CORPORATE DATA

Board of Directors and Corporate Auditors
President and Chief Executive Officer (as of June 29, 2004)
Directors

1-1 Kanda Nishiki - cho, Chiyoda - ku, Tokyo, 101 - 8442 Japan
Tel : +81-3-3292-6223
Fax :+81-3-3292-6440
http : //www. toshibatec. co. jp/
Established : February 21, 1950
Employees : 4,300 (as of June 2004)
Common Stock : ¥39,971million (as of June 2004)
Stock Listing : Tokyo Stock Exchange (1st Section)◇Yoshihiro Maeda◇Yasuhiro Hatakeyama◇Tetsuo Satofuka

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

Corporate Auditors

MAIN CONSOLIDATED COMPANIES (as of March 31, 2004)

Teruo Miyamoto
Hiroshi Inazuka
Noriyuki Nakamura
Yuzo KatoTOSEI DENKI CO., LTD.
TEC PRECISION CO., LTD.
TEC APPLIANCE CO., LTD.
TEC ENGINEERING CORPORATIONTER CO., LTD.
TEC INFORMATION SYSTEMS CORPORATIONTOSHIBA TEC DOCUMENT PROCESSING SYSTEMS CO., LTD.
TOSHIBA TEC EUROPE IMAGING SYSTEMS S.A.
TEC SINGAPORE ELECTRONICS PTE. LTD.
TIM ELECTRONICS SDN. BHD.
TOSHIBA COPYING MACHINE (Shenzhen) CO., LTD.
P.T. TEC INDONESIATEC AMERICA, INC.
TOSHIBA TEC EUROPE RETAIL INFORMATION SYSTEMS S.A.
TOSHIBA TEC U.K. IMAGING SYSTEMS LTD.
TOSHIBA TEC GERMANY IMAGING SYSTEMS GmbHTOSHIBA TEC FRANCE IMAGING SYSTEMS S.A.
TOSHIBA TEC (H.K.) LOGISTICS & PROCUREMENT LIMITED

#ANNUAL̲本文̲0910 04.9.10 3:45 PM ページ 1

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

2000¥348,872
12,6984,150
241,931
126,927

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
256,311116,218Yen

Per share data:
Net income(loss) Basic
Total shareholders’ equity¥14.40440.50¥(25.81)405.11¥(17.83)
389.58

U.S.dollars¥13.57405.49¥28.16414.18

2000¥270,720
6,754
2,139
39,971
208,537
116,993

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
103,844Yen

Per share data:
Net income(loss) Basic
Cash dividends
Total shareholders’ equity

¥7.42
5.00
406.02¥(22.37)4.00
381.83¥(20.39)0.00
359.11$0.266
3.919
Thousands of
U.S.dollars

Millions of yen

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

2004$3,359,949
142,246
75,6082,425,121
1,099,612

2004$2,320,825
64,82233,381
378,191
1,774,302
982,534
U.S.dollars

¥7.99
5.00
367.35¥12.41
6.00
370.14$0.117
0.057
3.502

The dollar amounts in this report represent translations of yen, for convenience only, at the rate of ¥105.69=US$1.00, theexchange rate prevailing on March 31, 2004.

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

#ANNUAL̲本文̲0910 04.9.15 11:32 AM ページ 2

REVIEW OF THE YEAR
During fiscal year 2003 there were bright signs pointing toward an economic recovery, such as improved
corporate earnings, increased exports and plant and equipment investment, as well as the firm undertone ofconsumer spending against the background of an improvement in the US economy and high growth in Asia,
centering on China, although Japan showed severe employment figures and a high yen trend.
Under these circumstances, the TOSHIBA TEC Group focused its energies on implementing its policies of“Structural Changes for a Highly Profitable Group” as laid down in Mid-term Management Plan. This included
the development of competitive new products, deeper market penetration, more powerful and efficient sales
promotion, procurement cost reductions, more selective and productive investment of resources and stronger
group management.
Net sales recorded 355,113 million yen, a 4% increase from the previous year. Steady growth in the businessareas of Retail Information Systems and Document Processing & Telecommunication Systems has led thisresult. Regarding Profit & Loss, due to sales increase and cost reduction, the operating income reached 15,034
million yen, a 18% increase over the previous year, making it a record. Income before income taxes andminority interest stood at 10,640 million yen, a 56% increase compared with the previous year, and the net
income for the fiscal year 2003 was 7,991 million yen, representing a 4,044 million yen improvement over fiscal
year 2002.

