventories (Note 6)
Deferred tax assets (Notes 4(b) and 12)
Other
Less: allowance for doubtful receivables

Total Current Assets
Investments and Other Assets:
Investments in securities (Note 8)
Investments in unconsolidated subsidiaries and affiliates
Long-term loans
Deferred tax assets (Notes 4(b) and 12)
Other

Total Investments and Other Assets
Property, Plant and Equipment:
Land (Note 8)
Buildings and structures (Note 8)
Machinery and equipment
Construction in progress
Less: accumulated depreciation

Net Property, Plant and Equipment
Translation adjustment
Total Assets
The accompanying notes are integral parts of these statements.

22

TOYODA AUTOMATIC LOOM WORKS, LTD.

2000

1999

¥ 77,332
6,020
66,45930,215
4,556
11,096(389)¥ 49,955
10,44756,49327,260–12,029(419)

195,289

155,765

1,839,747

175,165
16,183
14,622
5,311
9,945

164,693
17,406
8,098
–
7,449

1,650,166
152,457
137,751
50,035
93,684

221,226

197,646

2,084,093

36,456
151,755
420,357
8,291(358,153)

32,742
144,750
399,127
16,171(333,894)

343,438
1,429,628
3,960,028
78,104(3,374,029)

258,706

258,896

2,437,169

10,693

4,764

100,737¥ 685,914¥ 617,071$ 6,461,746

2000

$

728,520
56,714
626,079
284,644
42,922
104,535(3,667)

Thousands of
U.S. dollars(Note 1)Millions of yen

LIABILITIES AND SHAREHOLDERS’ EQUITYCurrent Liabilities:
Short-term bank loans
Current portion of long-term debt (Notes 7(a) and (b))
Payables – Trade
Payables – Other
Accrued expenses
Accrued income taxes
Employees’ savings deposits
Other
Total Current Liabilities

1999

2000

¥

9,312
987
78,113
10,57919,594
8,021
17,841
1,436

¥

5,876
874
62,788
16,83917,085
4,146
17,739
1,784

2000

$

87,7259,300
735,876
99,657
184,585
75,560168,075
13,528145,883

127,1311,374,306

181,072
2,041
18,815
103
1,388

148,618–
19,952188
1,235

1,705,811
19,233
177,249967
13,077

203,419

169,993

1,916,337

Total Liabilities

349,302297,124

3,290,643

Minority interests in consolidated subsidiaries

20,31918,789191,422Long-term Liabilities:
Long-term debt (Note 7(a) and (b))
Deferred tax liabilities (Notes 4(b) and 12)
Provision for retirement and severance benefits
Consolidation difference (Notes 2(a) and 4(a))
Other
Total Long-term Liabilities

Shareholders’ Equity (Note 10):
Common stock, par value ¥50:
Authorized – 1,091,245,000 shares
Issued 2000 – 283,296,225 shares
1999 – 283,296,225 shares
Capital surplus
Retained earnings (Note 4(a))
Treasury stock at cost

40,17840,178378,508

60,673
215,463(21)

60,673200,308(1)

571,575
2,029,800(202)

Total Shareholders’ Equity¥316,293¥301,158$2,979,681

Total Liabilities and Shareholders’ Equity¥685,914¥617,071$6,461,746

TOYODA AUTOMATIC LOOM WORKS, LTD. 23

Consolidated Statements of Income
Toyoda Automatic Loom Works, Ltd. and its consolidated subsidiaries
For the years ended March 31, 2000, 1999 and 1998
Thousands of
U.S. dollars(Note 1)Millions of yen

2000

1999

1998

2000

Net Sales¥625,773¥558,876¥572,698$5,895,173

Cost of Sales

557,554495,789

498,319

5,252,508

68,21963,08774,379642,665

39,352

38,27341,650370,718

Operating Income

28,867

24,81432,729271,947

Other Income (Expenses):
Interest and dividend income
Interest expenses
Other, net (Note 4(a))

7,765(2,532)(6,938)8,560(2,041)(8,161)

8,277(2,329)(5,475)73,147(23,852)(65,358)

27,162

23,172

33,202

255,884

Income taxes (Notes 4(a) and (b))
Deferred tax benefit (Notes 4(b) and 12)
Minority interests in consolidated subsidiaries
Amortization of consolidation difference (Note 4(a))
Equity in earnings of affiliates (Note 4(a))

15,394(2,811)893––

11,904–877––

12,538
–
290
150
267

145,023(26,487)
8,413––

Net Income

13,686

10,391

20,491

128,93548.32¥ 36.30¥ 72.33

Gross Profit
Selling, General and Administrative Expenses (Note 4(a))

Income before Income Taxes

Net Income per Share (in yen or U.S. dollars)
The accompanying notes are integral parts of these statements.

24

TOYODA AUTOMATIC LOOM WORKS, LTD.

¥

$

0.46

Consolidated Statements of Shareholders’ Equity
Toyoda Automatic Loom Works, Ltd. and its consolidated subsidiaries
For the years ended March 31, 2000, 1999 and 1998

Millions of yen
Number ofshares(Thousands)

Commonstock

CapitalsurplusLegalreserve(Note 4(a))

Retainedearnings(Note 4(a))

Treasurystock

Balance at March 31, 1997
282,233
Net income–
Transfer to legal reserve–
Cash dividends paid–
Bonuses to directors and corporate auditors–
Decrease due to additions of newly consolidated subsidiaries–
Retirements of shares (Note 10)(4,255)
Conversions of convertible bonds (Note 10)
9,774
Other
–

¥ 31,458
–
–
–
–
–
–
8,675
–

¥ 51,963
–
–
–
–
–
–
8,665
–

¥ 7,835
–
257
–
–
–
–
–
–

¥ 189,899
20,491(257)(4,680)(185)(23)(9,999)
–
–

¥ (1)
–
–
–
–
–
–
–
(1)

287,752–––––

40,133–––––60,628
–
–
–
–
–

8,092
(8,092)––––

195,246
8,092
701
10,391(4,604)
(209)

