2002
TOSHIBA MACHINE CO.,LTD.

Numazu Headquarters
2068-3, Ooka, Numazu-shi, Shizuoka-ken 410-8510, Japan
Tel : 81-(0)55-926-5141
Fax : 81-(0)55-925-6501

Tokyo Main Branch
2-11, 4-chome Ginza, Chuo-ku, Tokyo 104-8141, Japan
Tel : 81-(0)3-3567-0520
Fax : 81-(0)3-3562-5220
URL:http://www.toshiba-machine.co.jp/

TOSHIBA MACHINE

SM02074-1500-SS

An Outline of the Company

TOSHIBA MACHINE, an integrated machine builder with longstanding
international renown for its total capability and quality, excels in the production ofmachine tools, plastic processing machinery, industrial machinery, hydraulic equipment, semiconductor manufacturing equipment, precision machinery, and electronic controls.

TOSHIBA MACHINE was one of the first companies to establish mechatronics oriented production systems by utilizing its own advanced precision technolo-

Contents
2

An Outline of the Company

3

Foreword

5

Financial Highlights（ Consolidated ）6

Overseas Operations for Fiscal 2002

7

Overseas Offices

gies and sophisticated electronics experience for the research and development of
the advanced technologies required for the future and for continuous and stable
growth.

Financial Review

911

Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Shareholders' Equity

12 Consolidated Statements of Cash Flows
13 Notes to Consolidated Financial Statements

Company name:
Headquarters:

TOSHIBA MACHINE CO., LTD．
2068-3, Ooka, Numazu-shi, Shizuoka-ken 410-8510, Japan

21 Independent Auditors' Report

Established:
1938
Capital:¥ 12,484 million (U.S.$ 94 million)
Total no. of employees: 2,195 (current as of March 31, 2002)

22 Directors and Auditors

2

An Outline of the Company

TOSHIBA MACHINE, an integrated machine builder with longstanding
international renown for its total capability and quality, excels in the production ofmachine tools, plastic processing machinery, industrial machinery, hydraulic equipment, semiconductor manufacturing equipment, precision machinery, and electronic controls.

TOSHIBA MACHINE was one of the first companies to establish mechatronics oriented production systems by utilizing its own advanced precision technolo-

Contents
2

An Outline of the Company

3

Foreword

5

Financial Highlights（ Consolidated ）6

Overseas Operations for Fiscal 2002

7

Overseas Offices

gies and sophisticated electronics experience for the research and development of
the advanced technologies required for the future and for continuous and stable
growth.

Financial Review

911

Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Shareholders' Equity

12 Consolidated Statements of Cash Flows
13 Notes to Consolidated Financial Statements

Company name:
Headquarters:

TOSHIBA MACHINE CO., LTD．
2068-3, Ooka, Numazu-shi, Shizuoka-ken 410-8510, Japan

21 Independent Auditors' Report

Established:
1938
Capital:¥ 12,484 million (U.S.$ 94 million)
Total no. of employees: 2,195 (current as of March 31, 2002)

22 Directors and Auditors2Foreword
The Japanese economy, entwined in a deflationary spiral and reeling from the affects of the

Despite a slight improvement in inventory and a general feeling that the economy has stabilized,

September 11 terrorist attacks in the United States, remained stagnant due to depressed con-the general economic outlook is expected to remain bleak due to continued depressed consumer

sumer spending, and decreased investment and low growth in the IT industry.

demand caused by the acute unemployment situation, chronic bad debt problem, and the delay in

An unfavorable business climate also prevailed in the machine industry as constraints placedon international investment in plant and equipment resulted in a continuation of bleak demand.

the recovery of the American economy. Despite such dire conditions, the Toshiba Machine group,in order to remain as a vital industrial force, will be implementing their TOSHIBA MACHINE

Under such severe conditions, the Toshiba Machine group based on their CS (Customer Sat-ACTION PROGRAM 21 Advanced I (TM-AP21 Ad. I) consisting of such things as the reorganiza-

isfaction) corporate policy, and despite its continued efforts to secure orders, both domesticallytion of our various business units, processes, and cost outlays, as well as the establishing of aand overseas, the development of new products and selling of their printing press division,

manufacturing company in China, implementation of a revised CS oriented user-oriented solution-type

recorded a decrease of approximately 30.9% in total orders received compared to the previous

policy, and business alliances with other companies to further strengthen our sales and profitability.

term for machine tools, plastic processing machinery, and semiconductor equipment, totaling

As for manufacturing, we plan to continue the rationalization of our operations, in addition to the¥92,796 million (US$ 696 million ). (An exchange rate of ¥133.25=$1.00 shall be used throughout

further improvement of our product quality and environment based on ISO 9001 and 14001.

this text).
As for sales volume, a drop in demand for our plastic processing machinery, printing presses, andsemiconductor equipment resulted in a 17.9% decrease over the previous term, totaling ¥104,598
million (US$ 785 million ).
In terms of profit and loss, despite such favorable factors as improved foreign exchange conditions, proceeds from the sale of our offset web-press division, and the further upgrading andrationalization of our production and management systems, these were more than offset by stag-

Takahiro Inokuma
President
July, 2002

nant market demand and the costs involved in the reorganizing of our company group resulting
in the incurring of a company group fiscal pre-tax loss of ¥664 million (US$ 5 million ), and a net
loss of ¥1,924 million (US$ 14 million ).
We regret to announce that despite showing a profit as a single company, the Toshiba MachineCompany will forego the distribution of a dividend for the fiscal year just ended in order to continue the reinforcement of our finances.

34

Foreword
The Japanese economy, entwined in a deflationary spiral and reeling from the affects of the

Despite a slight improvement in inventory and a general feeling that the economy has stabilized,

September 11 terrorist attacks in the United States, remained stagnant due to depressed con-the general economic outlook is expected to remain bleak due to continued depressed consumer

sumer spending, and decreased investment and low growth in the IT industry.

demand caused by the acute unemployment situation, chronic bad debt problem, and the delay in

An unfavorable business climate also prevailed in the machine industry as constraints placedon international investment in plant and equipment resulted in a continuation of bleak demand.

the recovery of the American economy. Despite such dire conditions, the Toshiba Machine group,in order to remain as a vital industrial force, will be implementing their TOSHIBA MACHINE

Under such severe conditions, the Toshiba Machine group based on their CS (Customer Sat-ACTION PROGRAM 21 Advanced I (TM-AP21 Ad. I) consisting of such things as the reorganiza-

isfaction) corporate policy, and despite its continued efforts to secure orders, both domesticallytion of our various business units, processes, and cost outlays, as well as the establishing of aand overseas, the development of new products and selling of their printing press division,

manufacturing company in China, implementation of a revised CS oriented user-oriented solution-type

recorded a decrease of approximately 30.9% in total orders received compared to the previous

policy, and business alliances with other companies to further strengthen our sales and profitability.

term for machine tools, plastic processing machinery, and semiconductor equipment, totaling

As for manufacturing, we plan to continue the rationalization of our operations, in addition to the¥92,796 million (US$ 696 million ). (An exchange rate of ¥133.25=$1.00 shall be used throughout

further improvement of our product quality and environment based on ISO 9001 and 14001.

this text).
As for sales volume, a drop in demand for our plastic processing machinery, printing presses, andsemiconductor equipment resulted in a 17.9% decrease over the previous term, totaling ¥104,598
million (US$ 785 million ).
In terms of profit and loss, despite such favorable factors as improved foreign exchange conditions, proceeds from the sale of our offset web-press division, and the further upgrading andrationalization of our production and management systems, these were more than offset by stag-

Takahiro Inokuma
President
July, 2002

nant market demand and the costs involved in the reorganizing of our company group resulting
in the incurring of a company group fiscal pre-tax loss of ¥664 million (US$ 5 million ), and a net
loss of ¥1,924 million (US$ 14 million ).
We regret to announce that despite showing a profit as a single company, the Toshiba MachineCompany will forego the distribution of a dividend for the fiscal year just ended in order to continue the reinforcement of our finances.

3

4

Financial Highlights (Consolidated)
2002
Net sales
Cost of sales
Selling, general andadministrative expenses
Operating income (loss)
Income (loss) before income
taxes and minority interests
Income taxes
Net income (loss)

2001

Overseas Operations for Fiscal 2002
2000

1999

1998

¥104,599$784,983¥74,495$559,062¥28,636$214,904¥1,468$11,017¥(2,010)($15,084)¥413$3,099¥(1,924)($14,439)¥127,359¥109,283¥125,352¥155,943¥92,048¥80,852¥90,694¥114,452¥1,558¥(8,661)¥(1,326)¥6,603¥(11.53)($0.09)¥−$−¥140,035$1,050,919¥37,306$279,970¥2,378$17,846¥2,289$17,178¥2,951$22,146¥9.33¥(51.90)¥(7.95)¥39.71

¥−

¥−

¥2.00

¥3.00

¥30,883¥4,428¥2,123¥733¥30,310¥(1,879)¥(8,779)¥171¥33,779¥879¥(856)¥524¥36,913¥4,578¥7,640¥955

Per common share:
Net income (loss)
Cash dividends
Total assets
Shareholders' equity
Capital expenditure (property,
plant and equipment)
Depreciation
R & D expenditure

Number of employees

3,565¥166,588¥153,563¥159,579¥169,324¥39,620¥36,075¥43,971¥46,152¥2,565¥2,953¥4,100¥3,543

Net Sales

During the fiscal term under review,the north American region experienced an
economic slowdown due to the adverse
effects of the September 11 terrorist
attacks, while except for China, the Asian
economy had slow growth in the first half,
but showed signs of recovery during thelatter half.
Under such conditions, our machine
tools, injection molding machines and semiconductor equipment sales totalled 4,096
million (US$ 31 million ), a 20% decreaseover the previous term, contributing toapproximately 42.2% of total group sales.
The leading types of machines exported were injection molding machines, diecasting machines, and machine tools while
North America was leading destination for
approximately 30% of our exports, followedby such markets as China, Korea, Taiwan,
Europe, Indonesia and Thailand.
During the current business year, thefurther enhancing of our regional sales andservice networks, along with the providingof even better products and the implementation of a total type solution business forour customers is planned.