PRODUCTS LINE UP (as of March, 2004)

2

Retail Information Systems

Document Processing & Telecommunication Systems

Main Products
POS systems:
Systems for head office of mass-sales shops, stores,
shopping centers, convenience stores, department
stores, specialty shops, restaurants
e-business solution
Electronic cash registers:
Electronic cash registers for specialty shops, generalretail stores
Digital Computing Scales:
Commercial digital computing scales, label printers
equipped with electronic scales, small automatic
wrapping machines
Bar code systems:
Bar code systems, two-dimensional code systems
Office automation equipment:
JIMCOM (office computers), personal computers,
electronic meeting boards
Supplies:
Consumables for retails information systems
equipment

Main Products
Document Processing & Telecommunication Systems:
Digital MFPs, digital full color MFPs, analog copiers,
plain-paper facsimile machines, thermal paper
facsimile machines
Special terminals, etc.:
Teller terminals for specific customers, terminal
equipment, inkjet print heads

Home Electric Appliances & Others
Main Products
Vacuum cleaners:
Canister-type, upright, hand-held, special vacuum
cleaners for business use
Health equipment, etc.:
Air massage systems, relaxation chairs, juicer-mixers,
food processors, compact motors
Components:
Printed circuit boards, constant voltage power
supplies, dies and molds, molded products

#ANNUAL̲本文̲0910 04.9.10 3:45 PM ページ 3

Consolidated Balance Sheets
March 31, 2004 and 2003

Thousands of
U.S.dollars

Millions of yen

ASSETS
Current assets
Cash and cash equivalents
Trade notes and accounts receivable
Inventories
Deferred income taxes (Note 10)Prepaid expenses and other current assets
Allowance for doubtful accounts
Total current assets
Fixed assets
Property, plant and equipment:
Land (Note 5)
Buildings and structures (Note 5)
Machinery and equipment (Note 5)
Tools, furniture and fixtures
Construction in progress
Less accumulated depreciation

Intangible assets:
Goodwill
Other intangible assets

Investments and other assets:
Investment securities: (Notes 5 and 12)
Unconsolidated subsidiaries and affiliates
Other
Deferred income taxes (Note 10)
Other investments and other assets
Allowance for doubtful accounts

Total fixed assets
Total assets

2004

2003

2004

¥53,772
60,81033,5867,350
6,629(1,576)
160,571¥49,303
60,06038,304
6,954
6,281(1,086)
159,816$ 508,771
575,363317,778
69,54362,721(14,912)1,519,264

5,626
26,296
22,634
67,3301,144(89,432)
33,5985,630
26,366
22,634
67,2491,262(88,596)
34,54553,231
248,803214,155
637,052
10,824(846,173)
317,892

4,677
6,620
11,297

2,809
6,641
9,450

44,252
62,636
106,888

22,675
3,558
17,7807,007(175)
50,845

9,090
11,153
17,302
6,807(492)
43,860214,543
33,664
168,228
66,298(1,656)
481,077

95,74087,855905,857¥256,311¥247,671$2,425,121

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

3

#ANNUAL̲本文̲0910 04.9.10 3:45 PM ページ 4

Thousands of
U.S.dollars

Millions of yen

LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS' EQUITYCurrent liabilities
Trade notes and accounts payable
Short-term loans (Notes 3 and 5)
Current portion of long-term debt (Notes 3 and 5)
Accrued income and other taxes
Other current liabilities
Total current liabilities