(2)
–
–
–
–
–

–
(4,500)
44
–

–
–
45
–

–
–
45
–

–
–
–
–

(84)
(9,225)
–
–

–
–
–
1

Balance at March 31, 1999
283,296
Increase due to additions of newly consolidated subsidiaries–
Prior years deferred tax adjustments (Note 4(b))–
Net income–
Cash dividends paid–
Bonuses to directors and corporate auditors–
Treasury stock owned by newly consolidated subsidiaries
–
Other
–

40,178
–
–
–
–
–
–
–

60,673
–
–
–
–
–
–
–

–
–
–
–
–
–
–
–

200,308
702
5,487
13,686(4,533)
(187)
–
–

(1)
–
–
–
–
–
(20)
–

¥40,178¥60,673–¥215,463¥(21)

Balance at March 31, 1998
Reclassification of legal reserve to retained earnings
Increase due to additions of newly consolidated subsidiaries
Net income
Cash dividends paid
Bonuses to directors and corporate auditors
Decrease due to additions of affiliates
newly accounted for under the equity method
Retirements of shares (Note 10)
Conversions of convertible bonds (Note 10)
Other

Balance at March 31, 2000

283,296

Thousands of U.S. dollars (Note 1)
Commonstock

CapitalsurplusLegalreserve(Note 4(a))

Retainedearnings(Note 4(a))

Treasurystock

Balance at March 31, 1999
Increase due to additions of newly consolidated subsidiaries
Prior years deferred tax adjustments (Note 4(b))
Net income
Cash dividends paid
Bonuses to directors and corporate auditors
Treasury stock owned by newly consolidated subsidiaries
Other$ 378,508 $ 571,575
–
–
–
–
–
–
–
–
–
–
–
–
–
–

– $ 1,887,023
–
6,611
–
51,693–
128,935–(42,701)–(1,761)
–
–
–
–

$

(7)
–
–
–
–
–
(195)
–

Balance at March 31, 2000

$378,508 $571,575– $2,029,800$(202)

The accompanying notes are integral parts of these statements.

TOYODA AUTOMATIC LOOM WORKS, LTD. 25

Consolidated Statements of Cash Flows
Toyoda Automatic Loom Works, Ltd. and its consolidated subsidiaries
For the years ended March 31, 2000, 1999 and 1998
Thousands of
U.S. dollars(Note 1)Millions of yen

2000

1999

1998

2000

¥ 27,162¥ 23,172¥ 33,202$ 255,884

42,752(70)(1,408)
5,036
3,277
897
(5,801)(7,765)2,532(8,427)(1,998)16,9802,409

34,380
120
(507)
3,763
2,094
1,505
(752)
(8,560)2,042
11,896(888)(13,730)(881)

27,958
150
861
(267)
2,115
1,471
62
(8,277)2,330
8,377(2,634)970
549

402,746(662)(13,265)
47,43930,875
8,452(54,645)(73,147)
23,852(79,392)(18,827)
159,961
22,694(196)(1,083)

(222)
771

(191)
(5,424)(1,843)(10,199)

74,29754,203

61,252699,923

7,779(2,532)(11,486)

8,575(2,042)(16,598)

8,326(2,330)(16,291)

73,283(23,852)(108,208)

Net Cash Provided by Operating Activities

68,05844,13850,957641,146

Cash Flows from Investing Activities:
Payments for purchases of securities
Proceeds from sales of securities
Payments for purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Payments for purchases of investment securities
Proceeds from sales of investment securities
Payments for loans madeProceeds from collections of loans
Payments for acquisition of business
Other, net(3,506)
7,608(52,082)
1,147(16,101)
26(10,503)
3,958(1,498)3,764(6)
10,060(77,707)838(26,762)146(5,980)4,507–(1,323)(9,505)
5,157(32,474)615(10,708)
66(5,141)
6,075–
19,013(33,032)
71,671(490,643)
10,808(151,679)
242(98,943)
37,289(14,118)
35,463

Net Cash Used in Investing Activities(67,187)(96,227)(26,902)(632,942)

Cash Flows from Financing Activities:
Proceeds from issuances of bonds
Repayments of bonds
Increase (decrease) in short-term bank loans
Proceeds from long-term bank loans
Repayments of long-term bank loans
Cash dividends paid (including amount transferred to minority interests)
Retirements of shares
Other, net

29,849
–
1,934
1,633
(1,031)(4,863)–(22)

40,091(300)(1,438)2,272(2,272)(4,757)(9,225)(3)

29,835(24,010)678
970(5,625)(4,704)(9,999)(63)

281,195–
18,21815,385(9,719)(45,810)–(206)

Net Cash Provided by (Used in) Financing Activities

27,50024,368(12,918)

259,063

Translation Difference in Cash and Cash Equivalents(1,807)

(301)

114

(17,019)

Net Increase (Decrease) in Cash and Cash Equivalents

26,564(28,022)

11,251

250,248

Cash and Cash Equivalents at Beginning of Year49,95574,30362,322

470,609

Cash Flows from Operating Activities:
Income before income taxes
Adjustments to reconcile income before income taxes
to net cash provided by operating activities:
Depreciation and amortization of intangibles
Amortization of consolidation difference
Provision for retirement and severance benefits, net of payments
Equity in earnings of affiliates
Income and loss from sales or disposal of property, plant and equipment
Write-downs of securities
Income and loss from sales of securities (including investment securities)
Interest and dividend income
Interest expenses(Increase) decrease in receivables(Increase) in inventories
Increase (decrease) in payables
Increase (decrease) in accrued expenses
Bonuses to directors and corporate auditors paid(including amount transferred to minority interests)
Other, net
Sub TotalInterest and dividend income received
Interest expenses paid
Income taxes paid

Increase in Cash and Cash Equivalents Due to Additions of Newly Consolidated Subsidiaries
Cash and Cash Equivalents at End of Year

813

3,674

730

7,663

¥ 77,332¥ 49,955¥ 74,303$ 728,520

Notes: 1. See Note 2(c) of the Notes to Consolidated Financial Statements for the scope of Cash and cash equivalents.
2. See Note 4(c) of the Notes to Consolidated Financial Statements for the standards used to prepare the Statements of Cash Flows.
The accompanying notes are integral parts of these statements.
26

TOYODA AUTOMATIC LOOM WORKS, LTD.