Millions of yen

155,943

9127,35931,085

104,592

125,35109,283

27,19824,009¥2,749¥3,313¥3,035¥3,467¥−¥3,501

Molding
75,86858,404

59,187

3,999

−

ery

Machin49,42650,335e Tools

Machin27,97530,06848,99029,10242,156

2000

1999

1998

2002

2001

Total Sales & Overseas Sales
Millions of yen

3

155,94

9

127,35ales

9104,5925,352

1

Total S3

109,2844,096s

as SaleOverse46,00761,428

¥−
1998

3,814

Other P

29,84655,139¥2,610Total
roducts

38,88743,247

2000

1999

2002

2001

−
Export Percentages by Major Products

In millions of yen (thousands of U.S. dollars) except for number of employees and per-share data.
Other P

roductse Tools

Machin

26%

19%

55%

achineryM
Molding5

6

Financial Highlights (Consolidated)
2002
Net sales
Cost of sales
Selling, general andadministrative expenses
Operating income (loss)
Income (loss) before income
taxes and minority interests
Income taxes
Net income (loss)

2001

Overseas Operations for Fiscal 2002
2000

1999

1998

¥104,599$784,983¥74,495$559,062¥28,636$214,904¥1,468$11,017¥(2,010)($15,084)¥413$3,099¥(1,924)($14,439)¥127,359¥109,283¥125,352¥155,943¥92,048¥80,852¥90,694¥114,452¥1,558¥(8,661)¥(1,326)¥6,603¥(11.53)($0.09)¥−$−¥140,035$1,050,919¥37,306$279,970¥2,378$17,846¥2,289$17,178¥2,951$22,146¥9.33¥(51.90)¥(7.95)¥39.71

¥−

¥−

¥2.00

¥3.00

¥30,883¥4,428¥2,123¥733¥30,310¥(1,879)¥(8,779)¥171¥33,779¥879¥(856)¥524¥36,913¥4,578¥7,640¥955

Per common share:
Net income (loss)
Cash dividends
Total assets
Shareholders' equity
Capital expenditure (property,
plant and equipment)
Depreciation
R & D expenditure

Number of employees

3,565¥166,588¥153,563¥159,579¥169,324¥39,620¥36,075¥43,971¥46,152¥2,565¥2,953¥4,100¥3,543

Net Sales

During the fiscal term under review,the north American region experienced an
economic slowdown due to the adverse
effects of the September 11 terrorist
attacks, while except for China, the Asian
economy had slow growth in the first half,
but showed signs of recovery during thelatter half.
Under such conditions, our machine
tools, injection molding machines and semiconductor equipment sales totalled 4,096
million (US$ 31 million ), a 20% decreaseover the previous term, contributing toapproximately 42.2% of total group sales.
The leading types of machines exported were injection molding machines, diecasting machines, and machine tools while
North America was leading destination for
approximately 30% of our exports, followedby such markets as China, Korea, Taiwan,
Europe, Indonesia and Thailand.
During the current business year, thefurther enhancing of our regional sales andservice networks, along with the providingof even better products and the implementation of a total type solution business forour customers is planned.

Millions of yen

155,943

9127,35931,085

104,592

125,35109,283

27,19824,009¥2,749¥3,313¥3,035¥3,467¥−¥3,501

Molding
75,86858,404

59,187

3,999

−

ery

Machin49,42650,335e Tools

Machin27,97530,06848,99029,10242,156

2000

1999

1998

2002

2001

Total Sales & Overseas Sales
Millions of yen

3

155,94

9

127,35ales

9104,5925,352

1

Total S3

109,2844,096s

as SaleOverse46,00761,428

¥−
1998

3,814

Other P

29,84655,139¥2,610Total
roducts

38,88743,247

2000

1999

2002

2001

−
Export Percentages by Major Products

In millions of yen (thousands of U.S. dollars) except for number of employees and per-share data.
Other P

roductse Tools

Machin

26%

19%

55%

achineryM
Molding56Overseas Offices
Overseas Subsidiaries, Affiliates and Joint VenturesTOSHIBA MACHINE CO . AMERICA
Chicago Head Office

TOSHIBA MACHINE SOUTH EAST ASIA PTE. LTD. TOSHIBA MACHINE (THAILAND) CO., LTD
Head Office
TMT SERVICE & ENGINEERING CO., LTD

755 Greenleaf Avenue,
Elk Grove Village, IL 60007, U.S.A.
Tel : [1]-847-593-1616
Fax : [1]-847-593-0897

No. 24 Tuas Avenue 4,
Singapore 639374, SINGAPORE
Tel : [65]-68611455
Fax : [65]-68612023

Los Angeles Office

Kuala Lumpur Office1481 South Balboa Avenue,
Ontario , CA 91761 , U.S.A.
Tel : [1]-909-923-4009
Fax : [1]-909-923-7258

70-G, Jalan SS21/62, Damansara Utama,
47400 Petaling Jaya,
Selangor Darul Ehsan, MALAYSIA
Tel . [60]-(0)3-77297544
Fax : [60]-(0)3-77297545

New Jersey Office1578 Sussex Turnpike,
Randolph, NJ 07869,U.S.A.
Tel : [1]-973-252-9956
Fax : [1]-973-252-9959

Columbus Office (OHIO)
4150 Weaver Court South, Hilliard,
OH 43026, U.S.A.
Tel : [1]-614-529-9223
Fax : [1]-614-529-9305

Atlanta Office6478 Putnam Ford Drive, Suite #106,
Woodstock, GA 30189, U.S.A.
Tel : [1]-678-494-8005
Fax : [1]-678-494-8006

Colorado Office9465 West 77th Drive, Arvada,Colorado 80005, U.S.A.
Tel : [1]-303-422-1590
Fax : [1]-303-422-1590

TOSHIBA MACHINE CO . CANADA LTD .
6 Shields Court , Suite 101 , Markham ,Ontario , L3R 4S1 , CANADA
Tel : [1]-905-479-9111
Fax : [1]-905-479-6098

Penang Office127/28 Panjathanee Tower, 23rd Floor,
Nonthree Road, Khwaeng Chong Nonthree,
Khet Yannawa, Bangkok 10120, THAILAND
Tel . [66]-(0)2-681-0158
Fax : [66]-(0)2-681-0162

SHANGHAI TOSHIBA MACHINE CO., LTD.
Head Office
405 Citic Pent-Ox Metropolis,
1085 Pudong Avenue, Shanghai, 200135,
PEOPLE'S REPUBLIC OF CHINA
Tel . [86]-(0)21-5885-0606
Fax : [86]-(0)21-5866-2450

No. 21, Jalan Prai Jaya 4, Bandar Prai Jaya,
13600 Prai, Penang, MALAYSIA
1F Block, 223 Fu Te Bei Street,
Tel . [60]-(0)4-3980086
Wai Gao Qiao Free Trade Zone,
Fax : [60]-(0)4-3989652
Shanghai , 200131
PEOPLE'S REPUBLIC OF CHINA

Jakarta Office

Rukan Pesona Indah Kapuk A/12A, JL. Raya
Kapuk Kamal 20A, Jakarta, 14470,
INDONESIA
Tel . [62]-(0)21-5561760
Fax : [62]-(0)21-5561750

Tianjin Office

Room No.B901, Jindong Building,
No.99, Liuwei Road, Hedong District,Tianjin, 300171
PEOPLE'S REPUBLIC OF CHINA
Tel . [86]-(0)22-2416-0311
TOSHIBA MACHINE TAIWAN CO., LTD. Fax : [86]-(0)22-2416-0380
No. 62, Lane 188, Jui-Kuang Road,
Nei-Hu District, Taipei, TAIWAN
Tel . [886]-(0)2-2659-6558
JAPAN MACHINES (AUSTRALIA) PTY. LTD.
Fax : [886]-(0)2-2659-6381
Sydney Office
1 Giffard Street, Silverwater,
TOSHIBA MACHINE HONG KONG LTD. N.S.W. 2128, AUSTRALIAHead Office
Tel . [61]-(0)2-9739-8787
Suite 1010, 10th Floor, Tower 3,
Fax : [61]-(0)2-9648-4717
China Hong Kong City,
33 Canton Road, Tsim Sha Tsui,
Kowloon, HONG KONG
Tel : [852]-2735-1868
Fax : [852]-2735-1872

Financial Review

Shenzhen Office
TOSHIBA MACHINE (EUROPE) G.m.b.H. Room 611, Century Plaza Hotel,
Karl-Arnold-Strasse 2a,47877 Willich-Münchheide, GERMANY
Tel . [49]-(0)2154-9275-0
Fax : [49]-(0)2154-9275-75

Kin Chit Road, Shenzhen,
PEOPLE'S REPUBLIC OF CHINA
Tel . [86]-(0)755-8232-0453
Fax : [86]-(0)755-8234-3497

Branch and Representative Offices

7

TOSHIBA MACHINE CO.,LTD.
U . K . BRANCHTOSHIBA MACHINE CO., LTD.
BEIJING OFFICE

60 Burners Lane , Kiln Farm ,Milton Keynes MK11 3HD ,UNITED KINGDOM
Tel . [44]-(0)1908-562327
Fax : [44]-(0)1908-562348

Beijing Fortune Building, Room No. 303,
5 Dong Sanhuan Bei-Lu, Chaoyang District,
Beijing, 100004,
PEOPLE'S REPUBLIC OF CHINA
Tel . [86]-(0)10-6590-8977
Fax : [86]-(0)10-6590-8979

8

Overseas Offices
Overseas Subsidiaries, Affiliates and Joint VenturesTOSHIBA MACHINE CO . AMERICA
Chicago Head Office

TOSHIBA MACHINE SOUTH EAST ASIA PTE. LTD. TOSHIBA MACHINE (THAILAND) CO., LTD
Head Office
TMT SERVICE & ENGINEERING CO., LTD

755 Greenleaf Avenue,
Elk Grove Village, IL 60007, U.S.A.
Tel : [1]-847-593-1616
Fax : [1]-847-593-0897

No. 24 Tuas Avenue 4,
Singapore 639374, SINGAPORE
Tel : [65]-68611455
Fax : [65]-68612023

Los Angeles Office

Kuala Lumpur Office1481 South Balboa Avenue,
Ontario , CA 91761 , U.S.A.
Tel : [1]-909-923-4009
Fax : [1]-909-923-7258

70-G, Jalan SS21/62, Damansara Utama,
47400 Petaling Jaya,
Selangor Darul Ehsan, MALAYSIA
Tel . [60]-(0)3-77297544
Fax : [60]-(0)3-77297545

New Jersey Office1578 Sussex Turnpike,
Randolph, NJ 07869,U.S.A.
Tel : [1]-973-252-9956
Fax : [1]-973-252-9959

Columbus Office (OHIO)
4150 Weaver Court South, Hilliard,
OH 43026, U.S.A.
Tel : [1]-614-529-9223
Fax : [1]-614-529-9305

Atlanta Office6478 Putnam Ford Drive, Suite #106,
Woodstock, GA 30189, U.S.A.
Tel : [1]-678-494-8005
Fax : [1]-678-494-8006

Colorado Office9465 West 77th Drive, Arvada,Colorado 80005, U.S.A.
Tel : [1]-303-422-1590
Fax : [1]-303-422-1590

TOSHIBA MACHINE CO . CANADA LTD .
6 Shields Court , Suite 101 , Markham ,Ontario , L3R 4S1 , CANADA
Tel : [1]-905-479-9111
Fax : [1]-905-479-6098

Penang Office127/28 Panjathanee Tower, 23rd Floor,
Nonthree Road, Khwaeng Chong Nonthree,
Khet Yannawa, Bangkok 10120, THAILAND
Tel . [66]-(0)2-681-0158
Fax : [66]-(0)2-681-0162

SHANGHAI TOSHIBA MACHINE CO., LTD.
Head Office
405 Citic Pent-Ox Metropolis,
1085 Pudong Avenue, Shanghai, 200135,
PEOPLE'S REPUBLIC OF CHINA
Tel . [86]-(0)21-5885-0606
Fax : [86]-(0)21-5866-2450

No. 21, Jalan Prai Jaya 4, Bandar Prai Jaya,
13600 Prai, Penang, MALAYSIA
1F Block, 223 Fu Te Bei Street,
Tel . [60]-(0)4-3980086
Wai Gao Qiao Free Trade Zone,
Fax : [60]-(0)4-3989652
Shanghai , 200131
PEOPLE'S REPUBLIC OF CHINA

