Numazu Headquarters

ANNUAL REPORT 2000

2068-3,Ooka,Numazu-shi,Shizuoka-ken 410-8510,Japan
Tel: 81-(0)559-26-5141
Fax: 81-(0)559-25-6501

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/

SM00082-3000-SZ
Printed in Japan

Contents
2 An Outline of the Company
3 Foreword
5 Financial Highlights
Numazu Plant
6 Overseas Operations for Fiscal 2000
7 Overseas Offices
Financial Review

9 Balance Sheets
Statements of Earnings

11 and Retained Earnings

12 Statements of Cash Flows
13 Notes to Financial Statements
Sagami Plant
Report of Independent Certified

17 Public Accountants
18 Directors

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 of machine 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 mechatronicsoriented production systems by utilizing its own advanced precision technologies andsophisticated electronics experience for the research and development of the advanced
technologies required for the future and for continuous and stable growth.

Gotemba Plant

Company name:TOSHIBA MACHINE CO., LTD.
Headquarters:
2068-3, Ooka, Numazu-shi, Shizuoka-ken 410-8510, Japan
Established:
1938
Capital:¥12,485 million (U.S.$118 million)
Total no. of employees: 2,334 (current as of March 31, 2000)

1

2

Contents
2 An Outline of the Company
3 Foreword
5 Financial Highlights
Numazu Plant
6 Overseas Operations for Fiscal 2000
7 Overseas Offices
Financial Review

9 Balance Sheets
Statements of Earnings

11 and Retained Earnings

12 Statements of Cash Flows
13 Notes to Financial Statements
Sagami Plant
Report of Independent Certified

17 Public Accountants
18 Directors

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 of machine 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 mechatronicsoriented production systems by utilizing its own advanced precision technologies andsophisticated electronics experience for the research and development of the advanced
technologies required for the future and for continuous and stable growth.

Gotemba Plant

Company name:TOSHIBA MACHINE CO., LTD.
Headquarters:
2068-3, Ooka, Numazu-shi, Shizuoka-ken 410-8510, Japan
Established:
1938
Capital:¥12,485 million (U.S.$118 million)
Total no. of employees: 2,334 (current as of March 31, 2000)

12

Foreword

Bolstered by economic and financial

Toshiba Machine Company group, on apolicies, and led by a slight upturn in the

consolidated basis recorded a total of

Due to this fiscal loss incurred for theIT (Information Technology) industry, the¥105,543 million (US$994 million) inperiod under review, we will be foregoinginternationalization of our sales andJapanese economy began to show faintorders received. (An exchange rate ofa dividend distribution for the fiscal term

service network based on our CS

signs of recovery despite being bogged¥106.15 = $1.00 will be used throughout

just ended.

(Customer Satisfaction) policy. As for ourdown by stagnant consumer spending andthis report)

private-sector plant and equipment

million).

Despite economic forecasts for a

research, development and offering of new
products, and the further

manufacturing systems, further

As for our consolidated sales, due togradual recovery due to increased activity

rationalization and efficiency measures are

protracted weak demand for our machinein the IT and semiconductor industries,

to be implemented based on ISO9001 andtools and printing presses, total groupsuch factors as depressed consumer

ISO14001 for the production of quality,

continued to enjoy robust economic

sales totaled ¥109,283 million (US$1,030

demand, instability in the foreign

environmentally friendly products.

growth, with Europe, in general, showing

million), a 12.8% decrease over theexchange rates, and fierce competition

increasing signs of an economic recovery,

previous term.

suggest that the current bleak economic

our entire group, both domestic and

Despite such drastic reforms as theenvironment will continue. Nevertheless,overseas companies, did not suffer fromdisplay strong signs of a recovery in theimplementation of a voluntary retirement

the Toshiba Machine Company group is

any Y2K related problems neither at thelatter half of the fiscal year.

program, transferring of our company

determined to increase the volume of

beginning of the year nor any later leap

headquarters, reorganization of ourorders received and sales volume, restore

year effects, the special Y2K task force

growth in selected sectors, bleak

business divisions, and the consolidation

our profitability, and remain an influential

organized to solve any potential problems

conditions continued to plague theof our group management, we regret toforce in the industry by the continuing of

was dissolved in April of this year.

industry as a whole.

announce that due to depressed market

our medium term corporate restructuring

Under such conditions, despite ourdemand and a special loss taken for costs

program.

ongoing efforts to secure orders, bothincurred in carrying out our voluntary

domestically and overseas, as well theretirement program, the Toshiba Machine

efficiency, we also plan to continue

development of new products, due toCompany group incurred a fiscal pre-tax

various reforms in our organization,

greatly depressed domestic and Northloss of ¥3,676 million (US$35 million)

business processes, costs, and group

American machine tool demand, theand a net loss of ¥8,661 million (US$82

management, in addition to the speedy

investment.
Overseas, the American economy

while the Asian economy started to

In the machinery industry, despite

We are also glad to announce that as

To further improve our group

July, 2000
34

Foreword

Bolstered by economic and financial

Toshiba Machine Company group, on apolicies, and led by a slight upturn in the

consolidated basis recorded a total of

Due to this fiscal loss incurred for theIT (Information Technology) industry, the¥105,543 million (US$994 million) inperiod under review, we will be foregoinginternationalization of our sales andJapanese economy began to show faintorders received. (An exchange rate ofa dividend distribution for the fiscal term

service network based on our CS

signs of recovery despite being bogged¥106.15 = $1.00 will be used throughout

just ended.

(Customer Satisfaction) policy. As for ourdown by stagnant consumer spending andthis report)

private-sector plant and equipment

million).

Despite economic forecasts for a

research, development and offering of new
products, and the further

manufacturing systems, further

As for our consolidated sales, due togradual recovery due to increased activity

rationalization and efficiency measures are

protracted weak demand for our machinein the IT and semiconductor industries,

to be implemented based on ISO9001 andtools and printing presses, total groupsuch factors as depressed consumer

ISO14001 for the production of quality,

continued to enjoy robust economic

sales totaled ¥109,283 million (US$1,030

demand, instability in the foreign

environmentally friendly products.

growth, with Europe, in general, showing

million), a 12.8% decrease over theexchange rates, and fierce competition

increasing signs of an economic recovery,

previous term.

suggest that the current bleak economic

our entire group, both domestic and

Despite such drastic reforms as theenvironment will continue. Nevertheless,overseas companies, did not suffer fromdisplay strong signs of a recovery in theimplementation of a voluntary retirement

the Toshiba Machine Company group is

any Y2K related problems neither at thelatter half of the fiscal year.

program, transferring of our company

determined to increase the volume of

beginning of the year nor any later leap

headquarters, reorganization of ourorders received and sales volume, restore

year effects, the special Y2K task force

growth in selected sectors, bleak

business divisions, and the consolidation

our profitability, and remain an influential

organized to solve any potential problems

conditions continued to plague theof our group management, we regret toforce in the industry by the continuing of

was dissolved in April of this year.

industry as a whole.

announce that due to depressed market

our medium term corporate restructuring

Under such conditions, despite ourdemand and a special loss taken for costs

program.

