Corporate Data
2-17-2 Higashi Gotanda, Shinagawa-ku, Tokyo 141-8664 Japan
Tel: +81-3-6422-7000
Fax: +81-3-6422-7111
http: //www.toshibatec.co.jp/
Established: February 21, 1950
Employees: 4,202〈Consolidated: 14,468〉(as of March 2005)
Common Stock: ¥39,971 million (as of March 2005)
Stock Listing: Tokyo Stock Exchange (1st Section)
Board of Directors and Corporate Auditors

April

President and Chief Executive Officer (as of June 29, 2005)◇Yoshihiro Maeda

Directors

May◇Tetsuo Satofuka

Masahiro Hirata
Haruo Asada
Kazuaki Ushiyama
Yoshiyasu Kikuchi
Hisatsugu Nonaka◇：Representative Director

Corporate Auditors

Teruo Miyamoto
Noriyuki Nakamura
Hiroshi Inazuka
Yuzo Kato

June

ANNUAL REPORT 2005
For the Year Ended March 31, 2005

July

Main Consolidated Companies (as of March 31, 2005)
・TOSEI DENKI CO., LTD.

August・TEC PRECISION CO., LTD.
・TEC APPLIANCE CO., LTD.

September・TEC ENGINEERING CORPORATION・TER CO., LTD.
・TEC INFORMATION SYSTEMS CORPORATION

October・TOSHIBA TEC DOCUMENT PROCESSING SYSTEMS CO., LTD.
・TOSHIBA TEC EUROPE IMAGING SYSTEMS S.A.

November・TEC SINGAPORE ELECTRONICS PTE. LTD.
・TIM ELECTRONICS SDN. BHD.
・TOSHIBA COPYING MACHINE (Shenzhen) CO., LTD.

December・P.T. TEC INDONESIA・TOSHIBA TEC AMERICA RETAIL INFORMATION SYSTEMS, INC.

January

・TOSHIBA TEC EUROPE RETAIL INFORMATION SYSTEMS S.A.
・TOSHIBA TEC U.K. IMAGING SYSTEMS LTD.
・TOSHIBA TEC GERMANY IMAGING SYSTEMS GmbH

February

・TOSHIBA TEC FRANCE IMAGING SYSTEMS S.A.
・TOSHIBA TEC (H.K.) LOGISTICS & PROCUREMENT LIMITEDMarchFinancial Highlights
Years ended March 31

Thousands of
U.S.dollars

Millions of yen

Consolidated
Net sales
Operating income
Net income(loss)
Total assets
Total shareholders’ equity

2001¥337,208
6,923(7,438)250,764
116,730

2002¥337,204
5,090(5,136)
240,752
112,2442003¥341,667
12,741
3,947
247,671
114,863

2004¥355,113
15,034
7,991
256,311116,218

2005¥376,187
16,195
6,348
270,056
119,779Yen

Per share data:
Net income(loss) Basic
Total shareholders’ equity¥(25.81)405.11¥(17.83)
389.58¥13.57405.49

U.S.dollars¥28.16414.18¥22.44428.88

2001¥264,619
2,937(6,447)39,971
211,991
110,022

2002¥246,08713(5,874)39,971
185,633
103,4662003¥241,202
6,245
2,333
39,971
181,221104,0442004¥245,288
6,851
3,528
39,971
187,526
103,8442005¥257,510
5,691
4,055
39,971
198,634
105,248

Yen

Per share data:
Net income(loss) Basic
Cash dividends
Total shareholders’ equity¥(22.37)4.00
381.83¥(20.39)0.00
359.11¥7.99
5.00
367.35$0.2093.994
Thousands of
U.S.dollars

Millions of yen

Non-Consolidated
Net sales
Operating income
Net income(loss)
Common stock
Total assets
Total shareholders’ equity

2005$3,502,998
150,805
59,1122,514,722
1,115,365

2005$2,397,896
52,99437,760372,204
1,849,651
980,054
U.S.dollars¥12.41
6.00
370.14¥14.338.00
376.91$0.1330.074
3.510

The dollar amounts in this report represent translations of yen, for convenience only, at the rate of ¥107.39=US$1.00, theexchange rate prevailing on March 31, 2005.

CONTENTS
Financial Highlights ..........................................................................................................1
Consolidated Balance Sheets.............................................................................................3
Consolidated Statements of Operations.............................................................................5
Consolidated Statements of Shareholders' Equity .............................................................6
Consolidated Statements of Cash Flows ...........................................................................7
Notes to Consolidated Financial Statements .....................................................................8
Supplemental Information of Non-Consolidated Financial Statements ..........................13
1

REVIEW OF THE YEAR
The Japanese economy in fiscal year 2004 marked a steady recovery, led by the expansion of exports and anincrease in capital investments until it started to slow down moderately later in the year, owing to a loss inexport momentum that was a driving force for economic recovery.
As for business conditions outside Japan, the US economy maintained a firm undertone, even though it slowed
down a little in the latter half of the year. The European economy registered a slow recovery. In Asia, China
continued to achieve strong growth, but the Asian economic recovery weakened in general.
Under such circumstances, the TOSHIBA TEC Group devoted itself to structural reforms, as follows:• Improving merchantability by releasing a new POS system and extending the digital MFP lineup• Strengthening cost competitiveness by shifting production to a plant in China (Shenzhen)• Strengthening marketability by expanding and reinforcing direct sales channels
The TOSHIBA TEC Group’s consolidated sales ended at ¥376,187 million, a 6% increase over the previous
fiscal year due to greater sales of products at both the Document Processing & Telecommunication Systems andRetail Information Systems, and profits increased due to continuous efforts to reduce costs and other measures.
When compared with the previous fiscal year, operating income increased 8%, ending at ¥16,195 million.
Owing to expenses incurred for the Home Electric Appliances structural reforms, such as a shift in production,
net income ended at ¥6,348 million, a 21% decrease.