Jakarta Office

Rukan Pesona Indah Kapuk A/12A, JL. Raya
Kapuk Kamal 20A, Jakarta, 14470,
INDONESIA
Tel . [62]-(0)21-5561760
Fax : [62]-(0)21-5561750

Tianjin Office

Room No.B901, Jindong Building,
No.99, Liuwei Road, Hedong District,Tianjin, 300171
PEOPLE'S REPUBLIC OF CHINA
Tel . [86]-(0)22-2416-0311
TOSHIBA MACHINE TAIWAN CO., LTD. Fax : [86]-(0)22-2416-0380
No. 62, Lane 188, Jui-Kuang Road,
Nei-Hu District, Taipei, TAIWAN
Tel . [886]-(0)2-2659-6558
JAPAN MACHINES (AUSTRALIA) PTY. LTD.
Fax : [886]-(0)2-2659-6381
Sydney Office
1 Giffard Street, Silverwater,
TOSHIBA MACHINE HONG KONG LTD. N.S.W. 2128, AUSTRALIAHead Office
Tel . [61]-(0)2-9739-8787
Suite 1010, 10th Floor, Tower 3,
Fax : [61]-(0)2-9648-4717
China Hong Kong City,
33 Canton Road, Tsim Sha Tsui,
Kowloon, HONG KONG
Tel : [852]-2735-1868
Fax : [852]-2735-1872

Financial Review

Shenzhen Office
TOSHIBA MACHINE (EUROPE) G.m.b.H. Room 611, Century Plaza Hotel,
Karl-Arnold-Strasse 2a,47877 Willich-Münchheide, GERMANY
Tel . [49]-(0)2154-9275-0
Fax : [49]-(0)2154-9275-75

Kin Chit Road, Shenzhen,
PEOPLE'S REPUBLIC OF CHINA
Tel . [86]-(0)755-8232-0453
Fax : [86]-(0)755-8234-3497

Branch and Representative Offices

7

TOSHIBA MACHINE CO.,LTD.
U . K . BRANCHTOSHIBA MACHINE CO., LTD.
BEIJING OFFICE

60 Burners Lane , Kiln Farm ,Milton Keynes MK11 3HD ,UNITED KINGDOM
Tel . [44]-(0)1908-562327
Fax : [44]-(0)1908-562348

Beijing Fortune Building, Room No. 303,
5 Dong Sanhuan Bei-Lu, Chaoyang District,
Beijing, 100004,
PEOPLE'S REPUBLIC OF CHINA
Tel . [86]-(0)10-6590-8977
Fax : [86]-(0)10-6590-8979

8

Consolidated Balance Sheets
TOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIESMarch 31, 2002 and 2001
Millions of yen

ASSETS

Thousands of
U.S. dollars

2002

2001

2002

¥31,606
34
49,420(915)
48,505¥37,500
95
64,074(937)
63,137$237,193
255
370,882(6,867)364,015

Marketable securities (Note 4)
Notes and Accounts receivable, trade
Allowance for doubtful receivables
Net receivables

6,992
18,401
767
26,160587
1,429
108,321

8,852
17,039865
26,756812
4,483
132,783

52,473138,094
5,756
196,323
4,406
10,724
812,916Work in process
Raw materials and supplies
Total inventories
Deferred taxes (Note 11)
Other current assets
Total current assets

24,471

25,390183,647

Current portion of long-term debt (Notes 6 and 10)
Notes and Accounts payable
Income taxes payable
Accrued expenses
Other current liabilities

2002

2001

2002

¥42,480
5,785
22,123
265
4,104
1,621
1,001
77,379¥50,098
3,425
32,894
665
5,490
1,782
1,229
95,583$318,799
43,415
166,026
1,989
30,79912,1657,512
580,705

Total current liabilities

17,723
1,173
6,380
25,27622,6571,526
6,568
30,751133,006
8,803
47,880189,689

102,65574

126,334
634

770,394555

12,485
19,405
3,791
1,631
(5)
(1)
37,306

12,485
19,405
5,725
2,154
(149)
(0)
39,62093,696145,629
28,45012,240(37)(8)
279,970¥140,035¥166,588$1,050,919

Long-term liabilities:
Long-term debt (Notes 6 and 10)
Deferred taxes (Note 11)
Accrued severance indemnities (Note 7)
Total long-term liabilities
Total liabilities

Property, plant and equipment,net(Notes 5,6 and 10)

Short-term bank loans (Notes 6 and 10)

Advances received

Inventories:
Finished products

Thousands of
U.S. dollars

Current liabilities:

Current assets:
Cash and time deposits (Note 14)

LIABILITIES ANDSHAREHOLDERS' EQUITY

Millions of yen

Minority interest in consolidated subsidiaries
Shareholders' equity:

Investments and long-term loans:

Common stock

Investments in:

Authorized - 360,000,000 shares

Unconsolidated subsidiaries andIssued -2001

166,885,530 sharesaffiliated companies(Note 13)

Issued -2002

166,885,530 shares

Other securities (Note 4)Long-term loans
Deferred taxes (Note 11)
Other investments
Total investments and long-term loans
Other assets
Total assets

384
4,749
552
369
753
6,807
436
¥140,035

384
5,691
667
425
856
8,023
392
¥166,588

2,882
35,640
4,142
2,769
5,651
51,084
3,272$1,050,919

See accompanying notes to financial statements

Additional paid-in capital
Retained earnings
Unrealized holding gain on securities
Foreign currency translation adjustments
Treasury stock
Total shareholders' equity
Contingent liabilities (Note 8)
Total liabilities and shareholders' equity

See accompanying notes to financial statements

910Consolidated Balance Sheets
TOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIESMarch 31, 2002 and 2001
Millions of yen

ASSETS

Thousands of
U.S. dollars

2002

2001

2002

¥31,606
34
49,420(915)
48,505¥37,500
95
64,074(937)
63,137$237,193
255
370,882(6,867)364,015

Marketable securities (Note 4)
Notes and Accounts receivable, trade
Allowance for doubtful receivables
Net receivables

6,992
18,401
767
26,160587
1,429
108,321

8,852
17,039865
26,756812
4,483
132,783

52,473138,094
5,756
196,323
4,406
10,724
812,916Work in process
Raw materials and supplies
Total inventories
Deferred taxes (Note 11)
Other current assets
Total current assets

24,471

25,390183,647

Current portion of long-term debt (Notes 6 and 10)
Notes and Accounts payable
Income taxes payable
Accrued expenses
Other current liabilities

2002

2001

2002

¥42,480
5,785
22,123
265
4,104
1,621
1,001
77,379¥50,098
3,425
32,894
665
5,490
1,782
1,229
95,583$318,799
43,415
166,026
1,989
30,79912,1657,512
580,705

Total current liabilities

17,723
1,173
6,380
25,27622,6571,526
6,568
30,751133,006
8,803
47,880189,689

102,65574

126,334
634

770,394555

12,485
19,405
3,791
1,631
(5)
(1)
37,306

12,485
19,405
5,725
2,154
(149)
(0)
39,62093,696145,629
28,45012,240(37)(8)
279,970¥140,035¥166,588$1,050,919

Long-term liabilities:
Long-term debt (Notes 6 and 10)
Deferred taxes (Note 11)
Accrued severance indemnities (Note 7)
Total long-term liabilities
Total liabilities

Property, plant and equipment,net(Notes 5,6 and 10)

Short-term bank loans (Notes 6 and 10)

Advances received

Inventories:
Finished products

Thousands of
U.S. dollars

Current liabilities:

Current assets:
Cash and time deposits (Note 14)

LIABILITIES ANDSHAREHOLDERS' EQUITY

Millions of yen

Minority interest in consolidated subsidiaries
Shareholders' equity:

Investments and long-term loans:

Common stock

Investments in:

Authorized - 360,000,000 shares

Unconsolidated subsidiaries andIssued -2001

166,885,530 sharesaffiliated companies(Note 13)

Issued -2002

166,885,530 shares

Other securities (Note 4)Long-term loans
Deferred taxes (Note 11)
Other investments
Total investments and long-term loans
Other assets
Total assets

384
4,749
552
369
753
6,807
436
¥140,035

384
5,691
667
425
856
8,023
392
¥166,588

2,882
35,640
4,142
2,769
5,651
51,084
3,272$1,050,919

See accompanying notes to financial statements

Additional paid-in capital
Retained earnings
Unrealized holding gain on securities
Foreign currency translation adjustments
Treasury stock
Total shareholders' equity
Contingent liabilities (Note 8)
Total liabilities and shareholders' equity

See accompanying notes to financial statements

910Consolidated Statements of Operations
TOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIES
years ended March 31, 2002 and 2001

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Other income:Interest and dividends
Gain on sales of offset rotary presses business
OthersOther expenses:
Interest
Special benefits for employees retired
under early retirement program
Restructuring expenses related toprinting presses business
Loss on disposal of inventories
OthersIncome(loss) before income taxes
and minority interests
Income taxes:(Note 11)
Current
Deferred
Minority interests in loss of
consolidated subsidiaries
Net income (loss)

Consolidated Statements of Cash Flows
Thousands of
U.S. dollars

Millions of yen

2002¥104,599
74,49530,104
28,636
1,468

2001¥127,359
92,04835,31130,8834,428

2002$784,983
559,062
225,921214,904
11,017

161
1,500
616
2,277

193
−
1,627
1,820

1,208
11,257
4,623
17,088

1,261

1,566

9,464

777

417

5,831

714
877
2,126
5,755

−
−
2,142
4,125

5,358
6,581
15,95543,189(2,010)
413
162
251
499

2,123
733
882
(149)
168

(15,084)
3,099
1,216
1,884
3,744

¥1,558¥(1,924)¥9.33¥(11.53)

Net income (loss) per share of common stock$(14,439)
U.S. dollars

Yen$(0.09)See accompanying notes to financial statements.