ongoing efforts to secure orders, bothincurred in carrying out our voluntary

domestically and overseas, as well theretirement program, the Toshiba Machine

efficiency, we also plan to continue

development of new products, due toCompany group incurred a fiscal pre-tax

various reforms in our organization,

greatly depressed domestic and Northloss of ¥3,676 million (US$35 million)

business processes, costs, and group

American machine tool demand, theand a net loss of ¥8,661 million (US$82

management, in addition to the speedy

investment.
Overseas, the American economy

while the Asian economy started to

In the machinery industry, despite

We are also glad to announce that as

To further improve our group

July, 2000
3

4

FINANCIAL HIGHLIGHTS (consolidated)

Overseas Operations 2000
Net Sales

155,943

Millions of yen

147,546

Net sales
Cost of sales
Selling, general andadministrative expenses
Operating income
Income before income taxes
and minority interest
Income taxes
Net income (loss)
Per common share:
Net income (loss)
Cash dividends
Total assets
Shareholder’s equity
Capital expenditure(property, plant and equipment)
Depreciation
R & D expenditure

Number of employees

2000

1999

1998

1997

1996

¥109,283$1,029,515¥80,852$761,677¥30,310$285,539¥(1,879)$(17,701)¥(8,779)$(82,704)¥171$(1,611)¥(8,661)$(81,592)¥125,352¥155,943¥147,546¥130,313¥(51.90)$(0.49)¥—$—¥153,563$1,446,660¥36,075$339,849¥2,953$27,819¥3,313$31,211¥3,035$28,592
3,999¥90,694¥33,779¥879¥114,452¥36,913¥4,578¥113,078¥35,192¥(723)¥101,317¥32,750¥(3,754)¥(856)¥7,640¥(434)¥(3,995)

¥524

¥955

¥436

¥491

¥(1,326)¥6,603¥(917)¥(4,160)¥(7.95)¥39.71¥(5.55)¥(25.25)

¥2.00

¥3.00

¥—

¥—

¥159,579¥169,324¥158,597¥157,571¥43,971¥4,100¥46,152¥3,543¥39,431¥3,278¥40,353¥2,684¥3,467¥3,501¥3,597¥3,684

¥—

¥—

¥—

¥—

Despite continued strong growth of theAmerican economy and distinct signs of arecovery in the Asian economy during thelatter half of the fiscal year, due todecreased north American demand formachine tools, total export orders received
totaled ¥34,136 million (US$ 322 million),
an approximately 5% decrease compared tothe previous fiscal year.
In regards to export sales, an increase in
injection molding machine andsemiconductor equipment sales more thancompensated for decrease in machine tool
sales resulting in a total of ¥39,171 million(US$ 369 million), a 9% increase comparedto the previous fiscal year, contributing toapproximately 49% of total sales.
Although the north American region
accounted for 36% of total export amount,
other principal markets were China, South
Korea, Taiwan, Europe, Malaysia andSingapore.
By machinery type, the major share of
injection molding machines and die castmachinery were exported to north Americaand Asia, while north America, Asia, as
well as Europe represented the largest
market for our machine tools.
In the future, we plan to further improve
our overseas sales and service network by
quickly responding to our customers needs
with the providing of quality products andafter-sales service.

125,352

31,085——roducts

29,84630,55375,868yMachiner
Molding

59,18750,33573,590e Tools

68,275

Machin29,10242,15648,99042,278

2000

1999

31,485

1998

1997

1996

Total Sales & Overseas Sales
155,943

Millions of yen

147,546

125,352

109,283lesaTotal S

130,313as

OverseSales

61,42846,00743,24756,67354,499

1996

1997

2000

1999

1998

Export Percentages by Major Products
e Tools

Machints
Produc
Other

—

Total

Other P

24,00931,678130,313109,283—

27%

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

27%

46%

g
Moldin5ryeMachin6

FINANCIAL HIGHLIGHTS (consolidated)

Overseas Operations 2000
Net Sales

155,943

Millions of yen

147,546

Net sales
Cost of sales
Selling, general andadministrative expenses
Operating income
Income before income taxes
and minority interest
Income taxes
Net income (loss)
Per common share:
Net income (loss)
Cash dividends
Total assets
Shareholder’s equity
Capital expenditure(property, plant and equipment)
Depreciation
R & D expenditure

Number of employees

2000

1999

1998

1997

1996

¥109,283$1,029,515¥80,852$761,677¥30,310$285,539¥(1,879)$(17,701)¥(8,779)$(82,704)¥171$(1,611)¥(8,661)$(81,592)¥125,352¥155,943¥147,546¥130,313¥(51.90)$(0.49)¥—$—¥153,563$1,446,660¥36,075$339,849¥2,953$27,819¥3,313$31,211¥3,035$28,592
3,999¥90,694¥33,779¥879¥114,452¥36,913¥4,578¥113,078¥35,192¥(723)¥101,317¥32,750¥(3,754)¥(856)¥7,640¥(434)¥(3,995)

¥524

¥955

¥436

¥491

¥(1,326)¥6,603¥(917)¥(4,160)¥(7.95)¥39.71¥(5.55)¥(25.25)

¥2.00

¥3.00

¥—

¥—

¥159,579¥169,324¥158,597¥157,571¥43,971¥4,100¥46,152¥3,543¥39,431¥3,278¥40,353¥2,684¥3,467¥3,501¥3,597¥3,684

¥—

¥—

¥—

¥—

Despite continued strong growth of theAmerican economy and distinct signs of arecovery in the Asian economy during thelatter half of the fiscal year, due todecreased north American demand formachine tools, total export orders received
totaled ¥34,136 million (US$ 322 million),
an approximately 5% decrease compared tothe previous fiscal year.
In regards to export sales, an increase in
injection molding machine andsemiconductor equipment sales more thancompensated for decrease in machine tool
sales resulting in a total of ¥39,171 million(US$ 369 million), a 9% increase comparedto the previous fiscal year, contributing toapproximately 49% of total sales.
Although the north American region
accounted for 36% of total export amount,
other principal markets were China, South
Korea, Taiwan, Europe, Malaysia andSingapore.
By machinery type, the major share of
injection molding machines and die castmachinery were exported to north Americaand Asia, while north America, Asia, as
well as Europe represented the largest
market for our machine tools.
In the future, we plan to further improve
our overseas sales and service network by
quickly responding to our customers needs
with the providing of quality products andafter-sales service.

