日時： 最終印刷日時：2004/11/19 19:03

FY2004 Consolidated Financial Results
November 17, 2004

Note: The following report is an English translation of the Japanese-language original.
Company name

INPEX CORPORATION

Code number

1604

Stock Exchange on
which the Company
is listed
Location of the head
officeTokyo Stock
Exchange
Tokyo(URL http://www.inpex.co.jp/)
Kunihiko Matsuo, President
Representative
Seiya Ito, Director & General Manager, Corporate Planning & Management Dept.
Contact person
TEL+81-3-5448-1238
Date of the meeting of the
May 24, 2004
Board of Directors for the
FY2004 financial results
Prepared in accordance withaccounting principles generallyNo
accepted in the United States ofAmerica
1. Consolidated Financial Results for FY2004 (April 1, 2003―March 31, 2004)(1) Consolidated operating results
Note: Amounts less than one million yen are rounded off.
Net sales
Operating income
Ordinary income
Million yen

FY2004
FY2003%

218,831
201,533

(3.5)
0.2

%

Yen

24.6
1.1

(Notes) 1.
2.
3.
4.

n

Yen

(19,612.92)(15,726.17)

―
―

%

13.1
11.5

%

21.9

43.3

22.4

34.8

Equity in earnings of affiliates: FY2004, ¥452 million; FY2003, (¥1,503) million
Average number of shares issued and outstanding during the year (consolidated): FY2004, 589,200 shares; FY2003, 589,200 shares
On May 18, 2004, there was a 3-for-1 stock split of common stock. Net income per share for FY2004 and FY2003 restated for theeffect of this stock split is presented in parentheses.
Change in accounting policy: No
The percentage expressions for net sales, operating income, ordinary income and net income represent the change from the previous
fiscal year.

(2) Consolidated financial position
Total assets
Million yen

FY2004
FY2003Note:

Net income per share—diluted

Ordinary income as a percentage Ordinary income as a percentage
of total capitalof net sales%

FY2004
FY2003

%

35.3
(8.9)

Yen

58,838.76
47,178.51

Return on shareholders’ equity

Million yen

94,77370,050Net income per share—basic

Million yen

34,781
27,911%

93,876
97,270Net income
FY2004
FY2003

Million yen

8.6
9.4

525,298
338,747

Note: Amounts less than one million yen are rounded off.
Ratio of shareholders’Shareholders’ equity
Net assets per shareequityMillion yen

278,113
253,569

%

52.9
74.9

Yen

471,826.00
430,169.19(157,275.33)(143,389.73)

Number of shares issued and outstanding at the end of year (consolidated): FY2004, 589,200 shares; FY2003, 589,200 shares
On May 18, 2004, there was a 3-for-1 stock split of common stock. Net assets per share for FY2004 and FY2003 restated for the effect of
this stock split are presented in parentheses.

― 1 ―日時： 最終印刷日時：2004/11/19 19:03(3) Consolidated cash flows
Cash flows fromoperating activities

Note: Amounts less than one million yen are rounded off.
Cash and cash
Cash flows from
Cash flows fromequivalents at end ofinvesting activities
financing activities
year

Million yen

FY2004
FY2003

Million yen

44,464
51,282Million yen(218,121)(40,533)

Million yen

151,120
21,237(4) Scope of consolidation and equity method
Number of consolidated subsidiaries
Number of unconsolidated subsidiaries accounted for by the equity method
Number of affiliated companies accounted for by the equity method

54,58278,41427 companies
None
8 companies(5) Changes in scope of consolidation and equity method
Consolidated subsidiaries
Affiliated companies accounted for under the equity method

Increase
3 companies
None

2. Consolidated Forecast for FY2005 (April 1, 2004―March 31, 2005)
Net sales
Ordinary income
Million yen

FY2005
Semiannual
FY2005Decrease
1 company
2 companies

Net income
Million yen

Million yen

―

―

―

―

―

―

― 2 ―

I Consolidated Financial Statements
1.【Consolidated balance sheets】
As of March 31, 2003
Description

Note
No.

As of March 31, 2004
Ratio
(%)

AmountAmount(Millions of yen)
Fluctuation
Ratio Increase/(%)
decrease(Assets)
Current assets:
Cash and deposits

78,41463,722

Accounts receivable-trade*3

15,78819,265Marketable securities

20,865

18,979Inventories

1,373

892

Deferred tax assets
Other current assets
Less allowance for doubtful
accounts
Total current assets

53

43

2,609

4,071

(28)

(21)

119,07635.2

106,952

20.4(12,123)

6.7

5,272

26.2

134,022

Fixed assets
Tangible fixed assets:*1

Buildings and structures

6,179

6,745

Wells
Machinery, equipment andvehicles
Land

834

1,413

3,444

2,030

4,014

4,001

Other

15,396

Total tangible fixed assets

29,869Intangible assets:
Exploration and development
rightsMining rights-

Goodwill
Other

20,9508.8

134,367

810

651

3,036

2,867

38

Total intangible assets

35,141

3,885

21
1.1

137,908

Investments and other assets:
Investment securities
Long-term loans receivable
Recoverable accounts under
production sharing
Deferred tax assets
Other investments
Less allowance for
doubtful accounts
Less allowance forrecoverable accounts under
production sharing
Less allowance forinvestments in exploration
Total investments and otherassetsTotal fixed assets
Total assets*2, 3

96,173

79,37154

52

136,441

208,768

1,497

4,205

2,084

3,614

(129)

(329)

(42,838)(44,676)(7,368)(5,710)185,91454.9

245,295

46.7

59,380219,67064.8

418,34579.6

198,675

338,747100.0

525,298

100.0

186,551― 3 ―As of March 31, 2003

Description

Note
No.

As of March 31, 2004
Ratio
(%)

AmountAmountFluctuation
Ratio
(%)

Increase/decrease

5.5

1,619

(Liabilities)
Current liabilities:
Accounts payable

3,538

3,272

131

117

Income taxes payable

8,293

8,371

Other current liabilities

15,311

17,132Current portion of long-term
debt

Total current liabilities

27,2758.0

28,894Long-term liabilities:
Long-term debt

46,864

169,307

Deferred tax liabilities
Accrued employees’ retirement
benefits
Accrued officers’ retirement
benefits
Other

*3

2,693

10,314

791

783

644

511

6,012

4,493

Total long-term liabilities

57,007

16.8

185,41035.3

128,403

Total liabilities

84,282

24.8

214,30540.8

130,022894

0.3

32,8786.3

31,984(Minority interests)
Minority interests inconsolidated subsidiaries(Shareholders’ equity)
Common stock
Retained earnings
Unrealized holding gain on
securities
Translation adjustments
Total shareholders’ equity
Total liabilities, minority
interests and shareholders’equity*529,4608.7

29,4605.6―

220,852

65.2

249,62847.5

28,775

410

0.1

154

0.0

(256)

2,847

0.9

(1,128)(0.2)(3,975)

253,56974.9

278,11352.9

24,544

338,747100.0

525,298

100.0

186,551― 4 ―2.【Consolidated Statements of Income】(Millions of yen)
For the year ended March 31, 2003
Desctiption

Note
No.

Ratio
(%)

Amount

For the year ended March 31, 2004 Fluctuation

AmountRatio(%)

Increase/decrease

Net sales

201,533

100.0

218,831100.0

17,297

Cost of sales

95,99747.6

105,758

48.3

9,761

105,53652.4

113,072

51.7

7,535

2,478

1.2

11,552

5.3

9,074

5,788

2.9

7,644

3.5

1,855

97,27048.3

93,87642.9(3,393)

15,503

7.1

13,21814,606

6.7(14,897)

Gross profit
Exploration expenses
Selling, general andadministrative expenses*1, 2Operating income
Other income
Interest income

1,309

1,574

-

10,761Gain on sales of mining rights

271

1,497

Equity in earnings of affiliates-

452

Foreign exchange gain

Other

703

2,284

1.1

1,217

Other expenses
Interest expense

689

1,816

Loss on devaluation of
investment securities

26

-

1,503

-

16,234

10,056

5,944

746

Foreign exchange loss

2,537

-

Other

2,568

Equity in losses of affiliates
Provision for allowance forrecoverable accounts under
production sharing
Amortization of explorationand development rights

29,504

14.6

Ordinary income

70,05034.8

94,77343.3

24,722

Income before income taxes
and minority interests

70,05034.8

94,77343.3

24,72260,318

27.5

8,364

Income taxes-current

51,142

Income taxes-deferred

810

1,986

55,081
51,95325.8

Minority interests(9,814)

(4.8)

(326)

(0.1)

9,487

Net income

27,911

13.8

34,781

15.9

6,870

― 5 ―

5,237

3.【Consolidated Statements of Retained Earnings】(Millions of yen)
For the year ended March 31, 2003
Description

Note
No.

Amount

For the year ended March 31, 2004 Fluctuation
Increase/decreaseAmount(Retained earnings)
Balance at beginning of year

198,956

220,852

21,89534,781

6,870

6,006

(10)

249,628

28,775Addition:
Net income

27,911

27,911

34,781

Deduction:
Cash dividends paid
Directors’ bonus(included statutory auditors’ )

5,892

5,892

124

114

(5)

Balance at end of year

6,016
220,852

― 6 ―

(5)

4.【Consolidated Statements of Cash Flows】(Millions of yen)
For the year ended March For the year ended March 31,
Fluctuation
2004
31, 2003
Description

Note
No.

Cash flows from operating activities
Income before income taxes and minority
interests
Depreciation and amortization(Gain) loss on retirement and sales of tangible
fixed assets
Amortization of goodwill
Provision for allowance for doubtful accounts
Provision for allowance for recoverable
accounts under production sharing(Reversal of) provision for accrued retirement
benefits
Interest and dividend income
Interest expense
Gain on sales of marketable securities
Loss on sales of marketable securities
Loss on devaluation of investment securities
Foreign exchange (gain) loss
Equity in losses (earnings) of affiliates
Gain on sales of mining rights
Gain on sales of investment securities
Loss on sales of investment securities
Accounts receivable
Recovery of recoverable accounts under
production sharing (capital expenditure)
Recovery of recoverable accounts under
production sharing (operating expenditures)
Inventories
Accounts payable
Other receivables
Accrued expenses
Long-term accrued expenses
Advance payments received
Bonuses to directors and statutory auditors
Other

AmountIncrease/decreaseAmount70,05094,773

2,463

4,049

(15)

58

168
14

168
123

16,355

11,284163(141)(1,405)
689
(16)
2
26
1,977
1,503
(242)
63
(2,259)(1,711)
1,816(11,980)(452)(1,497)(63)(2,521)

14,212

21,744(14,685)(13,827)

(567)
(458)
(1,555)
1,829
1,410
4,795
(124)
1,871

480
(266)
(389)
541
(741)
(2,160)
(114)
(827)

96,26898,348Interest and dividends received
Interest paid
Income taxes paid

2,397
(718)
(46,664)

2,471(1,322)(55,033)

Net cash provided by operating activities

51,282

44,464

Subtotal

― 7 ―

2,080

(6,818)

For the year ended March
31, 2003
Description

Note
No.