Notes to Consolidated Financial Statements
1. Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements have been

made for presentation in a form which is more familiar to readers

prepared from accounts and records maintained by Toyoda

outside Japan. These reclassifications do not affect the values of total

Automatic Loom Works, Ltd. (the “Company”), and its domestic andassets, shareholders’ equity, net sales or net income.

overseas consolidated subsidiaries (together, hereinafter referred to

The accompanying financial statements are stated in Japanese yen,as the “Companies”) in accordance with generally accepted

the currency of the country in which the Company is incorporated

accounting principles in Japan. Furthermore, these consolidated

and operates, and solely for the convenience of readers outside

financial statements have been prepared based on the consolidated

Japan, yen amounts as of and for the year ended March 31, 2000,

financial statements prepared in accordance with the Japanese

have been translated into U.S. dollars at the rate of ¥106.15 toRegulations Concerning the Terminology, Forms and Preparation

U.S.$1, the exchange rate prevailing in Tokyo on March 31, 2000.

Methods of the Consolidated Financial Statements (the “Regulations”).

These translations should not be construed as representations that

Relevant notes have been added and certain reclassifications of the

yen amounts have been, could have been or could be converted into

accounts in the basic financial statements disclosed in Japan have been

U.S. dollars.

2. Summary of Significant Accounting Policies(a) Consolidation
The Company had 31, 30 and 26 subsidiaries as of March 31,

presented as consolidation difference. Such differences are amortizedon a straight-line basis over a period generally not exceeding 20 years,

2000, 1999 and 1998, respectively. The accompanying consolidated

except for insignificant amounts, which is charged to income asfinancial statements include the accounts of the Company and 27, 27

incurred. The differences incurred before fiscal 1999 are amortized

and 10 of them as of March 31, 2000, 1999 and 1998, respectively. In

on a straight-line basis over five years.

addition, for fiscal 2000, due to the amendment of the Regulations,
two other companies which had been classified as affiliates (meaning(b) Investments in unconsolidated subsidiaries and affiliates

20 percent to 50 percent ownership of company’s equity) until fiscal

For fiscal 2000, the Company had two (three for fiscal 1999 and 16

1999 were included as consolidated subsidiaries, because thefor fiscal 1998) unconsolidated subsidiaries and nine (11 for fiscal

Company had substantial control over them. The 29 consolidated

1999 and 13 for fiscal 1998) affiliates. The equity method is applied tosubsidiaries including the above-mentioned two companies are listed

the investments in two major affiliates since investments in theon page 39.

remaining unconsolidated subsidiaries and affiliates are not material

For fiscal 2000, two (three for fiscal 1999 and 16 for fiscal 1998)
subsidiaries, were not consolidated with the Company because their
combined assets, net sales, net income and retained earnings in thefor the consolidated financial statements.
The major affiliates accounted for under the equity method arelisted on page 39.

aggregate are not significant in relation to those set forth in the
consolidated financial statements of the Companies.

(c) Cash and cash equivalents

The fiscal years of the subsidiaries are not necessarily the same as

Cash and cash equivalents include all highly liquid investments,

the Company’s. Accounts of those subsidiaries, which have different

generally with original maturities of three months or less, that are

fiscal periods, have been adjusted for significant transactions toreadily convertible to known amounts of cash and are so nearproperly reflect their financial positions as of March 31, 2000, 1999

maturity that they present insignificant risk of changes in valueand 1998, respectively.

because of changes in interest rates, in accordance with the

For the purpose of preparing the consolidated financial statements,

Regulations.

all significant inter-company transactions, account balances andunrealized profits among the Companies have been eliminated, andthe portion attributable to minority interest has been credited/charged against it.
The differences between the cost and underlying net equity ofinvestments in consolidated subsidiaries at the time of acquisition are(d) Securities
Securities that are quoted on stock exchanges are stated mainly at
the lower of cost, as determined by the moving average method, ormarket value. Other securities are stated at cost, as determined by
the moving average method.

TOYODA AUTOMATIC LOOM WORKS, LTD. 27

Notes to Consolidated Financial Statements(e) Inventories
Inventories are stated mainly at cost determined by the moving
average method.

(l) Consumption tax
Principally, the consumption tax under the Japanese Consumption
Tax Law withheld by the Companies on sales of goods is not includedin the amount of net sales in the accompanying consolidated(f) Property, plant and equipment, and depreciation

statements of income, and the consumption tax borne by theProperty, plant and equipment are stated at cost.

Companies under the law on purchases of goods and services, andDepreciation of property, plant and equipment, for the Company

expenses is not included in the related amount.

and its domestic subsidiaries and affiliates, is computed mainly by the
declining-balance method and, for its overseas subsidiaries andaffiliates, is computed mainly by the straight-line method based on theestimated useful lives of the assets.

(m) Appropriation of retained earnings
In the accompanying consolidated statements of shareholders’equity, the approved amount during the relevant fiscal year isreflected for the appropriation of retained earnings of consolidated(g) Bond issue expenses

subsidiaries.

Bond issue expenses are charged to income as incurred.
(n) Income taxes(h) Allowances for doubtful accounts
Allowances for doubtful accounts are provided mainly at the
maximum amount deductible under the tax laws of Japan.

Income taxes are principally provided in amounts currently payablefor each year. Until fiscal 1999, deferred income taxes arising fromtiming differences between reporting for accounting purposes andthat for tax purposes had not been required to be accounted for(i) Provision for retirement and severance benefits
The annual provision for retirement and severance benefits isunder Japanese accounting principles and therefore had not beenrecorded in the financial statements by the Company and its domestic

calculated to state liability at the present value, based on the amountsubsidiaries and affiliates. (For overseas subsidiaries and affiliates,

which would be required if all employees voluntarily terminated theirdeferred income taxes have been recorded and reflected in theiremployment at each balance sheet date, less amounts compensatedrespective financial statements.)

by the qualified retirement pension plan which cover 50 percent of
the amount of the benefits of the retired employees after 20 years of
employment.