Consolidated Statements of Shareholders Equity
TOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIES
years ended March 31, 2002 and 2001

Balance at March 31, 2000
Net income
Bonuses to directors andstatutory auditors
Balance at March 31, 2001
Net loss
Bonuses to directors andstatutory auditors
Balance at March 31, 2002

Balance at March 31, 2001
Net loss
Bonuses to directors andstatutory auditors
Balance at March 31, 2002

Number of
Shares
166,885,530

166,885,530

12,485

19,405

166,885,530¥12,485¥19,405

Retainedearnings¥4,185
1,558
18
5,725
1,924

Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

¥(2,010)¥2,123$(15,085)

2,289
(20)

2,610
(163)

17,178
(150)

(188)
57

876
104

(1,411)428

599(1,500)

289
−

4,495
(11,257)

14,654596(10,771)(161)(1,399)
(563)
(287)

(14,718)(1,931)
8,421
301
1,277
(606)
(604)

109,974
4,473(80,833)(1,208)(10,499)(4,225)(2,154)

1,296(2,021)9,726(2,142)
334
(6)
(18)
155
1,500
(55)

(1,555)
1,103
70
( 32)
350
−
367

(16,075)
2,507
(45)
(135)
1,163
11,257
(413)

(232)

303

(1,741)(7,617)800(3,374)( 318)
482(3,544)(57,163)
6,004(25,321)(10,191)(3,380)(76,480)

144

421

1,081

Net cash decreased during the year
Cash and cash equivalent at the beginning of year

(8,983)40,594(4,677)45,272(67,415)
304,646

Cash and cash equivalent at the end of year (Note 14)¥31,611¥40,595$237,231

Operating Activities:
Income (loss) before income taxes and minority interests
Adjustments to reconcile income (loss) before income taxes
and minority interests to net cash provided by operating activities:
Depreciation and amortization
Allowance for doubtful receivables
Provision for severance indemnities,
less payments
Devaluation of marketable securities
Loss on sales and disposal ofproperty, plant and equipment
Gain on sales of offset rotary presses businessChanges in operating assets and liabilities:
Notes and accounts receivables, trade
Inventories
Notes and accounts payables, trade
Advances received
Accrued expenses
Income taxes paid
OthersNet cash provided by (used in) operating activities
Investing Activities:
Purchase of property, plant and equipment
Sale of property, plant and equipment
Increase in short-term loan receivables, net
Payment of long-term loan receivables
Repayment of long-term loan receivables
Gain on sales of offset rotary presses business
OthersNet cash used in (provided by) investment activities
Financing Activities:
Decrease in short-term bank loans
Proceeds from long-term debt
Repayment of long-term debt
Net cash used in financing activities

Millions of yen

Common Additional paidin capitalstock¥19,405¥12,485

TOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIES
years ended March 31, 2002 and 2001

Effect of exchange rate change on
cash and cash equivalents

See accompanying notes to financial statements.

10¥3,791Thousands of U.S. dollars
Common Additional paid Retainedin capitalStockearnings$145,629$93,696$42,964
14,439$93,696$145,629

75$28,450

See accompanying notes to financial statements.

11

12

Consolidated Statements of Operations
TOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIES
years ended March 31, 2002 and 2001

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Other income:Interest and dividends
Gain on sales of offset rotary presses business
OthersOther expenses:
Interest
Special benefits for employees retired
under early retirement program
Restructuring expenses related toprinting presses business
Loss on disposal of inventories
OthersIncome(loss) before income taxes
and minority interests
Income taxes:(Note 11)
Current
Deferred
Minority interests in loss of
consolidated subsidiaries
Net income (loss)

Consolidated Statements of Cash Flows
Thousands of
U.S. dollars

Millions of yen

2002¥104,599
74,49530,104
28,636
1,468

2001¥127,359
92,04835,31130,8834,428

2002$784,983
559,062
225,921214,904
11,017

161
1,500
616
2,277

193
−
1,627
1,820

1,208
11,257
4,623
17,088

1,261

1,566

9,464

777

417

5,831

714
877
2,126
5,755

−
−
2,142
4,125

5,358
6,581
15,95543,189(2,010)
413
162
251
499

2,123
733
882
(149)
168

(15,084)
3,099
1,216
1,884
3,744

¥1,558¥(1,924)¥9.33¥(11.53)

Net income (loss) per share of common stock$(14,439)
U.S. dollars

Yen$(0.09)See accompanying notes to financial statements.

Consolidated Statements of Shareholders Equity
TOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIES
years ended March 31, 2002 and 2001

Balance at March 31, 2000
Net income
Bonuses to directors andstatutory auditors
Balance at March 31, 2001
Net loss
Bonuses to directors andstatutory auditors
Balance at March 31, 2002

Balance at March 31, 2001
Net loss
Bonuses to directors andstatutory auditors
Balance at March 31, 2002

Number of
Shares
166,885,530

166,885,530

12,485

19,405

166,885,530¥12,485¥19,405

Retainedearnings¥4,185
1,558
18
5,725
1,924

Thousands of
U.S. dollars

Millions of yen

2002

2001

2002

¥(2,010)¥2,123$(15,085)

2,289
(20)

2,610
(163)

17,178
(150)

(188)
57

876
104

(1,411)428

599(1,500)

289
−

4,495
(11,257)

14,654596(10,771)(161)(1,399)
(563)
(287)

(14,718)(1,931)
8,421
301
1,277
(606)
(604)

109,974
4,473(80,833)(1,208)(10,499)(4,225)(2,154)

1,296(2,021)9,726(2,142)
334
(6)
(18)
155
1,500
(55)

(1,555)
1,103
70
( 32)
350
−
367

(16,075)
2,507
(45)
(135)
1,163
11,257
(413)

(232)

303

(1,741)(7,617)800(3,374)( 318)
482(3,544)(57,163)
6,004(25,321)(10,191)(3,380)(76,480)

144

421

1,081

Net cash decreased during the year
Cash and cash equivalent at the beginning of year

(8,983)40,594(4,677)45,272(67,415)
304,646

Cash and cash equivalent at the end of year (Note 14)¥31,611¥40,595$237,231

Operating Activities:
Income (loss) before income taxes and minority interests
Adjustments to reconcile income (loss) before income taxes
and minority interests to net cash provided by operating activities:
Depreciation and amortization
Allowance for doubtful receivables
Provision for severance indemnities,
less payments
Devaluation of marketable securities
Loss on sales and disposal ofproperty, plant and equipment
Gain on sales of offset rotary presses businessChanges in operating assets and liabilities:
Notes and accounts receivables, trade
Inventories
Notes and accounts payables, trade
Advances received
Accrued expenses
Income taxes paid
OthersNet cash provided by (used in) operating activities
Investing Activities:
Purchase of property, plant and equipment
Sale of property, plant and equipment
Increase in short-term loan receivables, net
Payment of long-term loan receivables
Repayment of long-term loan receivables
Gain on sales of offset rotary presses business
OthersNet cash used in (provided by) investment activities
Financing Activities:
Decrease in short-term bank loans
Proceeds from long-term debt
Repayment of long-term debt
Net cash used in financing activities

Millions of yen

Common Additional paidin capitalstock¥19,405¥12,485

TOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIES
years ended March 31, 2002 and 2001

Effect of exchange rate change on
cash and cash equivalents

See accompanying notes to financial statements.

10¥3,791Thousands of U.S. dollars
Common Additional paid Retainedin capitalStockearnings$145,629$93,696$42,964
14,439$93,696$145,629

75$28,450

See accompanying notes to financial statements.

1112

Notes to Consolidated Financial Statements
TOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIES

1. Basis of Presenting Consolidated Financial Statements
The consolidated balance sheets, statements ofoperations and cash flows are prepared from thosewhich are in accordance with accounting principles
generally accepted and applied in Japan, which may
differ in some material respects from accounting principles generally accepted in countries and jurisdictions
other than Japan. The preparation of these financial
statements requires management to make estimatesand assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets
and liabilities at the date of the consolidated financial
statements and the reported amounts of revenues andexpenses during the reporting period. Actual results
could differ from these estimates. The consolidated
statements of shareholders' equity have been preparedto supply additional information.
The consolidated balance sheets, statements of operations and cash flows incorporate certain reclassifications and rearrangements in order to present thesestatements in forms which are more familiar to readersof these statements outside of Japan. In addition, thenotes to the consolidated financial statements include
information which is not required under generally
accepted accounting principles and practice in Japanbut is presented herein as additional information.

2. Summary of Significant Accounting Policies(a). Basis of consolidation and accounting for investments inunconsolidated subsidiaries and affiliated companies
The consolidated financial statements include theaccounts of Toshiba Machine Company and, certain
subsidiaries which are not material are not consolidated, those of its subsidiaries (together the Companies).
All significant intercompany transactions and accounts
and unrealized intercompany profits are eliminated inconsolidation.
The difference between the cost and underlying net
equity of investments in consolidated subsidiaries at
the time of acquisition is deferred and amortized over
five-year period.
Investments in affiliates (15 to 50 percent-owned
companies except subsidiaries) in which the ability to
exercise significant influence exist and not consolidated
subsidiaries, except not material, are stated at cost plus
equity in undistributed earning (losses).
Net consolidated income (losses) includes the Company's share of the current net earnings (losses) of suchcompanies, after elimination of unrealized intercompany profits.
(b). Translation of Foreign Currencies
Monetary assets and liabilities denominated in foreign currencies are translated into Japanese yen at theexchange rate prevailing at the balance-sheet date
except for those hedged by a forward contract, which
are translated using the contracted rate .
The foreign exchange gains and losses from translation are recognized in the consolidated statements ofincome to the extent that they are not hedged by foreign exchange derivatives.
All the assets and liabilities of foreign subsidiaries
and affiliates are translated at current rates at therespective balance sheet dates and all income and13

expense accounts are translated at average rates forthe respective periods. The components of shareholders' equity are translated at their historical exchange
rates.
Effective April 1, 2000, the Company and domestic
consolidated subsidiaries adopted a revised accounting
standard for foreign currency transactions.
In accordance with a revised accounting standard
for foreign currency translation, the Company has
included foreign currency translation adjustments inshareholders' equity and minority interests in consolidated subsidiaries. Prior to the year ended March 31,
2001, foreign currency translation adjustments were
included in assets or liabilities. The adoption of revised
accounting standard for foreign currency transactions
did not have a material effect on the accompanying
financial statements.
(c). Marketable and Investment Securities
Until to the year ended March 31, 2000 marketablesecurities had been valued at the lower of cost or market, cost being determined by the moving averagemethod, and investment securities other than marketable securities stated at cost determined by themoving average method. Effective April 1, 2000 theCompany and domestic consolidated subsidiaries adopted the new accounting standard for financial instruments. This accounting standard for financial instruments requires that securities be classified into three
categories: trading, held to maturities or other securities. Under the accounting standard trading securities
are carried at fair value and held to maturity securities
are carried at amortized cost. Marketable securities
classified as other securities are carried at fair value
with changes in unrealized holding gain or loss, net ofthe applicable income taxes, included directly in shareholder's equity. Non-marketable securities classified
other securities are carried at cost.
Cost of securities sold is determined by the moving
average method.
As a result, unrealized holding gain on securities¥2,154 million was credited to the Shareholders' equity
representing the increase in market value over cost ofinvestment securities of ¥3,656 million net of deferred
tax liabilities ¥1,503 million as of the March 31, 2001.
The adoption of the accounting standard for financial instruments did not have a material effect on
income before income taxes and minority interests.
As of April 1, 2000, the Companies and domestic
consolidated subsidiaries assessed their classification of
securities due to the new accounting standards.
As a result of this assessment, cash and cash equivalents, and investment securities increased ¥4,999 million, ¥1,969 million respectively, and marketable securities decreased the same amount as of March 31, 2001.
(d). Inventories
Inventories are stated at the cost, determined by
the identified cost for finished products and work inprocess, and by the moving average method for raw
materials and supplies.

(e). Allowance for doubtful receivables
The allowance for doubtful accounts is stated basedon the default ratio sustained over a specific period in

the past and the estimated uncollectible amount basedon the analysis of certain individual accounts, including
probable bad debts and claims in bankruptcy.
This amount is considered sufficient to cover possible losses on collection.
(f). Bonuses
The bonus to the employees are paid twice a year
and accrued based on estimated amounts to be paid in
the subsequent period. Bonuses to directors and statutory auditors, which are subject to approval by theshareholders, are an appropriation of retained earnings
and not charged to income.