2004

2003

2004

¥ 46,203
22,556
5
3,852
36,931
109,547¥41,927
25,9895,029
2,662
34,085
109,692$ 437,156
213,41747
36,446
349,428
1,036,494

2,810
25,296
1,544
29,65069
21,104
1,051
22,224

26,587239,341
14,609280,537

139,197

131,916

1,317,031

896

892

8,478

39,971

39,971

378,191

Capital surplus

52,984

52,983

501,315

Retained earnings
Unrealized holding gains on securities
Foreign currency translation adjustments
Less treasury stock, at cost:
7,663,687 shares in 2004
5,041,923 shares in 2003

28,547324(2,984)23,783543(975)

270,101
3,066(28,234)(2,624)-(1,442)(24,827)-

Total shareholders’ equity

116,218

114,863

1,099,612

Total liabilities, minority interest and shareholders’ equity¥256,311¥247,671$ 2,425,121

Long-term liabilities
Long-term debt (Notes 3 and 5)
Accrued retirement benefits (Note 4)
Other long-term liabilities
Total long-term liabilities
Total liabilities
Contingent liabilities (Note 6)
Minority interest in consolidated subsidiaries
Shareholders’ equity
Common stock
Authorized-1,000,000,000 shares
Issued- 288,145,704 shares

4

#ANNUAL̲本文̲0910 04.9.10 3:45 PM ページ 5

Consolidated Statements of Operations
Years ended March 31, 2004 and 2003

Millions of yen

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses (Note 7)
Operating Income
Non-operating income and expenses:
Interest and dividend income
Interest expense
Amortization for transition obligation of retirement benefits
Expenses of extra pension for early retirement
Other, net (Note 8)
Income before income taxes and minority interest
Income taxes:
Current
DeferredIncome before minority interest
Minority interest in income of consolidated subsidiaries
Net Income

2004¥355,113
214,319
140,794
125,760
15,034

2003¥341,667
212,446
129,221
116,480
12,741

2004$3,359,949
2,027,808
1,332,141
1,189,895
142,246955(869)(1,613)(2,867)
10,6401,064(897)(1,613)(344)(4,109)
6,842

9,036
(8,222)(15,262)(27,126)
100,672

3,257
(893)
8,276
285
¥7,991

1,694
988
4,160
213
¥3,94730,816(8,449)78,305
2,697$75,608

Yen

Per share data
Net income-Basic
Cash dividends

Thousands of
U.S.dollars

2004¥28.16¥6.00

U.S dollars

2003¥13.57¥5.00

2004$0.266$0.057

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

5

#ANNUAL̲本文̲0910 04.9.10 3:45 PM ページ 6

Consolidated Statements of Shareholders’ Equity
March 31, 2004 and 2003

Thousands of
U.S.dollars

Millions of yen

2004

2003

2004

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

¥39,971¥39,971¥39,971¥39,971$378,191$378,191

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

¥52,9831¥52,984¥52,983¥52,983$501,3069$501,315

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

¥23,783
7,991(2,262)(66)(899)¥28,547¥19,068
3,947
613
155
¥23,783$225,025
75,608(21,402)(624)(8,506)$270,101

¥543
(219)
¥324

¥867
(324)
¥543

$5,138(2,072)$3,066

Foreign currency translation adjustments
Balance at beginning of year
Net change during the year
Balance at end of year¥(975)(2,009)¥(2,984)¥(637)(338)¥(975)$(9,225)(19,009)$(28,234)

Less treasury stock
Balance at beginning of year
Net change during the year
Balance at end of year¥(1,442)(1,182)¥(2,624)¥(8)(1,434)¥(1,442)$(13,644)(11,183)$(24,827)