PRODUCTS LINE UP (as of March, 2005)
Retail Information Systems
eBusiness
FSP
General merchandise systems
Convenience store/Shopping center systems
Super market systems
Hospitality/Hotel systems
Barcode printers
Handheld terminals
OA Equipment/JIMCON
Supplies/Printing services
Environmental equipment

Document Processing & Telecommunication Systems
Full Color MFPs
B&W MFPs
Analog Copiers
Facsimiles
Inkjet printheads
Components (printed circuit boards, constant voltage power supplies, molded products etc)

Home Electric Appliances & Others
Vacuum cleaners
MotorsHealth equipment2

Consolidated Balance Sheets
March 31, 2005 and 2004

Millions of yen

ASSETS
Current assets
Cash and cash equivalents
Trade notes and accounts receivable
Inventories
Deferred income taxes (Note 9)
Prepaid expenses and other current assets
Allowance for doubtful accounts
Total current assets

Thousands of
U.S.dollars

2005

2004

2005

¥64,960
52,86434,302
8,608
10,719(1,956)
169,497¥53,772
60,81033,5867,350
6,629(1,576)
160,571$604,898
492,262
319,415
80,156
99,814(18,214)
1,578,331

5,675
26,87523,79568,178
1,516(92,872)
33,167

5,626
26,296
22,634
67,3301,144(89,432)
33,59852,845250,256
221,575
634,864
14,117(864,811)
308,846

8,076
6,196
14,272

4,677
6,620
11,29775,20357,696
132,899

23,9783,628
18,656
7,012(154)
53,12022,675
3,558
17,7807,007(175)
50,845223,280
33,783
173,722
65,295(1,434)
494,646

Total fixed assets

100,559

95,740936,391

Total assets¥270,056¥256,311$2,514,722

Fixed assets
Property, plant and equipment:
Land
Buildings and structures
Machinery and equipment
Tools, furniture and fixtures
Construction in progress
Less accumulated depreciation

Intangible assets:
Goodwill
Other intangible assets

Investments and other assets:
Investment securities: (Note 11)
Unconsolidated subsidiaries and affiliates
Other
Deferred income taxes (Note 9)
Other investments and other assets
Allowance for doubtful accounts

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

3

Thousands of
U.S.dollars

Millions of yen

LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS' EQUITYCurrent liabilities
Trade notes and accounts payable
Short-term loans (Note 3)
Current portion of long-term debt (Note 3)
Accrued income and other taxes
Other current liabilities
Total current liabilities

2005

2004

2005

¥46,180
21,122
4
7,105
41,228
115,639¥46,203
22,556
5
3,852
36,931
109,547$430,021
196,68537
66,161
383,909
1,076,813

Long-term liabilities
Long-term debt (Note 3)
Accrued retirement benefits (Note 4)
Other long-term liabilities
Total long-term liabilities

3,463
27,9342,414
33,811

2,810
25,296
1,544
29,65032,247260,117
22,479314,843

149,450

139,197

1,391,656

827

896

7,701

39,971

39,971

372,204

Capital surplus

52,98552,984493,389

Retained earnings
Unrealized holding gains on securities
Foreign currency translation adjustments
Less treasury stock, at cost:
9,015,037 shares in 2005
7,663,687 shares in 2004

31,575288(1,793)28,547324(2,984)

294,022
2,682(16,696)(3,247)-(2,624)(30,236)-

Total shareholders’ equity

119,779

116,218

1,115,365

Total liabilities, minority interest and shareholders’ equity¥270,056¥256,311$2,514,722

Total liabilities
Contingent liabilities (Note 5)
Minority interest in consolidated subsidiaries
Shareholders’ equity
Common stock
Authorized-1,000,000,000 shares
Issued- 288,145,704 shares

4Consolidated Statements of Operations
Years ended March 31, 2005 and 2004

Millions of yen

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses (Note 6)
Operating income
Non-operating income and expenses:
Interest and dividend income
Equity in earnings of affiliates
Interest expense
Amortization for transition obligation of retirement benefits
Restructuring cost *1
PCB wastes treatment cost
Other, net (Note 7)
Income before income taxes and minority interest
Income taxes:
Current
DeferredIncome before minority interest
Minority interest in income of consolidated subsidiaries
Net income

2005¥376,187
229,930
146,257
130,062
16,195

2004¥355,113
214,319
140,794
125,760
15,0342005$3,502,998
2,141,075
1,361,923
1,211,118
150,805

910
1,134
(525)
(1,613)(1,428)(400)(3,283)
10,990955(869)(1,613)(2,867)
10,6408,474
10,560(4,889)(15,020)(13,297)(3,725)(30,571)
102,337

6,112(1,645)
6,523
175¥6,348

3,257
(893)
8,276
285
¥7,991

56,914(15,318)
60,741
1,629$59,112Yen

Per share data
Net income-Basic
Cash dividends

Thousands of
U.S.dollars

2005¥22.44¥8.00

U.S dollars

2004¥28.16¥6.00

2005$0.209$0.074

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
*1 Restructuring cost consists mainly of loss on disposal of domestic manufacturing facilities of the Home ElectricAppliances due to the overseas transfer of production.