Cash flows from investing activities
Decrease in short-term investments
Purchases of marketable securities
Proceeds from sales of marketable securities
Purchases of tangible fixed assets
Proceeds from sales of tangible fixed assets
Purchase of intangible assets
Proceeds from sales of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Investment in recoverable accounts under
production sharing (capital expenditure)
Additional acquisition of shares of consolidated
subsidiary
Decrease in short-term loans receivables, net
Long-term loans madeCollection of long-term loans receivables
Purchase of mining rights
Proceeds from sales of mining rights
Proceeds of subsidiaries’ stock resulting fromthe change in the scope of consolidation
Other

Amount

For the year ended March
Fluctuation
31, 2004
AmountIncrease/decrease

90(2,423)38,691(8,916)236(5)(59,675)
29,86420,706(8,920)22(0)0(19,661)
3,685(39,412)(58,997)

-

(633)

0
(8)
4
-

1
(0)
2
(163,511)
3,052

-

3,992

1,020

2,139

(40,533)(218,121)

17,381(148)

136,028
(195)

9,901

30,320(5,892)(4)(5,892)(9,140)-21,237

151,120

129,883(3,348)(1,295)

2,053

28,638(23,831)(52,470)

Cash and cash equivalents at beginning of yea

49,77578,414

28,638Cash and cash equivalents at end of year

78,41454,582(23,831)

Net cash used in investing activities
Cash flows from financing activities
Proceeds from long-term debt
Repayment of long-term debt
Proceeds from minority interests for additional
sharesCash dividends paid
Restricted cash depositedOther
Net cash provided by financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents― 8 ―(177,588)

Basis of Presenting Consolidated Financial Statements
Item

For the year ended March 31, 2003

For the year ended March 31, 2004

1. Scope of consolidation

No. of consolidated subsidiaries: 25
Major subsidiaries:
INPEX Natuna, Ltd., INPEX Alpha, Ltd.,INPEX ABK, Ltd., INPEX Sahul, Ltd., INPEX
North Caspian Sea, Ltd., INPEX Browse, Ltd.,INPEX Masela Ltd.

No. of consolidated subsidiaries: 27
Major subsidiaries
INPEX Natuna, Ltd., INPEX Alpha, Ltd.,INPEX ABK, Ltd., INPEX Sahul, Ltd., INPEX
North Caspian Sea, Ltd., INPEX Southwest
Caspian Sea, Ltd., INPEX Browse, Ltd.,INPEX Masela Ltd.
During this fiscal year:
No. of new companies included inconsolidated subsidiaries
3
No. of companies excluded from consolidated
subsidiaries
1

During this fiscal year period:
No. of new companies included in consolidated
subsidiaries
4
No. of companies excluded from consolidated
subsidiaries
2
Details for the above changes:(1) INPEX Offshore North Mahakam, Ltd.,INPEX Offshore South Sulawesi, Ltd.,INPEX BTC Pipeline, LTD. and INPEXDLNGPL Pty Ltd has been included due toestablishment of the companies.
(2) INPEX Sabo Timor Sea, Ltd. and INPEX
Offshore Bunyu, Ltd., has been excluded
due to completion of liquidation.
Unconsolidated subsidiary:None
2. Application of equity
methodDetails for the above changes:(1) INPEX Jawa, Ltd., and INPEX Smatra,
Ltd., has been included due to increase of
the shareholding ratio.
(2) Azadegan Oil Development, Ltd., has been
included due to establishment of thecompany.
(3) INPEX West Natuna, Ltd., has been
excluded due to completion of liquidation

Unconsolidated subsidiary accounted for by theequity method:
None

Unconsolidated subsidiary:
Same as on the left
Unconsolidated subsidiary accounted for by theequity method:Same as on the left

No. of affiliates accounted for by the equity
method:10

No. of affiliates accounted for by the equity
method :8

Major affiliates:
INPEX Jawa, Ltd., MI Berau B.V.,
ALBACORA JAPAO PETROLEO LTDA,INPEX Offshore North Campos, Ltd.

Major affiliates:
MI Berau B.V., ALBACORA JAPAOPETROLEO LTDA, INPEX Offshore North
Campos, Ltd.

During this fiscal year:
No. of companies newly included in affiliates
accounted for by equity method:1
No. of companies excluded from affiliates
accounted for by the equity method: 1

During this fiscal year year:
No. of companies excluded from affiliates
accounted for by the equity method:2

Details for the above changes:(1) JJI S&N B.V. has been included inaffiliates accounted for by the equity
method due to new investment.

(2) JIT Kazakhstan, Ltd. has been excluded
form affiliates accounted for by the equity
method due to the completion ofliquidation.

Procedures for application of equity method:
Regarding affiliates accounted for by the equity
method that have a different closing date thanthe consolidated closing date for the year, we
use the financial statements of each company.

― 9 ―Details for the above changes:(1) Japex AC, Ltd., has been deleted bycompletion of liquidation.
(2) INPEX Jawa, Ltd., has been included inconsolidated subsidiary due to increase of
the shareholding ratio as a result of
acquisition of additional shares and,
therefore, has been excluded from affiliates
accounted for by the equity method.
Procedures for application of equity method:Same as on the left

Item

For the year ended March 31, 2003

For the year ended March 31, 2003

3. Closing dates for the
fiscal year of
consolidated
subsidiaries

Companies for which the closing date for the
fiscal year differs from the consolidated closing
date are as follows.

Companies for which the closing date for the
fiscal year differs from the consolidated closing
date are as follows.

Company

Closing No
datete

Closing No
datete

INPEX ABK, Ltd.

Dec. 31 1

INPEX ABK, Ltd.

Dec. 31 1

INPEX Tengah, Ltd.
INPEX East Arguni, Ltd

Dec. 31 1
Dec. 31 1

INPEX Tengah, Ltd.
INPEX East Arguni, Ltd

Dec. 31 1
Dec. 31 1

INPEX West Arguni, Ltd.

Dec. 31 1

INPEX West Arguni, Ltd.

Dec. 31 1

INPEX Browse, Ltd.
INPEX Rabe Timor Sea, Ltd.

Dec. 31 1
Dec. 31 1

INPEX Browse, Ltd.
INPEX Rabe Timor Sea, Ltd.

Dec. 31 1
Dec. 31 1

INPEX Masera Arafura Sea, Ltd.
INPEX Northeast Mahakam, Ltd.

Dec. 31 1
Dec. 31 1

INPEX Masera Arafura Sea, Ltd.
INPEX Northeast Mahakam, Ltd.

Dec. 31 1
Dec. 31 1

INPEX Southwest Caspian Sea, Ltd.
INPEX South Natuna, Ltd.

Dec. 31 1
Dec. 31 1

INPEX Southwest Caspian Sea, Ltd.
INPEX South Natuna, Ltd.

Dec. 31 1
Dec. 31 1

INPEX Timor Sea, Ltd.

Dec. 31 1

INPEX Timor Sea, Ltd.

Dec. 31 1

INPEX Sahul, Ltd.
INPEX Alpha, Ltd.

Dec. 31 1
Dec. 31 1

INPEX Sahul, Ltd.
INPEX Alpha, Ltd.

Dec. 31 1
Dec. 31 1

INPEX North Makassar, Ltd.
INPEX Northeast Sahara, Ltd.

Dec. 31 1
Dec. 31 1

INPEX North Makassar, Ltd.
INPEX Northeast Sahara, Ltd.

Dec. 31 1
Dec. 31 1

INPEX North Caspian Sea, Ltd.

Dec. 31 1

INPEX North Caspian Sea, Ltd.

Dec. 31 1

INPEX North Natuna, Ltd.
INPEX West Natuna, Ltd.

Dec. 31 1
Dec. 31 1

INPEX North Natuna, Ltd.
INPEX Offshore North Mahakam, Ltd.

Dec. 31 1
Dec. 31 1

INPEX Offshore North Mahakam, Ltd.
INPEX Offshore South Sulawesi, Ltd.

Dec. 31 1
Dec. 31 1

INPEX Offshore South Sulawesi, Ltd.
Azadegan Petroleum Development, Ltd.

Dec. 31 1
Dec. 31 1

INPEX BTC Pipeline, Ltd.

Dec. 31 1

INPEX BTC Pipeline, Ltd.

Dec. 31 1

INPEX DLNGPL Pty Ltd

Dec. 31 1

INPEX DLNGPL Pty Ltd

Dec. 31 1

Note 1. We used the financial statements of theconsolidated subsidiaries as of their closing date
for the fiscal year. However, the necessary
adjustments have been made to the financial
statements of those companies to reflect any
significant transactions made between the
Company’s closing date and those of theconsolidated subsidiaries.
4. Accounting policies
1) Valuation method ofsignificant assts

Company(1) Securities
Other securities
With a determinable market value
Other securities with a determinable
market value are stated at fair value withany changes in unrealized holding gain or
loss, net of the applicable income taxes,
included directly in shareholders’ equity.
Cost of securities sold is determined by themoving average method.
Without a determinable market value
Other securities without a determinable
market value are stated at cost
determined by the moving averagemethod.
(2) Inventories
Inventories are stated principally at cost
determined by the average method― 10 ―

Note 1. We used the financial statements of theconsolidated subsidiaries as of their closing date
for the fiscal year. However, the necessary
adjustments have been made to the financial
statements of those companies to reflect any
significant transactions made between the
Company’s closing date and those of theconsolidated subsidiaries.

(1) Securities
Other securities
With a determinable market value
Same as on the left

Without a determinable market value
Same as on the left(2) Inventories
Same as on the left

Item

For the year ended March 31, 2003

2) Depreciation methodof significant
depreciable assets(1) Tangible fixed assets
Depreciation of tangible fixed assets isdetermined primarily by the decliningbalance method, except for the buildings(excluding facilities annexed) acquired on
and after April 1, 1998, on which
depreciation is computed by the straightline method, at rates based on the useful
lives and residual value of the respective
assets as prescribed by the corporate tax
law. However, depreciation of certain
mining facilities of two domestic
subsidiaries is computed by the unit-ofproduction method.
(2) Intangible assets
Exploration and development rights at the
exploration stage are fully amortized in theyear such rights are acquired
Other intangible assets are amortizedprimarily by the straight-line method at
rates based on the useful lives and residual
value of the respective assets as prescribedby the corporate tax law.
Capitalized computer software costs arebeing amortized over a period of five years.