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

#ANNUAL̲本文̲0910 04.9.10 3:45 PM ページ 7

Consolidated Statements of Cash Flows
Years ended March 31, 2004 and 2003

Millions of yen

Cash flows from operating activities
Income before income taxes and minority interests
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
Loss on sales or disposals of fixed assets
Profits on sales of investment securities
Write down of investment securities
Expenses of extra pension for early retirement
Changes in assets and liabilities:
Notes and accounts receivable
Inventories
Notes and accounts payable
Other
Sub TotalInterest and dividend income received
Interest expense payments
Expenses of extra pension for early retirement
Income taxes payments
Other
Net cash provided by operating activities
Cash flows from investing activities
Decrease in time deposits, net
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
Proceeds (Repayments) of short-term loans, net
Proceeds of long-term loans
Repayments of long-term debt
Redemption of straight bonds
Purchase of treasury stock
Payments of dividend
Payments of dividend to minority shareholder
Other
Net cash provided by (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 subsidiaries
Cash and cash equivalents at end of year

Thousands of
U.S.dollars

2004

2003

2004

¥10,640¥6,842$100,672

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

11,408(152)
3,096(1,064)
897
597
(233)
547
344

96,878956
39,663(9,036)
8,222
4,825
(388)
445
-

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

1,631
4,927(9,290)(333)
19,217
1,272
(902)
(344)
(1,755)
2,916
20,404(8,232)45,56750,733
23,475353,780
7,967(8,392)(19,511)
333,844(7,678)(2,143)(8,242)
195(1,331)71
1,140(17,988)36(6,964)(3,270)(4,792)
463
(392)
263
834
(13,822)(72,646)(20,276)(77,983)
1,845(12,593)672
10,785(170,196)(5,187)3,182(795)(5,000)(1,184)(2,255)(145)
3(11,381)(1,696)
4,219
49,3035,560(38)(1,434)
(2)
(16)
4,070
(918)
9,734
37,768(49,077)
30,107(7,522)(47,308)(11,203)(21,336)(1,372)
28(107,683)(16,047)
39,918466,488250¥53,772

1,654
147¥49,3032,365$508,771

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
7

#ANNUAL̲本文̲0910 04.9.10 3:45 PM ページ 8

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¥105.69 = US$1.00 prevailing as of March 31, 2004. 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,
2004 and 2003, accounts of 32 and 29 subsidiaries areconsolidated respectively.
All significant inter-company transactions and accounts are
eliminated in consolidation. All assets and liabilities of thesubsidiaries are revaluated on acquisitions, if applicable. The
difference between the cost of investments in subsidiaries andthe equity in their assets at the dates of acquisition is principallyamortized by the straight-line method over 15 years.
The investments in remaining unconsolidated subsidiaries oraffiliated companies are stated at cost. There are no companies
included in the consolidation on equity basis in the years ended
March 31, 2004 and 2003.
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.

(B) Foreign Currency Translation
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 thebalance sheet date. The components of shareholders’ equity aretranslated at their historical rates. Translation adjustments arepresented as a component of shareholders’ equity and minority
interest.

8

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.

(H) Allowance for Doubtful Accounts
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 thepast.

#ANNUAL̲本文̲0910 04.9.10 3:45 PM ページ 9(I) Retirement Benefits

3. Short-Term Loans and Long-Term Debt

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.

The average interest rate for short-term bank loans
outstanding at March 31, 2004 is 3.2 %.

(J) Leases
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.

The long-term debt at March 31, 2004 and 2003, consists ofthe following :Millions of yen

2004
Straight bonds¥Long-term loans:
Due serially through 2022, with interest
rate of 3.17% to 6.10%
2,815
2,815
Less current portion
5¥2,810Thousands of
U.S.dollars

2003¥5,000

2004
$-

98
5,098
5,029
¥69

26,634
26,634
47$26,587

The aggregate annual maturities of long-term debt (including
the current portion) outstanding at March 31, 2004 are as
follows:
Year ending
March 31

Millionsof yenThousands of
U.S.dollars

2005
2006
2007
2008 and thereafter

¥5
4
3
2,803
¥2,815$47
38
28
26,521$26,634

4. Retirement Benefit
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, 2004 and 2003 for theCompanies’ defined benefit plans:Millions of yen