125,352

31,085——roducts

29,84630,55375,868yMachiner
Molding

59,18750,33573,590e Tools

68,275

Machin29,10242,15648,99042,278

2000

1999

31,485

1998

1997

1996

Total Sales & Overseas Sales
155,943

Millions of yen

147,546

125,352

109,283lesaTotal S

130,313as

OverseSales

61,42846,00743,24756,67354,499

1996

1997

2000

1999

1998

Export Percentages by Major Products
e Tools

Machints
Produc
Other

—

Total

Other P

24,00931,678130,313109,283—

27%

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

27%

46%

g
Moldin5ryeMachin6Overseas Offices
Overseas Subsidiaries, Affiliates and Joint VenturesTOSHIBA MACHINE CO. AMERICA
Chicago Head Office
755 Greenleaf Avenue,
Elk Grove Village, IL 60007, U.S.A.
Tel: [1]-847-593-1616
Fax: [1]-847-593-0897
Los Angeles Office1481 South Balboa Avenue,
Ontario, CA 91761, U.S.A.
Tel: [1]-909-923-4009
Fax: [1]-909-923-7258
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 Office1412 Oakbrook Drive, Suite 185,
Norcross, GA 30093, U.S.A.
Tel: [1]-770-729-0777
Fax: [1]-770-729-0061
Denver Office5310 Ward Road, Arvada, CO 80002, U.S.A.
Tel: [1]-303-422-1938
Fax: [1]-303-422-0752
Cincinnati Office
230 Northland Boulevard,
Suite 126B, Cincinnati,
OH 45246, U.S.A.
Tel: [1]-513-772-4899
Fax: [1]-513-772-5899
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

Branch and Representative Office
TOSHIBA MACHINE CO., LTD.
U.K. BRANCH
c/o STEVENS INTERNATIONAL LIMITED
60 Burners Lane, Kiln Farm,
Milton Keynes MK11 3HD, UNITED KINGDOM
Tel: [44]-(0)-1908-562327
Fax: [44]-(0)-1908-562348
TOSHIBA MACHINE CO., LTD.
BEIJING REPRESENTATIVE OFFICE
Beijing Fortune Building,Room No. 917, 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

7

TOSHIBA MACHINE (EUROPE) G.m.b.H.
Otto-Brenner-Strasse 5,47877 Willich-Münchheide,F. R. GERMANY
Tel: [49]-(0)2154-9275-0
Fax: [49]-(0)2154-9275-75
TOSHIBA MACHINE S.E. ASIA PTE. LTD.
Head Office
No. 24 Tuas Avenue 4,
Singapore 639374, SINGAPORE
Tel: [65]-8611455
Fax: [65]-8612023
Kuala Lumpur Office
70-G, Jalan SS21/62, Damansara Utama,
47400 Petaling Jaya,
Selangor Darul Ehsan, MALAYSIA
Tel: [60]-(0)3-7197544
Fax: [60]-(0)3-7197545
Penang Office
Level 31, TG3 & 4 Menara Komtar,
10000 Penang, MALAYSIA
Tel: [60]-(0)4-2631380
Fax: [60]-(0)4-2631353
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
TOSHIBA MACHINE TAIWAN CO., LTD.
No. 62, Lane 188, Jui-Kuang Road, Nei-Hu District,Taipei, TAIWAN, R.O.C.
Tel: [886]-(0)2-2659-6558
Fax: [886]-(0)2-2659-6381
TOSHIBA MACHINE HONG KONG LTD.
Head Office
Suite 1010, 10th Floor, Tower 3,
China Hong Kong City,
33 Canton Road, Tsim Sha Tsui,
Kowloon, HONG KONG
Tel: [852]-2735-1868
Fax: [852]-2735-1872

Shenzhen Office
Room 611, Century Plaza Hotel,
Kin Chit Road, Shenzhen,
PEOPLE’S REPUBLIC OF CHINA
Tel: [86]-(0)755-232-0453
Fax: [86]-(0)755-234-3497
TOSHIBA MACHINE (THAILAND) CO., LTD.
127/28 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
TMT SERVICE & ENGINEERING CO., LTD.
127/28 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.
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
JAPAN MACHINES (AUSTRALIA) PTY. LTD.
1 Giffard Street, Silverwater,
N. S.W. 2128, AUSTRALIA
Tel: [61]-(0)2-9739-8787
Fax: [61]-(0)2-9648-4717

F i n a n c i a l

R e v i e w

Overseas Offices
Overseas Subsidiaries, Affiliates and Joint VenturesTOSHIBA MACHINE CO. AMERICA
Chicago Head Office
755 Greenleaf Avenue,
Elk Grove Village, IL 60007, U.S.A.
Tel: [1]-847-593-1616
Fax: [1]-847-593-0897
Los Angeles Office1481 South Balboa Avenue,
Ontario, CA 91761, U.S.A.
Tel: [1]-909-923-4009
Fax: [1]-909-923-7258
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 Office1412 Oakbrook Drive, Suite 185,
Norcross, GA 30093, U.S.A.
Tel: [1]-770-729-0777
Fax: [1]-770-729-0061
Denver Office5310 Ward Road, Arvada, CO 80002, U.S.A.
Tel: [1]-303-422-1938
Fax: [1]-303-422-0752
Cincinnati Office
230 Northland Boulevard,
Suite 126B, Cincinnati,
OH 45246, U.S.A.
Tel: [1]-513-772-4899
Fax: [1]-513-772-5899
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

Branch and Representative Office
TOSHIBA MACHINE CO., LTD.
U.K. BRANCH
c/o STEVENS INTERNATIONAL LIMITED
60 Burners Lane, Kiln Farm,
Milton Keynes MK11 3HD, UNITED KINGDOM
Tel: [44]-(0)-1908-562327
Fax: [44]-(0)-1908-562348
TOSHIBA MACHINE CO., LTD.
BEIJING REPRESENTATIVE OFFICE
Beijing Fortune Building,Room No. 917, 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

7

TOSHIBA MACHINE (EUROPE) G.m.b.H.
Otto-Brenner-Strasse 5,47877 Willich-Münchheide,F. R. GERMANY
Tel: [49]-(0)2154-9275-0
Fax: [49]-(0)2154-9275-75
TOSHIBA MACHINE S.E. ASIA PTE. LTD.
Head Office
No. 24 Tuas Avenue 4,
Singapore 639374, SINGAPORE
Tel: [65]-8611455
Fax: [65]-8612023
Kuala Lumpur Office
70-G, Jalan SS21/62, Damansara Utama,
47400 Petaling Jaya,
Selangor Darul Ehsan, MALAYSIA
Tel: [60]-(0)3-7197544
Fax: [60]-(0)3-7197545
Penang Office
Level 31, TG3 & 4 Menara Komtar,
10000 Penang, MALAYSIA
Tel: [60]-(0)4-2631380
Fax: [60]-(0)4-2631353
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
TOSHIBA MACHINE TAIWAN CO., LTD.
No. 62, Lane 188, Jui-Kuang Road, Nei-Hu District,Taipei, TAIWAN, R.O.C.
Tel: [886]-(0)2-2659-6558
Fax: [886]-(0)2-2659-6381
TOSHIBA MACHINE HONG KONG LTD.
Head Office
Suite 1010, 10th Floor, Tower 3,
China Hong Kong City,
33 Canton Road, Tsim Sha Tsui,
Kowloon, HONG KONG
Tel: [852]-2735-1868
Fax: [852]-2735-1872

