2OO2ANNUALREPORT
For the Year Ended March 31, 2002

Financial Highlights
Years ended March 31

Millions of yen

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

1998

1999

2000

¥293,631
13,348
8,124
197,092
101,870¥296,926
11,8398,030
229,181
115,094¥348,872
12,6984,150
241,931
126,927

Thousands of U.S. dollars

2001

2002

¥337,208 ¥337,204
6,923
5,090
(7,438)(5,136)
250,764
240,752
116,730
112,244Yen

Per share data:
Net income (loss) –Basic
DilutedTotal shareholders' equity¥30.3030.17
379.90¥29.3729.31
399.44¥14.40–440.50

1998

1999

2000

¥232,406
10,791
7,314
36,791
167,663
98,398¥228,485
6,286
4,593
39,971
200,453
108,198¥270,720
6,754
2,139
39,971
208,537
116,993¥(25.81)–405.11¥(17.83)–
389.582001

2002¥27.2827.24
4.00
366.96¥16.80–4.00
375.50

¥7.42
–
5.00
406.02$(0.134)–
2.924

Thousands of U.S. dollars¥264,619 ¥246,087
2,937
13(6,447)(5,874)39,971
39,971
211,991
185,633
110,022
103,466

Yen

Per share data:
Net income (loss) –Basic
DilutedCash dividends
Total shareholders' equity$2,530,612
38,199(38,544)
1,806,770
842,356
U.S. dollars

Millions of yen

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

2002

2002

$1,846,807
98(44,083)
299,969
1,393,118
776,480
U.S. dollars¥(22.37)–4.00
381.83¥(20.39)–0.00
359.11$(0.153)
–
0.000
2.695

The dollar amounts in this report represent translations of yen, for convenience only, at the rate of ¥133.25=US$1.00, theexchange rate prevailing on March 31, 2002.

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
This fiscal year, the Japanese economy saw exports suffer because of the worldwide decline in demand for IT as
well as the slowdown of the US economy. While capital investment and private consumption remained stagnant,the bad loan problem worsened, and in the latter half of the term, both the stock and bond markets showed aweak undertone. The circumstances surrounding the economy remained extremely severe.
Against this background, our Group focused its corporate strengths and efforts on the implementation of the,,“Toshiba TEC Action Plan in order to increase cost competitiveness, boost sales volumes and efficiency, andstreamline the workforce.
Owing to the increasingly severe retail environment, the Retail Information Systems Division suffered a drop insales as its key products failed to make advances. The Document Processing & Telecommunications Systems
Division reported some increase in sales after reinforcing its new product development and production base, andadding three European sale subsidiaries to take over business from Toshiba's subsidiaries as Toshiba TEC's
consolidated companies.
As a result of these measures, the overall net sales were ¥337,204 million, almost unchanged from the previous
year. As for profits and losses, the operating income stood at ¥5,090 million, 26% below fiscal year 2001, while
loss before income tax and minority interests was ¥6,570 million, which is 47% less than the previous year
owing to substantial reduction in both production and operating costs, although special expenses for early
retirement were added and there were cuts in sales prices. The net loss for this fiscal year reached a record
amount of ¥5,136 million.

PRODUCTS LINE UP (as of March, 2002)
Retail Information Systems

Document Processing & Telecommunication Systems

Main Products

Main Products•

Peripherals•Multi-Function
Copiers•Facsimile•Computer Peripheral Equipment•Specialized Terminals•

TOTAL POS Systems
Modular Open POS, Integrated Open POS, Hospitality
Open POS, Operation Unit
Electronic Cash Registers (ECRs)
Specialized ECRs, ECRs for hospitality storesElectronic scales/Automatic packaging devices
Counter-top electronic scales, label printers
Bar code system devices
Bar code printers/systems, 2-D code systems
Environmental equipment
Waste disposal equipment
Office equipment
Office and accounting computers<Supplies>
Distribution & retail supplies, office equipment supplies

•
•
•
•
•

2

Home Electric Appliances & Others

Main Products
cleaners, juicers, mixers, food processors•Vacuum
Healthequipment•Small motors•Components•

Consolidated Balance Sheets
March 31, 2002 and 2001

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

2002

2001

2002

¥37,768
59,35842,421
5,264
8,671(1,007)¥53,085
65,47544,468
4,247
6,484
(764)

$283,437
445,463
318,356
39,50565,073(7,556)

152,475

172,995

1,144,278

5,657
26,17421,751
65,975
1,740(84,368)
36,9295,597
23,31820,97564,404941(80,338)
34,89742,454
196,428
163,235
495,122
13,058(633,156)
277,141