However, from fiscal 2000, tax effect accounting has been adopted
in Japan. See Note 4(b).
See also Note 4(a) for the presentation of enterprise taxes in theaccompanying consolidated statements of income.

(j) Lease transaction
Finance leases other than those that are deemed to transfer theownership of the leased assets to lessees are mainly accounted for by(o) Amounts per share
Net income per share is computed based on the average number

the method similar to that applicable to ordinary operating leases.

of outstanding shares of common stock during the fiscal year.

(k) Translation adjustment(p) Assets and liabilities of consolidated subsidiaries

Accounts of overseas consolidated subsidiaries and affiliates
accounted for under the equity method have been translated into
Japanese yen as follows:
1. Assets and liabilities have been translated at the prevailing fiscal
year-end rate.
2. Shareholders’ equity has been translated at the rate prevailingwhen equity was acquired or when a change in equity occurred.
3. Revenue and expenses have been translated at the prevailingfiscal average rate, although the prevailing fiscal year-end rate
had been used until fiscal 1999. See Note 3.

28

TOYODA AUTOMATIC LOOM WORKS, LTD.

Assets and liabilities of consolidated subsidiaries are evaluated byusing the market price method.

3. Change in Accounting
Until fiscal 1999, revenue and expenses accounts of overseas
consolidated subsidiaries had been translated into Japanese yen with

incurred throughout the fiscal years.
If the figures of fiscal 2000 had been presented based on thefiscal year-end rates. From fiscal 2000, the Company uses fiscal

method used until fiscal 1999, net sales for fiscal 2000 would beaverage rates. This change was made to present the operating results¥615,341 million ($5,796,902 thousand), income before income taxes

more precisely as the significance of the overseas consolidated

would be ¥26,611 million ($250,690 thousand) and net income

subsidiaries had been increasing and their revenue and expenses werewould be ¥13,488 million ($127,069 thousand).

4. Additional Information(a) From fiscal 1999, the Company has presented consolidated
financial statements as follows.

million ($92,957 thousand) (¥4,556 million ($42,922 thousand) incurrent assets and ¥5,311 million ($50,035 thousand) in investments

In the consolidated balance sheets, legal reserve and retained

and other assets), and deferred tax liabilities are recognized in theearnings have been combined and shown as retained earnings.

amount of ¥2,041 million ($19,233 thousand) and included in long-

Consolidation difference, which had been placed between theterm liabilities in the consolidated financial statements as of Marchliabilities section and the shareholders’ equity section until fiscal 1998,

31, 2000.

has been included in long-term liabilities from fiscal 1999.
In the consolidated statements of income, enterprise taxes (¥2,088

If the figures of fiscal 2000 had been presented based on themethod used until fiscal 1999, net income for fiscal 2000 and retained

million for fiscal 1999) had been included in selling, general andearnings as of March 31,2000 would be ¥10,716 million ($100,952

administrative expenses until fiscal 1998. For fiscal 1998, enterprisethousand) and ¥207,006 million ($1,950,124 thousand), respectively.

taxes were ¥3,343 million. However, they have been included in

In addition to the above, deferred tax assets relating to priorincome taxes from fiscal 1999. Amortization of consolidation

periods are recognized as prior years deferred tax adjustments ofdifference (¥120 million for fiscal 1999), which had been classified as a

¥5,487 million ($51,693 thousand) in retained earnings as of Marchdeductible item from income before income taxes until fiscal 1998,

31, 2000.

has been included in selling, general and administrative expenses.
Equity in earnings of affiliates (loss of ¥3,763 million for fiscal 1999),(c) Until fiscal 1999, consolidated statements of cash flows had

which had been added to or deducted from income before income

been prepared in conformity with the accounting principles

taxes until fiscal 1998, has been included in other, net of other incomeprescribed by the Company and accepted by the independent public

or expenses. These adjustments have not been applied to the financial

accountants. However, from fiscal 2000, they have to be prepared instatements presented prior to fiscal 1999 retroactively.

accordance with newly prescribed rules in the amended Regulations.

If the figures of fiscal 1999 had been presented based on the

Pursuant to the amendment, the consolidated statements of cash

method used until fiscal 1998, operating income and income before

flows for fiscal 1999 and 1998 were restated to make the figuresincome taxes for fiscal 1999 would have been ¥22,846 million andcomparable with those of fiscal 2000.

¥24,968 million, respectively.

According to this change, deposits and securities (for stocks, they
had been stated as marketable securities separately) with original(b) Tax effect accounting has been adopted from fiscal 2000 due
to the amendment of the Regulations. In conformity therewith,maturities of over three months have been classified as short-term
investments from fiscal 2000.

deferred tax assets are newly recognized in the amount of ¥9,867

TOYODA AUTOMATIC LOOM WORKS, LTD. 29

Notes to Consolidated Financial Statements
5. Marketable Securities
Current and non-current marketable securities included in current assets and in investments and other assets as of March 31, 2000
were as follows:
Millions of yen

Book
value

Current:
Stock
Bonds
Other

Thousands of U.S. dollars

Marketvalue

Valuation
profitBook
value

Marketvalue

Valuation
profit

¥

393
2
–

¥

1,256
3
–

¥

863
1
–

$

3,694
23
–

$

11,826
28
–

$

8,132
5
–

Sub-total

¥

395

¥

1,259

¥

864

$

3,717

$

11,854$

8,137

Non-Current:
Stock
Bonds
Other

¥162,983
2,000
50¥1,323,286
1,997
50

¥1,160,303(3)–$1,535,403
18,841471$12,466,190
18,812475$10,930,787(29)
4Sub-total¥165,033¥1,325,333¥1,160,300$1,554,715$12,485,477$10,930,762