Shenzhen Office
Room 611, Century Plaza Hotel,
Kin Chit Road, Shenzhen,
PEOPLE’S REPUBLIC OF CHINA
Tel: [86]-(0)755-232-0453
Fax: [86]-(0)755-234-3497
TOSHIBA MACHINE (THAILAND) CO., LTD.
127/28 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
TMT SERVICE & ENGINEERING CO., LTD.
127/28 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.
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
JAPAN MACHINES (AUSTRALIA) PTY. LTD.
1 Giffard Street, Silverwater,
N. S.W. 2128, AUSTRALIA
Tel: [61]-(0)2-9739-8787
Fax: [61]-(0)2-9648-4717

F i n a n c i a l

R e v i e w

BALANCE SHEETS (consolidated)
TOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIESASSETS

March 31, 2000 and 1999

Millions of
yen
2000

Millions of
yen
1999

Thousands of
U.S. dollars
2000

Current assets:
Cash and cash equivalents (Note 2.i)Marketable securities

March 31, 2000 and 1999

LIABILITIES ANDSHAREHOLDERS’ EQUITY

Millions of
yen
2000

Millions of
yen
1999

Thousands of
U.S. dollars
2000¥50,017¥51,392$471,192

3,750

526

35,327

Current liabilities:¥45,272¥33,754$426,491

2,080

2,586

19,595Trade receivables:

Short-term bank loans (Note 5)
Current portion of long-term debt (Note 5)
Trade payables:

Notes

15,657

41,691

147,499

Notes

17,07718,063160,876

Accounts

33,69920,683

317,466

Accounts

7,396

8,114

69,67549,35662,374464,965

Total payables

24,473

26,177

230,551(1,136)(1,186)(10,702)

Income taxes payable

389

288

3,665

48,22061,188454,263

Accrued expenses

4,238

4,996

39,925

Advanced received

1,480

2,040

13,943

708

975

6,670

85,05586,394801,273

25,791

20,742242,967

13

—

122

Accrued severance indemnities

5,692

7,257

53,622

Total long-term liabilities

31,49627,999296,711

116,551

114,393

1,097,984

937

1,215

8,827

12,485

12,485

117,617Additional paid-in capital

19,405

19,405

182,807

Retained earnings

4,185

12,081

39,42500036,07543,971

339,849¥153,563¥159,579$1,446,660

Allowance for doubtful receivables
Net receivables
Inventories:
Finished products

8,511

8,445

80,179Work in process

15,532

19,857

146,321

782

786

7,367

24,82529,088233,867

818

—

7,706

Long-term liabilities:

2,003

1,064

18,869Long-term debt (Note 5)

123,218

127,680

1,160,791

Raw materials and supplies
Total inventories
Deferred taxes
Other current assets
Total current assets

Investments and long-term loans:

Other current liabilities
Total current liabilities

Deferred taxes

Total liabilities

Investments in:
Unconsolidated subsidiaries and affiliated companies

424

611

3,994

Minority interest in consolidated subsidiaries

Other securities

185

260

1,743

Shareholders’ equity:

Long-term loans

948

967

8,931

Common stock of ¥50 par value

Deferred taxes

260

—

2,449

Authorized — 360,000,000 shares

Other investments

856

943

8,064

Issued — 1999

166,885,530 shares

2,673

2,781

25,181

Issued — 2000

166,885,530 shares

Total investments and long-term loans

Property, plant and equipment

Treasury stock
26,721

28,455

251,729

Other assets

381

410

3,589

Foreign currency translation adjustment

570

253

5,370

¥153,563¥159,579$1,446,660(Notes 4 and 5)

Total assets

Total shareholders’ equity

Contingent liabilities (Note 6)
Total liabilities and shareholders’ equity

See accompanying notes to financial statements

910

BALANCE SHEETS (consolidated)
TOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIESASSETS

March 31, 2000 and 1999

Millions of
yen
2000

Millions of
yen
1999

Thousands of
U.S. dollars
2000

Current assets:
Cash and cash equivalents (Note 2.i)Marketable securities

March 31, 2000 and 1999

LIABILITIES ANDSHAREHOLDERS’ EQUITY

Millions of
yen
2000

Millions of
yen
1999

Thousands of
U.S. dollars
2000¥50,017¥51,392$471,192

3,750

526

35,327

Current liabilities:¥45,272¥33,754$426,491

2,080

2,586

19,595Trade receivables:

Short-term bank loans (Note 5)
Current portion of long-term debt (Note 5)
Trade payables:

Notes

15,657

41,691

147,499

Notes

17,07718,063160,876

Accounts

33,69920,683

317,466

Accounts

7,396

8,114

69,67549,35662,374464,965

Total payables

24,473

26,177

230,551(1,136)(1,186)(10,702)

Income taxes payable

389

288

3,665

48,22061,188454,263

Accrued expenses

4,238

4,996

39,925

Advanced received

1,480

2,040

13,943

708

975

6,670

85,05586,394801,273

25,791

20,742242,967

13

—

122

Accrued severance indemnities

5,692

7,257

53,622

Total long-term liabilities

31,49627,999296,711

116,551

114,393

1,097,984

937

1,215

8,827

12,485

12,485

117,617Additional paid-in capital

19,405

19,405

182,807

Retained earnings

4,185

12,081

39,42500036,07543,971

339,849¥153,563¥159,579$1,446,660

Allowance for doubtful receivables
Net receivables
Inventories:
Finished products

8,511

8,445

80,179Work in process

15,532

19,857

146,321

782

786

7,367

24,82529,088233,867

818

—

7,706

Long-term liabilities:

2,003

1,064

18,869Long-term debt (Note 5)

123,218

127,680

1,160,791

Raw materials and supplies
Total inventories
Deferred taxes
Other current assets
Total current assets

Investments and long-term loans:

Other current liabilities
Total current liabilities

Deferred taxes

Total liabilities

Investments in:
Unconsolidated subsidiaries and affiliated companies

424

611

3,994

Minority interest in consolidated subsidiaries

Other securities

185

260

1,743

Shareholders’ equity:

Long-term loans

948

967

8,931

Common stock of ¥50 par value

Deferred taxes

260

—

2,449

Authorized — 360,000,000 shares

Other investments

856

943

8,064

Issued — 1999

166,885,530 shares

2,673

2,781

25,181

Issued — 2000

166,885,530 shares

Total investments and long-term loans

Property, plant and equipment

Treasury stock
26,721

28,455

251,729

Other assets

381

410

3,589

Foreign currency translation adjustment

570

253

5,370

¥153,563¥159,579$1,446,660(Notes 4 and 5)

Total assets

Total shareholders’ equity

Contingent liabilities (Note 6)
Total liabilities and shareholders’ equity

See accompanying notes to financial statements

910

Statements of Operations and Retained Earnings (consolidated)

Statements of Cash Flows (consolidated)

TOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIESTOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIES

Years ended March 31, 2000 and 1999

Millions of
yen
2000

Millions of
yen
1999

Thousands of
U.S. dollars
2000

Net sales¥109,283¥125,352$1,029,515

Cost of sales

80,852

90,694

761,677

Income before income taxes and minority interests

28,431

34,658267,838

Adjustments to reconcile income before income taxes

30,31033,779285,539(1,879)879(17,701)

Gross profit
Selling, general and administrative expenses
Operating income (loss)

Millions of
yen
2000

Thousands of
U.S. dollars
2000¥(8,779)$(82,704)