For the year ended March 31, 2004
(1) Tangible fixed assets
Same as on the left(2) Intangible assets
Exploration and development rights at the
exploration stage are fully amortized in theyear such rights are acquired and those at
the production stage are amortized by theunit-of-production method.
Other intangible assets are amortized by thestraight-line method at rates based on theuseful lives and residual value of therespective assets as prescribed by the
corporate tax law.
Capitalized computer software costs arebeing amortized over a period of five years.

3) Accounting fordeferred assets4) Basis for significant
allowances

Defered assets are charged to income as
incurred.
(1) Allowance for doubtful receivables
The allowance for doubtful receivables isprovided at an amount determined based on
the historical experience of bad debt withrespect to ordinary receivables, plus anestimate of uncollectible amounts
determined by reference to specific doubtfulreceivables from customers which areexperiencing financial difficulties.
(2) Allowance for recoverable accounts under
production sharing
An allowance for recoverable accounts under
production sharing is provided for probablelosses on investments made during the
exploration phase under production sharing
contracts arising from the failure to discovercommercial oil and gas.
(3) Allowance for investment in exploration
The allowance for investments in exploration
is provided for future potential losses oninvestments in exploration companies at an
estimated amount based on the net assets of
the investees.

― 11 ―

Same as on the left
(1) Allowance for doubtful receivables
Same as on the left

(2) Allowance for recoverable accounts under
production sharing
Same as on the left

(3) Allowance for investment in exploration
Same as on the left

Item

For the year ended March 31, 2003
(4) Accrued employees’ retirement benefits
Accrued employees’ retirement benefits areprovided at the amount calculated based on theretirement benefit obligation at end of the year.

For the year ended March 31, 2004
(4) Accrued employees’ retirement benefits
Same as on the left

Because the Company and subsidiaries areclassified as small enterprises, we employ asimplified method (at the amount which
would be required to be paid if all active
employees voluntarily terminated theiremployment as of the balance sheet date) forthe calculation of the retirement benefit
obligation.

5) Translation of
consolidated
subsidiaries’
significant assets andliabilities
denominated inforeign currencies
into yen in
preparation of theirfinancial statements

6) Accounting forimportant leases(5) Accrued officers’ retirement benefits
Accrued officers’ retirement benefits arestated at the amount which would be
required to be paid if all officers voluntarily
terminated their services as of the balance
sheet date based on their respective internal
rules.
Monetary assets and liabilities denominated inforeign currencies are translated into yen at theexchange rates prevailing at the balance sheet
date. The resulting exchange gain or loss iscredited or charged to income.
The revenue and expense accounts of theoverseas subsidiaries are translated into yen
at the rates of exchange in effect at thebalance sheet date. Except for thecomponents of shareholders’ equity, thebalance sheet accounts are also translated
into yen at the rates of exchange in effect atthe balance sheet date. The components ofshareholders’ equity are translated at their
historical exchange rates. Translation
adjustments are presented as a component ofshareholders’ equity and minority interests.
Non-cancelable
leasesareprimarily
accounted for as operating leases except thatlease agreements which stipulate the transferof ownership of the leased assets to thelessee are accounted for as finance leases.

― 12 ―(5) Accrued officers’ retirement benefits
Same as on the left

Same as on the left

Same as on the left

Item

For the year ended March 31, 2003

(7) Other significant
issues for
preparation of theconsolidated
financial statements(1) Consumption tax
Transactions subject to consumption tax arerecorded at amounts exclusive ofconsumption tax.
.
(2) Recoverable accounts under production
sharing
Cash investments made by the Company
during exploration, development andproduction phases under a production sharing
contract are recorded as “Recoverable
accounts under production sharing” so long as
they are recoverable under the terms of therelevant contract. When the Company
receives the natural gas and crude oil inaccordance with the contract, an amountcorresponding to the purchase costs of the
products (i.e., a cost recovery portion of theinvestments) is released from this account(3) Accountg for Treasury stock and Reversal of
Legal Reserves
Effective April 1, 2002, the Company adopted“Accounting Standard for Treasury Stock andReversal of Legal Reserves” (AccountingStandard No.1 issued by the AccountingStandards Board of Japan on February 21,2002). The effect of the adoption of thesestandard was insignificant.
(4) Accounting standard for net income per share
Effective April 1, 2002, the Company adapted“Accounting Standard for Net Income per
Share” (Accounting Standard No. 2 issued by
the Accounting Standards Board of Japan on
September 25, 2002) and the “Application
Guideline for Accounting Standard for Net
Income Per Share” (Application Guideline for
Accounting Standards No 4 issued by the
Accounting Standards Board of Japan on
September 25, 2002).
The impact of the adoption of the newstandard and the application guideline has
been disclosed in “Per share information”.
The assets and liabilities of consolidated
subsidiaries are valued at their fair values asof their dates of aquisition. However,historical value is used for those consideredinsignificant.
Goodwill is amortized using a straight-line
method over the period no more than 20
years.
The statements of consolidated retained
earnings are prepared based on the finalized
distribution of profit finalized during the year.
Cash (cash and cash equivalents) in the
consolidated statement of cash flow consistedof cash on hand, cash in banks which can bewithdrawn on demand, and short-term
investments with a maturity of three months
or less when purchased which can easily beconverted to cash and are subject to little riskof change in value.

5

Valuation of assets
and liabilities of
consolidated
subsidiaries

6

Amortization of
goodwill

7

Treatment ofappropriation ofretained earnings
Scope of cash andcash equivalents inthe consolidated
statements of cash
flows

8

― 13 ―For the year ended March 31, 2004
(1) Consumption tax
Same as on the left

(2) Recoverable accounts under production
sharing
Same as on the left

(3) Accountg for Treasury stock and Reversalof Legal Reserves―――――――――(4) Accounting standard for net income pershare――――――――

Same as on the left

Same as on the left

Same as on the left

Same as on the left

Notes(Consolidated Balance Sheetss)
As of March 31, 2003

As of March 31, 2004

*1 Accumulated depreciation*1 Accumulated depreciation
Accumulated depreciation of tangible fixed assets was
Accumulated depreciation of tangible fixed assets was¥21,405 million.
¥23,145 million.
*2 The Company have invested in unconsolidated subsidiaries *2 The Company have invested in unconsolidated subsidiaries
and related companies.
and related companies.
Investment securities (equities)
Investment securities (equities)¥22,285 million¥13,679 million*3 Pledged assets
Cash and deposits of ¥9,140 million were pledged ascollateral for long-term borrowings of ¥83,090 million――――――――――and guarantee obligation of ¥7,264 million.
In addition, investment securities of ¥2,722 million were
pledged as collateral for the BTC pipeline project
financing.
4 Contingent liabilities
4 Contingent liabilities
The Company and its consolidated subsidiaries were
The Company and its consolidated subsidiaries were
contingently liable as guarantors of indebtedness ofcontingently liable as guarantors of indebtedness ofthe following companies:
the following companies:
Millions of yen
Millions of yen
Sakhalin Oil and Gas Development
Sakhalin Oil and Gas Development
905
1,918
Co., Ltd
Co., LtdALBACORA JAPAOALBACORA JAPAO
4,799
3,514
PETROLEO LIMITADAPETROLEO LIMITADAJJI S&N B.V.
3,963
JJI S&N B.V.
4,028
Total
9,669
Total
9,461
In addition, INPEX BTC Pipeline, LTD, aconsolidated subsidiary, was contingently liable asguarantor of indebtedness of BTC Pipeline Project
Finance in the amount of ¥4,330 million until BTC
Pipeline project completion (guarantee forcompletion).
*5 Our total number of shares issued and outstanding as of *5 Our total number of shares issued and outstanding as ofMarch 31, 2003, was 589,200.
March 31, 2004, was 589,200.

(Consolidated Statements of Income)For the year ended March 31, 2003

For the year ended March 31, 2004

*1. Major accounts and amounts included in selling, general *1. Major accounts and amounts included in selling, generaland administrative expenses were as follows:
and administrative expenses were as follows:
Millions of yen
Millions of yen
Personnel expenses
2,738
Personnel expenses
3,254(Including provision for accrued officers’(Including provision for accrued officers’
142)
139)
retirement benefits
retirement benefits(Include provision for accrued(Include provision for accrued
employees’ retirement benefits
155)
employees’ retirement benefits
103)
Travel and transportation expenses
314
Travel and transportation expenses
402
Depreciation expenses
452
Depreciation expenses
2,329
Petroleum resource rent tax
1,201*2 Research and development expenses included in generaland administrative expenses¥64 million*2 Research and development expenses included in generaland administrative expenses¥56 milion― 14 ―

(Consolidated Statements of Cash Flows)
For the year ended March 31, 2003
１

For the year ended March 31, 2004

Cash and cash equivalents as of the balance sheet date１
are reconciled to the accounts reported in the
consolidated balance sheet as follows:
Millions of yen
Cash and deposits
78,414
Time deposits which a maturity
exceeds three months
Cash and cash equivalents at end
78,414of year2

Cash and cash equivalents as of the balance sheet date
are reconciled to the accounts reported in the
consolidated balance sheet as follows:
Millions of yen
Cash and deposits
63,722Time deposits pledged(9,140)Cash and cash equivalents at end
54,582of yearCondensed financial position of newly consolidated
subsidiaries.

―――――――――
Following are the assets and and liabilities of INPEX
Jawa, Ltd. and INPEX Smatra, Ltd. which become
consolidated subsidiaries during the year following theacquisition of their stock.:
Millions of yen
Current assets
13,916
Fixed assets
2,539
Current liabilities(34)
Long-term liabilities(0)
Minority interests(2,526)(5,126)
Minority interests in the Company in
INPEX Jawa, Ltd. and INPEX Smatra,
Ltd.
Purchase of stock of INPEX Jawa, Ltd.
8,768
and INPEX Smatra, Ltd.
(12,761)
Cash and cash equivalents held by
INPEX Jawa, Ltd. and INPEX Smatra,
Ltd.
3,992
Net proceeds from the acquistion ofshares of INPEX Jawa, Ltd. and INPEX
Smatra, Ltd.