5

Consolidated Statements of Shareholders’ Equity
March 31, 2005 and 2004

Thousands of
U.S.dollars

Millions of yen

2005

2004

2005

Common stock
Balance at beginning of year
Balance at end of year

¥39,971¥39,971¥39,971¥39,971$372,204$372,204

Capital surplus
Balance at beginning of year
Increase from selling treasury stock
Balance at end of year

¥52,9841¥52,985¥52,9831¥52,984$493,379
10$493,389

Retained earnings
Balance at beginning of year
Net income
Cash dividends
Bonuses to directors and corporate auditors
Decrease from inclusion in consolidation of subsidiaries
Decrease from inclusion in equity method
Decrease from merger of non-consolidated subsidiary
Balance at end of year

¥28,547
6,348(1,963)
(46)
(638)
(433)
(240)
¥31,575¥23,783
7,991(2,262)
(66)
(899)
–
–
¥28,547$265,825
59,112(18,279)(428)(5,941)(4,032)(2,235)$294,022

¥324
(36)
¥288

¥543
(219)
¥324

$3,017(335)$2,682Foreign currency translation adjustments
Balance at beginning of year
Net change during the year
Balance at end of year¥(2,984)
1,191¥(1,793)¥(975)(2,009)¥(2,984)$(27,787)
11,091$(16,696)

Less treasury stock
Balance at beginning of year
Net change during the year
Balance at end of year¥(2,624)(623)¥(3,247)¥(1,442)(1,182)¥(2,624)$(24,435)(5,801)$(30,236)

Unrealized holding gains on securities
Balance at beginning of year
Net change during the year
Balance at end of year

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

6

Consolidated Statements of Cash Flows
Years ended March 31, 2005 and 2004

Millions of yen

Cash flows from operating activities
Income before income taxes and minority interest
Adjustment to reconcile income before income taxes andminority interest to net cash provided by operating activities:
Depreciation and amortization
Allowance for doubtful accounts
Accrual for retirement benefits, less payments
Interest and dividend income
Interest expense
Equity in earnings of affiliates
Loss on sales or disposals of fixed assets
Profits on sales of investment securities
Write down of investment securities
Restructuring cost
Changes in assets and liabilities:
Notes and accounts receivable
Inventories
Notes and accounts payable
Other
Sub TotalInterest and dividend income received
Interest expense payments
Income taxes payments
Net cash provided by operating activities
Cash flows from investing activities
Acquisition of property, plant and equipment
Acquisition of intangible assets
Acquisition of investment securities
Proceeds from sales of investment securities
Payments of loan receivable
Proceeds from loan receivable
Other
Net cash used in investing activities
Cash flows from financing activities
Repayments of short-term loans, net
Proceeds of long-term debt
Repayments of long-term debt
Redemption of straight bonds
Purchase of treasury stock
Payments of dividend
Payments of dividend to minority shareholders
Other
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents resulting from:
Subsidiaries inclusion in consolidation
Merger of non-consolidated subsidiary
Cash and cash equivalents at end of year

Thousands of
U.S.dollars

2005

2004

2005

¥10,990¥10,640$102,337

10,367
171
2,637
(910)
525
(1,134)
586
(44)
96
1,428

10,239
101
4,192
(955)
869
–
510
(41)
47
–

96,536
1,592
24,555(8,474)
4,889(10,560)
5,457
(410)
894
13,297

12,114907(4,673)
1,874
34,934741(540)(3,668)31,467

(870)
4,816
5,362
2,481
37,391842(887)(2,062)35,284

112,804
8,446(43,514)
17,451
325,300
6,900(5,028)(34,156)
293,016(8,425)(1,701)(7,068)
212
(30)
56
655
(16,301)(7,678)(2,143)(8,242)
195(1,331)71
1,140(17,988)(78,452)(15,840)(65,816)
1,974
(279)
521
6,099
(151,793)(3,311)
1,160
(283)
–
(626)
(1,962)(237)
4(5,255)668
10,57953,772(5,187)3,182(795)(5,000)(1,184)(2,255)(145)
3(11,381)(1,696)
4,219
49,303(30,832)
10,802(2,635)–(5,829)(18,270)(2,207)
37(48,934)
6,221
98,510500,717517
92¥64,960

250–¥53,7724,814
857$604,898

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

7

Notes to Consolidated Financial Statements
1. Basis of Presenting Consolidated
Financial Statements
The consolidated financial statements of TOSHIBA TECCORPORATION (the “Company ) have been prepared inaccordance with accounting principles generally accepted inJapan, which are different in certain respects as to theapplication and disclosure requirements of International
Financial Reporting Standards, and are compiled from theconsolidated financial statements prepared by the Company as
required by the Securities and Exchange Law of Japan.
Certain reclassifications have been made to present theconsolidated financial statements in a format which is morefamiliar to readers outside Japan.
Solely for the convenience of the readers, the consolidated
financial statements have been presented in U.S. dollars bytranslating Japanese yen amounts at the exchange rate of¥107.39 = US$1.00 prevailing as of March 31, 2005. The
translation should not be construed as a representation that theJapanese yen could be converted into U.S. dollar at the above or
any other rate of exchange.