3,313

31,211

(52)

(490)

(1,572)(14,809)

Devaluation of marketable securities

499

4,701

137

1,291

(2,263)(21,319)

Operating Activities:

and minority interests to net cash provided by operating activities:
Depreciation and amortization
Allowance for doubtful receivables
Provision for severance indemnities, less payments

Other income:Years ended March 31, 2000

158

343

1,488

Exchange loss

Gain on sale of property, plant and equipment

2,440

—

22,986

Gain and loss on sales and disposal of property, plant and equipment

Others

1,351

829

12,728Changes in operating assets and liabilities:

3,949

1,172

37,202

Trade notes and accounts receivables

14,290134,621

Inventories

4,263

40,160Trade notes and accounts payables(3,242)(30,542)

Advanced received(560)(5,276)

Accrued expenses(912)(8,592)

Income taxes paid

(369)

(3,476)(351)(3,306)

4,402

41,470Purchase of property, plant and equipment(2,580)(24,305)

2,635

24,823

Interest and dividends

Other expenses:
Interest

1,541

1,591

14,517

Special benefits for employees retired under early retirement program

6,421

—

60,490

Others

2,887

1,316

27,198

10,8492,907

102,205

Net cash provided by operating activities(8,779)(856)(82,704)

Investing Activities:

Loss before income taxes and minority interests

OthersIncome taxes:

171

524

1,611

Sale of property, plant and equipment

Current

471

524

4,437

Increase in short-term loan receivables, net

(94)

(886)

Deferred(300)—(2,826)

Payment of long-term loan receivables(364)(3,429)

289

54

2,723

Repayment of long-term loan receivables

383

3,608

8,661

1,326

81,592Others

264

2,488

244

2,299

Decrease in short-term bank loans(1,493)(14,065)

Proceeds from long-term debt

6,540

61,611

Repayment of long-term debt

(168)

(1,583)Issue of bond

2,000

18,841(7)(65)

Minority interests in income of consolidated subsidiaries
Net loss

Net cash provided by investment activities
Financing Activities:

Retained earnings:
12,081

14,262

113,811

Increase due to addition of subsidiaries to consolidation

293

—

2,760

Cumulative effect of change in accounting for income taxes

493

—

4,644

Net cash provided by financing activities

6,872

64,739Cash dividends

—

835

—

Net cash increased during the year

11,518

108,508

Directors’ and statutory auditors’ bonuses

21

20

198

Cash and cash equivalent at the beginning of year

33,754

317,983

4,185

12,081

39,425

Cash and cash equivalent at the end of year

45,272426,491¥ (51.90)¥(7.95)$(0.49)Balance at beginning of year

Balance at end of year
Net loss per share of common stock11

In millions of yen (thousands of U.S. dollars) except for Earnings per common share.
See accompanying notes to financial statements.

Dividends paid for minority interest

12Statements of Operations and Retained Earnings (consolidated)

Statements of Cash Flows (consolidated)

TOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIESTOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIES

Years ended March 31, 2000 and 1999

Millions of
yen
2000

Millions of
yen
1999

Thousands of
U.S. dollars
2000

Net sales¥109,283¥125,352$1,029,515

Cost of sales

80,852

90,694

761,677

Income before income taxes and minority interests

28,431

34,658267,838

Adjustments to reconcile income before income taxes

30,31033,779285,539(1,879)879(17,701)

Gross profit
Selling, general and administrative expenses
Operating income (loss)

Millions of
yen
2000

Thousands of
U.S. dollars
2000¥(8,779)$(82,704)

3,313

31,211

(52)

(490)

(1,572)(14,809)

Devaluation of marketable securities

499

4,701

137

1,291

(2,263)(21,319)

Operating Activities:

and minority interests to net cash provided by operating activities:
Depreciation and amortization
Allowance for doubtful receivables
Provision for severance indemnities, less payments

Other income:Years ended March 31, 2000

158

343

1,488

Exchange loss

Gain on sale of property, plant and equipment

2,440

—

22,986

Gain and loss on sales and disposal of property, plant and equipment

Others

1,351

829

12,728Changes in operating assets and liabilities:

3,949

1,172

37,202

Trade notes and accounts receivables

14,290134,621

Inventories

4,263

40,160Trade notes and accounts payables(3,242)(30,542)

Advanced received(560)(5,276)

Accrued expenses(912)(8,592)

Income taxes paid

(369)

(3,476)(351)(3,306)

4,402

41,470Purchase of property, plant and equipment(2,580)(24,305)

2,635

24,823

Interest and dividends

Other expenses:
Interest

1,541

1,591

14,517

Special benefits for employees retired under early retirement program

6,421

—

60,490

Others

2,887

1,316

27,198

10,8492,907

102,205

Net cash provided by operating activities(8,779)(856)(82,704)

Investing Activities:

Loss before income taxes and minority interests

OthersIncome taxes:

171

524

1,611

Sale of property, plant and equipment

Current

471

524

4,437

Increase in short-term loan receivables, net

(94)

(886)

Deferred(300)—(2,826)

Payment of long-term loan receivables(364)(3,429)

289

54

2,723

Repayment of long-term loan receivables

383

3,608

8,661

1,326

81,592Others

264

2,488

244

2,299

Decrease in short-term bank loans(1,493)(14,065)

Proceeds from long-term debt

6,540

61,611

Repayment of long-term debt

(168)

(1,583)Issue of bond

2,000

18,841(7)(65)

Minority interests in income of consolidated subsidiaries
Net loss

Net cash provided by investment activities
Financing Activities:

Retained earnings:
12,081

14,262

113,811

Increase due to addition of subsidiaries to consolidation

293

—

2,760

Cumulative effect of change in accounting for income taxes

493

—

4,644

Net cash provided by financing activities

6,872

64,739Cash dividends

—

835

—

Net cash increased during the year

11,518

108,508

Directors’ and statutory auditors’ bonuses

21

20

198

Cash and cash equivalent at the beginning of year

33,754

317,983

4,185

12,081

39,425

Cash and cash equivalent at the end of year

45,272426,491¥ (51.90)¥(7.95)$(0.49)Balance at beginning of year

Balance at end of year
Net loss per share of common stock11

In millions of yen (thousands of U.S. dollars) except for Earnings per common share.
See accompanying notes to financial statements.

Dividends paid for minority interest

12

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSTOSHIBA MACHINE CO., LTD.

1. Basis of Presenting Financial Statements
The consolidated balance sheets, statements ofoperations and cash flows are prepared from those which
are in accordance with accounting principles generally
accepted in Japan, which may differ in some material
respects from accounting principles generally accepted incountries and jurisdictions other than Japan. The
preparation of these financial statements requires
management to make estimates and assumptions that
affect the reported amounts of assets and liabilities anddisclosure of contingent assets and liabilities at the date of
the consolidated financial statements and the reported
amounts of revenues and expenses during the reporting
period. Actual results could differ from these estimates.
The consolidated balance sheets, statements ofoperations and cash flows incorporate certain
reclassifications and rearrangements in order to present
these statements in forms which are more familiar to thereaders of these statements outside of Japan. In addition,
the notes to the consolidated financial statements include
information which is not required under generally
accepted accounting principles and practices in Japan but
is presented herein as additional information.