2,780
5,539
8,319

2,064
5,307
7,371

20,863
41,56962,432

6,578
9,984
19,521
8,148(1,202)43,0291,237
10,52017,215
7,918(1,389)35,50149,36674,927
146,499
61,148(9,021)
322,919

88,277

77,769662,492¥240,752¥250,764$1,806,770

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

Total fixed assets
Total assets

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

3Millions of yen

LIABILITIES, MINORITY INTERESTS AND SHAREHOLDERS' EQUITYCurrent liabilities

Thousands of U.S. dollars

2002

2001

2002

¥48,708
19,12434
2,604
33,551¥59,451
7,641
8,048
5,632
32,053$365,538
143,520255
19,542
251,790104,021112,825

780,645

Total long-term liabilities

5,201
17,702691
23,594

5,180
14,758450
20,38839,032
132,848
5,186
177,066

Total liabilities

127,615

133,213957,711

893

821

6,703

Common stock
Authorized-1,000,000,000 shares
Issued- 288,145,704 shares

39,971

39,971

299,969

Capital surplus

52,98352,983397,621

Retained earnings
Unrealized holding gains on securities
Foreign currency translation adjustments
Less treasury stock

19,068
867
(637)
(8)

25,689397(2,309)(1)

143,099
6,507(4,780)(60)

112,244

116,730

842,356¥240,752¥250,764$1,806,770

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 payables and current liabilities

Total current liabilities
Long-term liabilities
Long-term debt (Notes 3 and 5)
Accrued retirement benefits (Note 4)
Other long-term liabilities

Contingent liabilities (Note 6)

Minority interests
Shareholders' equity

Total shareholders' equity
Total liabilities, minority interests and shareholders' equity

4

Consolidated Statements of Operations
Years ended March 31, 2002 and 2001

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
Expenses of extra pension for early retirement
Other, net (Note 7)

Loss before income taxes and minority interests
Income taxes:
Current
Deferred
Loss before minority interests
Minority interests

Net Loss

Thousands of U.S. dollars

2002¥337,204
216,550
120,654
115,564
5,090

2001¥337,208
223,678
113,530
106,607
6,923

2002$2,530,612
1,625,141
905,471867,272
38,199968(777)(1,613)(4,633)(5,605)

1,075
(513)
(16,907)–(2,879)7,265(5,831)(12,105)(34,769)(42,064)(6,570)(12,301)(49,305)

1,851(3,350)

6,302(11,211)

13,891(25,140)(5,071)(7,392)(38,056)

65¥(5,136)

46¥(7,438)

488$(38,544)

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

5Consolidated Statements of Shareholders' Equity
March 31, 2002 and 2001

Millions of yen

Thousands of U.S. dollars

2002

2001

2002

¥39,971¥39,971¥39,971¥39,971$299,969$299,969¥52,983¥52,983¥52,983¥52,983$397,621$397,621¥25,689(5,136)(1,152)
0
(430)
–
37
25
35
¥19,068¥33,975(7,438)
(829)
(51)
–
32
–
–
–
¥25,689$192,788(38,544)(8,645)0(3,228)
–
277
188
263
$143,099

¥397
470
¥867

¥–
397
¥397

$2,9793,528$6,507¥(2,309)
1,672¥(637)¥(3,992)
1,683¥(2,309)$(17,328)
12,548$(4,780)

¥(1)
(7)
¥(8)

¥(2)
1
¥(1)

$(8)
(52)
$(60)

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

Capital surplus
Balance at beginning of year
Balance at end of year

Retained earnings
Balance at beginning of year
Net loss
Cash dividends paid
Bonuses to directors and statutory auditors
Adjustment of prior periods inclusion in consolidation of subsidiaries
Increase from inclusion in consolidation of subsidiaries
Increase from exclusion of subsidiary from consolidation
Increase from exclusion of affiliated company from equity method
Increase from merger of non-consolidated subsidiary
Balance at end of year

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

Foreign currency translation adjustments
Balance at beginning of year
Net change during the period
Balance at end of year

Less treasury stock
Balance at beginning of year
Net change during the period
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, 2002 and 2001

Millions of yen

Thousands of U.S. dollars

2002

2001

2002

¥(6,570)¥(12,301)$(49,305)