2. Summary of Significant Accounting
Policies(A) Basis of Consolidation and Accounting ofInvestments in Affiliated Companies
The consolidated financial statements include the accounts of
the Company and its significant majority-owned subsidiaries(together the “Companies”). For the years ended March 31,
2005 and 2004, accounts of 37 and 32 subsidiaries areconsolidated respectively. All significant inter-company
transactions and accounts are eliminated in consolidation.
All assets and liabilities of the subsidiaries are revaluated on
acquisitions, if applicable. The difference between the cost ofinvestments in subsidiaries and the equity in their assets at thedates of acquisition is principally amortized by the straight-line
method over 5 to 15 years.
The equity method of accounting is adopted for investments inmajor unconsolidated subsidiaries and affiliated companies. For
the year ended March 31, 2005, the equity method of accounting
has been adopted for 7 companies, and the main companies are
as follows,
TOSHIBA TEC NETHERLANDS RETAIL INFORMATION SYSTEMS B.V.
TOSHIBA TEC SWITZERLAND AGTOSHIBA AMERICA BUSINESS SOLUTIONS, INC.
The investments in remaining unconsolidated subsidiaries oraffiliated companies are stated at cost.
Certain subsidiary has a year end which differs from that of
the Company. As a result, adjustments have been made for any
significant transactions which took place during the period
between the year end of the subsidiary and the year end of theCompany.
The main consolidated companies are presented on the last
page of this report.

8

balance sheet date. The components of shareholders’ equity aretranslated at their historical rates. Translation adjustments arepresented as a component of shareholders’ equity and minority
interest.
Generally gains and losses on foreign currency translations arerecognized in current net income, unless hedged by foreignexchange contracts.

(C) Cash and Cash Equivalents
Cash and cash equivalents include all highly liquid
investments, generally with original maturates of three months
or less.

(D) Investment Securities
Marketable securities classified as “Other securities” arereported at fair value with unrealized holding gains or losses,
net of taxes, included in shareholders’ equity.
Non-marketable securities classified as “Other securities” arecarried at cost, which is determined by the moving averagemethod.
Cost of securities sold is determined by the moving averagemethod.

(E) Inventories
Finished goods, merchandise and semi-finished components
are principally stated at the lower of cost or market by first-in,
first-out method, or are stated at cost by the specific cost
method. Work-in-process is principally stated at the lower ofcost or market by the moving average method, or is stated atcost by the specific cost method. Raw materials are principallystated at the lower of cost or market by the moving averagemethod.

(F) Property, Plant and Equipment and Depreciation
Property, plant and equipment are carried at cost. Material
improvements are capitalized, but repair and maintenanceincluding minor improvements are charged to income.
Depreciation of property, plant and equipment is generally
computed by the declining-balance method for the Company
and its domestic subsidiaries, and by the straight-line method forthe overseas subsidiaries, at rates based on estimated useful
lives of the respective assets. The useful lives of principal
property, plant and equipment are summarized as follows:
Buildings and structures
15 to 38 years
Machinery and equipment 5 to 11 years
Tools, furniture and fixtures 2 to 6 years(G) Intangible Assets and Amortization
Intangible assets are amortized by the straight-line method
over their estimated useful lives.
Goodwill recognized through purchase and acquisition ofsubsidiary is amortized by the straight-line method over 5 to 15
years period.

(B) Foreign Currency Translation(H) Allowance for Doubtful Accounts

Revenue and expense accounts of foreign subsidiaries aretranslated into yen using the average rate during the year. Thebalance sheet accounts, except for the components ofshareholders’ equity, are translated at the rate in effect at the

Allowance for doubtful accounts is provided in amountsufficient to cover probable losses on collection. It consists ofindividually estimated uncollectible amounts and an amountcalculated using the rate of actual losses on collection in the past.

(I) Retirement Benefits(P) Size-Based Enterprise Tax

Upon retirement or termination of employment, employees of
the Company and its domestic subsidiaries are generally entitledto lump-sum payments determined by reference to their current
basic rate of pay, length of service and conditions under which
the termination occurs.
The Company and certain domestic subsidiaries accrue theliability and make contributions to a non-contributory taxqualified pension plans (the “Funded Plan”) for employees’
severance indemnities payable, as part of the existing retirement
plan.
Retirement benefits for employees are provided mainly at an
amount calculated based on the retirement benefit obligationand the fair value of the pension plan assets, as adjusted for
unrecognized actuarial gain or loss.

With the implementation of the “Revision of the Local Tax Law”
effective on April 1, 2004, some part of corporate enterprise tax is tobe calculated by a combination of “amount of added value” and“amount of common stock” formerly based on “amount of income”.
Accordingly, such portion of corporate enterprise tax is included in“Selling, general and administrative expenses” from the fiscal year
beginning on April 1, 2004, formerly included in “Income taxes”.
As a result, general and administrative expenses increased by 496
million yen, operating income and income before tax decreased by
496 million yen.

(J) Leases

The long-term debt at March 31, 2005 and 2004, consists ofthe following :The Companies lease certain equipment under non-cancelable
lease agreements referred to as finance leases. Finance leases
other than those, which transfer the ownership of the leased
property to the Companies, are accounted for as operatingleases.

(K) Income Taxes, Deferred Tax Assets and Liabilities
Deferred tax assets and liabilities are determined based on the
differences between financial reporting and the tax bases of theassets and liabilities and are measured using the enacted tax
rates and laws which will be in effect when the differences are
expected to reverse.

(L) Derivative Financial Instruments
The Company and certain subsidiaries have entered into
forward exchange contracts to hedge the foreign currencytransactions related to foreign accounts receivable and payable.
Derivative financial instruments are reported at fair value withunrealized gain or loss charged or credited to operations, except
for those which meet the criteria for deferral hedge accounting
under which unrealized gains or losses is deferred as assets or
liabilities. Receivables and payables hedged by qualified
forward foreign exchange contracts are translated at thecorresponding foreign exchange contract rates.