2004
2003
Retirement benefit obligation¥(60,202) ¥(57,056)
Plan assets
20,926
19,628
Unfunded retirement benefit obligation(39,276) (37,428)
Unrecognized net retirement
benefit obligation at transition
1,613
3,226
Unrecognized actuarial gain or loss 10,587
12,367
Unrecognized past service cost
1,780
731
Net retirement benefit obligation ¥(25,296) ¥(21,104)

Thousands of
U.S.dollars

2004$(569,609)
197,994(371,615)
15,262
100,170
16,842$(239,341)

The components of retirement benefit expenses for the years
ended March 31, 2004 and 2003 are as follows:
Millions of yen

2004
Service cost
¥3,354
Interest cost
1,353
Expected return on plan assets(177)
Amortization of net retirement
benefit obligation at transition
1,613
Amortization of actuarial gain or loss 1,363
Amortization of past service cost
218
Total
¥7,724

Thousands of
U.S.dollars

2003¥3,044
1,450
(243)

2004
$31,734
12,802(1,675)

1,613
965
91
¥6,92015,262
12,896
2,063$73,082

9

#ANNUAL̲本文̲0910 04.9.10 3:45 PM ページ 10

The assumption used in accounting for the above plans in2004 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. Assets Pledged as Collateral
The following assets are pledged as collateral at March 31,
2004 and 2003.
Millions of yen

2004
¥¥-

Investment securities
Land
Buildings and structures
Machinery and equipment

2003
¥16
533
78
43
¥670

Thousands of
U.S.dollars

2004
$$-

The obligations collateralized by the above assets at March
31, 2004 and 2003 are as follows :Millions of yen

2004
Short-term loans¥Long-term debts (including current portion)
¥-

2003
¥90
146
¥236

Thousands of
U.S.dollars

2004
$$-

6. 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, 2004 and 2003 are as
follows :Millions of yen

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

Thousands of
U.S.dollars

2004

2003

2004

¥10,894419
1,827¥9,161314
2,119$103,075
3,964
17,286

8. Non-Operating Income and ExpensesOther, Net“Other, net” for the years ended March 31, 2004 and 2003,
consists of the following:

Write-down and disposal of inventories
Loss on sales or disposals
of fixed assets
Foreign exchange loss
Write-down of investment securities
Profit on sales of investment securities
Other, net

Millions of yen

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

10

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

2003¥5,002
2,404
51,3552,474
18,694
6,538

Thousands of
U.S.dollars

2004$54,887
22,188568,001
24,666
179,847
65,806

Thousands of
U.S.dollars

2004
2003
¥(930) ¥(1,125)

2004$(8,799)

(510)
(597)
(460)
(597)
(547)
233
(967) (1,476)¥(2,867) ¥(4,109)(4,825)(4,352)(9,150)$(27,126)

9. Research and Development Expenses
Research and development costs charged to income for theyears ended March 31, 2004 and 2003 are as follows:
Millions of yen

2004¥25,687

2003¥24,477

Thousands of
U.S.dollars

2004$243,041

10. Income Taxes and Deferred Tax Assets
and Lii abilities
The following table summarizes the difference between thestatutory tax rate and the Company’s effective tax rate for theyears ended March 31, 2004 and 2003.
Statutory tax rate
Effect of :Different tax rates applied
to income of foreign subsidiaries
Expenses not deductiblefor income tax purposesTax effect, acknowledged from eliminationof consolidated unrealized gains
Corporation tax deduction forresearch expenditures
Other, net

2004
42.0%

2003
42.0%

(12.7)(10.3)

3.1

4.1(10.2)

-

(4.5)
4.5
22.2%

3.4
39.2%

Significant components of the Companies’ deferred tax assets
and liabilities at March 31, 2004 and 2003 are as follows:

7. Selling, General and Administrative Expenses
Major components of selling, general and administrative
expenses at March 31, 2004 and 2003 are as follows:

Millions of yen

Millions of yen

Deferred tax assets:
Accrued retirement benefits
Intangible assets
Accrued bonuses
Elimination of consolidated
unrealized gains
Other
Valuation allowanceThousands of
U.S.dollars