3

Summary of the increase in assets and liabilities
following the acquisition of interests--------------------Brakedown is as follows:
Mining rights for Azeri-Chiragu-deepwater-Gunashiri
fieldsMillions of yen
Current assets
5
Fixed assets
164,494
Current liabilities(988)
Payment for the acquisition(163,511)
4

Summary of the decrease in assets and liabilities
following the sales of interests.
Breakdown is as follows:
A part of mining right of Bayu Undan Unit rights
Millions of yen
Current assets
21
Fixed assets
1,737
Current liabilities(203)
Subtotal
1,555
Gain on sales of mining rights(1,497)
Proceeds from sales of mining
3,052
rights― 15 ―

(Lease)Description is omitted because of data disclosure via EDINET.
(Securities)
Precious fiscal year
1 Other securities with determinable market value as of March 31, 2003
Acquisition costs(Millions of yen)Type of securities

Carrying value(Millions of yen)

Unrealized gain
(loss)(Millions of yen)

Securities whose carrying value exceeds theiracquisition costs
7683(1) Stocks(2) Bonds
40,53540,863①National and local government bonds
15,90316,013②Corporate bonds－－③Other－－(3) Other
Sub total
56,51656,960
Securities whose acquisition costs exceeds theircarrying value(1) Stocks
180
194(2) Bonds
20,20020,197①National and local government bonds
1,204
1,200
②Corporate bonds－－③Other－－(3) Other
Sub total
21,60021,577
Total
78,11678,538(Note) The Company recognized impairment loss of ¥26 million during the year ended March 31, 2003

7
327
109
－
－
444

(14)
(3)
(4)
－
－
(22)
421

2 Other securities sold during the year ended March 31, 2003
Proceeds form sales(Millions of yen)
68,555Gain on sales(Millions of yen)

Loss on sales(Millions of yen)259

65

3 Other securites without a determinable market value as of March 31, 2003
Carring value(Millions of yen)Type of securities

Other securities
Unlisted stock
12,685
Trust beneficiary certifucates
3,529(Note) An allowance is provided for investments in exploration companies included in unlisted stocks
above at an estimated amount based on the net assets of the investees.

4 The redemption schedule for securities with maturity date classified as other securities as of March 31, 2003
Type of securities(1) Bonds
and①National
government bonds②Corporates③Other(2) OtherTotal

Due in one year
(Millions ofyen)

Due after one
year through fiveyears(Millions ofyen)

Due after five
years through ten
years(Millions ofyen)

Due after ten
years(Millions ofyen)

13,173
7,691－－

47,148
9,522
－
3,529

20,86560,200

738
－
－
－
738

－
－
－
－
－

local

― 16 ―

Fiscal Year (FY 2004)
1 Other securities with determinable market value as of March 31, 2004
Acquisition
costs(Millions ofyen)Type of securites
Securities whose carrying value exceeds their acquisition
costs(1) Stocks(2) Bonds①National and local government bonds② Corporate bonds③ Other(3) Other
Sub total
Securities whose acquisition costs exceeds their carryingvalue(1) Stocks(2) Bonds①National and local government bonds②Corporate bonds③Other(3) Other
Sub total
Total

Carrying value(Millions ofyen)

Unrealized gain
(loss)(Millions of
yen)

209

282

72

29,983
5,966－－
36,16030,074
6,001－－
36,358

91
34
－
－
198

77

70

(6)

24,141
3,221－－

24,108
3,221
－
－

(32)
(0)
－
－

27,44063,60027,40063,758(40)
158

2 Other securities sold during the year ended March 31, 2004
Proceeds form sales(Millions of yen)
24,391Gain on sales(Millions of yen)

Loss on sales(Millions of yen)－63

3 Other securites without a determinable market value as of March 31, 2004
Carring value(Millions of yen)Type of securities

Other securities
Unlisted stock
17,402Trust beneficiary certifucates
3,509(Note) An allowance is provided for investments in exploration companies included in unlisted stocks
above at an estimated amount based on the net assets of the investees.
4 The redemption schedule for securities with maturity date classified as other securities as of March 31, 2004

Type of securities(1) Bonds①National and local government
bonds②Corporates bonds③Other(2) OtherTotal

Due in one year
(Millions of yen)

Due after one year
through five years(Millions of yen)

Due after five years
through ten years(Millions of yen)

Due after ten
years(Millions of yen)

10,645
4,824
－
3,509

43,537
4,397－－

18,97947,935

－
－
－
－
－

－
－
－
－
－

― 17 ―

(Delivative)
Fiscal year of 2003 (April 1, 2002 through March 31, 2003)
None

Fiscal year of 2004 (April 1, 2003 through March 31, 2004)
None(Retirement Benefits)
For the year ended March 31, 2003

For the year ended March 31, 2004

1 Outline of adapted retirement benefis plan
1 Outline of adapted retirement benefis plan
Lump-sum payment on retirement:
Same as on the left
Adapting lump-sum retirement plan per the rule ofretirement benefits plan)
2 Retirement benefits oligation
2 Retirement benefits obligation
Millions of yen
Retirement benefit obligation(791)
Retirement benefit obligation
Accrued retirement benefits
3 Retirement benefit expenses
Service cost

(791)

Accured retirement benefits
3 Retirment benefit expenses

Millions of yen
155

Retirement benefit expenses
155
4 Accounting for retirement benefit obligation
Simplified method (per the rule of retirement
benefit plan)

Millions of yen(783)

Service cost

(783)
Millions of yen
103

Retirement benefit expenses
4 Accounting for retirement benefit obligation
Same as on the left

― 18 ―

103

(Tax Accounting)
As of Maerch 31, 2003
1

As of Maerch 31, 2004

The significant components of deferred tax assets andliabilities are summarized as follows:(Millions of yen)
Deferred tax assets:
23,915Investing in related parties
Loss on devaluation of land
4,547
Allowance for investment in
3,843
exploration
Allowance for recoverable accounts
2,793
under production sharing
Net operating loss
1,634
Accumulated amortization of998
development costs
Accrued retirement benefits
453
Other
4,040
Total gross deferred tax assets
42,227
Valuation allowance(39,104)
Total deferred tax assets
3,122
Deferred tax liabilities:
Foreign taxes
2,676
Other
1,592
Total deferred tax liabilities
Net deferred tax liabilities

1

4,268
1,145

Net amount of deferred tax liabilities were included in thefollowing accounts on consolidated balance sheets(Millions of yen)
Current assets—Deferred tax assets
53
Fixed assets—Deferred tax assets
1,497
Current liabilities—Other(3)
Long-term liabilities—Deferred tax(2,693)
liabilities
2

The effective tax rates reflected in the consolidated
statements of income for the year differ from thestaturoty rate for the following reasons:Statutory tax rate
(Adjustment)
Permanent differences such asentertainment expenditures
Permanent differences such as dividend
incomeValuation allowance
Foreign tax credit
Foreign taxes
Equity in losses of affiliates
Other
Effective tax rates

Total deferred tax assets
Deferred tax liabilities
Foreign taxes
Other
Total deferred tax liabilities

9,881
5,425
15,306

Net deferred tax liabilities

6,366

8,942

Net amount of deferred tax liabilities were included in thefollowing accounts on consolidated balance sheets(Millions of yen)
Current assets—Deferred tax assets
43
Fixed assets—Deferred tax assets
4,205
Current liabilities—Other(300)
Long-term liabilities—Deferred tax(10,314)liabilities
2

36.2%

The significant components of deferred tax assets andliabilities are summarized as follows:(Millions of yen)
Deferred tax assets
29,259Investing in related parties
Loss on devaluation of land
4,547
Recoverable accounts under
6,778
production sharing (Foreign taxes）
Allowance for investment in
2,558
exploration
Allowance for recoverable accounts
670
under production sharing
Net operating loss
4,757
Accumulated amortization of545
development costs
Accrued retirement benefits
402
Other
4,598
Total gross deferred tax assets
54,119Valuation allowance(45,177)

A reconciliation of the differences between the statutory
tax rate and the effective tax rates when tax-effectaccounting is applied is as follows:

5.7%(39.9%)
67.9%
0.7%
2.4%

Statutory tax rate
(Adjustment)
Permanently nondeductible expenses suchas entertainment expenditures
Permanent exclusion from gross revenue
such as dividend income
Valuation allowance
Foreign tax credit
Foreign taxes
Equity in earnings of affiliates
Other

0.7%
(29.5%)
54.0%(0.6%)
1.9%

73.1%

Effective tax rates

62.8%

0.1%
(0.0%)― 19 ―

36.2%
0.1%(0.0%)

(Segment Information)【Segment information by business category】
FY2003 (April 1, 2002 through March 31, 2003）
Segment information by category has been omitted because the crude oil and natural gas business accounts
for more than 90% of total sales and operating income, as well as more than 90% of total assets.
FY2004 (April 1, 2003 through March 31, 2004）
Segment information by category has been omitted because the crude oil and natural gas business accounts
for more than 90% of total sales and operating income, as well as more than 90% of total assets.

― 20 ―

【Geographical segment information】
FY2003 (April 1, 2002 through March 31, 2003)(Millions of yen)
Asia-Oceania

I.

Other

Total

Elimination

Consolidated

Net sales and operating income
Net sales(1) Sales to third parties(2) Intergroup sales and transfers
Total sales
Operating expenses
Operating income

196,986
4,547
201,533
201,533－－－－－－
196,986
4,547
201,533
201,533－
100,733
3,654
104,387(124)
104,263
96,252892
97,145
124
97,270176,649
8,788
185,438
153,308
338,747
II. Total assets(Notes) 1. Countries and areas are segmented based on their geographic proximity and their mutual operational relationships.
2 Major countries and areas that belong to segments other than Japan are as follows:(1) Asia-Oceania････Indonesia, Australia and East Timor(2) Other････United Arab Emirates
3 The whole company’s assets of ¥153,308 million under the column of the elimination or the whole company was mainlycomprised by holding company’s cash and deposits, securities, investing securities and assets belonged to administration
departments.

FY2004 (April 1, 2003 through March 31, 2004)(Millions of yen)
Asia-Oceania
I.

NIS

Other

Total

Elimination Consolidated

Net sales and operating income
Net sales(1) Sales to third parties

211,422―

7,408

218,831―

218,831(2) Intergroup sales and transfer

―

6,506

―

6,506

(6,506)―

Total
211,4226,506
7,408
225,337(6,506)
218,831
Operating expenses
121,4264,754
5,440
131,621(6,666)
124,954
Operating income
89,995
1,752
1,968
93,716
159
93,876
II. Total assets
214,326
191,6976,410
412,434
112,864
525,298(Notes) 1. Countries and areas are segmented based on their geographic proximity and their mutual operational relationships.
2 Major countries and areas that belong to segments other than Japan are as follows:(1) Asia-Oceania････Indonesia, Australia and East Timor(2) NIS
････Republic of Kazakhstan, Republic of Azerbaijan(3) Other････United Arab Emirates, Islamic Republic of Iran
3 The whole company’s assets of ¥112,879 million under the column of the elimination or the whole company was mainlycomprised by holding company’s cash and deposits, securities, investing securities and assets belonged to administration
departments.
4 Change of classification of region
In the past, NIS was included in the other region, however, NIS have exceeded their share more than 10% in total assets.
We have shown them explicitly.
In FY2003, ¥94 million of operating loss and ¥2,390 million of assets attributed to NIS. There were no net sales to third
parties as well as intergroup sales and transfer.