(M)Revenue Recognition
Sales are generally recognized at the time of shipment of thegoods to customers except for sales of certain product, which
are recorded in the accounts upon customer acceptance.

(N) Research and Development Expenses
Research and development costs are charged to income as
incurred.

(O) Appropriation of Retained Earnings
Under the Commercial Code of Japan, the appropriation ofretained earnings with respect to a given financial period is
made by resolution of the shareholders at a general meeting held
subsequent to the close of such financial period. The accounts
for that period do not, therefore, reflect such appropriation.

3. Short-Term Loans and Long-Term Debt
The average interest rate for short-term bank loans
outstanding at March 31, 2005 is 3.6 %.

Millions of yen

2005
Long-term debt:
Due serially through 2022, with interest
rate of 3.17% to 6.10%¥3,4673,467
Less current portion

4¥3,463Thousands of
U.S.dollars

2004

2005

¥2,8152,815$32,284
32,284

5¥2,81037$32,247

The aggregate annual maturities of long-term debt (including
the current portion) outstanding at March 31, 2005 are as
follows:
Year ending
March 31

Millionsof yenThousands of
U.S.dollars

2006
2007
2008
2009 and thereafter

¥4
3
53
3,407
¥3,467$3728494
31,725$32,284

4. Retirement Benefits
The Company and its domestic subsidiaries have defined
benefit plans,i.e., Funded Plans and lump-sum payment plans,
covering substantially all employees who are entitled to lumpsum or annuity payments, the amounts of which are determinedby reference to their basic rates of pay, length of service, and theconditions under which termination occurs.
The following table sets forth the funded and accrued status of
the plans, and the amounts recognized in the consolidatedbalance sheet as of March 31, 2005 and 2004 for theCompanies’ defined benefit plans:Millions of yen

2005
2004
Retirement benefit obligation¥(63,218) ¥(60,202)
Plan assets
23,34420,926
Unfunded retirement benefit obligation(39,874) (39,276)
Unrecognized net retirement
benefit obligation at transition
1,613
Unrecognized actuarial gain or loss 10,378
10,587
Unrecognized past service cost
1,562
1,780
Net retirement benefit obligation ¥(27,934) ¥(25,296)

Thousands of
U.S.dollars

2005$(588,677)
217,376(371,301)
96,63914,545$(260,117)

9

The components of retirement benefit expenses for the years
ended March 31, 2005 and 2004 are as follows:
Millions of yen

2005¥3,286
1,225(206)

Service cost
Interest cost
Expected return on plan assets
Amortization of net retirement
benefit obligation at transition
1,613
Amortization of actuarial gain or loss 1,555
Amortization of past service cost
218
Total
¥7,691Thousands of
U.S.dollars

2004¥3,354
1,353
(177)

2005
$30,598
11,407(1,918)

1,613
1,363
218
¥7,72415,02014,4802,030$71,617

The assumption used in accounting for the above plans in2005 are as follows:
Discount rates
2.0%〜2.3%
Expected return on assets 0.0%〜2.0%
Amortization period of past service cost
10 years Straight-line method
Amortization period of actuarial gain or loss
10 years Straight-line method
Amortization period of net transition obligation
5 years Straight-line method

5. Contingent liabilities
The Companies are contingently liable mainly with respect todiscounted trade notes receivable and guarantees on loans
payable in ordinary course of business.
Contingent liabilities at March 31, 2005 and 2004 are as
follows :7. Non-Operating Income and ExpensesOther, Net“Other, net” for the years ended March 31, 2005 and 2004,
consists of the following:
Millions of yen

2005
2004
Write-down and disposal of inventories ¥(940)¥(930)
Loss on sales or disposals
of property, plant and equipment
(586)
(510)
Foreign exchange loss
(414)
(460)
Other, net(1,343)(967)¥(3,283) ¥(2,867)

2005$(8,753)(5,457)(3,855)(12,506)$(30,571)

8. Research and Development Expenses
Research and development costs charged to income for theyears ended March 31, 2005 and 2004 are as follows:
Millions of yen

2005¥25,761

2004¥25,687

Thousands of
U.S.dollars

2005$239,883

9. Income Taxes and Deferred Tax Assets
and Lii abilities
There is no significant difference between the statutory tax
rate and the Company’s effective tax rate for the years ended
March 31, 2005.
The difference between the statutory tax rate and the Company ’s

6. Selling, General and Administrative Expenses

effective tax rate for the years ended March 31, 2004 is as follows:
2004
Statutory tax rate
42.0%
Effect of :Different tax rates applied to income of foreign subsidiaries(12.7)
Expenses not deductible for income tax purposes
3.1
Tax effect, acknowledged from elimination of consolidated
unrealized gains(10.2)
Corporation tax deduction for research expenditures(4.5)
Other, net
4.5
22.2%

Major components of selling, general and administrative
expenses at March 31, 2005 and 2004 are as follows:Significant components of the Companies’ deferred tax assets
and liabilities at March 31, 2005 and 2004 are as follows:

Millions of yen

Trade notes receivablediscounted or endorsed
Guarantees on lease contract
Guarantees on loans and others

Delivering expense
Advertising expense
Personal expense
Depreciation and amortization
Research and development expense
Other selling expense