Total¥165,428¥1,326,592¥1,161,164$1,558,432$12,497,331$10,938,899

Notes: 1. Market value is calculated mainly based on the closing price of the Tokyo Stock Exchange.
2. Book value of the securities which are excluded from disclosure above is as follows:

Millions of yen

Thousands of
U.S. dollars

Current:
Bonds used in repurchase agreements
Commercial paper used in repurchase agreements
Discount bank debenture
Foreign unlisted bondMoney management fund

¥ 3,994
3,993
3,491
810
632

$ 37,623
37,62032,889
7,628
5,958

Non-current:
Domestic private stock
Foreign private stock¥22,856
3,310$215,322
31,183

6. Inventories
Inventories as of March 31, 2000 and 1999 were as follows:
Millions of yen

Thousands of
U.S. dollars

2000

1999

2000

Finished goods
Raw materials
Work in process
Supplies¥ 3,342
4,615
18,104
4,154¥ 2,223
3,421
18,062
3,554$ 31,485
43,476
170,548
39,135

Total¥30,215¥27,260$284,644

30

TOYODA AUTOMATIC LOOM WORKS, LTD.

7. Long-term Debt(a) Long-term debt as of March 31, 2000 and 1999 was as follows:
Thousands of
U.S. dollars

Millions of yen

2000

1999

2000

¥ 75,748¥ 75,748$ 713,594

2.70% bonds due 2008 without collateral

30,00030,000282,619

1.50% bonds due 2003 without collateral

20,00020,000188,413

2.15% bonds due 2008 without collateral

20,00020,000188,413

1.50% bonds due 2006 without collateral

15,000–141,309

1.94% bonds due 2009 without collateral

15,000–141,309

1.80% bonds due 2005

300

300

2,826

Long-term bank loans

6,011

3,444

56,628

(987)

(874)

(9,300)¥181,072¥148,618$1,705,811

Parent company:
0.35% convertible bonds due 2003 without collateral

Consolidated subsidiaries:

Less: current portion of long-term debt
Total

Note: The conversion period of the 0.35 percent convertible bonds due 2003 is from May 1, 1996 to September 29, 2003 and the conversion price was¥2,020 per share as of March 31,2000. The aggregate number of shares issuable upon conversion thereof at such conversion price was 37,499
thousand shares.

(b) Annual maturities of long-term debt as of March 31, 2000 are as follows:

2001
2002
2003
2004
2005
2006 and thereafter
Total

Millions of yen

Thousands of
U.S. dollars

¥

$

987
1,053
857
97,129

9,300
9,917
8,071
915,020

418

3,942

81,615

768,861¥182,059$1,715,111

8. Assets Pledged as Collateral
Investment securities, land, buildings and structures at the bookvalue of ¥13,297 million ($125,265 thousand) were pledged ascollateral for bank loans or employees’ savings deposits or otherliabilities as of March 31, 2000.

9. Contingent Liabilities
Contingent liabilities for guarantees of loans of two companies andindustrial revenue bond issues of one village in Michigan, U.S.A.

amounted to ¥3,306 million ($31,144 thousand) as of March 31,
2000.

TOYODA AUTOMATIC LOOM WORKS, LTD. 31

Notes to Consolidated Financial Statements
10. Shareholders’ Equity
Under the Japanese Commercial Code, amounts equal to at least

held after the close of the fiscal year to which the dividends are

10 percent of the sum of the cash dividends and other external

applicable. In addition, semi-annual dividends may be paid upon

appropriations paid by the Company and its domestic subsidiaries

resolution of the Board of Directors, subject to limitations imposed

must be set aside as a legal reserve until it equals 25 percent ofby the Japanese Commercial Code.

common stock. The legal reserve may be used to reduce a deficit orProceeds from the conversions of convertible bonds have been

may be transferred to common stock by taking appropriate

accounted for in approximately equal amounts as common stock andcorporate action. In consolidation, the legal reserves of the Company

capital surplus. At least 50 percent of the proceeds have been

and its domestic subsidiaries are accounted for as retained earnings.

accounted for as common stock, in accordance with the provisions ofYear-end dividends are approved by the shareholders at a meeting

the Japanese Commercial Code.

11. Research and Development Expenses
Research and development expenses, which were included inamounted to ¥24,062 million ($226,676 thousand), ¥23,231 million

selling, general and administrative expenses and manufacturing costs,and ¥23,112 million for fiscal 2000, 1999 and 1998, respectively.

12. Income Taxes(a) The significant components of deferred tax assets and liabilities as of March 31, 2000 were as follows:
Millions of yen

Thousands of
U.S. dollars¥ 2,368
1,708
1,452
1,338
993
776
507
4,034

$ 22,305
16,092
13,67812,609
9,353
7,308
4,780
38,00013,176(2,394)

124,125(22,553)

Total deferred tax assets

10,782

101,572

Deferred tax liabilities:
Depreciation
Land
Reserve for advanced depreciation
Reserve for special depreciation
Other

1,304
1,112
409
59
72

12,281
10,475
3,852
555
686

Total deferred tax liabilities

2,956

27,849¥ 7,826$ 73,723

Deferred tax assets:
Net operating loss carry-forwards for tax purposes
Receivables – Trade
Accrued expenses
Depreciation
Provision for retirement and severance benefits
Enterprise tax payable
Securities
Other
Sub-total
Less: valuation allowance

Net deferred tax assets

32

TOYODA AUTOMATIC LOOM WORKS, LTD.