2. Summary of Significant Accounting Policies
a. Basis of consolidation
The consolidated financial statements include theaccounts of the Toshiba Machine Co.,Ltd and its
seventeen significant subsidiaries. Subsidiaries notincluded in the consolidated accounts are excluded fromthese accounts because they are all small in terms of total
assets, net sales, net income, and retained earnings. All
significant intercompany transactions and accounts havebeen eliminated.
If the cost of an investment in a consolidated
subsidiary or in an affiliate accounted for under the equity
method differs from the underlying net equity, thatamount is deferred and amortized on a straight-line basis
over five years.
Investments in unconsolidated subsidiaries andaffiliates are stated at cost and the equity method is notapplied for the valuation of such investments because they
are small in terms of net income and retained earnings.

b. Translation of foreign currency transactions
and accounts
Foreign currency transactions are translated using
foreign exchange rates prevailing at the transactions dates.
Current receivables and payables in foreign currencies aretranslated at year-end using current exchange rates,
whereas long-term receivables and payables in foreign
currencies are not revalued using the current rate at thebalance sheet date. Foreign currency transactions andaccounts with related forward exchange contracts aremeasured using the contract rate.
All the assets and liabilities of foreign subsidiaries andaffiliates are translated at current rates at the respectivebalance sheet dates and all the income and expense
13

Years ended March 31, 2000 and 1999

accounts are translated at average rates for the respective
periods. Foreign currency financial statement translationdifferences are recorded in the balance sheet as acomponent of assets or liabilities.

c. Allowance for doubtful accounts
The allowance for doubtful accounts represents the
maximum amount permitted for tax purposes andadditional allowance based on an evaluation of thecollectability of individual receivables. This amount is
considered sufficient to cover possible losses oncollection.

of full liability based on voluntary retirement. The
difference between that amount and the amount actually
paid is deductible at the time of payment.
The Company and two consolidated subsidiaries have
the Corporate Pension Plan, which has been qualified forJapanese tax law, for above employee retirement plan.
Past service cost in that Pension Plan has been amortizedby 8 or15 years.
Directors are not covered by the programs describedabove, since amounts vary with circumstances and it istherefore not practicable to compute liability for future
payments. Such allowances are not deductible fromtaxable income until they are paid.

d. Inventories
Inventories are stated at the cost, determined by theidentified cost for finished products and work in process,and by the moving average method for raw materials andsupplies.

e. Securities and investments
In previous periods, the Company valued listed
marketable securities at cost based on an average.
However, due to a change in consolidated accounting
effective in the term under review, listed marketablesecurities are stated at the lower of moving average costor market. As a result of this change in accounting
methods, the Company recorded a ¥499 million ($4,700
thousand) devaluation of marketable securities underother expenses. The effect of this change was to increase
the loss before income taxes and minority interests by¥499 million ($4,700 thousand).
Income on securities is generally recognized when adividend or interest payment is received.

f. Property, plant and equipment, depreciationand lease transaction
Property, plant and equipment is stated at cost.
Depreciation of property, plant and equipment, except
for building is computed by the declining balance method
over the applicable useful lives. Building is depreciatedby the straight line method over the estimated lives.
Finance lease transactions, except for those which meetthe condition that the ownership of the leased asset issubstantially transferred to the lessee, are accounted for as
operating lease transactions.

g. Liability for employee retirement andseverance indemnities
Under the Company’s employee retirement plan, an
allowance based on the length of service and basic salaryat the date of termination is paid to employees byterminating their employment. Payments for voluntarytermination are less than the payments for involuntarytermination.
For tax purposes, only 33% of the retirement liability
on a voluntary basis is deductible at the time accrued, but
the liability for employee retirement and severance
indemnities included in the balance sheets represents 50%

h. Appropriations of retained earnings or
disposition of accumulated deficit
Appropriations of retained earnings reflected in theaccompanying consolidated financial statements havebeen recorded after approval by the shareholders as
required under the Japanese Commercial Code.

i. Cash equivalents
For the purpose of the statements of cash flows, theCompany considers all highly liquid investments which
are readily convertible into cash and/or mature within
three months or less to be cash equivalents.

j. Reclassifications
Certain accounts in the consolidated statement for theyears ended March 31, 1999 have been reclassified toconform to the presentation.

3. U.S. Dollar amounts
The U.S. dollar amounts are included solely forconvenience and have been translated into United States
dollars at the rate of ¥106.15=U.S.$1, the approximate
exchange rate prevailing in the Japanese foreign exchange
market as at March 31, 2000.
This translation should not be construed as arepresentation that the Japanese yen amounts shown could
be converted into U.S. dollars.

4. Property, Plant and Equipment
Property, plant and equipment on March 31, 2000 and 1999 consisted of the following:
Millions of
yen
2000

Millions of
yen
1999

Thousands of
U.S. dollars
2000

Land

¥6,776¥6,358$63,834

Buildings and structures

29,532

28,941

278,210

Machinery and equipment

37,756

38,683355,685

629

626

5,926

8,156

11,74376,835

80

286

754

82,92986,637781,244(56,208)(58,182)(529,515)¥26,721¥28,455$251,729

VehiclesTools, furniture and fixtures
Construction in progress

Less accumulated depreciation

Depreciation charged to income for the years ended March 31, 2000 and 1999 amounted to ¥3,313 million (U.S.$31,211 thousand) and ¥3,467 million,
respectively.

14

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSTOSHIBA MACHINE CO., LTD.

1. Basis of Presenting Financial Statements
The consolidated balance sheets, statements ofoperations and cash flows are prepared from those which
are in accordance with accounting principles generally
accepted in Japan, which may differ in some material
respects from accounting principles generally accepted incountries and jurisdictions other than Japan. The
preparation of these financial statements requires
management to make estimates and assumptions that
affect the reported amounts of assets and liabilities anddisclosure of contingent assets and liabilities at the date of
the consolidated financial statements and the reported
amounts of revenues and expenses during the reporting
period. Actual results could differ from these estimates.
The consolidated balance sheets, statements ofoperations and cash flows incorporate certain
reclassifications and rearrangements in order to present
these statements in forms which are more familiar to thereaders of these statements outside of Japan. In addition,
the notes to the consolidated financial statements include
information which is not required under generally
accepted accounting principles and practices in Japan but
is presented herein as additional information.