2004

2003

2004

¥10,176
7,112
3,244

¥9,091
7,080
2,958$96,282
67,291
30,694

1,211
4,891
26,634(401)
26,23326
6,771
25,926(619)
25,307

11,45846,277
252,002(3,794)248,208

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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

2004

2003

2004

508
435
159
1,102
¥25,131

528
371
152
1,051
¥24,256

4,807
4,116
1,504
10,427$237,781

11. 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, 2004 and 2003, 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

2004

2003

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

Machinery and equipment ¥255
Tools, furniture and fixtures 212
¥467

¥141
125
¥266

¥114
87
¥201

¥252
668
¥920

¥139
571
¥710

¥113
97
¥210

Thousands of U.S.dollars

2004
Machinery and equipment
Tools, furniture and fixtures

Acquisition
cost

Accumulated
depreciation

New bookvalue$2,413
2,006$4,419$1,3341,183$2,517$1,079823$1,902(1)Future minimum lease payments (including the interest
portion thereon) subsequent to March 31, 2004 for finance leasetransactions accounted for as operating leases are summarized
as follows:

Due within one year
Due after one year

Millions of yen

Thousands of
U.S.dollars

2004
¥69
132
¥201

2004
$653
1,249
$1,902

12. Securities(1) Information regarding marketable Other Securities as ofMarch 31, 2004 and 2003 is as follows:
Millions of yen

2004

2003

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

Securities whose carrying value exceeds their acquisition cost:
Stocks¥1,221 ¥2,342 ¥1,121¥820¥1,079 ¥259
Securities whose acquisition cost exceeds their carrying value:
Stocks
183
177
(6)
699
634
(65)
Total
¥1,404 ¥2,519 ¥1,115 ¥1,519¥1,713 ¥194
Thousands of U.S.dollars

2004
Acquisition
cost

Securities whose carrying
value exceeds their acquisition cost:
Stocks$11,553
Securities whose acquisition
cost exceeds their carrying value:
Stocks1,731
Total$13,284

Carrying
value

Unrealized
gain (loss)$22,159$10,606

1,675$23,834(57)$10,549(2) The proceeds from sales of securities for the years ended
March 31, 2004 and 2003 were ¥195 million ($1,845 thousand)and ¥463 million, respectively. The realized gains on those sales
for the year ended March 31, 2004 and 2003 were ¥42 million($397 thousand) and ¥233 million, respectively.
The realized losses on those sales for the year ended March
31, 2004 were ¥1 million ($9 thousand).

13. Derivative Financial Instruments
Fair value information of the derivative financial instruments
at March 31, 2004 and 2003 is summarized below according to
the disclosure requirements applicable to the respective year:
Millions of yen

2004
Contract
amountFair
value

Forward exchange contracts:
Sell U.S.dollars ¥1,057 ¥1,025

2003
Unrealized Contract
gains
amount

¥33

Fair
value

Unrealized
gains

¥-

¥-

¥-

Thousands of U.S.dollars(2) Lease payments for the years ended March 31, 2004 and2003, are ¥74 million ($700 thousand) and ¥124 million,
respectively.

2004
Forward exchange contracts:
Sell U.S.dollars

Contract
amountFair
value

Unrealized
gains$10,001$9,698$312(B) Operating leases
Future minimum lease payments subsequent to March 31,
2004 for noncancelable operating leases are summarized asfollows:

Due within one year
Due after one year

Millions of yen

Thousands of
U.S.dollars

2004
¥105
222
¥327

2004
$993
2,100
$3,093

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

#ANNUAL̲本文̲0910 04.9.10 3:45 PM ページ 12

14. 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

2004
2003
2004
Net Sales
Retail Information Systems
Unaffiliated customers¥161,297 ¥153,455 $1,526,133
Intersegment
2,897
3,234
27,410
Total
164,194 156,689
1,553,543
Document Processing & Telecommunication Systems
Unaffiliated customers
174,307 169,808
1,649,229
Intersegment
1,537
1,577
14,543
Total
175,844 171,385
1,663,772
Home Electric Appliances & Others
Unaffiliated customers
19,50918,404
184,587
Intersegment
418
298
3,955
Total
19,927
18,702
188,542
Eliminations(4,852) (5,109)(45,908)
Consolidated¥355,113 ¥341,667 $3,359,949
Operating Income
Retail Information Systems¥5,890¥3,345Document Processing & Telecommunication Systems
9,845
9,547
Home Electric Appliances & Others
(711)
(127)
Eliminations
10(24)
Consolidated¥15,034 ¥12,741$55,729
93,150(6,727)
94$142,246

Identifiable Assets
Retail Information Systems¥67,467 ¥72,747$638,348
Document Processing & Telecommunication Systems
136,609 120,671
1,292,545
Home Electric Appliances & Others
17,64020,047
166,903
Corporate and Eliminations
34,59534,206327,325
Consolidated¥256,311 ¥247,671 $2,425,121
Depreciation and Amortization
Retail Information Systems¥2,666¥3,268Document Processing & Telecommunication Systems
6,140
7,019
Home Electric Appliances & Others
1,433
1,121
Consolidated¥10,239 ¥11,408
Capital Expenditures
Retail Information Systems¥2,783¥2,666
Document Processing & Telecommunication Systems
5,246
6,565
Home Electric Appliances & Others 1,747
1,392
Consolidated¥9,776 ¥10,623(note)

12$25,225
58,094
13,559$96,878

2004

2003

Thousands of
U.S.dollars

2004

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

31,51833,513
298,21229,71632,232
281,162
61,23465,745579,374(67,091) (69,786)(634,791)¥355,113 ¥341,667 $3,359,949

Operating Income
Japan
North America
EuropeAsia and others
Eliminations
Consolidated¥ 8,375
87
892
5,532
148
¥15,034

Identifiable Assets
Japan
North America
EuropeAsia and others
Corporate and Eliminations
Consolidated¥181,267 ¥176,357 $1,715,082
1,668
1,762
15,78258,33452,296551,935
31,87230,657
301,561(16,830) (13,401)(159,239)¥256,311 ¥247,671 $2,425,121¥244,447 ¥239,184
36,65037,178281,097 276,362$2,312,868
346,769
2,659,637

4,583
22
4,605

4,263
0
4,263

43,363208
43,571

74,565703
75,26864,707376
65,083

705,506
6,652
712,158¥7,759
37
(505)
5,620
(170)
¥12,741$79,241823
8,440
52,342
1,400$142,246(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, Spain③Asia 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, 2004 and 2003, are ¥34,678 million($328,111 thousand) and ¥34,299 million, respectively.

(C) Net Sales by Region$26,332
Millions of yen

49,636
16,529$92,497

Corporate assets mainly consist of cash, time deposits, securities
and investments with financial institutions of the Company.
Corporate assets at March 31, 2004 and 2003, are ¥34,678 million($328,111 thousand) and ¥34,299 million, respectively.

2004
Net Sales
Japan
North America
EuropeAsia and others
Net sales(note)

2003¥183,433 ¥169,282
60,241
70,55084,813
76,633
26,62625,202¥355,113 ¥341,667

Thousands of
U.S.dollars

2004$1,735,577
569,978
802,469
251,925$3,359,949

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.

#ANNUAL̲本文̲0910 04.9.10 3:45 PM ページ 13

Supplemental Information
Non-Consolidated Balance Sheets
March 31, 2004 and 2003

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
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

Total fixed assets
Total assets

2004

2003

2004

¥33,255
33,571¥33,062
34,105$314,647
317,636

10,828
4,354
4,313
8,199
(289)
94,231

11,551
6,031
5,464
7,119
(270)
97,062

102,450
41,19640,80877,576(2,734)
891,579

4,857
20,12015,10454,813
1,098(71,357)
24,635

4,857
19,925
15,10354,9601,131(70,856)
25,12045,955
190,368
142,909518,620
10,389(675,154)
233,087