11,901
(71)
2,940
(968)
777
651
(254)
191
889
4,633

12,881600
4,625(1,075)
513
481
(759)
–
717
–

89,313(533)
22,064(7,265)
5,831
4,886(1,906)1,433
6,672
34,76917,836
10,673(15,246)768
28,150983(752)(4,633)(7,861)
15,887(5,457)(1,488)
3,976
215
2,928
936
(655)
–
(5,119)(1,910)133,854
80,098(114,417)
5,764
211,258
7,377(5,644)(34,769)(58,994)
119,228122(12,112)(2,266)(1,036)564(8,200)
(579)
319
544
(22,644)

1,185(7,513)(1,829)
(62)
2,210
–
(92)
1,868
1,319
(2,914)916(90,897)(17,006)(7,775)
4,233(61,538)(4,345)2,394
4,083(169,935)

383
100
(77)
(8,017)(1,168)16(8,763)361(15,159)
53,085

5,244
–
(220)
–
(878)
38
4,184
485
(155)
53,215

2,874
750
(578)
(60,165)(8,765)
120(65,764)
2,709(113,762)
398,386(213)
55–¥37,768––25¥53,085(1,599)412–$283,437

Cash flows from operating activities
Loss before income taxes and minority interests
Adjustment to reconcile income (loss) before income taxes andminority interests to net cash provided by operating activities:
Depreciation and amortization
Reversal of 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
Loss on sales of investment securities
Loss from revaluation of investment securities and other asset
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

Net cash provided by (used in) 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 for business transfer
Payments of loan receivable
Proceeds from loan receivable
Other

Net cash used in investing activities
Cash flows from financing activities
Proceeds of short-term loans, net
Proceeds of long-term loans
Repayments of long-term debt
Redemption of convertible bonds
Payments of dividend
Other

Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents

Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase (Decrease) in cash and cash equivalents resulting fromsubsidiary exclusion from consolidation
merge of non-consolidated subsidiarysubsidiaries inclusion in consolidation

Cash and cash equivalents at end of year

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

translations are recognized in current net income, unlesshedged by foreign exchange contracts.

The consolidated financial statements of TOSHIBA TECCORPORATION have been prepared in accordance withaccounting principles and practices generally accepted inJapan, which may differ in certain respects from accounting
principles and practices generally accepted in countries andjurisdictions other than Japan.
The accompanying consolidated financial statements arecompiled from the financial statements filed with the
Director General of the Kanto Local Finance Bureau as
required under the Japanese Securities and Exchange Law.
Certain reclassifications have been made to present theconsolidated financial statements in a format which isfamiliar to readers outside Japan. The consolidated
statements of shareholders' equity have been prepared forthe purpose of inclusion in this report, although suchstatements are not customarily prepared in Japan.
Solely for the convenience of the reader, the consolidated
financial statements have been presented in U.S. dollars bytranslating Japanese yen amounts at the exchange rate of¥133.25=US$1.00 prevailing as of March 31, 2002.

(C) Appropriation of Retained Earnings

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 parent company (the “Company ) and its
significant majority-owned subsidiaries (together the,,“Companies ). For the years ended March 31, 2002 and2001, accounts of 23 and 21 subsidiaries are consolidated
respectively. All significant inter-company transactions andaccounts are eliminated.
All assets and liabilities of the subsidiaries are revaluatedon acquisitions, if applicable, and the excess of cost overunderlying net assets at the date of acquisition are charged
to income as immaterial.
The investments in remaining unconsolidated subsidiaries
or affiliated companies are stated at cost.
For the year ended March 31, 2002, investment inAdvanced Peripherals Technology Inc. formerly accounted
by the equity method is excluded from the consolidation as
the company has sold some of its shares. There are nocompanies included in the consolidation on equity basis in
the year ending March 31, 2002.
The main consolidated companies are presented on thelast page of this report.

(B) Foreign Currency Translation
Revenue and expense accounts of the foreign subsidiaries
are translated into yen using the average rate during theyear. The balance sheet accounts, except for the components
of shareholders' equity, are translated at the rates in effect atthe balance sheet date. The components of shareholders'equity are translated at their historical rates. Translation
adjustments are presented as a component of shareholders'equity and minority interests.
Generally gains and losses on foreign currency
8

Under the Commercial Code of Japan, the appropriationof retained 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.

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

(E) Research and Development Expenses
Research and development expenses are charged toincome as incurred.

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

(G) Investment Securities,,
Marketable securities classified as “Other securities arecarried at fair value with changes in unrealized holding gainor loss, net of the applicable income taxes, included directly
in shareholders' equity.
,,
Non-marketable securities classified as “Other securities
are carried at cost, cost being determined by the moving
average method.
Cost of securities sold is determined by the moving
average method.