Thousands of
U.S.dollars

2005

2004

2005

¥15,058252
1,589¥10,894419
1,827$140,218
2,347
14,797

Millions of yen

2005¥6,582
2,243
63,1692,560
18,898
7,047

2004¥5,801
2,345
60,032
2,607
19,008
6,955

Thousands of
U.S.dollars

2005$61,291
20,886588,221
23,838
175,975
65,621Millions of yen

Deferred tax assets:
Accrued retirement benefits
Intangible assets
Accrued bonuses
Elimination of consolidated
unrealized gains
Other
Valuation allowance10

Thousands of
U.S.dollars

Thousands of
U.S.dollars

2005

2004

2005

¥11,015
7,225
3,408

¥10,176
7,112
3,244

$102,570
67,27831,735

1,989
5,782
29,419(728)
28,691

1,211
4,891
26,634(401)
26,233

18,52153,841
273,945(6,779)267,166

Thousands of
U.S.dollars

Millions of yen

Deferred tax liabilities:
Retained earnings appropriatedfor tax allowable reserves
Unrealized gains on securities
Other
Net deferred tax assets

2005

2004

2005

491
411
526
1,428
¥27,263

508
435
159
1,102
¥25,131

4,572
3,827
4,898
13,297$253,869

10. Leases(A) Finance leases
The following pro forma amounts represent the acquisition
cost, accumulated depreciation and net book value of leased
property as of March 31, 2005 and 2004, which would havebeen reflected in the consolidated balance sheet if finance leaseaccounting had been applied to the finance lease transactions
currently accounted for as operating leases:
Millions of yen

2005

2004

Acquisition Accumulated New book Acquisition Accumulated New bookcost
depreciation
value
cost
depreciation
value

Machinery and equipment ¥346
Tools, furniture and fixtures 197
¥543

¥187
117
¥304

¥159
80
¥239

¥255
212
¥467

¥141
125
¥266

¥114
87
¥201

Thousands of U.S.dollars

2005
Machinery and equipment
Tools, furniture and fixtures(1)

Acquisition
cost

Accumulated
depreciation

New book
value$3,222
1,834$5,056$1,741
1,089$2,830$1,481745$2,226

Future minimum lease payments (including the interest
portion thereon) subsequent to March 31, 2005 forfinance lease transactions accounted for as operatingleases are summarized as follows:

Due within one year
Due after one year

Millions of yen

Thousands of
U.S.dollars

2005
¥74
165
¥239

2005
$689
1,537
$2,226

11. Securities(1)

Information regarding marketable Other Securities as ofMarch 31, 2005 and 2004 is as follows:
Millions of yen

2005

2004

Acquisition Carrying Unrealized Acquisition Carrying Unrealized
cost
value
gain(loss)
cost
value
gain(loss)

Securities whose carrying value exceeds their acquisition cost:
Stocks¥983 ¥2,024 ¥1,041 ¥1,221¥2,342 ¥1,121
Securities whose acquisition cost exceeds their carrying value:
Stocks
272
221
(51)
183
177
(6)
Total
¥1,255 ¥2,245¥990 ¥1,404¥2,519 ¥1,115
Thousands of U.S.dollars

2005
Acquisition
cost

Carrying
value

Unrealized
gain (loss)

Securities whose carrying value exceeds their acquisition cost:
Stocks$9,153 $18,847$9,694
Securities whose acquisition cost exceeds their carrying value:
Stocks
2,533
2,058
(475)
Total
$11,686 $20,905$9,219(2)

The proceeds from sales of securities for the years ended
March 31, 2005 and 2004 were ¥212 millions ($1,974
thousands) and ¥195 millions, respectively. The realized
gains on those sales for the year ended March 31, 2005 and2004 were ¥45 millions ($397 thousands) and ¥42 millions,
respectively. The realized losses on those sales for the year
ended March 31, 2005 and 2004 were both ¥1million ($9thousands).

12. Derivative Financial Instruments
Fair value information of the derivative financial instruments
at March 31, 2005 and 2004 is summarized below according to
the disclosure requirements applicable to the respective year:
Millions of yen

2005
Contract
amountFair
value

Forward exchange contracts:
Sell Euros ¥1,556 ¥1,562

2004
Unrealized Contractgain(loss) amount

Fair
value

Unrealizedgain(loss)¥(6) ¥1,057 ¥1,025¥33

Thousands of U.S.dollars

2005

(2)

Lease payments for the years ended March 31, 2005 and2004, are ¥87 millions ($810 thousands) and ¥74 millions,
respectively.

(B) Operating leases
Future minimum lease payments subsequent to March 31,
2005 for noncancelable operating leases are summarized asfollows:

Due within one year
Due after one year

Millions of yen

Thousands of
U.S.dollars

2005
¥117
151
¥268

2005
$1,0901,406$2,496

Forward exchange contracts:
Sell Euros

Contract
amountFair
value

Unrealizedgain(loss)$14,489$14,545$(56)

Above forward exchange contracts are taken by the Company
as to hedge the inter-company transactions. They meet thecriteria for deferral hedge accounting, and holding gains orlosses of these financial instruments are deferred in the NonConsolidated Financial Statements of the Company.