(g). Warranty reserve for sold products
The warranty reserve included in other current liabilities provided to cover the cost of repairs which may
be clamed by customers. The amount of this reserve isestimated based on a past experience with repairs to
products under warranty.
(h). Depreciation of property, plant and equipment
Depreciation of building is computed, with minor
exceptions, by the straight-line method and otherdepreciation of property, plant and equipment is computed by the declining balance method based on Japanese tax laws.
(i). Finance Leases
Finance leases, which do not transfer ownership ofthe leased assets to the lessees are accounted for in thesame manner as operating leases.
(j). Income Taxes
The Companies accrue income taxes based on taxable income.
The Companies include many items for financial
reporting purpose which, in the case of expenses, arenot currently deductible and in the case of income, arenot currently taxable.
Income taxes based on temporary differences
between tax and financial reporting purposes arereflected as deferred income taxes in the consolidated
financial statements using the asset and liability
method.
(k). Retirement and Severance Benefits
The severance indemnity regulation of the Companies provide for benefit payments determined by reference to the employee's current basic rate of pay andlength of service.
The Company and certain consolidated subsidiaries
have a non-contributory funded pension plan for
employees. The Company and certain consolidated subsidiaries pay the full cost of the benefits to a bankwhich act as trustees.
Effective April 1, 2000 the Company and its' domestic consolidated subsidiaries adopted a new accounting
standard for employees' retirement benefits andaccounted for the liability for retirement benefits basedon the projected benefit obligations and plan assets atthe balance sheet date.
The unrecognized transitional obligation is being
amortized over 15 years. As a result, compared withthe prior method, net periodic benefit cost increased by¥589 million and income before income taxes
decreased by ¥589 million for the year ended March
31, 2001.
Severance benefits paid to directors and statutory
auditors are charged to income as paid. Any amounts
eventually payable to directors and statutory auditors
upon retirement are subject to approval by the shareholders.
(l). Legal Reserve
On October 1, 2001, an amendment to the Codebecame effective. The amendment eliminates the stated per value of the Company's outstanding shares
which results in all outstanding shares having no pervalue at March 31, 2002. Before the date on which theamendment came into effect, the Company's share ofcommon stock had a per value of ¥50 per shares.
Under the code the Company and domestic subsidiaries are required to appropriate as a legal reserve
an amount of retained earnings equal to at least 10% of
cash dividends and other distributions for each period
until such reserve and the amount of capital surplus
equals 25% of the common stock. The code also provides that, to the extent that the sum of capital surplus
and legal reserve exceeds 25% of the common stock,
the amount of any such excess is available for appropriations by resolution of the shareholders.
Retained earnings in the accompanying consolidated financial statements at March 31, 2002 include thelegal reserve of ¥2,278 million($17,096 thousand).

(m). Amounts per Share of Common Stock
Net income(loss) per share is computed based on
the weighted-average number of shares of common
stock outstanding during each year.
Diluted net income per share is not presented since
the Company has never issued any securities with adilutive effect, such as bonds with warrants and convertible bonds.
Cash dividends per share represent the actual
amount declared as applicable to the respective years.
(n). Statements of Cash Flows
In preparing the statements of cash flows, cash on
hand, readily-available deposits and short-term highly
liquid investments with maturities of not exceeding
three months at the time of purchase are considered tobe cash and cash equivalents.
(o). Reclassifications
Certain accounts in the consolidated financial statements for the years ended March 31, 2001 have been
reclassified to conform to the 2002 presentation.

3. U.S. Dollar Amounts
U.S. dollar amounts are included solely for the convenience of the reader and have been translated at therate of ¥133.25=U.S.$1,the approximate exchange rate
prevailing in the Japanese foreign exchange market on
March 29, 2002. This translation should not be construed as a representation that the yen amounts actually represent, have been, or could be converted into U.S.
dollars.
14

Notes to Consolidated Financial Statements
TOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIES

1. Basis of Presenting Consolidated Financial Statements
The consolidated balance sheets, statements ofoperations and cash flows are prepared from thosewhich are in accordance with accounting principles
generally accepted and applied in Japan, which may
differ in some material respects from accounting principles generally accepted in countries and jurisdictions
other than Japan. The preparation of these financial
statements requires management to make estimatesand assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets
and liabilities at the date of the consolidated financial
statements and the reported amounts of revenues andexpenses during the reporting period. Actual results
could differ from these estimates. The consolidated
statements of shareholders' equity have been preparedto supply additional information.
The consolidated balance sheets, statements of operations and cash flows incorporate certain reclassifications and rearrangements in order to present thesestatements in forms which are more familiar to readersof these statements outside of Japan. In addition, thenotes to the consolidated financial statements include
information which is not required under generally
accepted accounting principles and practice in Japanbut is presented herein as additional information.

2. Summary of Significant Accounting Policies(a). Basis of consolidation and accounting for investments inunconsolidated subsidiaries and affiliated companies
The consolidated financial statements include theaccounts of Toshiba Machine Company and, certain
subsidiaries which are not material are not consolidated, those of its subsidiaries (together the Companies).
All significant intercompany transactions and accounts
and unrealized intercompany profits are eliminated inconsolidation.
The difference between the cost and underlying net
equity of investments in consolidated subsidiaries at
the time of acquisition is deferred and amortized over
five-year period.
Investments in affiliates (15 to 50 percent-owned
companies except subsidiaries) in which the ability to
exercise significant influence exist and not consolidated
subsidiaries, except not material, are stated at cost plus
equity in undistributed earning (losses).
Net consolidated income (losses) includes the Company's share of the current net earnings (losses) of suchcompanies, after elimination of unrealized intercompany profits.
(b). Translation of Foreign Currencies
Monetary assets and liabilities denominated in foreign currencies are translated into Japanese yen at theexchange rate prevailing at the balance-sheet date
except for those hedged by a forward contract, which
are translated using the contracted rate .
The foreign exchange gains and losses from translation are recognized in the consolidated statements ofincome to the extent that they are not hedged by foreign exchange derivatives.
All the assets and liabilities of foreign subsidiaries
and affiliates are translated at current rates at therespective balance sheet dates and all income and13

expense accounts are translated at average rates forthe respective periods. The components of shareholders' equity are translated at their historical exchange
rates.
Effective April 1, 2000, the Company and domestic
consolidated subsidiaries adopted a revised accounting
standard for foreign currency transactions.
In accordance with a revised accounting standard
for foreign currency translation, the Company has
included foreign currency translation adjustments inshareholders' equity and minority interests in consolidated subsidiaries. Prior to the year ended March 31,
2001, foreign currency translation adjustments were
included in assets or liabilities. The adoption of revised
accounting standard for foreign currency transactions
did not have a material effect on the accompanying
financial statements.
(c). Marketable and Investment Securities
Until to the year ended March 31, 2000 marketablesecurities had been valued at the lower of cost or market, cost being determined by the moving averagemethod, and investment securities other than marketable securities stated at cost determined by themoving average method. Effective April 1, 2000 theCompany and domestic consolidated subsidiaries adopted the new accounting standard for financial instruments. This accounting standard for financial instruments requires that securities be classified into three
categories: trading, held to maturities or other securities. Under the accounting standard trading securities
are carried at fair value and held to maturity securities
are carried at amortized cost. Marketable securities
classified as other securities are carried at fair value
with changes in unrealized holding gain or loss, net ofthe applicable income taxes, included directly in shareholder's equity. Non-marketable securities classified
other securities are carried at cost.
Cost of securities sold is determined by the moving
average method.
As a result, unrealized holding gain on securities¥2,154 million was credited to the Shareholders' equity
representing the increase in market value over cost ofinvestment securities of ¥3,656 million net of deferred
tax liabilities ¥1,503 million as of the March 31, 2001.
The adoption of the accounting standard for financial instruments did not have a material effect on
income before income taxes and minority interests.
As of April 1, 2000, the Companies and domestic
consolidated subsidiaries assessed their classification of
securities due to the new accounting standards.
As a result of this assessment, cash and cash equivalents, and investment securities increased ¥4,999 million, ¥1,969 million respectively, and marketable securities decreased the same amount as of March 31, 2001.
(d). Inventories
Inventories are stated at the cost, determined by
the identified cost for finished products and work inprocess, and by the moving average method for raw
materials and supplies.

(e). Allowance for doubtful receivables
The allowance for doubtful accounts is stated basedon the default ratio sustained over a specific period in

the past and the estimated uncollectible amount basedon the analysis of certain individual accounts, including
probable bad debts and claims in bankruptcy.
This amount is considered sufficient to cover possible losses on collection.
(f). Bonuses
The bonus to the employees are paid twice a year
and accrued based on estimated amounts to be paid in
the subsequent period. Bonuses to directors and statutory auditors, which are subject to approval by theshareholders, are an appropriation of retained earnings
and not charged to income.

(g). Warranty reserve for sold products
The warranty reserve included in other current liabilities provided to cover the cost of repairs which may
be clamed by customers. The amount of this reserve isestimated based on a past experience with repairs to
products under warranty.
(h). Depreciation of property, plant and equipment
Depreciation of building is computed, with minor
exceptions, by the straight-line method and otherdepreciation of property, plant and equipment is computed by the declining balance method based on Japanese tax laws.
(i). Finance Leases
Finance leases, which do not transfer ownership ofthe leased assets to the lessees are accounted for in thesame manner as operating leases.
(j). Income Taxes
The Companies accrue income taxes based on taxable income.
The Companies include many items for financial
reporting purpose which, in the case of expenses, arenot currently deductible and in the case of income, arenot currently taxable.
Income taxes based on temporary differences
between tax and financial reporting purposes arereflected as deferred income taxes in the consolidated
financial statements using the asset and liability
method.
(k). Retirement and Severance Benefits
The severance indemnity regulation of the Companies provide for benefit payments determined by reference to the employee's current basic rate of pay andlength of service.
The Company and certain consolidated subsidiaries
have a non-contributory funded pension plan for
employees. The Company and certain consolidated subsidiaries pay the full cost of the benefits to a bankwhich act as trustees.
Effective April 1, 2000 the Company and its' domestic consolidated subsidiaries adopted a new accounting
standard for employees' retirement benefits andaccounted for the liability for retirement benefits basedon the projected benefit obligations and plan assets atthe balance sheet date.
The unrecognized transitional obligation is being
amortized over 15 years. As a result, compared withthe prior method, net periodic benefit cost increased by¥589 million and income before income taxes
decreased by ¥589 million for the year ended March
31, 2001.
Severance benefits paid to directors and statutory
auditors are charged to income as paid. Any amounts
eventually payable to directors and statutory auditors
upon retirement are subject to approval by the shareholders.
(l). Legal Reserve
On October 1, 2001, an amendment to the Codebecame effective. The amendment eliminates the stated per value of the Company's outstanding shares
which results in all outstanding shares having no pervalue at March 31, 2002. Before the date on which theamendment came into effect, the Company's share ofcommon stock had a per value of ¥50 per shares.
Under the code the Company and domestic subsidiaries are required to appropriate as a legal reserve
an amount of retained earnings equal to at least 10% of
cash dividends and other distributions for each period
until such reserve and the amount of capital surplus
equals 25% of the common stock. The code also provides that, to the extent that the sum of capital surplus
and legal reserve exceeds 25% of the common stock,
the amount of any such excess is available for appropriations by resolution of the shareholders.
Retained earnings in the accompanying consolidated financial statements at March 31, 2002 include thelegal reserve of ¥2,278 million($17,096 thousand).