(H) Inventories
Inventories are generally stated at cost determined by theweighted average method for finished goods and by the lastpurchase cost method for work-in-process and raw
materials.

(I) Property, Plant and Equipment andDepreciation
Property, plant and equipment are stated at acquisitioncost. Material improvements are capitalized, but repair andmaintenance including minor improvements are charged toincome.
Depreciation of property, plant and equipment isgenerally computed by the declining-balance method for theCompany and its domestic subsidiaries, and by the straightline method for the overseas subsidiaries, at rates based on
estimated useful lives of the respective assets. The useful
lives of principal property, plant and equipment aresummarized as follows:
Buildings and structures
15 to 38 years
Machinery and equipment 5 to 11 years
Tools, furniture and fixtures 2 to 6 years

(J) Intangible Assets and Amortization
Intangible assets are amortized by the straight-line
method over their estimated useful lives.
Goodwill recognized through purchase is amortized by
the straight-line method over 5 to 15 years period.

(K) Leases
The Companies lease certain equipment under noncancelable lease agreements referred to as finance leases.
Finance leases other than those, which transfer theownership of the leased property to the Companies, areaccounted for as operating leases.

(L) Retirement Benefits
Upon retirement or termination of employment,
employees of the Company and its domestic subsidiaries are
generally entitled to lump-sum payments determined byreference to their current basic rate of pay, length of service
and conditions under which the termination occurs.
The Company and certain domestic subsidiaries accrue
the liability and make contributions to a non-contributory,,
tax-qualified pension plans (the “Funded Plan ) for
employees' severance indemnities payable, as part of theexisting retirement plan.
Retirement benefits for employees are provided mainly at
an amount calculated based on the retirement benefit
obligation and the fair value of the pension plan assets, asadjusted for unrecognized actuarial gain or loss.

(M) Income Taxes, Deferred Tax Assets andLiabilities
Deferred tax assets and liabilities are determined based on
the differences between financial reporting and the tax basesof the assets and liabilities and are measured using theenacted tax rates and laws which will be in effect when the
differences are expected to reverse.

Millions of yen
2002

2001

Convertible bonds:
Due 2002, with interest rate of 2.2%¥–
Straight bonds:
Due 2004, with interest rate of 3.0%
5,000Long-term loans:
Due serially through 2022, with interest
rate of 1.20% to 5.80%
235
5,235
Less current portion
34¥5,201The Company and certain subsidiaries have entered into
forward exchange contracts to hedge the foreign currencytransactions related to foreign accounts receivable andpayable on a consistent basis.
Derivative financial instruments are carried at fair value
with changes in unrealized gain or loss charged or credited
to operations, except for those which meet the criteria fordeferral hedge accounting under which unrealized gain orloss is deferred as an asset or a liability. Receivables andpayables hedged by qualified forward foreign exchange
contracts are translated at the corresponding foreignexchange contract rates.

$–

5,000

37,523211
13,228
8,048¥5,1801,764
39,287
255$39,032

The aggregate annual maturities of long-term debt(including the current portion) outstanding at March 31,
2002 are summarized as follows:
Millions Thousands ofof yenU.S.dollars

Year ending March 31

2003
2004
2005
2006 and thereafter

¥34
5,107
25
69
¥5,235The average interest rate for short-term bank loans
outstanding at March 31, 2002 is 4.0%.
The long-term debt at March 31, 2002 and 2001, consistsof the following:$255
38,326
188
518$39,287

4. Retirement Benefit
The Company and its domestic subsidiaries havedefined benefit plans, i.e., Funded Plans and lump-sum
payment plans, covering substantially all employees whoare entitled to lump-sum or annuity payments, the amountsof which are determined by reference to their basic rates ofpay, length of service, and the conditions under which
termination occurs.
The following table sets forth the funded and accrued
status of the plans, and the amounts recognized in the
consolidated balance sheet as of March 31, 2002 and 2001
for the Companies' defined benefit plans:
Thousands of
2002

Retirement benefit obligation¥(57,689)
Plan assets
25,043
Unfunded retirement benefit obligation (32,646)
Unrecognized net retirement
benefit obligation at transition
4,838
Unrecognized actuarial gain or loss 9,283
Unrecognized past service cost823
Net retirement benefit obligation ¥(17,702)

2001

U.S. dollars
2002¥(53,471) $(432,938)
29,312
187,940(24,159) (244,998)
6,450
36,3082,951
69,666–
6,176¥(14,758) $(132,848)