1113. Segment Information(B) Geographic Segments(A) Business Segment

Millions of yen

The Companies operate in three business areas.
The products line up of these areas is presented on the second
page of this report.
Millions of yen

Thousands of
U.S.dollars

2005
2004
2005
Net Sales
Retail Information Systems
Unaffiliated customers¥165,086 ¥161,297 $1,537,257
Intersegment
1,793
1,715
16,696
Total
166,879 163,012
1,553,953
Document Processing & Telecommunication Systems
Unaffiliated customers
195,429 177,198
1,819,806
Intersegment
5,044
4,840
46,969Total
200,473 182,038
1,866,775
Home Electric Appliances & Others
Unaffiliated customers
15,672
16,618145,935
Intersegment
193
192
1,797
Total
15,865
16,810147,732
Eliminations(7,030) (6,747)(65,462)
Consolidated¥376,187 ¥355,113 $3,502,998
Operating Income
Retail Information Systems¥6,595¥5,767
Document Processing & Telecommunication Systems
10,952
9,990
Home Electric Appliances & Others (1,365)(736)
Eliminations
13
13
Consolidated¥16,195 ¥15,034$61,412
101,983(12,711)
121$150,805

Identifiable Assets
Retail Information Systems¥67,479 ¥65,466$628,355
Document Processing & Telecommunication Systems
150,988 144,197
1,405,978Home Electric Appliances & Others 9,598
12,05489,375
Corporate and Eliminations
41,991
34,594
391,014
Consolidated¥270,056 ¥256,311 $2,514,722
Depreciation and Amortization
Retail Information Systems¥2,669¥2,633Document Processing & Telecommunication Systems
6,643
6,631
Home Electric Appliances & Others 1,055
975
Consolidated¥10,367 ¥10,239
Capital Expenditures
Retail Information Systems¥3,118¥2,759Document Processing & Telecommunication Systems
6,494
6,042
Home Electric Appliances & Others
782
975
Consolidated¥10,394¥9,776$24,853
61,8599,824$96,536$29,034
60,471
7,282$96,787

2005

12

2005

Net SalesJapan
Unaffiliated customers
Intersegment
Total
North America
Unaffiliated customers
Intersegment
Total
EuropeUnaffiliated customers
Intersegment
Total
Asia and others
Unaffiliated customers
Intersegment
Total
Eliminations
Consolidated

34,49231,518321,184
39,69029,716
369,588
74,182
61,234
690,772(90,444) (67,091)(842,201)¥376,187 ¥355,113 $3,502,998

Operating Income
Japan
North America
EuropeAsia and others
Eliminations
Consolidated¥8,745¥8,375
5
87
2,841
892
6,384
5,532
(1,780)148¥16,195 ¥15,034

Identifiable Assets
Japan
North America
EuropeAsia and others
Corporate and Eliminations
Consolidated¥187,185 ¥181,267 $1,743,039
1,966
1,668
18,30762,97458,334586,405
37,99931,872353,841(20,068) (16,830)(186,870)¥270,056 ¥256,311 $2,514,722¥252,174 ¥244,447
43,151
36,650295,325 281,097$2,348,207
401,816
2,750,023

3,605
4
3,609

4,583
22
4,605

33,56937
33,60685,916
7,599
93,51574,565703
75,268800,037
70,761
870,798$81,432
46
26,45559,447(16,575)$150,805(note 1) Criteria of geographical segmentation and the name of countries
or areas mainly included in each segment are as follows:(1) Criteria:geographical closeness(2) Countries & Areas①North America
U.S.A., Canada②Europe
U.K., France, Germany,
Belgium, Spain, Netherlands③Asia and others
Singapore, Malaysia, Indonesia,
China, Australia(note 2) Corporate assets mainly consist of cash, time deposits, securities
and investments with financial institutions of the Company.
Corporate assets at March 31, 2005 and 2004, are ¥42,508
millions ($395,828 thousands) and ¥34,678 millions, respectively.

(C) Net Sales by Region
Millions of yen

2005(note1) Corporate assets mainly consist of cash, time deposits, securities
and investments with financial institutions of the Company.
Corporate assets at March 31, 2005 and 2004, are ¥42,508
millions ($395,828 thousands) and ¥34,678 millions,
respectively.
(note2) For the year 2005, business organization change has taken place
for more efficient development of products.
The Key Component Business was combined with Document
Processing & Telecommunication Systems instead of Home
Electric Appliances & Others. The above figures of year 2004
are rearranged on the base of new Business Segment for easycomparison.

2004

Thousands of
U.S.dollars

Net Sales
Japan
North America
EuropeAsia and others
Net sales(note)

2004¥188,740 ¥183,433
65,83060,241
94,136
84,81327,481
26,626¥376,187 ¥355,113

Thousands of
U.S.dollars

2005$1,757,519
612,999
876,581
255,899$3,502,998

Net sales by region are determined based upon the locations of
the customers. Therefore, this information is different from thenet sales for geographic segments, which are determined based
upon where the sales originated.

Supplemental Information
Non-Consolidated Balance Sheets
March 31, 2005 and 2004

Thousands of
U.S.dollars

Millions of yen

ASSETS
Current assets
Cash and time deposits
Trade notes and accounts receivable
Inventories:
Finished goods
Work-in-process and raw materials
Deferred income taxes
Prepaid expenses and other current assets
Allowance for doubtful accounts
Total current assets

2005

2004

2005

¥42,358
25,415¥33,255
33,571$394,432
236,661

10,311
3,778
4,884
12,245(373)
98,618

10,828
4,354
4,313
8,199
(289)
94,23196,01435,18045,479114,024(3,473)
918,317

4,841
20,461
15,23054,9781,182(73,293)
23,3994,857
20,12015,10454,813
1,098(71,357)
24,63545,079190,530
141,819
511,947
11,007(682,494)
217,888

3,769
3,769

4,270
4,270

35,09635,096

49,605
3,458
15,822
4,082(119)
72,84841,222
3,395
15,7034,204(134)
64,390461,915
32,200147,332
38,011(1,108)678,350