(b)Reconciliations of differences between the statutory rate of income taxes and the effective rate of income taxes for the year ended
March 31, 2000 were as follows:
Rate

Statutory rate of income taxes
Addition (reduction) in taxes resulting from:
Equity in loss of affiliates
Net loss before income taxes of consolidated subsidiaries
Elimination of dividend income
Dividend income and others not recognized as taxable income
Other

41.2%

Effective rate of income taxes

46.3%

7.6
3.5
1.3
(8.6)
1.3

13. Lease Transaction(a) Finance leases which do not transfer ownership of leased assets to lessees
1. Pro forma information of acquisition cost and accumulated depreciation of leased assets as of March 31, 2000 and 1999 were as follows:
Millions of yen

Machinery and equipment:
Acquisition costLess: accumulated depreciation
Net leased assets

Thousands of
U.S. dollars

2000

1999

2000

¥7,720¥8,075$72,730

3,585

3,603

33,778¥4,135¥4,472$38,952

2. Pro forma obligations under finance leases as of March 31, 2000 and 1999 were as follows:
Millions of yen

Thousands of
U.S. dollars

2000

1999

2000

¥1,501¥1,421$14,136

2,634

2,929

24,816¥4,135¥4,350$38,952

Millions of yen

Thousands of
U.S. dollars

2000¥1,749$16,479

1999

1,679

–

1998

1,591

–

Obligations under finance leases:
Due within one year
Due after one year
Total
Note: Obligations under finance leases include the imputed interest expense portion.

3. Total lease payments for the years ended March 31, 2000, 1999 and 1998 were as follows:

Note: Pro forma depreciation expenses, which are not reflected in the accompanying consolidated statements of income, were computed by thestraight-line method for fiscal 2000, 1999 and 1998 and were equivalent to the amount of total lease payments of the above.

TOYODA AUTOMATIC LOOM WORKS, LTD. 33

Notes to Consolidated Financial Statements(b) Operating leases
Pro forma obligations under operating leases as of March 31, 2000 and 1999 were as follows:
Thousands of
U.S. dollars

Millions of yen

Obligations under operating leases:
Due within one year
Due after one year
Total

2000

1999

2000

¥203

¥174

$1,917

165

156

1,552

¥368

¥330

$3,469

14. Subsequent Events(a) The Board of Directors, by its resolution adopted on April 4,

BT Industries AB, the Company on July 19, 2000, issued domestic

2000, approved that the Company would purchase 25.1 percent ofbonds without collateral in the aggregate amount of ¥40,000 million

the outstanding common stock of BT Industries AB in Sweden from($376,825 thousand), being 1.25 percent ¥20,000 million bonds due

its major shareholders and would make a tender offer for the2005 and 1.91 percent ¥20,000 million bonds due 2010.

remaining 74.9 percent. The Company concluded an agreement withthe then major shareholders of BT Industries AB on April 4, 2000.

(b) On June 29, 2000, the shareholders of the Company authorized

On May 31, 2000, the Company purchased the 25.1 percent or

the payment of a year-end cash dividend to shareholders of record as

7,021 thousand shares from such major shareholders forof March 31, 2000, of ¥8 ($0.075) per share, or a total of ¥2,266

approximately ¥23,000 million ($216,675 thousand), and on June 22,

million ($21,350 thousand), and bonuses to directors and corporate

2000 obtained 72.0 percent or 20,156 thousand shares by tender

auditors of ¥184 million ($1,733 thousand). Cash dividends for theoffer for approximately ¥66,100 million ($622,704 thousand).

year thus totaled ¥16 ($0.151) per share, including a semi-annual

To partially finance the purchase and tender offer of the shares in

34

TOYODA AUTOMATIC LOOM WORKS, LTD.

dividend of ¥8 ($0.075).

15. Segment Information(a) Business segments

Thousands of
U.S. dollars

Millions of yen

2000

1999

1998

2000

¥423,413
3,335
426,748¥364,269
2,431
366,700¥366,387
4,021
370,408$3,988,818
31,4214,020,239

149,085–
149,085

151,370–
151,370

160,117–160,117

1,404,470–
1,404,470

23,135–
23,135

18,947–
18,947–––217,946–
217,946

30,1402,613
32,75324,2902,974
27,264

46,194
1,060
47,254283,939
24,620308,559

631,721(5,948)564,281(5,405)

577,779(5,081)

5,951,214(56,041)

Total¥625,773¥558,876¥572,698$5,895,173

Operating Costs and Expenses:
Automobile
Materials Handling Equipment
Textile Machinery
OthersElimination of inter-segment transactions¥402,320
143,335
26,10732,001(6,857)¥349,302
142,918
22,40225,064(5,624)¥351,635
147,386–
45,895(4,947)$3,790,106
1,350,307
245,940
301,471(64,597)

Total¥596,906¥534,062¥539,969$5,623,227

Operating Income (Loss):
Automobile
Materials Handling Equipment
Textile Machinery
OthersElimination of inter-segment transactions¥ 24,429
5,749(2,971)752
908¥ 17,397
8,452(3,455)2,200
220¥ 18,773
12,731
–
1,359
(134)

$ 230,133
54,163(27,994)
7,089
8,556

Total

¥ 28,867¥ 24,814¥ 32,729$ 271,947

Assets:Automobile
Materials Handling Equipment
Textile Machinery
OthersCorporate¥266,839
81,34323,42718,012296,293¥254,087
78,51822,224
20,729241,513¥204,216
69,730–43,877275,181$2,513,787
766,302220,702
169,684
2,791,271

Total¥685,914¥617,071¥593,004$6,461,746

Depreciation and Amortization of Intangibles:
Automobile
Materials Handling Equipment
Textile Machinery
OthersCorporate or elimination of inter-segment transactions¥ 31,707
7,751
978
2,398
(82)

¥ 26,518
5,548
1,024
1,404
(114)

¥ 21,473
4,549
–
1,959
(23)

$ 298,701
73,0139,217
22,588
(773)

Total

¥ 42,752¥ 34,380¥ 27,958$ 402,746

Capital Expenditures:
Automobile
Materials Handling Equipment
Textile Machinery
OthersCorporate or elimination of inter-segment transactions¥ 33,058
5,426
1,042
5,794
(574)

¥ 47,635
11,691
663
875
(396)

¥ 50,918
7,660
–
3,586
(157)