(m). Amounts per Share of Common Stock
Net income(loss) per share is computed based on
the weighted-average number of shares of common
stock outstanding during each year.
Diluted net income per share is not presented since
the Company has never issued any securities with adilutive effect, such as bonds with warrants and convertible bonds.
Cash dividends per share represent the actual
amount declared as applicable to the respective years.
(n). Statements of Cash Flows
In preparing the statements of cash flows, cash on
hand, readily-available deposits and short-term highly
liquid investments with maturities of not exceeding
three months at the time of purchase are considered tobe cash and cash equivalents.
(o). Reclassifications
Certain accounts in the consolidated financial statements for the years ended March 31, 2001 have been
reclassified to conform to the 2002 presentation.

3. U.S. Dollar Amounts
U.S. dollar amounts are included solely for the convenience of the reader and have been translated at therate of ¥133.25=U.S.$1,the approximate exchange rate
prevailing in the Japanese foreign exchange market on
March 29, 2002. This translation should not be construed as a representation that the yen amounts actually represent, have been, or could be converted into U.S.
dollars.
14

The aggregate annual maturities of long-term debt after March 31, 2002 are as follows:

4. Market Value Information
At March 31, 2002 and 2001, the book value and net unrealized gains (losses) of quoted securities included
in marketable securities and investment securities were as follows:
Thousands of U.S. dollars

Millions of yen

2001

2002

2002

Book
value

Marketvalue

Unrealized
gains (losses)

Book
value

Marketvalue

Unrealized
gains (losses)

Book
value

Marketvalue

Unrealized
gains (losses)¥1,85910−¥4,60410−¥2,7450−¥1,977
10−¥5,52910−¥3,552 $13,951 $34,552 $20,600
0
75
75
0
−
−
−
−

¥1,869¥4,614¥2,745¥1,987¥5,539¥3,552 $14,026 $34,627 $20,600

Investment securities
EquityBonds
Other

Year ending March 31
2003
2004
2005
2006
2007 and later

Thousands of U.S. dollars

Millions of yen$43,415
121,966
5,486
1,591
3,962
$176,420¥5,785
16,252731
212
528¥23,508

As of March 31, 2002 property, plant and equipment with a net book value of approximately ¥6,716 million($50,402 thousand) were pledged as collateral for long-term debt. In case of default and certain other specified
events, as is customary in Japan, additional collateral must be pledged if required by lending institutions undercertain circumstances. Generally banks have the right to offset cash deposited with them against any debt or
obligation that becomes due.

7. Retirement and Severance Benefits
5. Property, Plant and Equipment
Property, plant and equipment on March 31, 2002 and 2001 consisted of the following:
Millions of yen
Land
Buildings and structures
Machinery and equipment
VehiclesTools, furniture and fixtures
Construction in progress
Less accumulated depreciation

Thousands of
U.S. dollars

2002

2001

2002

¥6,77330,36733,519
631
7,562
273
79,125(54,654)¥24,471¥6,94529,57535,977615
8,021
96
81,229(55,839)¥25,390$50,829
227,895
251,550
4,735
56,7502,049
593,808( 410,161)$183,647

The severance indemnity regulation of the companies provide for benefit payments based on the employee's
current basic rate of pay and length of service.
The Companies and certain consolidated subsidiaries have a non-contributory funded pension plan for
employees. The Companies and certain consolidated subsidiaries pay the full cost of the benefits to a bankwhich act as the trustees.
Effective April 1, 2000 the Company and its' domestic consolidated subsidiaries adopted a new accounting
standard for employees' retirement benefits and accounted for the liability for retirement benefits based on the
projected benefit obligations and plan assets at the balance sheet date.
The liability for employees' retirement benefits at March 31, 2002 and 2001 consisted of the following:
Millions of yen
Projected benefit obligation
Faire value of plan assets
Unrecognized transitional obligation
Unrecognized actuarial loss

Depreciation expensed for the years ended March 31, 2002 and 2001 amounted to¥ 2,289 million ($ 17,178 thousand) and ¥ 2,610 million, respectively.

Net liability for retirement benefits

Thousands of
U.S. dollars

2002

2001

2002

¥20,183(1,129)(10,601)(2,073)¥6,380¥21,714(1,322)(11,764)(2,060)¥6,568$151,467(8,473)(79,557)(15,557)$47,880

The components of net periodic benefit costs for the year ended March 31, 2002 and 2001 were as follows:

6. Short-term Bank Loans and Long-term Debt
Millions of yen

The annual interest rates applicable to the loans outstanding on March 31, 2002 ranged principally from
0.47% to 3.54%. Long-term debt on March 31, 2002 and 2001 consisted of the following:
Millions of yen
1st Bonds due 2003 interest 2.9%
¥2,000,000,000 fixed rate Bonds due 2002
Loans, principally from Japanese banks andinsurance companies, with assets pledged ascollateral, maturing 2002 - 2009, interest 2.09 % - 2.60 %Less current portion

15

Thousands of
U.S. dollars

2002

2001

2002

¥3,0002,000¥3,0002,000$22,514
15,00918,50823,508
5,785¥17,723

21,082
26,082
3,425¥22,657

138,897
176,420
43,414$133,006

Service cost
Interest cost
Expected return on plan assets
Recognized actuarial loss
Amortization of transitional obligation

Thousands of
U.S. dollars

2002

2001

2002

¥1,205
530
(40)
206
1,163
¥3,064

¥976
555
(41)
−
1,203
¥2,693$9,043
3,977
(300)
1,546
8,728
$22,994

Certain consolidated subsidiaries have adopted the conventional method in calculating their projected benefit obligation.
Assumptions used in the accounting for the projected benefit obligation are as follows:
2001
2002
3.0%
3.0%
Discount rate
4.0%
4.0%
Expected rate of return on plan assets
15 years
15 years
Amortization period of transitional obligation
10 years
10 years
Amortization period of actuarial loss/gain
16

The aggregate annual maturities of long-term debt after March 31, 2002 are as follows:

4. Market Value Information
At March 31, 2002 and 2001, the book value and net unrealized gains (losses) of quoted securities included
in marketable securities and investment securities were as follows:
Thousands of U.S. dollars

Millions of yen

2001

2002

2002

Book
value

Marketvalue

Unrealized
gains (losses)

Book
value

Marketvalue

Unrealized
gains (losses)

Book
value

Marketvalue

Unrealized
gains (losses)¥1,85910−¥4,60410−¥2,7450−¥1,977
10−¥5,52910−¥3,552 $13,951 $34,552 $20,600
0
75
75
0
−
−
−
−

¥1,869¥4,614¥2,745¥1,987¥5,539¥3,552 $14,026 $34,627 $20,600

Investment securities
EquityBonds
Other

Year ending March 31
2003
2004
2005
2006
2007 and later

Thousands of U.S. dollars

Millions of yen$43,415
121,966
5,486
1,591
3,962
$176,420¥5,785
16,252731
212
528¥23,508

As of March 31, 2002 property, plant and equipment with a net book value of approximately ¥6,716 million($50,402 thousand) were pledged as collateral for long-term debt. In case of default and certain other specified
events, as is customary in Japan, additional collateral must be pledged if required by lending institutions undercertain circumstances. Generally banks have the right to offset cash deposited with them against any debt or
obligation that becomes due.

7. Retirement and Severance Benefits
5. Property, Plant and Equipment
Property, plant and equipment on March 31, 2002 and 2001 consisted of the following:
Millions of yen
Land
Buildings and structures
Machinery and equipment
VehiclesTools, furniture and fixtures
Construction in progress
Less accumulated depreciation

Thousands of
U.S. dollars

2002

2001

2002

¥6,77330,36733,519
631
7,562
273
79,125(54,654)¥24,471¥6,94529,57535,977615
8,021
96
81,229(55,839)¥25,390$50,829
227,895
251,550
4,735
56,7502,049
593,808( 410,161)$183,647

The severance indemnity regulation of the companies provide for benefit payments based on the employee's
current basic rate of pay and length of service.
The Companies and certain consolidated subsidiaries have a non-contributory funded pension plan for
employees. The Companies and certain consolidated subsidiaries pay the full cost of the benefits to a bankwhich act as the trustees.
Effective April 1, 2000 the Company and its' domestic consolidated subsidiaries adopted a new accounting
standard for employees' retirement benefits and accounted for the liability for retirement benefits based on the
projected benefit obligations and plan assets at the balance sheet date.
The liability for employees' retirement benefits at March 31, 2002 and 2001 consisted of the following:
Millions of yen
Projected benefit obligation
Faire value of plan assets
Unrecognized transitional obligation
Unrecognized actuarial loss

Depreciation expensed for the years ended March 31, 2002 and 2001 amounted to¥ 2,289 million ($ 17,178 thousand) and ¥ 2,610 million, respectively.

Net liability for retirement benefits

Thousands of
U.S. dollars

2002

2001

2002

¥20,183(1,129)(10,601)(2,073)¥6,380¥21,714(1,322)(11,764)(2,060)¥6,568$151,467(8,473)(79,557)(15,557)$47,880

The components of net periodic benefit costs for the year ended March 31, 2002 and 2001 were as follows:

6. Short-term Bank Loans and Long-term Debt
Millions of yen

The annual interest rates applicable to the loans outstanding on March 31, 2002 ranged principally from
0.47% to 3.54%. Long-term debt on March 31, 2002 and 2001 consisted of the following:
Millions of yen
1st Bonds due 2003 interest 2.9%
¥2,000,000,000 fixed rate Bonds due 2002
Loans, principally from Japanese banks andinsurance companies, with assets pledged ascollateral, maturing 2002 - 2009, interest 2.09 % - 2.60 %Less current portion

15

Thousands of
U.S. dollars

2002

2001

2002

¥3,0002,000¥3,0002,000$22,514
15,00918,50823,508
5,785¥17,723

21,082
26,082
3,425¥22,657

138,897
176,420
43,414$133,006

Service cost
Interest cost
Expected return on plan assets
Recognized actuarial loss
Amortization of transitional obligation

Thousands of
U.S. dollars

2002

2001

2002

¥1,205
530
(40)
206
1,163
¥3,064

¥976
555
(41)
−
1,203
¥2,693$9,043
3,977
(300)
1,546
8,728
$22,994

Certain consolidated subsidiaries have adopted the conventional method in calculating their projected benefit obligation.
Assumptions used in the accounting for the projected benefit obligation are as follows:
2001
2002
3.0%
3.0%
Discount rate
4.0%
4.0%
Expected rate of return on plan assets
15 years
15 years
Amortization period of transitional obligation
10 years
10 years
Amortization period of actuarial loss/gain
16

8. Contingent Liabilities
On March 31, 2002 contingent liabilities for notes discounted in the ordinary course of business and for loans
guaranteed by the Company, principally on behalf of non-consolidated subsidiaries and affiliated companies,
amounted to ¥679 million ($5,096 thousand) and ¥949 million ($ 7,122 thousand), respectively.