2. Summary of Significant Accounting Policies
a. Basis of consolidation
The consolidated financial statements include theaccounts of the Toshiba Machine Co.,Ltd and its
seventeen significant subsidiaries. Subsidiaries notincluded in the consolidated accounts are excluded fromthese accounts because they are all small in terms of total
assets, net sales, net income, and retained earnings. All
significant intercompany transactions and accounts havebeen eliminated.
If the cost of an investment in a consolidated
subsidiary or in an affiliate accounted for under the equity
method differs from the underlying net equity, thatamount is deferred and amortized on a straight-line basis
over five years.
Investments in unconsolidated subsidiaries andaffiliates are stated at cost and the equity method is notapplied for the valuation of such investments because they
are small in terms of net income and retained earnings.

b. Translation of foreign currency transactions
and accounts
Foreign currency transactions are translated using
foreign exchange rates prevailing at the transactions dates.
Current receivables and payables in foreign currencies aretranslated at year-end using current exchange rates,
whereas long-term receivables and payables in foreign
currencies are not revalued using the current rate at thebalance sheet date. Foreign currency transactions andaccounts with related forward exchange contracts aremeasured using the contract rate.
All the assets and liabilities of foreign subsidiaries andaffiliates are translated at current rates at the respectivebalance sheet dates and all the income and expense
13

Years ended March 31, 2000 and 1999

accounts are translated at average rates for the respective
periods. Foreign currency financial statement translationdifferences are recorded in the balance sheet as acomponent of assets or liabilities.

c. Allowance for doubtful accounts
The allowance for doubtful accounts represents the
maximum amount permitted for tax purposes andadditional allowance based on an evaluation of thecollectability of individual receivables. This amount is
considered sufficient to cover possible losses oncollection.

of full liability based on voluntary retirement. The
difference between that amount and the amount actually
paid is deductible at the time of payment.
The Company and two consolidated subsidiaries have
the Corporate Pension Plan, which has been qualified forJapanese tax law, for above employee retirement plan.
Past service cost in that Pension Plan has been amortizedby 8 or15 years.
Directors are not covered by the programs describedabove, since amounts vary with circumstances and it istherefore not practicable to compute liability for future
payments. Such allowances are not deductible fromtaxable income until they are paid.

d. Inventories
Inventories are stated at the cost, determined by theidentified cost for finished products and work in process,and by the moving average method for raw materials andsupplies.

e. Securities and investments
In previous periods, the Company valued listed
marketable securities at cost based on an average.
However, due to a change in consolidated accounting
effective in the term under review, listed marketablesecurities are stated at the lower of moving average costor market. As a result of this change in accounting
methods, the Company recorded a ¥499 million ($4,700
thousand) devaluation of marketable securities underother expenses. The effect of this change was to increase
the loss before income taxes and minority interests by¥499 million ($4,700 thousand).
Income on securities is generally recognized when adividend or interest payment is received.

f. Property, plant and equipment, depreciationand lease transaction
Property, plant and equipment is stated at cost.
Depreciation of property, plant and equipment, except
for building is computed by the declining balance method
over the applicable useful lives. Building is depreciatedby the straight line method over the estimated lives.
Finance lease transactions, except for those which meetthe condition that the ownership of the leased asset issubstantially transferred to the lessee, are accounted for as
operating lease transactions.

g. Liability for employee retirement andseverance indemnities
Under the Company’s employee retirement plan, an
allowance based on the length of service and basic salaryat the date of termination is paid to employees byterminating their employment. Payments for voluntarytermination are less than the payments for involuntarytermination.
For tax purposes, only 33% of the retirement liability
on a voluntary basis is deductible at the time accrued, but
the liability for employee retirement and severance
indemnities included in the balance sheets represents 50%

h. Appropriations of retained earnings or
disposition of accumulated deficit
Appropriations of retained earnings reflected in theaccompanying consolidated financial statements havebeen recorded after approval by the shareholders as
required under the Japanese Commercial Code.

i. Cash equivalents
For the purpose of the statements of cash flows, theCompany considers all highly liquid investments which
are readily convertible into cash and/or mature within
three months or less to be cash equivalents.

j. Reclassifications
Certain accounts in the consolidated statement for theyears ended March 31, 1999 have been reclassified toconform to the presentation.

3. U.S. Dollar amounts
The U.S. dollar amounts are included solely forconvenience and have been translated into United States
dollars at the rate of ¥106.15=U.S.$1, the approximate
exchange rate prevailing in the Japanese foreign exchange
market as at March 31, 2000.
This translation should not be construed as arepresentation that the Japanese yen amounts shown could
be converted into U.S. dollars.

4. Property, Plant and Equipment
Property, plant and equipment on March 31, 2000 and 1999 consisted of the following:
Millions of
yen
2000

Millions of
yen
1999

Thousands of
U.S. dollars
2000

Land

¥6,776¥6,358$63,834

Buildings and structures

29,532

28,941

278,210

Machinery and equipment

37,756

38,683355,685

629

626

5,926

8,156

11,74376,835

80

286

754

82,92986,637781,244(56,208)(58,182)(529,515)¥26,721¥28,455$251,729

VehiclesTools, furniture and fixtures
Construction in progress

Less accumulated depreciation

Depreciation charged to income for the years ended March 31, 2000 and 1999 amounted to ¥3,313 million (U.S.$31,211 thousand) and ¥3,467 million,
respectively.

14

5. Short-term Bank Loans and Long-term Debt

6. Contingent Liabilities

The annual interest rates applicable to the loans outstanding on March 31, 2000 ranged principally from 0.46% to7.17%. Long-term debt on March 31, 2000 and 1999 consisted of the following:
Millions of
yen
2000

Millions of
yen
1999

Thousands of
U.S. dollars
2000

1st Bonds, due 2004 interest 2.9%

¥3,000¥3,000$28,262¥2,000,000,000 fixed rate Bonds due 2002

2,000

—

18,841

24,541

18,268231,191

29,541

21,268278,294

3,750

526

35,327¥25,791¥20,742$242,967

Loans, principally from Japanese banks and

On March 31, 2000 contingent liabilities for notes discounted in the ordinary course of business and for loans guaranteedby the Company principally on behalf of non-consolidated subsidiaries and affiliated companies amounted to ¥1,834
million (U.S.$17,277 thousand) and ¥1,378 million (U.S.$12,982 thousand), respectively.

7. Leases
Finance leases of the Companies other than those where ownership of the lease assets is transferred to the lessee, areaccounted for as operating leases.
Periodic lease charges to the Companies, as a lessee, charged to income for the years ended March 31, 1999 and 2000
are ¥549 million and ¥557 million ($5,247 thousand), respectively. The leased assets and related expenses of theCompanies’ finance leases other than those where the ownership of the lease assets is transferred to the lessee and are being
accounted for as operating leases, if capitalized, at March 31, 2000 comprise the following(in equivalent amounts):

insurance companies, with assets pledged as collateral,maturing 2000 – 2009, interest 1.21% – 2.60%

Less current portion

Millions of
yen
2000

Thousands of
U.S. dollars
2000

Machinery, equipment and vehicles¥1,229$11,578

Tools, furniture and fixtures

2,519

23,731

Accumulated depreciation(1,452)(13,679)¥2,296$21,630

The aggregate annual maturities of long-term debt after March 31, 2000 are as follows:
The present values of future lease payments of the Companies at March 31, 2000 are as follows:
Millions ofyen

Thousands of
U.S. dollars

2001¥3,750$35,327

2002

3,180

29,958

2003

5,927

55,836

2004

15,875

149,553

809

7,620

¥29,541$278,294

Millions of
yen
2000

Thousands of
U.S. dollars
2000

Current obligation¥856$8,064Long-term obligation

1,440

13,566

Present values of lease payments¥2,296$21,630

Year ending March 31,

2005 and later

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

As of March 31, 2000 property, plant and equipment with a net book value of approximately ¥7,429 million (U.S.$69,986
thousand) were pledged as collateral for long term debt. As is customary in Japan, additional collateral must be pledged if
required by lending institutions under certain circumstances, and generally banks have the right to offset cash deposited withthem against any debt or obligation that becomes due and in case of default and certain other specified events against all otherdebts payable to the banks.