Total fixed assets

100,016

93,295

931,334

Total assets¥198,634¥187,526$1,849,651

Fixed assets
Property, plant and equipment:
Land
Buildings and structures
Machinery and equipment
Tools, furniture and fixtures
Construction in progress
Less accumulated depreciation

Intangible assets:
Other intangible assets

Investments and other assets:
Investment securities
Subsidiaries and affiliates
Other
Deferred income taxes
Other investments and other assets
Allowance for doubtful accounts

13Thousands of
U.S.dollars

Millions of yen

LIABILITIES AND SHAREHOLDERS’ EQUITYCurrent liabilities
Trade notes and accounts payable
Current portion of long-term debt
Accrued income taxes
Other payables and current liabilities
Total current liabilities

2005

2004

2005

¥38,241
4
2,480
30,761
71,486¥37,9815
829
23,80362,618$356,095
37
23,093
286,442665,667

Long-term liabilities
Long-term debt
Accrued retirement benefits
Other long-term liabilities
Total long-term liabilities

23
21,811
66
21,90027
20,96869
21,064

214
203,101
615
203,930

Total liabilities

93,386

83,682

869,597

39,971

39,971

372,204

52,98552,984493,389

10,743
4,534
262

8,770
4,442
301

100,037
42,2202,440(3,247)––(2,624)(30,236)–

Total shareholders’ equity

105,248

103,844980,054

Total liabilities and shareholders’ equity¥198,634¥187,526$1,849,651

Shareholders’ equity
Common stock
Authorized-1,000,000,000 shares
Issued- 288,145,704 shares
Capital surplus
Retained earnings :Voluntary reserve
UnappropriatedUnrealized holding gains on securities
Less treasury stock, at cost:
9,015,037 shares in 2005
7,663,687 shares in 2004

14

Supplemental Information
Non-Consolidated Statements of Operations and Retained Earnings
Years ended March 31, 2005 and 2004

Thousands of
U.S.dollars

Millions of yen

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income and expenses:
Interest and dividend income
Interest expense
Amortization for transition obligation of retirement benefits
Restructuring cost *1
PCB wastes treatment cost
Other, net
Income before income taxes
Income taxes:
Current
Deferred
Net income

Unappropriated retained earnings at beginning of year
Transfer from voluntary reserve
Appropriation of retained earnings:
Cash dividends
Bonuses to directors and corporate auditors
Transfer to voluntary reserve
Cash interim dividends
Unappropriated retained earnings at end of year2005
¥257,510
187,172
70,33864,647
5,691

2004¥245,288
174,082
71,20664,355
6,851

2005$2,397,896
1,742,919
654,977
601,983
52,9945,276(15)(1,300)(1,428)(164)(2,638)
5,422

3,037
(138)
(1,300)––(3,250)5,200

49,129(140)(12,105)(13,297)(1,527)(24,565)
50,489

2,031
(664)
4,055

814
858
3,528

18,912(6,183)37,760

4,442
27

5,208
29

41,363
251

(841)
(27)
(2,000)(1,122)¥4,534(1,415)(47)(2,014)(847)¥4,442(7,831)(251)(18,624)(10,448)$42,220*1 Restructuring cost consists mainly of loss on disposal of domestic manufacturing facilities of the Home ElectricAppliances due to the overseas transfer of production.

15

16

Corporate Data
2-17-2 Higashi Gotanda, Shinagawa-ku, Tokyo 141-8664 Japan
Tel: +81-3-6422-7000
Fax: +81-3-6422-7111
http: //www.toshibatec.co.jp/
Established: February 21, 1950
Employees: 4,202〈Consolidated: 14,468〉(as of March 2005)
Common Stock: ¥39,971 million (as of March 2005)
Stock Listing: Tokyo Stock Exchange (1st Section)
Board of Directors and Corporate Auditors

April

President and Chief Executive Officer (as of June 29, 2005)◇Yoshihiro Maeda

Directors

May◇Tetsuo Satofuka

Masahiro Hirata
Haruo Asada
Kazuaki Ushiyama
Yoshiyasu Kikuchi
Hisatsugu Nonaka◇：Representative Director

Corporate Auditors

Teruo Miyamoto
Noriyuki Nakamura
Hiroshi Inazuka
Yuzo Kato

June

ANNUAL REPORT 2005
For the Year Ended March 31, 2005

July

Main Consolidated Companies (as of March 31, 2005)
・TOSEI DENKI CO., LTD.

August・TEC PRECISION CO., LTD.
・TEC APPLIANCE CO., LTD.

September・TEC ENGINEERING CORPORATION・TER CO., LTD.
・TEC INFORMATION SYSTEMS CORPORATION

October・TOSHIBA TEC DOCUMENT PROCESSING SYSTEMS CO., LTD.
・TOSHIBA TEC EUROPE IMAGING SYSTEMS S.A.

November・TEC SINGAPORE ELECTRONICS PTE. LTD.
・TIM ELECTRONICS SDN. BHD.
・TOSHIBA COPYING MACHINE (Shenzhen) CO., LTD.

December・P.T. TEC INDONESIA・TOSHIBA TEC AMERICA RETAIL INFORMATION SYSTEMS, INC.

January

・TOSHIBA TEC EUROPE RETAIL INFORMATION SYSTEMS S.A.
・TOSHIBA TEC U.K. IMAGING SYSTEMS LTD.
・TOSHIBA TEC GERMANY IMAGING SYSTEMS GmbH

February

・TOSHIBA TEC FRANCE IMAGING SYSTEMS S.A.
・TOSHIBA TEC (H.K.) LOGISTICS & PROCUREMENT LIMITED

March