― 21 ―

【Oversea sales】
FY2003 (April 1, 2002 through March 31, 2003)(Millions of yen)
Asia
Oversea sales

Other57,418

Total
5,737

Consolidated net sales

63,155201,533

Oversea sales as a percentage of consolidated net
28.5
2.8
31.3
sales
(Notes) 1. Countries and areas are segmented based on their geographic proximity.
2 Major countries and areas that belong to segments other than Japan are as follows:(1) Asia ････South Korea, Taiwan, Indonesia, Singapore(2) Other････Australia
3 Overseas sales consisted of export sales of the Company and its domestic consoridated subsidiaries and sales (other thanexports to Japan) of its foreign consolidated subsidiaries.

FY2004 (April 1, 2003 through March 31, 2004)(Millions of yen)
Asia
Oversea sales

Other
58,089Consolidated net sales

Total
6,257

64,346
218,831

Oversea sales as a percentage of consolidated net
2.9
29.4
26.5
sales
(Notes) 1. Countries and areas are segmented based on their geographic proximity.
2 Major countries and areas that belong to segments other than Japan are as follows:(1) Asia ････South Korea, Taiwan, Indonesia, Singapore(2) Other････Australia
3 Overseas sales consisted of export sales of the Company and its domestic consoridated subsidiaries and sales (other thanexports to Japan) of its foreign consolidated subsidiaries.

― 22 ―

【Related party transactions】
FY2003 (April 1, 2002 through March 31, 2003)
1 Holding company and major corporate shareholders
None

2 Director and major individual shareholders
None

3 Subsidiaris
Classification

Name

Affiliateaccounted
for by theequitymethodAffiliateaccounted
for by theequitymethodJJI S&N
B.V.

Albacora
Japão
Petróleo
Limitada

Balance at
Holding
Transaction(being Description of relation
the end of
Capital or Description ofContents of amount
Address
Item fiscal year
held)ratio
transaction (Millions
investments
businessof voting Interlocking Relations in(Millionsof yen)directors
businessrightsof yen)Exploration
andAmsterdam,
Investment
Kingdom of 33,590
Debt
development25%
2and debt
3,963
Thousands
guarantee
theof crude oilof Euroguarantee
and natural
Netherlandsgas
Rio deJaneiro,29,525Federative Thousandsof Realrepublic of
BrazilLeasing ofproduction
facilities

50%―

Investment
Debt
and debt
guarantee
guarantee

4,799

-

-

4 Fellow subsidiaris
None

FY2004 (April 1, 2003 through March 31, 2004)

1 Holding company and major corporate shareholders

Classification

Name

Japan
Major
National Oil
shareholder
Corporation

Balance
Holding Description of relation
Transaction
at the end(beingInvestment
Description ofContents of amountof fiscal
Address (Millions
held)ratio
Itembusinesstransaction (Millions
year
of voting Interlocking Relations inof yen)of yen)(Millionsdirectors
businessrightsof yen)AssetsChiyodaAcquisition
administration(50%)―
Investment ofku,
1,223,193 including
9,402
establishment ofTokyo
securities
a core company

2 Director and major individual shareholders
None

3 Subsidiaries
None

4 Fellow subsidiaris
None― 23 ―

(Per share information)
Item

For the year ended March 31, 2003

For the year ended March 31, 2004)

Net assets per share¥430,169.19¥471,826.00

Net income per share¥47,178.51¥58,838.76

Fully diluted net income per share has
not been reported because of no issuingof residual securities such as convertiblebond.
Effective April 1, 2002, the Company
adapted “Accounting Standard for Net
Income per Share” (AccountingStandard No. 2 issued by the
Accounting Standards Board of Japanon September 25, 2002) and the“Application Guideline for AccountingStandard for Net Income Per Share”(Application Guideline for AccountingStandards No 4 issued by by the
Accounting Standards Board of Japanon September 25, 2002).
If the same stated had been adopted forthe year ended March 31, is as follows
Net assets per share¥391,550.10
Net income per share¥46,642.47

Fully diluted net income per share has
not been reported because of no issuingof residual securities such as convertiblebond.

(Note)Net income per share is calculated based on the following:

For the year ended
March 31, 2003
Net income (Millions of yen)

For the year ended
March 31, 2004

27,911

34,781

Amount not attributable to common stockholders(Millions of yen)

114

114

(Directore’s bonuses as appropriation of profit)

(114)

(114)

Net income attributable to common stockholders(Millions of yen)

27,797

34,667

The average number of shares (Thousand of shares)

589

589

― 24 ―

(Significant Subsequent Event)For the year ended March 31, 2003

For the year ended March 31, 2004

1. Shear exchange with Japan Oil Development Co., Ltd.
On May 28, 2003, INPEX Southwest Caspian Sea Ltd.,
consolidated subsidiary of the Company, obtained total amountAt the meeting of the Board of Directors held on March 29,
of US$966.15 million of joint financing, comprised of Japan
2004, it was resolved that Japan Oil Development Co., Ltd.,Bank for International Cooperation, Mizuho Corporate Bank
would become our wholly owned subsidiary through aand The Bank of Tokyo-Mitsubishi, Ltd., to finance forshare exchange. The share exchange contract was signed on
acquiring interests in Azeri-Chirag oil field and Deepwater oil
the same day. The share exchange contract was approved atfield of Gunashli of Republic of Azerbaijan.
the extraordinary general meeting of the shareholders heldon April 15, 2004.
.
(1) Outline of the share exchange① Purpose of the share exchange
As we intend to become a core company to promote theoil development business in Japan, we are seeking todiversify in our business operations. It was deemed
desirable for our group to have Japan Oil Development
Co., Ltd., to be our wholly owned subsidiary in terms ofdiversifying our regions, balancing between crude oil andnatural gas, balancing between operators and nonoperators, and ensuring current stable production andfuture increases of production; the Company had been
producing and selling crude oil in the United ArabEmirates for many years as an operator.
② Content of the share exchange
The Company acquired from Japan Oil Development Co.,
Ltd., in accordance with Articles 352 or 363 of theCommercial Code.
③ Date of the share exchange
May 17, 2004
④ Number of the shares issued and exchanged under theshare exchange contract
The company issued 50,744.25 new shares of common
stock and exchanged them for 2 shares of Japan Oil
Development Co., Ltd.’s common stock held by Japan
National Oil Corporation.
⑤ Incremental common stock and additional paid-in capital
No increase in common stock was required due to theshare exchange, but additional paid-in capital was required
to be increased by ¥62,402 million.
⑥ Effective date for dividend
April 1, 2004
(2) Brief summary of Japan Oil Development Co., Ltd.
Representative Shigeru Usui, President
Capital: ¥18,800 million
Address: 5-6-6, Hiroo, Shibuya-ku, Tokyo
Major business:
Exploration and development of crude oil and selling crudeoil① Operating income and net income (year ended December
31, 2003)
Operating income ¥259,696 million
Net loss¥58,602 million
The above amounts reflect civil rehabilitation-related gainof ¥124,545 million and civil rehabilitation-related loss of¥192,396 million.

― 25 ―

For the year ended March 31, 2003)

For the year ended March 31, 2004
② Assets, liabilities and shareholders’ equity (as of December
31, 2003)（Millions of yen）
Current assets
Fixed assets
Total assets

104,777

Current liabilities
Long-term
48,264
liabilities
153,041 Total liabilities
shareholders’equity(Capital
Total liabilities
and shareholders’equity154,647
23,770178,417(25,375)
365,200 ）153,041

As of December 31, 2003, Japan Oil Development Co., Ltd.
was in the process of civil rehabilitation proceedings andthe civil rehabilitation plan was completed on January 31,
2004. A summary of Japan Oil Development Co., Ltd.’sfinancial position as of March 31, 2004 is as follows:（Millions of yen）
Current assets
Fixed assets
Total assets

73,629Current liabilities
Long-term
47,595liabilities
121,225 Total liabilities
Shareholders’equity(Capital
Total
liabilities
and shareholders’equity42,592
22,77365,36555,85918,800 ）121,225

2 Stock split
At the meeting of the Board of Directors held on April 15,
2004, it was resolved that the Company issued new shares fora stock split in the following manner.
(1) The Company made a 3-for-1 stock split effective May
18, 2004① Increase in common shares as a result of the stock split
1,279,888.50 shares② Details of stock split
We made a 3-for-1 stock split of the common stock whose
stockholders are listed on the final shareholder list as of May
1, 2004. Shares and odd shares for the stock split included in
50,744.25 new shares issued through the share exchange withJapan Oil Development Co., Ltd., on May 17, 2004.
(2) Effective date for dividend
April 1, 2004

Had this stock split been made as of April 1, 2002, amounts
per share information for the years ended March 31, 2003 and2004 would have been as follows:
FY2003
Net assets per share¥143,389.73
Net earnings per share¥15,726.17― 26 ―

FY2004
Net assets per share¥157,275.33
Net earnings per share¥19,612.92

For the year ended March 31, 2003

For the year ended March 31, 2004
3. Issuance of special class share
At the meeting of the Board of Directors held on April 15,
2004, it was resolved that the Company amend its Articles ofIncorporation and issue one special class share, and theresolution was approved by the extraordinary general
meeting of the shareholders held on May 10, 2004.
The category of shares, number of shares to be issued andissuing price were designated as follows.
Special class share(1) Method of subscription
All shares were issued to Japan National Oil Corporationby allocation to a third party.
(2) Number of new shares issued
One share(3) Issue PriceSame price as the offer price of the offering of theCompany’s common stock on condition of the resolution
under the Article 280-2, Section 2, of the Commercial
Code(4) Total issue value
Number of shares issued multiplied by the issuing price(5) Due date for payment
To be determined(6) Voting rights
A special class share has no voting rights at the generalshareholders meeting(7) Provisions for matters requiring resolution at the general
meeting of the special class shareholder
The following matters require resolution of the generalshareholders meeting of the special class stock shareholder.
①

②
③
④

At the time of a resolution for the appointment or
removal of directors at a general meeting ofshareholders, 20% or more of the voting rights attached
to shares of our common stock are held by a single nonpublic entity or a single non-public entity and its joint
shareholders
Disposition of all or part of the material assets
In the case of the Company’s subsidiary disposing ofimportant assets, the Company exercises voting rights at
the general shareholders meeting of its subsidiary.
Amendment to the Article of Incorporation with respect
to (i) the objectives of the Company or (ii) granting
voting rights to any shares other than the commonshares of the Company (except for the voting rights atmeetings of the Special Class Shareholder alreadygranted to the Special Class Share).