The significant components of deferred tax assets and liabilities at March 31, 2002 are as follows:

Millions of yen
Machinery, equipment and vehicles
Tools, furniture and fixtures
Less-Accumulated depreciation

U.S. dollars

2002

2001

2002

¥896
2,765
(1,986)¥1,675¥1,362
3,102(2,173)¥2,291$6,72420,750(14,904)$12,570

Future lease payments of the Companies are as follows:
Millions of yen
Current obligation
Long-term obligation
Present values of lease payments

2001

2002

¥148
113
25
53
270
134
213
¥956

¥244
130
21
55
320
178
289
¥1,237$1,111
848
188
398
2,026
1,006
1,597
$7,17430
1,143¥1,173¥(217)

17
1,509¥1,526¥(289)

225
8,578$8,803$(1,629)2002

9 LeasesFinance leases of the Companies other than those where ownership of the leased assets is transferred to thelessee, are accounted for as operating leases.
Periodic lease charges to the Companies, as a lessee, charged to income for the years ended March 31, 2002
and 2001 are ¥986 million ($7,400 thousand) and ¥1,023 million, respectively. The leased assets and related
expenses of the Companies' finance leases, other than those where the ownership of the lease assets is transferredto the lessee and accounted for as operating leases, if capitalized, at March 31, 2002 comprise the following (inequivalent amounts):
Thousands ofThousands of
U.S. dollars

2002

2001

2002

¥709
966
¥1,675¥943
1,348¥2,291$5,321
7,249$12,570

Pro forma information above does not excluded the imputed interest portion because the financial leaseobligations are not material compared with the book values of property, plant and equipment.

Thousands of
U.S. dollars

Millions of yen

Deferred tax assets:
Accrued employees bonuses
Allowance for doubtful accounts
Devaluation of inventories
Devaluation of Investment securities
Accrued pension and severance costs
Unrealized gain on inventories
Other
Deferred tax assets
Deferred tax liabilities:
Depreciation
Unrealized gain on Investment securities
Deferred tax liabilities
Net deferred tax (liabilities) assets

12.Derivatives
The Company enters into interest rate swap contracts and interest rate floor contracts to manage interest
rate exposures on certain liabilities. This derivative transactions are utilized solely for hedging purposes under
the Company's internal control rules and are subjected to supervision by the Board of Directors.
The contract amounts and estimated fair value of the derivative transactions outstanding at March 31, 2002
and 2001 are as follows:

10.Pledged Assets
Millions of yen

The following assets were pledged as collateral at March 31, 2002:

Land, property, plant and equipment (net of accumulated depreciation)

Millions of yen

Thousands of
U.S. dollars¥6,716$50,402

2002
Contract
amount

2001

Fair
value

Unrealized Contract
gains(losses) amount

Fair
value

Unrealized
gains(losses)

Interest rate floor contracts

The preceding collaterals were pledged to secure long-term debt amounting to ¥ 428 million ($3,212 thousand), short-term bank loans amounting to ¥750 million ($5,629 thousand) and bonds amounting to ¥3,000 million($22,514 thousand).

Sell:

Reconciliation between the statutory tax rate and the effective tax rate for the year ended March 31, 2002 is
not presented, as permitted, since the Company incurred a loss before income tax for the year then ended
17

¥(0)

¥(0)

¥300

¥(1)

¥(1)

Thousands of U.S. dollars

2002
Contract
amount

11.Income Taxes
Income taxes in Japan applicable to the Companies generally comprise Corporation Tax, Enterprise Tax andPrefectural and Municipal Inhabitants taxes. The statutory rates for the years ended March 31, 2002 and 2001
are approximately 41.1%.
The reconciliation of the differences between the statutory rate and effective tax rate of income taxes at
March 31, 2001 is as follows:
2001
41.1%
Statutory tax rate
Non-deductible expense for tax purpose
1.5
Change in valuation allowance
(5.8)
Other
(2.3)
Effective tax rate
34.5

¥100

Fair
value

Unrealized
gains(losses)

Interest rate floor contracts
Sell:

$750

$(0)

$(0)

13.Account balances and transactions with unconsolidated subsidiaries and affiliates
Account balances and transactions with unconsolidated subsidiaries and affiliates for the years ended March
31, 2002 and 2001 are as follows:
Thousands of
U.S. dollars

Millions of yen

2002
Investment securities

¥384

2001
¥384

2002
$2,88218

8. Contingent Liabilities
On March 31, 2002 contingent liabilities for notes discounted in the ordinary course of business and for loans
guaranteed by the Company, principally on behalf of non-consolidated subsidiaries and affiliated companies,
amounted to ¥679 million ($5,096 thousand) and ¥949 million ($ 7,122 thousand), respectively.

The significant components of deferred tax assets and liabilities at March 31, 2002 are as follows:

Millions of yen
Machinery, equipment and vehicles
Tools, furniture and fixtures
Less-Accumulated depreciation

U.S. dollars

2002

2001

2002

¥896
2,765
(1,986)¥1,675¥1,362
3,102(2,173)¥2,291$6,72420,750(14,904)$12,570

Future lease payments of the Companies are as follows:
Millions of yen
Current obligation
Long-term obligation
Present values of lease payments

2001

2002

¥148
113
25
53
270
134
213
¥956

¥244
130
21
55
320
178
289
¥1,237$1,111
848
188
398
2,026
1,006
1,597
$7,17430
1,143¥1,173¥(217)

17
1,509¥1,526¥(289)

225
8,578$8,803$(1,629)2002

9 LeasesFinance leases of the Companies other than those where ownership of the leased assets is transferred to thelessee, are accounted for as operating leases.
Periodic lease charges to the Companies, as a lessee, charged to income for the years ended March 31, 2002
and 2001 are ¥986 million ($7,400 thousand) and ¥1,023 million, respectively. The leased assets and related
expenses of the Companies' finance leases, other than those where the ownership of the lease assets is transferredto the lessee and accounted for as operating leases, if capitalized, at March 31, 2002 comprise the following (inequivalent amounts):
Thousands ofThousands of
U.S. dollars

2002

2001

2002

¥709
966
¥1,675¥943
1,348¥2,291$5,321
7,249$12,570

Pro forma information above does not excluded the imputed interest portion because the financial leaseobligations are not material compared with the book values of property, plant and equipment.

Thousands of
U.S. dollars

Millions of yen

Deferred tax assets:
Accrued employees bonuses
Allowance for doubtful accounts
Devaluation of inventories
Devaluation of Investment securities
Accrued pension and severance costs
Unrealized gain on inventories
Other
Deferred tax assets
Deferred tax liabilities:
Depreciation
Unrealized gain on Investment securities
Deferred tax liabilities
Net deferred tax (liabilities) assets

12.Derivatives
The Company enters into interest rate swap contracts and interest rate floor contracts to manage interest
rate exposures on certain liabilities. This derivative transactions are utilized solely for hedging purposes under
the Company's internal control rules and are subjected to supervision by the Board of Directors.
The contract amounts and estimated fair value of the derivative transactions outstanding at March 31, 2002
and 2001 are as follows:

10.Pledged Assets
Millions of yen

The following assets were pledged as collateral at March 31, 2002:

Land, property, plant and equipment (net of accumulated depreciation)

Millions of yen

Thousands of
U.S. dollars¥6,716$50,402

2002
Contract
amount

2001

Fair
value

Unrealized Contract
gains(losses) amount

Fair
value

Unrealized
gains(losses)

Interest rate floor contracts

The preceding collaterals were pledged to secure long-term debt amounting to ¥ 428 million ($3,212 thousand), short-term bank loans amounting to ¥750 million ($5,629 thousand) and bonds amounting to ¥3,000 million($22,514 thousand).

Sell:

Reconciliation between the statutory tax rate and the effective tax rate for the year ended March 31, 2002 is
not presented, as permitted, since the Company incurred a loss before income tax for the year then ended
17

¥(0)

¥(0)

¥300

¥(1)

¥(1)

Thousands of U.S. dollars

2002
Contract
amount

11.Income Taxes
Income taxes in Japan applicable to the Companies generally comprise Corporation Tax, Enterprise Tax andPrefectural and Municipal Inhabitants taxes. The statutory rates for the years ended March 31, 2002 and 2001
are approximately 41.1%.
The reconciliation of the differences between the statutory rate and effective tax rate of income taxes at
March 31, 2001 is as follows:
2001
41.1%
Statutory tax rate
Non-deductible expense for tax purpose
1.5
Change in valuation allowance
(5.8)
Other
(2.3)
Effective tax rate
34.5

¥100

Fair
value

Unrealized
gains(losses)

Interest rate floor contracts
Sell:

$750

$(0)

$(0)

13.Account balances and transactions with unconsolidated subsidiaries and affiliates
Account balances and transactions with unconsolidated subsidiaries and affiliates for the years ended March
31, 2002 and 2001 are as follows:
Thousands of
U.S. dollars

Millions of yen

2002
Investment securities

¥384

2001
¥384

2002
$2,88218

14.Cash and cash equivalents.
A reconciliation between cash and time deposits in the consolidated balance sheets and cash and cash
equivalents in the statements of cash flows at March 31, 2002 and 2001 is presented as follows:
Millions of yen

Cash and time deposits
Short-term investments
Cash and cash equivalents

Thousands of
U.S. dollars

2002

2001

2002

¥31,606¥5¥31,611¥37,500¥3,095¥40,595$237,193$38$237,231

14. Segment information(B) Geographic segment information of the companies for the year ended March 31, 2002 and 2001 were as follows:
Millions of yen

Year ended March 31, 2002

Japan

North America

Asia

Total

Eliminations Consolidated

Net sales¥97,685¥14,378¥2,885¥114,948¥(10,349) ¥104,599

Cost and expenses

95,82914,6882,868

113,385(10,254)

103,131

Operating income

1,856

(310)

17

1,563

(95)

1,468

Identifiable assets

113,367

10,6462,042

126,055

13,980140,035

Millions of yen

Year ended March 31, 2001

(A) Business segment information
The companies' business is classified into the following three segments based on the similarities of type andnature of business:
Machine Tools: Large size machine tools, Portal type machine tools, Grinding machines, Machining centers,
Horizontal boring machines, High-precision machines
Molding Machinery: Injection molding machines, Die casting machines, Plastic extrusion
Other Products: Rotogravure presses, Hydraulic equipment, Semiconductor manufacturing equipment, Electronic controls
The tables bellow present sales, operating expenses and operating profit information by business segment.