The components of retirement benefit expenses for theyear ended March 31, 2002 and 2001 are outlined asfollows:
Thousands ofMillions of yen
2002

3. Short-Term Loans and Long-Term Debt

2002

¥8,017

Millions of yen(N) Derivative Financial Instruments

Thousands of
U.S.dollars

Service cost
¥2,552
Interest cost
1,785
Expected return on plan assets(258)
Amortization of employee
net transition obligation
1,613
Amortization of actuarial gain or loss 295
Amortization of past service cost
91
Total
¥6,078

U.S. dollars

2001

2002

¥2,4081,721(321)$19,152
13,396(1,936)

14,8202,087–¥20,715

12,105
2,214
683$45,6149

The assumption used in accounting for the above plans in2002 were as follows:
Discount rates
2.5%~2.8%
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, 2002 and 2001.
Thousands ofMillions of yen

Investment securities
Land
Buildings and structures
Machinery and equipment

2002

2001

¥24
533
84
53
¥694

¥89
2,924
2,153
67
¥5,233

U.S. dollars
2002

$180
4,000
630
398
$5,208The obligations collateralized by the above assets at
March 31, 2002 and 2001, are as follows:
Thousands ofMillions of yen

Short-term loans
Long-term debts
Convertible bonds

2002

2001

¥135
164
–
¥299

¥298
82
8,017
¥8,397

U.S. dollars
2002$1,013
1,231–$2,244

6. Contingent Liabilities
The Companies are contingently liable mainly withrespect to discounted or endorsed trade notes receivable andguarantees on loans payable in ordinary course of business.
Contingent liabilities at March 31, 2002 and 2001, are as
Thousands offollows:
Millions of yen
2002

Trade notes receivablediscounted or endorsed
Guarantees on loans and others

2001¥8,511 ¥13,128
2,399
2,687

U.S. dollars
2002$63,872
18,004

7. Non-Operating Income andExpenses-Other, Net

Millions of yen
2001

Thousands of
U.S. dollars

Millions of yen
2002

2001

Thousands of
U.S. dollars
2002¥25,291 ¥27,650 $189,801

9. Income Taxes and Deferred Tax Assets
and Liabilities
The effective tax rate reflected in the consolidated
statements of operations for the year ended March 31, 2002
and 2001, differs from the statutory tax rate for thefollowing reasons:Statutory tax rate
Effect of:Different tax rates applied toincome of foreign subsidiaries
Expenses not deductible forincome tax purposes
Eliminations of cash dividend
from subsidiaries
Valuation allowance for deferred tax assets
Valuation allowance for eliminatedinter-company transactions
Other,net

2002

2001

42.0%

42.0%

5.5

5.8

(4.0)

(2.2)

–
(0.4)

(2.2)
(3.4)

(16.3)
(4.0)
22.8%

–
(0.1)
39.9%

Significant components of the Companies' deferred tax
assets and liabilities at March 31, 2002 and 2001, are as
follows:
Millions of yen
2002

Deferred tax assets:
Accrued retirement benefits
Intangible assets
Tax related loss carry forward
Accrued bonuses
Deferred assets
Other

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

2002

Write-down and disposal of inventories ¥(1,204) ¥(614) $(9,036)
Expenses for business center integration (910)– (6,829)
Write-down of investment securities(889)(377) (6,672)
Loss from revaluationof investment in golf membership
–
(861)
–
Loss on sales or disposalof property, plant and equipment(651)(481) (4,886)
Foreign exchange loss
(358)(38) (2,687)
Profit on sales of affiliate securities
254
–
1,906
Other, net(1,847)(508) (13,860)¥(5,605) ¥(2,879) $(42,064)
10

Research and development expenses charged to income
for the years ended March 31, 2002 and 2001 are as follows:

Valuation allowance,,“Other, net for the years ended March 31, 2002 and2001, consists of the following:2002

8. Research and Development Expenses

Net deferred tax assets

2001

Thousands of
U.S. dollars
2002¥8,674 ¥9,023 $65,096
6,883
4,570
51,655
4,337–
32,5482,243
1,967
16,833
1,926
3,110
14,4543,062
4,505
22,97927,125 23,175 203,565(532)(587) (3,992)
26,593 22,588 199,573
564
586
4,233
629
283
4,720
615
257
4,616
1,808
1,126
13,569¥24,785 ¥21,462 $186,004