― 27 ―

For the year ended March 31, 2003

For the year ended March 31, 2004
⑤ Mergers, share exchanges and share transfers except for thefollowing cases;(a) Mergers where the Company become the surviving
company, unless 20% or more of the voting rights attached
to shares of the Company’s common stock are held by asingle non-public entity or a single non-public entity andits joint shareholders at the time of the completion of suchmerger.
(b) Share exchanges where the Company becomes awholly-owning parent company, unless 20% or more of
the voting rights attached to shares of the Company’scommon stock are held by a single non-public entity or asingle non-public entity and its joint shareholders at thetime of the completion of such share exchange.
(c) Share transfers where a new holding company isestablished and the granting of class shares of such new
holding company to the holder of our special class sharewith rights that are the same as those of our special classshare under the new holding company’s articles ofincorporation is approved by resolution of the general
meeting of shareholders for such share transfer, unless
20% or more of the voting rights attached to shares ofcommon stock of the new holding company are held by asingle non-public entity or a single non-public entity andits joint shareholders at the time of the completion of suchshare transfer.
⑥ Reduction of the Company’s stated capital that results in aredemption of funds to shareholders.
⑦ Dissolution by resolution of the general shareholders
meeting(8) Redemption① Redemption of a special class share requires its
shareholder’s written request to the Company.
② If the special class share is transferred to a party other than
the government of Japan, the Company may redeem suchspecial class share by resolution of the Board of Directors
regardless of the wishes of the special class shareholder.
③ The redemption price will be the market price on the day ofrequest for ①, and for ②, the market price on the day
before the redemption date (both the day of request and the
day before the redemption date are referred to as “effectiveday”). If the common share is listed on the Tokyo Stock
Exchange, the closing price of a common share on theeffective day will be the market price of redemption. If aclosing price does not exist on a effective day, then theredemption price will be the closing price on the day closest
to the effective day.
4 Assignment of the mineral rights of INPEX North Makassar,Ltd.
At the meeting of the Board of Directors held on September 2,
2004, it was resolved that INPEX North Makassar, Ltd., amajority owned subsidiary of the Company, would assign its
mining rights and related obligations to a third party due to a
decline in expected profitability. The assignment of themining rights and related obligations is expected to become
effective November 22, 2004, subject to an approval of thegovernment of Republic of Indonesia. No gain or loss on theassignment of mining rights and related obligations will berecognized.

― 28 ―

ファイル名:437-3 - NT

更新日時:2004/11/19 1:40 印刷日時:04/11/19 18:40

FY2004 Non-consolidated Financial Results
November 17, 2004
Company name

INPEX CORPORATION

Code number

1604

(URL

Stock Exchange on
which the Company islistedLocation of the head
officeTokyo Stock ExchangeTokyo

http://www.inpex.co.jp/)
Kunihiko Matsuo, President
Saiya Ito, Director & General Manager, Corporate Planning & Management Dept.
TEL+81-3-5448-1238

Representative
Contact person
Date of the meeting of theBoard of Directors for the
FY2004 financial results
Date of the Annual Meeting of
Shareholders

April 15, 2004

Payingdividend

interim

June 23, 2004

Shares constituting
one unit

Yes
No

1. Financial Results for FY2004 (April 1, 2003―March 31, 2004)(1) Operating results

Note: Amounts less than one million yen are rounded off.
Net sales

Operating income

FY2004
FY2003

168,239
151,714

Yen

10.9
6.0

92,64886,829

Yen

6.7
(1.3)

76,20574,495

2.3
3.5

Ordinary
Ordinary
Return on
Net income perincome as a income as a
Net income per share—basic
shareholders’share—diluted
percentage of percentage ofequitytotal capital
net sales

Net income％

Million yen

Yen

Yen

％

Yen

FY2004
28,3494.7
47,959.97(15,986.65)
FY200327,0642.0
45,779.20(15,259.73)(Notes) 1. Average number of shares issued and outstanding during the year:2.
3.

Ordinary income％

Million yen

―
―

％

11.0
11.4

％

26.2
27.9

45.3
49.1

FY2004, 589,200 shares; FY2003, 589,200 shares
On May 18, 2004, there was a 3-for-1 stock split of common stock. Net income per share for FY2004 and FY2003 restated for theeffect of this stock split is presented in parentheses.
Change in accounting policy: No
The percentage expressions for net sales, operating income, ordinary income and net income represent the change from the previous
fiscal year.

(2) Cash dividends
Annual cash dividends per share
InterimYen

FY2004
FY2003(Note)

Year-end
Yen

10,000.00
10,000.00

Yen

0.00
0.00

Year-end dividend at March 31, 2004

Total cash dividends
paid (annual)

Shareholders’ equity

Million yen(Notes) 1.

2.

％

20.9
21.8

2.2
2.4

Special dividend ¥2,500

Note: Amounts less than one million yen are rounded off.

Total assets
FY2004
FY2003

5,892
5,892

Ordinary dividend ¥7,500(3) Financial position％

Million yen

10,000.00
10,000.00

Cash dividends as apercentage ofshareholders’ equity

Payout ratio

301,376
281,414

Ratio of shareholders’ equity

269,813247,625

Net assets per share％

Million yen

89.5
88.0

Yen

457,776.99
420,118.95(152,592.33)(140,039.65)

Number of shares issued and outstanding at the end of year: FY2004, 589,200 shares; FY2003, 589,200 shares
On May 18, 2004, there was a 3-for-1 stock split of common stock. Net assets per share for FY2004 and FY2003 restated for the effectof this stock split are presented in parentheses.
Number of treasury stock held by the Company: FY2004, — shares; FY2003, — shares

2. Forecast for FY2005 (April 1, 2004–March 31, 2005)
Net sales

Ordinary income

Million yen

FY 2005
Semiannual
FY2005

Net income

Million yen

Million yen

Annual cash dividends per share
Year-end
Yen

Yen

―

―

―

―

―

―

―

―

―

―

― 29 ―

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Ⅱ Non-consolidated Financial Statements(1) Financial Statements①Non-consolidated Balance Sheets(Millions of yen)
As of March 31, 2003
Description

Note
No.

Ratio
(%)

AmountFluctuation

As of March 31, 2004
Ratio
(%)

AmountIncrease/decrease(Assets)
Current assets
Cash and deposits*355,414

29,160Accounts receivable-trade

8,577

9,809

Marketable securities

20,733

18,822

Prepaid expenses

59

46

Deferred tax assets

3

7

128

97

12,064

3,148

358

170

(20)

-

Accounts receivable-other
Short-term loans to subsidiaries
and affiliates
Other
Less allowance for doubtful
accounts
Total current assets

97,31934.6

61,26320.3(36,055)

3.3

(382)

0.0

(16)

Fixed assets
Tangible fixed assets*1

Buildings

6,075

5,723

Structures

87

77

Machinery and equipment
Vehicles and transporting
equipment
Furniture and fixtures

1

0

9

14

132

120

4,014

4,001

Land
Total tangible fixed assets

10,3203.7

9,937

Intangible assets
Software

32

16

Other

5

5

Total intangible assets

38― 30 ―

0.0

21

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As of March 31, 2003
Description

Note
No.

Ratio
(%)

AmountFluctuation

As of March 31, 2004
Ratio
(%)

AmountIncrease/decrease

Investments and other assets:
Investment securities

71,09557,739Investment in subsidiaries

95,412

153,544

Investment in capital
Investment in affiliatedcompanies
Long-term loans receivable

472

654

878

878

48

48

Long-term loans receivablefrom employees
Long-term loans to
subsidiaries and affiliates
Long-term prepaid expenses

5

3

232

14,81530

32

Deferred tax assets

847

217

Guarantee money paid

19

59

69,34678,286

1,548

2,553

(129)

(260)

(66,071)(78,422)

Recoverable accounts under
production sharing
Other
Less allowance for
doubtful accounts
Less allowance forinvestments in exploration
Total investments and otherassets173,73661.7

230,153

76.4

56,416

Total fixed assets

184,09565.4

240,112

79.7

56,017

Total assets

281,414100.0

301,376

100.0

19,962― 31 ―

ファイル名:437-4 - NT

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As of March 31, 2003
Description

Note
No.

Ratio
(%)

AmountFluctuation

As of March 31, 2004
Ratio
(%)

AmountIncrease/decrease(Liabilities)
Current liabilities
Accounts payable-other

3,755

5,885

Income taxes payable

7,516

6,039

Accrued expenses

256

394

Advance received

3,656

2,936

Deposits received

32

35

Total current liabilities

15,2195.4

15,290

5.1

71Long-term liabilities
Long-term debt
Accrued employees’ retirement
benefits
Accrued officers’ retirement
benefits
Long-term accounts payableother
Other

*3

12,02010,563

785

776

467

377

5,219

4,477

78

78

Total long-term liabilities

18,5706.6

16,273

5.4(2,296)

Total liabilities

33,78912.0

31,56310.5(2,225)29,46010.5

29,4609.8―(Shareholders’ equity)
Capital*2Retained earnings
Legal reserve
Voluntary reserves
Reserve for overseas
investment loss
Reserve for dividends
Reserve for exchange
fluctuation
General reserve
Unappropriated retained
earnings
Total retained earnings
Unrealized holding gain on
securities
Total shareholders’ equity
Total liabilities andshareholders’ equity

7,365

7,365

291

291

1,500

1,500

1,000

1,000

179,718

200,718

27,97429,340―217,84877.4

240,21479.7

22,366

316

0.1

138

0.0

(177)

247,62588.0

269,81389.5

22,188281,414100.0

301,376

100.0

19,962― 32 ―

ファイル名:437-4 - NT

更新日時:2004/11/19 2:07 印刷日時:04/11/19 18:41②Non-consolidated Statements of Income(Millions of yen)
For the year ended March 31, 2003 For the year ended March 31, 2004 Fluctuation

Description

Note
No.

Percentage(%)

AmountPercentage Increase/(%)
decreaseAmountNet sales

151,714100.0

168,239

100.0

16,524

Cost of sales

61,58240.6

71,517

42.5

9,934

Gross profit
Selling, general andadministrative expenses
Selling expense
General and administrative
expenses

90,131

59.4

96,722

57.5

6,590

4,073

2.5

772

92,648

55.0

5,818

3,193

1.8

(1)

19,636

11.6

4,106

*1, 2
278
3,023

Operating income
Other income

306
3,301

2.2

86,829

57.2

3,766

*3

Interest income

391

353

Interest on securities

801

295

Dividend income

1,546

1,619

Other

455

3,194

2.1

924

Other expenses
Interest expense
Loss on devaluation of
investment securities
Provision for allowance forinvestments in exploration
Foreign exchange loss
Other

268

160

26

-

11,992

15,755

2,483

3,567

758

15,52910.2

Ordinary income

74,49549.1

76,205

45.2

1,710

Income before income taxes

74,49549.1

76,205

45.2

1,710

47,85628.4

425

28,349

16.8

1,284

Income taxes-current

46,541

Income taxes-deferred889

Net income
Retained earnings brought
forwardUnappropriated retained
earnings at end of year152

47,22447,43031.3

27,064

17.8

632

909

991

81

27,97429,3401,366― 33 ―

ファイル名:437-4 - NT

更新日時:2004/11/19 2:07 印刷日時:04/11/19 18:41③ Statement of Appropriation of Retained Earnings(Millions of yen)

Description

Note
No.