4,270
4,270

4,256
4,256

40,40140,401

41,222
3,395
15,7034,204(134)
64,39023,991
11,024
15,4604,760(452)
54,783390,028
32,122
148,576
39,777(1,268)609,235

93,295

84,159882,723¥187,526¥181,221$1,774,302

13

#ANNUAL̲本文̲0910 04.9.10 3:45 PM ページ 14

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

2004

2003

2004

¥37,9815
829
23,80362,618¥33,473
5,025
100
21,507
60,105$359,362
47
7,844
225,215
592,468

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

27
20,96869
21,06469
16,92380
17,072

255
198,392653
199,300

Total liabilities

83,682

77,177

791,768

39,971

39,971

378,191

52,984

52,983

501,315

8,770
4,442
301

6,785
5,208
539

82,97842,0292,848(2,624)-(1,442)(24,827)-

Total shareholders’ equity

103,844

104,044982,534

Total liabilities and shareholders’ equity¥187,526¥181,221$1,774,302

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:
7,663,687 shares in 2004
5,041,923 shares in 2003

14

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Supplemental Information
Non-Consolidated Statements of Operations and Retained Earnings
Years ended March 31, 2004 and 2003

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
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
Transfer from legal reserve
Cash interim dividends
Unappropriated retained earnings at end of year2004
¥245,288
174,082
71,20664,355
6,851

2003¥241,202
171,639
69,56363,318
6,245

2004$2,320,825
1,647,100
673,725
608,90364,822

3,037(138)(1,300)(3,250)
5,200

2,171
(171)
(1,300)(3,418)3,527

28,735(1,306)(12,300)(30,750)
49,201

814
858
3,528

(90)
1,284
2,333

7,702
8,118
33,3815,208
29(4,795)5,030

49,276274(1,415)(47)(2,014)(847)¥4,442(2,640)¥5,208(13,388)(445)(19,055)(8,014)$42,029

15

#ANNUAL̲本文̲0910 04.9.10 3:45 PM ページ 16

16

CORPORATE DATA

Board of Directors and Corporate Auditors
President and Chief Executive Officer (as of June 29, 2004)
Directors

1-1 Kanda Nishiki - cho, Chiyoda - ku, Tokyo, 101 - 8442 Japan
Tel : +81-3-3292-6223
Fax :+81-3-3292-6440
http : //www. toshibatec. co. jp/
Established : February 21, 1950
Employees : 4,300 (as of June 2004)
Common Stock : ¥39,971million (as of June 2004)
Stock Listing : Tokyo Stock Exchange (1st Section)◇Yoshihiro Maeda◇Yasuhiro Hatakeyama◇Tetsuo Satofuka

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

Corporate Auditors

MAIN CONSOLIDATED COMPANIES (as of March 31, 2004)

Teruo Miyamoto
Hiroshi Inazuka
Noriyuki Nakamura
Yuzo KatoTOSEI DENKI CO., LTD.
TEC PRECISION CO., LTD.
TEC APPLIANCE CO., LTD.
TEC ENGINEERING CORPORATIONTER CO., LTD.
TEC INFORMATION SYSTEMS CORPORATIONTOSHIBA TEC DOCUMENT PROCESSING SYSTEMS CO., LTD.
TOSHIBA TEC EUROPE IMAGING SYSTEMS S.A.
TEC SINGAPORE ELECTRONICS PTE. LTD.
TIM ELECTRONICS SDN. BHD.
TOSHIBA COPYING MACHINE (Shenzhen) CO., LTD.
P.T. TEC INDONESIATEC AMERICA, INC.
TOSHIBA TEC EUROPE RETAIL INFORMATION SYSTEMS S.A.
TOSHIBA TEC U.K. IMAGING SYSTEMS LTD.
TOSHIBA TEC GERMANY IMAGING SYSTEMS GmbHTOSHIBA TEC FRANCE IMAGING SYSTEMS S.A.
TOSHIBA TEC (H.K.) LOGISTICS & PROCUREMENT LIMITED