$ 311,423
51,122
9,815
54,586(5,409)Total¥ 44,746¥ 60,468¥ 62,007$ 421,537

Sales:
Automobile
Outside customer sales
Inter-segment transactions
Materials Handling Equipment
Outside customer sales
Inter-segment transactions
Textile Machinery
Outside customer sales
Inter-segment transactions
Others
Outside customer sales
Inter-segment transactions
Sub-total
Elimination of inter-segment transactions

TOYODA AUTOMATIC LOOM WORKS, LTD. 35

Notes to Consolidated Financial Statements(b) Geographical segments
Thousands of
U.S. dollars

Millions of yen

2000

1999

¥531,274
25,309556,583¥465,444
18,860484,304–––$5,004,933
238,432
5,243,365

79,232–
79,232

78,264–78,264–––746,409–746,40915,268589
15,857

15,168551
15,719–––143,832
5,552
149,384

651,672(25,899)578,287(19,411)––

6,139,158(243,985)

Total¥625,773¥558,876¥572,698$5,895,173

Operating Costs and Expenses:
Japan
North America
OthersElimination of inter-segment transactions¥533,987
74,547
15,358(26,986)¥465,139
73,342
15,100(19,519)––––$5,030,498
702,276
144,683(254,230)

Total¥596,906¥534,062¥539,969$5,623,227

Operating Income:Japan
North America
OthersElimination of inter-segment transactions¥ 22,596
4,685
499
1,087

¥ 19,166
4,922
619
107

–
–
–
–

$ 212,867
44,133
4,701
10,246

Total¥ 28,867¥ 24,814¥ 32,729$ 271,947

Assets:Japan
North America
OthersCorporate¥361,459
44,035
17,322
263,098¥349,787
39,113
15,846
212,325––––$3,405,174
414,833
163,186
2,478,553

Total¥685,914¥617,071¥593,004$6,461,746

Sales:
Japan
Outside customer sales
Inter-segment transactions
North America
Outside customer sales
Inter-segment transactions
Others
Outside customer sales
Inter-segment transactions
Sub-total
Elimination of inter-segment transactions

1998

2000

Notes:(a) Business segments
1. Amounts of the textile machinery business had been included in the “Others” Segment until fiscal 1998.
However, from fiscal 1999, these amounts have been separated from the “Others” Segment and are presented as the Textile Machinery Segment
because these have become more material than until fiscal 1998.
2. Main products of each segment:
Automobile .... passenger vehicles, diesel and gasoline engines, car air-conditioning compressors
Materials Handling Equipment .... counterbalanced forklifts, skid steer loaders, automated storage and retrieval systems
Textile Machinery .... ring spinning frames, air jet looms, water jet looms
Others .... ball grid array-type plastic package substrates for IC chipsets(b) Geographical segments
Until fiscal 1998, both the amounts of the transactions in Japan and the assets belonging to the Company and its domestic subsidiaries had been morethan 90 percent of the total amounts of all segments. Therefore, geographical segments information had been omitted for periods prior to fiscal 1999.

36

TOYODA AUTOMATIC LOOM WORKS, LTD.

Report of Independent Public Accountants

To the Board of Directors of
Toyoda Automatic Loom Works, Ltd.

We have examined the consolidated balance sheets of Toyoda Automatic Loom Works, Ltd. and its
consolidated subsidiaries as of March 31, 2000 and 1999, and the consolidated statements of income,shareholders’ equity and cash flows for the three years in the period ended March 31, 2000,
expressed in Japanese yen. Our examinations were made in accordance with generally accepted
auditing standards in Japan and, accordingly, included such tests of the accounting records and suchother auditing procedures as we considered necessary in the circumstances.
In our opinion, the aforementioned consolidated financial statements present fairly the financial
position of Toyoda Automatic Loom Works, Ltd. and its consolidated subsidiaries as of March 31,
2000 and 1999, and results of their operations and their cash flows for the three years in the period
ended March 31, 2000, in conformity with generally accepted accounting principles in Japan applied
on a consistent basis, except in regard to the changes in accounting procedures, with which we
concur, described in Note 3 to the consolidated financial statements.
Our examinations also covered the translation of Japanese yen amounts into the United States dollar
amounts included in the consolidated financial statements and, in our opinion, such translation has
been made in conformity with the basis stated in Note 1 to the consolidated financial statements.
Such United States dollar amounts are presented solely for the convenience of readers outside Japan.

ITOH AUDIT CORPORATION
June 29, 2000 (July 19, 2000 as to Note 14(a))
Nagoya, Japan

TOYODA AUTOMATIC LOOM WORKS, LTD. 37

Directors and Corporate Auditors(As of June 29, 2000)

BOARD OF DIRECTORS

Chairman

Executive Vice Chairman

Chisei Isogai

Akira Yokoi

President

Tadashi Ishikawa

Executive Vice President

Executive Vice President

Takamasa Yoshida

Shozo Nakayama

Senior Managing Directors
Tetsuro Toyoda
Morio Kawamura
Shiro Endo
Kazuhiko Takeuchi
Managing Directors
Shinji Takeuchi
Masazumi Konishi
Shinjiro Kamimura
Tatsuo Matsuura
Honorary Chairman
Yoshitoshi Toyoda

Directors
Tatsuro Toyoda
Koshi Iwata
Yoshimitsu Ogihara
Masanori ItohYoshikatsu Mizuno
Seiji Ueda
Yoshiaki Kamiya
Taketoshi Izumi
Akira Imura
Iwao Katayama
Shigetaka Yoshida
Shinichiro Matsuyama
Masafumi Kato
Kimpei Mitsuya
Hiroya Kono

CORPORATE AUDITORSStanding Corporate Auditors
Shigetaka Mitomo
Tadashi Komiya

38

TOYODA AUTOMATIC LOOM WORKS, LTD.