FY2003(June 20, 2003)

FY2004(June 23, 2004)

AmountAmountYear-overyear change
Increase/decrease

Unappropriated retained earnings

27,97429,340

1,366

Total

27,97429,3401,366

28,183

1,200

1,156

165

Appropriation of retained
earnings:
Cash dividends

Bonuses to directors andstatutory auditors(Auditors’ bonus
included above)

5,892

5,892

91

91

(5)

(5)

-

200

Voluntary reserves
Reserve for overseas
investment loss
General reserve

21,00026,983

Unappropriated retained earnings
to be carried forward

22,000991

Note: The date above represents the date of approval at the general shareholders’ meeting
Breakdown of dividends per share
FY2003
AnnualInterim

FY2004Year-end

AnnualInterimYear-end

Yen

Yen

Yen

Yen

Yen

Yen

10,000.00

0.00

10,000.00

10,000.00

0.00

10,000.00

Ordinary dividend

7,500.00

0.00

7,500.00

7,500.00

0.00

7,500.00

Special dividend

2,500.00

0.00

2,500.00

2,500.00

0.00

2,500.00

Common shares(Breakdown)― 34 ―

ファイル名:437-4 - NT

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Significant Accounting Policies

Item
1. Valuation method of
securities

FY2003(April 1, 2002, through March 31, 2003)

FY2004(April 1, 2003, through March 31, 2004)

1) Subsidiaries and related companies
Securities
ofInvestments
insubsidiaries and affiliates are stated atcost determined by the moving
average method.

1) Equities of subsidiaries and affiliates
Same as on the left

2) Other securities
a. Securities with a determinable
market value
Other securities with a determinable
market value are stated at fair value
with any changes in unrealized
holding gain or loss, net of theapplicable income taxes, included
directly in shareholders’ equity. Costof securities sold is determined by themoving average method.

2) Other securities
a. Securities withmarket value
Same as on the left

b. Securities without a determinable
market value
Other securities without adeterminable market value are statedat cost determined by the moving
average method.
2. Depreciation method ofsignificant depreciable
assets

3. Basis for significant
allowances

a determinableb. Securities without a determinable
market value
Same as on the left

(1) Fixed tangible assets
Depreciation of tangible fixed assets isdetermined primarily by the declining-balancemethod, except for the buildings (excluding
facilities annexed) acquired on and after April
1, 1998, on which depreciation is computedby the straight-line method, at rates based on
the useful lives and residual value of therespective assets as prescribed by the
corporate tax law.

(1) Fixed tangible assets
Same as on the left(2) Intangible assets
Intangible assets are amortized by the straightline method at rates based on the useful lives
and residual value of the respective assets asprescribed by the corporate tax law.
Capitalized computer software costs are being
amortized over a period of five years.

(2) Intangible assets
Same as on the left

(1) Allowance for doubtful receivables
The allowance for doubtful receivables isprovided at an amount determined based on
the historical experience of bad debt withrespect to ordinary receivables, plus anestimate of uncollectible amounts determinedby reference to specific doubtful receivablesfrom customers which are experiencing
financial difficulties.
(2) Allowance for investment in exploration
The allowance for investments in exploration
is provided for future potential losses oninvestments in exploration companies at an
estimated amount based on the net assets of
the investees.

(1) Allowance for doubtful receivables
Same as on the left

― 35 ―(2) Allowance for investment in exploration
Same as on the left

ファイル名:437-4 - NT

Description

更新日時:2004/11/19 2:07 印刷日時:04/11/19 18:41

For the year ended March 31, 2003
(3) Accrued employees’ retirement benefit
Accrued employees’ retirement benefits areprovided at the amount calculated based on
the retirement benefit obligation at end of theyear.

For the year ended March 31, 2004
(3) Accrued employees’ retirement benefits
Same as on the left

Because the Company is classified as small
enterprises, we employ a simplified method(at the amount which would be required tobe paid if all active employees voluntarily
terminated their employment as of thebalance sheet date) for the calculation of theretirement benefit obligation.
(4) Accrued officers’ retirement benefits
Accrued officers’ retirement benefits arestated at the amount which would be
required to be paid if all officers voluntarily
terminated their services as of the balance
sheet date based on their respective internal
rules.
Monetary assets and liabilities denominated inforeign currencies are translated into yen at
the exchange rates prevailing at the balance
sheet date. The resulting exchange gain orloss is credited or charged to income.

(4) Accrued officers’ retirement benefits
Same as on the left

Non-cancelable leases are primarily accounted
for as operating leases except that leaseagreements which stipulate the transfer ofownership of the leased assets to the lessee areaccounted for as finance leases.

Same as on the left

Consumption tax

Transactions subject to consumption tax arerecorded at amounts exclusive of consumption
tax.

Same as on the left

Accounting standard
for treasury stock andreversal of legal
reserves

Effective April 1, 2002, the Company adopted“Accounting Standard for Treasury Stock andReversal of Legal Reserves” (AccountingStandard No.1 issued by the AccountingStandards Board of Japan on February 21,2002). The effect of the adoption of thesestandard was insignificant.
Effective April 1, 2002, the Company
adapted “Accounting Standard for Net
Income per Share” (Accounting Standard
No. 2 issued by the Accounting Standards
Board of Japan on September 25, 2002) andthe “Application Guideline for AccountingStandard for Net Income Per Share”(Application Guideline for AccountingStandards No 4 issued by the AccountingStandards Board of Japan on September
25,2002).
The impact of the adoption of the newstandard and the application guideline has
been disclosed in “Per share information.”

4. Translation of assets
and liabilities
denominated in foreign
currencies into yen

5. Lease

Same as on the left

6. Other significant issues
for preparation of thefinancial statements

Per share amount― 36 ―――――――――――――――――――

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Notes(Non-consolidated Balance Sheets)
As of March 31, 2003

As of March 31, 2004

*1. Accumulated depreciation
Accumulated depreciation of tangible fixed assets was¥2,425 million.

*1. Accumulated depreciation
Accumulated depreciation of tangible fixed assets was¥2,761 million.

*2. Number of shares authorized to be issued, etc.
*2. Number of shares authorized to be issued, etc.
Total number of shares authorized to be issued by the
Total number of shares authorized to be issued by theCompany
Company
Common shares: 600,000 shares
Common shares: 600,000 shares
Number of shares issued and outstanding
Number of shares issued and outstanding
Common shares: 589,200 shares
Common shares: 589,200 shares*3. Pledged assets
Cash and deposits of ¥9,140 million were pledged ascollateral for long-term borrowings of ¥8,450 million
and a debt guarantee of ¥81,904 million.

―――――――――――――――――

4. Contingent liabilities
The Company was contingently liable as guarantors ofindebtedness of the following companies:

INPEX Natuna, Ltd.
ALBACORA JAPAO PETROLEO
LIMITADAJJI S＆N B.V.
Sukhalin Oil and Gas Development CO.,Ltd.
INPEX ABK, Ltd.
Total

Millions of yen
12,282
4,799
3,963
905
594
22,546

5. Restriction on dividends
The amount set forth in Article 290, Paragraph 1, Item 6,of the Commercial Code is ¥289 million.

4. Contingent liabilities
The Company was contingently liable as guarantors ofindebtedness of the following companies:

INPEX Southwest Caspian Sea, Ltd.
INPEX Natuna, Ltd.
JJI S＆N B.V.
ALBACORA JAPAO PETROLEO
LIMITADAINPEX BTC Pipeline, LTD.
Sukhalin Oil and Gas Development Co.,Ltd.
INPEX ABK, Ltd.
Total

Millions of yen
58,431
19,752
4,028
3,514
2,208
1,918
406
90,261

5.Restriction on dividends
The amount set forth in Article 124, Item 3, of the
Enforcement Regulations of the Commercial Code is¥290 million.

― 37 ―

ファイル名:437-4 - NT

更新日時:2004/11/19 2:07 印刷日時:04/11/19 18:41(Non-consolidated Statements of Income)For the year ended March 31, 2003

For the year ended March 31, 2004)*1. Major accounts and amounts included in selling, generaland administrative expenses were as follows:*1. Major accounts and amounts included in selling, generaland administrative expenses were as follows:

Officers’ salaries
Salary and bonus to employees
Welfare and employee benefit
Provision for accrued officers’
retirement benefits
Provision for allowance for employees’
retirement benefits
Rent expense
Tax and accounting
Travel and transportation cost
Entertainment expenses
Miscellaneous expenses
Other expenses
Research and development expenses
Depreciation and amortization
General administrative cost transferred
to other accounts

Millions of yen
235
1,774
232
90

Officers’ salaries
Salary and bonus to employees
Welfare and employee benefit
Provision for accrued officers’
retirement benefits
Provision for allowance for employees’
retirement benefits
Rent expense
Tax and accounting
Travel and transportation cost
Entertainment expenses
Miscellaneous expenses
Other expenses
Research and development expenses
Depreciation and amortization
General administrative cost transferred
to other accounts

150
123
106
193
68
410
663
64
448
(1,259)Millions of yen
240
2,196
317
111
100
164
97
220
81
862
756
56
384
(1,515)*2. Research and development expenses included in generaland administrative expenses*2 Research and development expenses included in generaland administrative expenses¥64 million¥56 million*3 Other income derived from transactions with relatedcompanies were as follows:
Dividend income*3 Other income derived from transactions with relatedcompanies were as follows:¥1,450 million― 38 ―

Dividend income
Miscellaneous income¥1,483 million¥638 million

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Description is omitted because of data disclosure via EDINET.

(Securities)
FY2003 (As of March 31, 2003)
No securities of investment in subsidiaries and affiliates with determinable market value.
FY2004 (As of March 31, 2004)
No securities of investment in subsidiaries and affiliates with determinable market value.