1516

5. Short-term Bank Loans and Long-term Debt

6. Contingent Liabilities

The annual interest rates applicable to the loans outstanding on March 31, 2000 ranged principally from 0.46% to7.17%. Long-term debt on March 31, 2000 and 1999 consisted of the following:
Millions of
yen
2000

Millions of
yen
1999

Thousands of
U.S. dollars
2000

1st Bonds, due 2004 interest 2.9%

¥3,000¥3,000$28,262¥2,000,000,000 fixed rate Bonds due 2002

2,000

—

18,841

24,541

18,268231,191

29,541

21,268278,294

3,750

526

35,327¥25,791¥20,742$242,967

Loans, principally from Japanese banks and

On March 31, 2000 contingent liabilities for notes discounted in the ordinary course of business and for loans guaranteedby the Company principally on behalf of non-consolidated subsidiaries and affiliated companies amounted to ¥1,834
million (U.S.$17,277 thousand) and ¥1,378 million (U.S.$12,982 thousand), respectively.

7. Leases
Finance leases of the Companies other than those where ownership of the lease assets is transferred to the lessee, areaccounted for as operating leases.
Periodic lease charges to the Companies, as a lessee, charged to income for the years ended March 31, 1999 and 2000
are ¥549 million and ¥557 million ($5,247 thousand), respectively. The leased assets and related expenses of theCompanies’ finance leases other than those where the ownership of the lease assets is transferred to the lessee and are being
accounted for as operating leases, if capitalized, at March 31, 2000 comprise the following(in equivalent amounts):

insurance companies, with assets pledged as collateral,maturing 2000 – 2009, interest 1.21% – 2.60%

Less current portion

Millions of
yen
2000

Thousands of
U.S. dollars
2000

Machinery, equipment and vehicles¥1,229$11,578

Tools, furniture and fixtures

2,519

23,731

Accumulated depreciation(1,452)(13,679)¥2,296$21,630

The aggregate annual maturities of long-term debt after March 31, 2000 are as follows:
The present values of future lease payments of the Companies at March 31, 2000 are as follows:
Millions ofyen

Thousands of
U.S. dollars

2001¥3,750$35,327

2002

3,180

29,958

2003

5,927

55,836

2004

15,875

149,553

809

7,620

¥29,541$278,294

Millions of
yen
2000

Thousands of
U.S. dollars
2000

Current obligation¥856$8,064Long-term obligation

1,440

13,566

Present values of lease payments¥2,296$21,630

Year ending March 31,

2005 and later

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

As of March 31, 2000 property, plant and equipment with a net book value of approximately ¥7,429 million (U.S.$69,986
thousand) were pledged as collateral for long term debt. As is customary in Japan, additional collateral must be pledged if
required by lending institutions under certain circumstances, and generally banks have the right to offset cash deposited withthem against any debt or obligation that becomes due and in case of default and certain other specified events against all otherdebts payable to the banks.

15

16

Report of Independent Certified Public Accountants

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

We have audited the consolidated balance sheets of Toshiba Machine Co., Ltd. as ofMarch 31, 2000 and 1999, and the related consolidated statements of operations andretained earnings and statements of cash flows for the years then ended. Our audits weremade in accordance with generally accepted auditing standards, procedures and practices inJapan and, accordingly, included such tests of the accounting records and such otherauditing procedures as we considered necessary in the circumstances.
In our opinion, the consolidated financial statements referred to above present fairly the
consolidated financial position of Toshiba Machine Co., Ltd. as of March 31, 2000 and
1999, and the results of their operations and cash flows for the years then ended, inconformity with generally accepted accounting principles in Japan applied on a consistentbasis, except for the change, with which we concur, in the method of accounting formarketable securities and security investments as described in Note 2.e to the consolidated
financial statements.
The United States dollar amounts shown in the accompanying consolidated financial
statements have been translated solely for convenience. We have reviewed this translation
and, in our opinion, the consolidated financial statements expressed in yen have beentranslated into dollars on the basis described in Note 3.

(From left)
Takuya Oikawa, Takahiko Inokuma, Yoshifumi Hayashi

Directors

Takahiko Inokuma

Senior Managing Director
Takuya Oikawa
Yoshifumi Hayashi

Tokyo, Japan
June 29, 2000

Directors
Yasuhiro Kuroki
Harukatsu Goto
Kunihiko Naruse
Tamotsu Mukai
Kouzyu Aoki
Keisuke Maehara
Harunori Nomura

CENTURY OTA SHOWA & CO.
Certified Public Accountant

Auditors
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.

17

President

Noburo Minami
Motoyasu Morita
Reiji Nakajima
Kunio Akita

18

Report of Independent Certified Public Accountants

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

We have audited the consolidated balance sheets of Toshiba Machine Co., Ltd. as ofMarch 31, 2000 and 1999, and the related consolidated statements of operations andretained earnings and statements of cash flows for the years then ended. Our audits weremade in accordance with generally accepted auditing standards, procedures and practices inJapan and, accordingly, included such tests of the accounting records and such otherauditing procedures as we considered necessary in the circumstances.
In our opinion, the consolidated financial statements referred to above present fairly the
consolidated financial position of Toshiba Machine Co., Ltd. as of March 31, 2000 and
1999, and the results of their operations and cash flows for the years then ended, inconformity with generally accepted accounting principles in Japan applied on a consistentbasis, except for the change, with which we concur, in the method of accounting formarketable securities and security investments as described in Note 2.e to the consolidated
financial statements.
The United States dollar amounts shown in the accompanying consolidated financial
statements have been translated solely for convenience. We have reviewed this translation
and, in our opinion, the consolidated financial statements expressed in yen have beentranslated into dollars on the basis described in Note 3.

(From left)
Takuya Oikawa, Takahiko Inokuma, Yoshifumi Hayashi

Directors

Takahiko Inokuma

Senior Managing Director
Takuya Oikawa
Yoshifumi Hayashi

Tokyo, Japan
June 29, 2000

Directors
Yasuhiro Kuroki
Harukatsu Goto
Kunihiko Naruse
Tamotsu Mukai
Kouzyu Aoki
Keisuke Maehara
Harunori Nomura

CENTURY OTA SHOWA & CO.
Certified Public Accountant

Auditors
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.

17

President

Noburo Minami
Motoyasu Morita
Reiji Nakajima
Kunio Akita

18

Numazu Headquarters

ANNUAL REPORT 2000

2068-3,Ooka,Numazu-shi,Shizuoka-ken 410-8510,Japan
Tel: 81-(0)559-26-5141
Fax: 81-(0)559-25-6501

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/

SM00082-3000-SZ
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