Japan North America

Millions of yen

MachineTools
Sales
Operating expenses
Operating income (loss)
Identifiable assets
Depreciation
Capital expenditure¥27,992
28,179(187)
26,399554
829

Molding
Machinery¥49,432
47,311
2,121
49,067794
351

Operating expenses
Operating income (loss)
Identifiable assets
Depreciation
Capital expenditure

Eliminations
and/or corporate Consolidated¥(3,206)(3,210)
4
12,594−−¥30,381
30,851(470)
51,975941
1,198¥104,599
103,1311,468
140,035
2,289
2,378

MachineTools

Molding
Machinery

Other
Products¥30,129
31,551(1,422)
37,524664
388¥58,430
54,423
4,007
55,835901
598¥42,392
40,162
2,230
62,0401,045
1,579

Eliminations
and/or corporate Consolidated¥(3,592)(3,205)(387)
11,189−−¥127,359
122,931
4,428
166,588
2,610
2,565

¥20,267¥5,669¥145,000¥(17,641) ¥127,359

Cost and expenses

114,723

19,943

5,543

140,209(17,278)

4,341

324

126

4,791

(363)

4,428

Identifiable assets

135,789

12,978

4,958

153,725

12,863

166,588

Thousands of U.S.dollars

Year ended March 31, 2002

Asia

Total

Eliminations Consolidated

Net sales$733,096$107,902$21,651$862,649$(77,666) $784,983

Cost and expenses

719,167

110,229

21,523

850,919(76,953)

773,966

Operating income

13,929(2,327)128

11,730(713)

11,017

Identifiable assets

850,784

79,895

15,325946,004

Sales
Operating expenses
Operating income (loss)
Identifiable assets
Depreciation
Capital expenditure

19$210,071
211,474(1,403)
198,116
4,157
6,221

Molding
Machinery$370,972
355,055
15,917368,233
5,959
2,634

Other
Products$228,000
231,527(3,527)390,056
7,062
8,991

Eliminations
and/or corporate Consolidated$(24,060)(24,090)30
94,514−−$784,983
773,966
11,0171,050,919
17,178
17,846104,915 1,050,919(C) Sales to foreign customers for the years ended March 31, 2002 and 2001 were as follows:
Millions of yen

Year ended March 31, 2002

North America
Sales to foreign customers
Ratio of Sales to foreign Customers (%)¥17,103

Ratio of Sales to foreign Customers (%)

Sales to foreign customers
Net sales
Ratio of Sales to foreign Customers (%)¥4,140¥44,096−−

104,599

21.8

4.0

42.2

Millions of yen

North America
Net sales¥22,853−

Year ended March 31, 2001
Sales to foreign customers

Total

Other

Asia

16.4

Total

Other

Asia

¥23,088¥28,649¥3,402¥55,139−−−

127,359

18.1

22.5

2.7

43.3

Thousands of U.S.dollars

Year ended March 31, 2002

MachineTools

122,931

Operating income

Thousands of U.S.dollars

Year ended March 31, 2002

Eliminations Consolidated¥119,064

Net sales

Millions of yen

Year ended March 31, 2001

Sales

Other
Products

Total

Net sales

Japan North America
Year ended March 31, 2002

Asia

North America

Asia

Other

Total

$128,353$171,505$31,069$330,927−−−

784,983

16.4

21.8

4.0

42.2

20

14.Cash and cash equivalents.
A reconciliation between cash and time deposits in the consolidated balance sheets and cash and cash
equivalents in the statements of cash flows at March 31, 2002 and 2001 is presented as follows:
Millions of yen

Cash and time deposits
Short-term investments
Cash and cash equivalents

Thousands of
U.S. dollars

2002

2001

2002

¥31,606¥5¥31,611¥37,500¥3,095¥40,595$237,193$38$237,231

14. Segment information(B) Geographic segment information of the companies for the year ended March 31, 2002 and 2001 were as follows:
Millions of yen

Year ended March 31, 2002

Japan

North America

Asia

Total

Eliminations Consolidated

Net sales¥97,685¥14,378¥2,885¥114,948¥(10,349) ¥104,599

Cost and expenses

95,82914,6882,868

113,385(10,254)

103,131

Operating income

1,856

(310)

17

1,563

(95)

1,468

Identifiable assets

113,367

10,6462,042

126,055

13,980140,035

Millions of yen

Year ended March 31, 2001

(A) Business segment information
The companies' business is classified into the following three segments based on the similarities of type andnature of business:
Machine Tools: Large size machine tools, Portal type machine tools, Grinding machines, Machining centers,
Horizontal boring machines, High-precision machines
Molding Machinery: Injection molding machines, Die casting machines, Plastic extrusion
Other Products: Rotogravure presses, Hydraulic equipment, Semiconductor manufacturing equipment, Electronic controls
The tables bellow present sales, operating expenses and operating profit information by business segment.

Japan North America

Millions of yen

MachineTools
Sales
Operating expenses
Operating income (loss)
Identifiable assets
Depreciation
Capital expenditure¥27,992
28,179(187)
26,399554
829

Molding
Machinery¥49,432
47,311
2,121
49,067794
351

Operating expenses
Operating income (loss)
Identifiable assets
Depreciation
Capital expenditure

Eliminations
and/or corporate Consolidated¥(3,206)(3,210)
4
12,594−−¥30,381
30,851(470)
51,975941
1,198¥104,599
103,1311,468
140,035
2,289
2,378

MachineTools

Molding
Machinery

Other
Products¥30,129
31,551(1,422)
37,524664
388¥58,430
54,423
4,007
55,835901
598¥42,392
40,162
2,230
62,0401,045
1,579

Eliminations
and/or corporate Consolidated¥(3,592)(3,205)(387)
11,189−−¥127,359
122,931
4,428
166,588
2,610
2,565

¥20,267¥5,669¥145,000¥(17,641) ¥127,359

Cost and expenses

114,723

19,943

5,543

140,209(17,278)

4,341

324

126

4,791

(363)

4,428

Identifiable assets

135,789

12,978

4,958

153,725

12,863

166,588

Thousands of U.S.dollars

Year ended March 31, 2002

Asia

Total

Eliminations Consolidated

Net sales$733,096$107,902$21,651$862,649$(77,666) $784,983

Cost and expenses

719,167

110,229

21,523

850,919(76,953)

773,966

Operating income

13,929(2,327)128

11,730(713)

11,017

Identifiable assets

850,784

79,895

15,325946,004

Sales
Operating expenses
Operating income (loss)
Identifiable assets
Depreciation
Capital expenditure

19$210,071
211,474(1,403)
198,116
4,157
6,221

Molding
Machinery$370,972
355,055
15,917368,233
5,959
2,634

Other
Products$228,000
231,527(3,527)390,056
7,062
8,991

Eliminations
and/or corporate Consolidated$(24,060)(24,090)30
94,514−−$784,983
773,966
11,0171,050,919
17,178
17,846104,915 1,050,919(C) Sales to foreign customers for the years ended March 31, 2002 and 2001 were as follows:
Millions of yen

Year ended March 31, 2002

North America
Sales to foreign customers
Ratio of Sales to foreign Customers (%)¥17,103

Ratio of Sales to foreign Customers (%)

Sales to foreign customers
Net sales
Ratio of Sales to foreign Customers (%)¥4,140¥44,096−−

104,599

21.8

4.0

42.2

Millions of yen

North America
Net sales¥22,853−

Year ended March 31, 2001
Sales to foreign customers

Total

Other

Asia

16.4

Total

Other

Asia

¥23,088¥28,649¥3,402¥55,139−−−

127,359

18.1

22.5

2.7

43.3

Thousands of U.S.dollars

Year ended March 31, 2002

MachineTools

122,931

Operating income

Thousands of U.S.dollars

Year ended March 31, 2002

Eliminations Consolidated¥119,064

Net sales

Millions of yen

Year ended March 31, 2001

Sales

Other
Products

Total

Net sales

Japan North America
Year ended March 31, 2002

Asia

North America

Asia

Other

Total

$128,353$171,505$31,069$330,927−−−

784,983

16.4

21.8

4.0

42.2

20

Independent Auditors Report

The Board of Directors and Shareholders
Toshiba Machine Co., Ltd.

Directors & Auditors

Directors President
Takahiko Inokuma
Senior Mnaging Director
Yasuhiro Kuroki

We have audited the consolidated balance sheets of Toshiba Machine Co., Ltd. and consolidated
subsidiaries as of March 31, 2002 and 2001, and the related consolidated statements of operations,shareholders' equity, and cash flows for the years then ended, all expressed in yen. Our audits weremade in accordance with auditing standards, procedures and practices generally accepted and appliedin Japan and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.

Directors
Tamotsu Mukai
keisuke Maehara
Reiji Nkajima
Katsuhiko Goto
kazuo Hanzawa
Kosei Takeyama

In our opinion, the accompanying consolidated financial statements, expressed in yen, present fairly the consolidated financial position of Toshiba Machine Co., Ltd. and consolidated subsidiaries at
March 31, 2002 and 2001, and the consolidated results of their operations and their cash flows for theyears then ended in conformity with accounting principles and practices generally accepted in Japanapplied on a consistent basis.

Auditors Motoyasu Morita
Kazutaka Yamashita
Fumio Kamahora
Kunio Akita

As described in Note 2 to the consolidated financial statements, Toshiba Machine Co., Ltd. andconsolidated subsidiaries have adopted new accounting standards for employees' retirement benefits
and financial instruments and the revised accounting standard for foreign currency transactions in the
preparation of their consolidated financial statements for the year ended March 31, 2002.
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to theyear ended March 31, 2002 are presented solely for convenience. Our audit also included the translation of yen amounts into U.S. dollar amounts and, in our opinion, such translation has been made on thebasis described in Note 3 to the consolidated financial statements.

June 27, 2002

See note 1 to the consolidated financial statements which explains the basis of preparing the consolidated financial statements of Toshiba Machine Co., Ltd. under Japanese accounting principles
and practices.

21

22

Independent Auditors Report

The Board of Directors and Shareholders
Toshiba Machine Co., Ltd.

Directors & Auditors

Directors President
Takahiko Inokuma
Senior Mnaging Director
Yasuhiro Kuroki

We have audited the consolidated balance sheets of Toshiba Machine Co., Ltd. and consolidated
subsidiaries as of March 31, 2002 and 2001, and the related consolidated statements of operations,shareholders' equity, and cash flows for the years then ended, all expressed in yen. Our audits weremade in accordance with auditing standards, procedures and practices generally accepted and appliedin Japan and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.

Directors
Tamotsu Mukai
keisuke Maehara
Reiji Nkajima
Katsuhiko Goto
kazuo Hanzawa
Kosei Takeyama

In our opinion, the accompanying consolidated financial statements, expressed in yen, present fairly the consolidated financial position of Toshiba Machine Co., Ltd. and consolidated subsidiaries at
March 31, 2002 and 2001, and the consolidated results of their operations and their cash flows for theyears then ended in conformity with accounting principles and practices generally accepted in Japanapplied on a consistent basis.

Auditors Motoyasu Morita
Kazutaka Yamashita
Fumio Kamahora
Kunio Akita

As described in Note 2 to the consolidated financial statements, Toshiba Machine Co., Ltd. andconsolidated subsidiaries have adopted new accounting standards for employees' retirement benefits
and financial instruments and the revised accounting standard for foreign currency transactions in the
preparation of their consolidated financial statements for the year ended March 31, 2002.
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to theyear ended March 31, 2002 are presented solely for convenience. Our audit also included the translation of yen amounts into U.S. dollar amounts and, in our opinion, such translation has been made on thebasis described in Note 3 to the consolidated financial statements.

June 27, 2002

See note 1 to the consolidated financial statements which explains the basis of preparing the consolidated financial statements of Toshiba Machine Co., Ltd. under Japanese accounting principles
and practices.

21

22

2002
TOSHIBA MACHINE CO.,LTD.

Numazu Headquarters
2068-3, Ooka, Numazu-shi, Shizuoka-ken 410-8510, Japan
Tel : 81-(0)55-926-5141
Fax : 81-(0)55-925-6501

Tokyo Main Branch
2-11, 4-chome Ginza, Chuo-ku, Tokyo 104-8141, Japan
Tel : 81-(0)3-3567-0520
Fax : 81-(0)3-3562-5220
URL:http://www.toshiba-machine.co.jp/

TOSHIBA MACHINE

SM02074-1500-SS