Corporate Auditors
Iwao Isomura
Hiroshi Makino

Corporate Data
(As of March 31, 2000)

PLANTS AND OFFICES
Main Products

Kariya Plant
Takahama Plant
Nagakusa Plant
Kyowa Plant
Obu Plant
Hekinan Plant
Head Office and Other

Textile machinery, car air-conditioning compressors
Forklifts, materials handling systems
Automobiles
Semiconductors, electronics equipment, press diesFoundry parts
Engines

Total

Number of
Employees

Land Area

1,757
1,620
2,250
848
538
1,216
933

170,000
327,000
269,000
164,000
156,000
271,000
1,162,000

9,162

2,519,000(m2)

CONSOLIDATED SUBSIDIARIES
LocationJapan
TIBC Corporation
Toyoda-Sulzer Mfg., Ltd.
Sun River Co., Ltd.
Izumi Machine Mfg. Co., Ltd.
Tokyu Co., Ltd.
Toyoda High System, Inc.
Nishina Industry Co., Ltd.
Tokaiseiki Co., Ltd.
Logistec Co., Ltd.
SKE, Inc.
SK Maintenance, Inc.
Iwama Loom Works, Ltd.
Kawamoto System Corporation
ARTI, Inc.
Hara Corporation
Mizuho Industry Co., Ltd.
Sun Valley, Inc.
Sun Staff, Inc.
Mino Tokyu Co., Ltd.
Shine’s, Inc.
Tokai System Laboratory Co., Ltd.
Esaka Sports Land Co., Ltd.

Aichi
Aichi
Osaka
Aichi
Aichi
Aichi
NaganoShizuoka
Aichi
Aichi
Aichi
Aichi
Aichi
Aichi
Gifu
Aichi
Aichi
Aichi
Gifu
Aichi
Aichi
Osaka

Overseas
Michigan Automotive Compressor, Inc.
Toyota Industrial Equipment Mfg., Inc.
Toyoda Textile Machinery, Inc.
Toyota Industrial Equipment S.A.
TD Deutsche Klimakompressor GmbH
Toyota Industry Kunshan Co., Ltd.
Kirloskar Toyoda Textile Machinery, Ltd.

Parma, Michigan, U.S.A.
Columbus, Indiana, U.S.A.
Charlotte, North Carolina, U.S.A.
Ancenis, France
Straβgräbchen, Sachsen, Germany
Kunshan, Jiangsu, China
Bangalore, Karnataka, India(Thousands of the local currency)

CapitalEquityownership¥3,000,000¥500,000¥150,000¥150,000¥135,000¥100,000¥100,000¥98,000¥90,000¥78,500¥50,000¥49,920¥47,000¥30,000¥23,193¥20,000¥20,000¥20,000¥18,000¥10,000¥10,000¥10,000

65.0%
51.0%
80.6%
59.2%
63.3%
90.0%
50.0%
92.1%
100.0%
100.0%
70.0%
50.0%
100.0%
100.0%
73.2%
93.8%
100.0%
100.0%
93.4%
100.0%
100.0%
100.0%

U.S.$146,000
U.S.$60,000
U.S.$1,300
EUR9,000
EUR20,452
U.S.$16,000
Rs816,200

60.0%
80.0%
100.0%
52.8%
65.0%
70.0%
85.5%

Note: ¥ – Japanese yen; U.S.$ – U.S. dollar; EUR – Euro; Rs – Indian rupee

AFFILIATES ACCOUNTED FOR UNDER THE EQUITY METHOD
LocationJapan
ST Liquid Crystal Display Corp.
Taikoh Transportation Co., Ltd.

Aichi
Aichi

(Thousands of the local currency)

CapitalEquityownership¥30,000,000¥ 83,985

50.0%
46.2%

TOYODA AUTOMATIC LOOM WORKS, LTD. 39

Investor Information(As of March 31, 2000)

Corporate Head Office
Toyoda Automatic Loom Works, Ltd.
2-1, Toyoda-cho, Kariya-shi, Aichi-ken 448-8671, Japan
Telephone: +81-(0)566-22-2511
Facsimile: +81-(0)566-27-5650

Transfer Agent
The Toyo Trust and Banking Company, Limited
1-4-3, Marunouchi, Chiyoda-ku, Tokyo 100-0005, Japan
Telephone: +81-(0)3-3287-2211

Major Shareholders
Date of Establishment
November 18, 1926

% ofOwnership

Common StockPar value: ¥50
Authorized: 1,091,245,000 shares
Issued: 1,283,296,225 shares

Securities Traded
Common stock: Tokyo, Osaka and Nagoya Stock Exchanges(Ticker Code: 6201)

Number of Shareholders
8,380

Toyota Motor Corporation

24.67

DENSO Corporation

7.48

The Sakura Bank, Limited

4.80

The Tokai Bank, Limited

4.47

Nippon Life Insurance Company

3.96

The Sanwa Bank, Limited

3.19

Mitsui Marine and Fire Insurance Co., Ltd.

2.78

Towa Real Estate Co., Ltd.

2.72

The Mitsui Trust and Banking Company, Limited*

2.60

The Chiyoda Fire & Marine Insurance Co., Ltd.

2.08

*Note: On April 1, 2000, The Mitsui Trust and Banking Company, Limited
and The Chuo Trust and Banking Company, Limited merged toform The Chuo Mitsui Trust and Banking Company, Limited.
Together, they held 3.73% of the then issued shares.

Independent Accountants
ITOH AUDIT CORPORATION
4-7-35, Meieki, Nakamura-ku, Nagoya-shi, Aichi-ken 450-8565, Japan

Common Stock Price & Trading Volume (Tokyo Stock Exchange)(yen)(thousand shares)
24,0003,000
HighOpening
Closing
Low

High
Closing
Opening
Low

Black: Opening Price > Closing PriceWhite: Closing Price > Opening Price

Common stock price (left scale)

2,500

20,0002,000

16,0001,500

12,000
Trading volume (right scale)

1,000

8,000

500

4,000

0

40

4/95

7

10

1/96

4

7

TOYODA AUTOMATIC LOOM WORKS, LTD.

10

1/97

4

7

10

1/98

4

7

10

1/99

4

7

10

1/00

4

0