― 39 ―

ファイル名:437-4 - NT

更新日時:2004/11/19 2:07 印刷日時:04/11/19 18:41(Tax Accounting)
As of March 31, 2003

As of March 31, 2004

1
１ The significant components of deferred tax assets andliabilities are summarized as follows:
Millions of yen
Deferred tax assets:
Allowance for investment in
27,256
exploration
Loss on devaluation of land
4,547
Non-deductible accounts payable2,915
otherUnrealized loss on investment
182
securities
Accrued retirement benefits
444
Other
155
Total gross deferred tax assets
35,502
Valuation allowance(33,729)
Total deferred tax assets
1,772
Deferred tax liabilities
Valuation difference
8
Reserve for overseas investment loss
912
Total deferred tax liabilities
921
Net deferred tax assets
851

The significant components of deferred tax assets andliabilities are summarized as follows
Millions of yen
Deferred tax assets:
Allowance for investment in
31,315
exploration
Loss on devaluation of land
4,547
Non-deductible accounts payable3,622
otherUnrealized loss on investment
182
securities
Accrued retirement benefits
395
Other
275
Total gross deferred tax assets
40,338Valuation allowance(39,017)
Total deferred tax assets
1,321
Deferred tax liabilities
Valuation difference3
Reserve for overseas investment loss
1,093
Total deferred tax liabilities
1,096
Net deferred tax assets
224

2

The effective tax rates reflected in the non-consolidated
statements of income for the year differ from thestatutory rate for the following reasons:

The effective tax rates reflected in the non-consolidated
statements of income for the year differ from thestatutory rate for the following reasons:Statutory tax rate
(Adjustment)
Permanently differences asentertainment expenditures
Permanent differences such as dividend
incomeForeign tax credit
Foreign taxes
Change in valuation allowance
Other
Effective tax rates

2

36.2%
0.1%
(0.7%)(34.3%)
59.2%
3.1%
0.0%
63.6%

― 40 ―

Statutory tax rate
(Adjustment)
Permanently differences asentertainment expenditures
Permanent differences such as dividend
incomeForeign tax credit
Foreign taxes
Change in valuation allowance
Other
Effective tax rates

36.2%
0.1%
(0.7%)(32.9%)
60.2%
0.2%(0.4%)
62.8%

ファイル名:437-4 - NT

更新日時:2004/11/19 2:07 印刷日時:04/11/19 18:41(Amount for per share)
Description

For the year ended March 31, 2003

For the year ended March 31, 2004

Net assets per share¥420,118.95¥457,776.99

Net income per share¥45,779.20¥47,959.97

Fully diluted net income per share has
not been reported because of no issuingof residual securities such as convertiblebond.
Effective April 1, 2002, the Company
adapted “Accounting Standard for Net
Income per Share” (AccountingStandard No. 2 issued by the
Accounting Standards Board of Japanon September 25, 2002) and the“Application Guideline for AccountingStandard for Net Income Per Share”(Application Guideline for AccountingStandards No 4 issued by by the
Accounting Standards Board of Japanon September 25,2002).
If the same stated had been adopted forthe year ended March 31, is as follows
Net assets per share¥384,839.19
Net income per share¥44,902.09

Fully diluted net income per share has
not been reported because of no issuingof residual securities such as convertiblebond.

(Note)

1.Diluted income per share is not presented because there are no dilutive potential of shares of common stock.
2.Net income per share information is calculated based in the following:
For the year ended
March 31, 2003

Net income (Millions of yen)

For the year ended March 31,
2004

27,064

28,349Amount not attributable to common stockholders(Millions of yen)

91

91

(Directors’ bonuses as appropriation of profit)

(91)

(91)

Net income attributable to common stockholders(Millions of yen)

26,97328,258The average number of shares (thousand shares)

589

589

― 41 ―

ファイル名:437-4 - NT

更新日時:2004/11/19 2:07 印刷日時:04/11/19 18:41(Significant Subsequent Event)For the year ended March 31, 2003

For the year ended March 31, 2004

1. Shear exchange with Japan Oil Development Co., Ltd.
As of May 28, 2003, the Company entered into a debt
guarantee agreement with Japan Bank for International
At the meeting of the Board of Directors held on March 29,
Cooperation (JBIC) in relation to a part of the borrowings
2004, it was resolved that Japan Oil Development Co., Ltd.,(US$492,736,500) by its subsidiary INPEX Southwest Caspian
would become our wholly owned subsidiary through aSea, Ltd. from the Bank.
share exchange. The share exchange contract was signed on
the same day. The share exchange contract was approved at
the extraordinary general meeting of the shareholders heldon April 15, 2004.
.
(1) Outline of the share exchange①

Purpose of the share exchange
As we intend to become a core company to promote theoil development business in Japan, we are seeking todiversify in our business operations. It was deemed
desirable for our group to have Japan Oil Development
Co., Ltd., to be our wholly owned subsidiary in terms ofdiversifying our regions, balancing between crude oil andnatural gas, balancing between operators and nonoperators, and ensuring current stable production andfuture increases of production; the Company had been
producing and selling crude oil in the United ArabEmirates for many years as an operator.
② Content of the share exchange
The Company acquired from Japan Oil Development Co.,
Ltd., in accordance with Articles 352 or 363 of theCommercial Code.
③ Date of the share exchange
May 17, 2004
④ Number of the shares issued and exchanged under theshare exchange contract
The company issued 50,744.25 new shares of common
stock and exchanged them for 2 shares of Japan Oil
Development Co., Ltd.’s common stock held by Japan
National Oil Corporation.
⑤ Incremental common stock and additional paid-in
capital
No increase in common stock was required due to theshare exchange, but additional paid-in capital was required
to be increased by ¥62,402 million.
⑥ Effective date for dividend
April 1, 2004
(2) Brief summary of Japan Oil Development Co., Ltd.
Representative Shigeru Usui, President
Capital: ¥18,800 million
Address: 5-6-6, Hiroo, Shibuya-ku, Tokyo
Major business:
Exploration and development of crude oil and selling crudeoil①

Operating income and net income (year ended
December 31, 2003)

Operating income ¥259,696 million
Net loss¥58,602 million
The above amounts reflect civil rehabilitation-related gainof ¥124,545 million and civil rehabilitation-related loss of¥192,396 million.

― 42 ―

ファイル名:437-4 - NT

更新日時:2004/11/19 2:07 印刷日時:04/11/19 18:41

For the year ended March 31, 2003)

For the year ended March 31, 2004②

Assets, liabilities and shareholders’ equity (as ofDecember 31, 2003)（Millions of yen）
Current assets
Fixed assets
Total assets

104,777

Current liabilities
Long-term
48,264
liabilities
153,041 Total liabilities
shareholders’equity(Capital
Total liabilities
and shareholders’equity154,647
23,770178,417(25,375)
365,200 ）153,041

As of December 31, 2003, Japan Oil Development Co., Ltd.
was in the process of civil rehabilitation proceedings andthe civil rehabilitation plan was completed on January 31,
2004. A summary of Japan Oil Development Co., Ltd.’sfinancial position as of March 31, 2004 is as follows:（Millions of yen）
Current assets
Fixed assets
Total assets

73,629Current liabilities
Long-term
47,595liabilities
121,225 Total liabilities
Shareholders’equity(Capital
Total
liabilities
and shareholders’equity42,592
22,77365,36555,85918,800 ）121,225

2 Stock split
At the meeting of the Board of Directors held on April 15,
2004, it was resolved that the Company issued new shares fora stock split in the following manner.
(1) The Company made a 3-for-1 stock split effective May
18, 2004① Increase in common shares as a result of the stock split
1,279,888.50 shares② Details of stock split
We made a 3-for-1 stock split of the common stock whose
stockholders are listed on the final shareholder list as of May
1, 2004. Shares and odd shares for the stock split included in
50,744.25 new shares issued through the share exchange withJapan Oil Development Co., Ltd., on May 17, 2004.
(2) Effective date for dividend
April 1, 2004

Had this stock split been made as of April 1, 2002, amounts
per share information for the years ended March 31, 2003 and2004 would have been as follows:
FY2003
Net assets per share¥140,039.65
Net earnings per share¥15,259.73― 43 ―

FY2004
Net assets per share¥152,529.33
Net earnings per share¥15,986.65

ファイル名:437-4 - NT

更新日時:2004/11/19 2:07 印刷日時:04/11/19 18:41

For the year ended March 31, 2003

For the year ended March 31, 2004
3. Issuance of special class share
At the meeting of the Board of Directors held on April 15,
2004, it was resolved that the Company amend its Articles ofIncorporation and issue one special class share, and theresolution was approved by the extraordinary general
meeting of the shareholders held on May 10, 2004.
The category of shares, number of shares to be issued andissuing price were designated as follows.
Special class share(1) Method of subscription
All shares were issued to Japan National Oil Corporationby allocation to a third party.
(2) Number of new shares issued
One share(3) Issue PriceSame price as the offer price of the offering of theCompany’s common stock on condition of the resolution
under the Article 280-2, Section 2, of the Commercial
Code(4) Total issue value
Number of shares issued multiplied by the issuing price(5) Due date for payment
To be determined(6) Voting rights
A special class share has no voting rights at the generalshareholders meeting(7) Provisions for matters requiring resolution at the general
meeting of the special class shareholder
The following matters require resolution of the generalshareholders meeting of the special class stock shareholder.
①

②
③

④

― 44 ―At the time of a resolution for the appointment or
removal of directors at a general meeting ofshareholders, 20% or more of the voting rights attached
to shares of our common stock are held by a single nonpublic entity or a single non-public entity and its joint
shareholders
Disposition of all or part of the material assets
In the case of the Company’s subsidiary disposing ofimportant assets, the Company exercises voting rights at
the general shareholders meeting of its subsidiary.
Amendment to the Article of Incorporation with respect
to (i) the objectives of the Company or (ii) granting
voting rights to any shares other than the commonshares of the Company (except for the voting rights atmeetings of the Special Class Shareholder alreadygranted to the Special Class Share).

ファイル名:437-4 - NT

更新日時:2004/11/19 2:07 印刷日時:04/11/19 18:41

For the year ended March 31, 2003

For the year ended March 31, 2004
⑤ Mergers, share exchanges and share transfers except for
the following cases;(a) Mergers where the Company become the surviving
company, unless 20% or more of the voting rights
attached to shares of the Company’s common stock areheld by a single non-public entity or a single non-public
entity and its joint shareholders at the time of thecompletion of such merger.
(b) Share exchanges where the Company becomes awholly-owning parent company, unless 20% or more of
the voting rights attached to shares of the Company’scommon stock are held by a single non-public entity or asingle non-public entity and its joint shareholders at thetime of the completion of such share exchange.
(c) Share transfers where a new holding company isestablished and the granting of class shares of such new
holding company to the holder of our special class sharewith rights that are the same as those of our special classshare under the new holding company’s articles ofincorporation is approved by resolution of the general
meeting of shareholders for such share transfer, unless
20% or more of the voting rights attached to shares ofcommon stock of the new holding company are held by asingle non-public entity or a single non-public entity andits joint shareholders at the time of the completion ofsuch share transfer.
⑥ Reduction of the Company’s stated capital that results in aredemption of funds to shareholders.
⑦ Dissolution by resolution of the general shareholders
meeting(8) Redemption① Redemption of a special class share requires its
shareholder’s written request to the Company.
② If the special class share is transferred to a party other than
the government of Japan, the Company may redeem suchspecial class share by resolution of the Board of Directors
regardless of the wishes of the special class shareholder.
③ The redemption price will be the market price on the dayof request for ①, and for ②, the market price on the day
before the redemption date (both the day of request andthe day before the redemption date are referred to as“effective day”). If the common share is listed on theTokyo Stock Exchange, the closing price of a commonshare on the effective day will be the market price ofredemption. If a closing price does not exist on a effective
day, then the redemption price will be the closing price on
the day closest to the effective day.

― 45 ―