10. Leases(A) Finance leases
The following pro forma amounts represent theacquisition cost, accumulated depreciation and net bookvalue of leased property as of March 31, 2002 which would
have been reflected in the balance sheet if finance lease

Millions of yen

accounting had been applied to the finance leasetransactions currently accounted for as operating leases:

Machinery andequipment
Tools, furnitureand fixtures

Millions of yen

Thousands of U.S. dollars

Acquisition Accumulated New bookcost
depreciation
value

Acquisition Accumulated New bookcost
depreciation
value

¥71

¥49

¥22

1,617 1,422¥1,688 ¥1,471

$533

$368

(1) Future minimum lease payments (including theinterest portion thereon) subsequent to March 31, 2002 forfinance lease transactions accounted for as operating leases
are summarized as follows:
Millions of yen

Thousands of U.S. dollars

2002

2002

¥102
115
¥217

$765
863
$1,628(2) Lease payments for the years ended March 31, 2002
and 2001, are ¥214 million ($1,606 thousand) and ¥247
million, respectively.

(B) Operating leases
Future minimum lease payments subsequent to March 31,
2002 for noncancelable operating leases are summarized asfollows:
Millions of yen

Thousands of U.S. dollars

2002

2002

¥129
383
¥512

$968
2,874
$3,842

Due within one year
Due after one year

(1) Information regarding marketable Other Securities asof March 31, 2002 is as follows:
Millions of yen
Carrying
value

Unrealizedgain(loss)

Due in one
year or lessDue after one
year throughfive years

¥–
¥–

¥10
¥10

$–
$–

$75
$75

StocksTotal

12. Supplementary Cashflow Information(1) Summary of transferred assets and liabilities ofcompany excluded from the consolidation throughliquidation as of April 1, 2001.
Millions of yen

Current Assets
Fixed Assets
Total Assets
Current Liabilities
Long-term Liabilities
Total Liabilities

Thousands of U.S. dollars

2002

2002

¥1,176
13
1,189
1,437
16
1,453

$8,82598
8,923
10,784120
10,904(2) Summary of transferred assets and liabilities of thecompany included in the consolidation through merger as ofApril 1, 2001.
Current Assets
Fixed Assets
Total Assets
Current Liabilities
Long-term Liabilities
Total Liabilities

Millions of yen

Thousands of U.S. dollars

2002

2002

¥87
14
101
71
10
81

$653
105
758
533
75
608

(3) Summary of assets and liabilities of increased throughacquisition of business transfer from non-consolidated
company as of April 1, 2001.
Millions of yen

11. Securities

Acquisition
cost

Due after one
year throughfive years$165

195 12,135 10,672 1,463¥217 $12,668 $11,040 $1,628

Due within one year
Due after one year

Thousands of U.S. dollars

Due in one
year or lessCurrent Assets
Fixed Assets
Total Assets
Current Liabilities
Total Liabilities

Thousands of U.S. dollars

2002

2002

¥19,132
5,945
25,077
16,877
16,877$143,580
44,615
188,195
126,657
126,657

Thousands of U.S. dollars
Acquisition
cost

Carrying
value

Unrealizedgain(loss)

Securities whose carrying value exceeds their acquisition cost:
Stocks¥717 ¥1,051 ¥334 $5,381 $7,887 $2,506
Securities whose acquisition cost exceeds their carrying value:
Stocks1,493 1,183(310) 11,205 8,878 (2,327)
Total¥2,210 ¥2,234¥24 $16,586$16,765 $179

(2) Sales of securities amount to ¥310 million ($2,326
thousand) with an aggregate loss of ¥191 million ($1,433
thousand) for the year ended March 31, 2002.
(3) The redemption schedule for securities with maturity
dates classified as Other Securities as of March 31, 2002 issummarized as follows:

13. Segment Information(A) Business Segment
The Companies operate in three business areas asfollows:(1) Retail Information Systems
point of sales systems
electronic cash registers
electronic scales
office equipment(2) Document Processing & Telecommunication Systems
multi-function-peripherals
copiers
facsimilecomputer peripheral equipment(3) Home Electric Appliances & Others
home electric appliances
components
11Thousands of
U.S. dollars

Millions of yen
2002

2001

2002

Net Sales
Retail Information Systems
Unaffiliated customers¥152,786 ¥162,966 $1,146,612
Intersegment
2,353
1,761
17,659Total
155,139
164,727 1,164,271
Document Processing & Telecommunication Systems
Unaffiliated customers
165,589
153,750 1,242,694
Intersegment
2,075
3,923
15,572
Total
167,664
157,673 1,258,266
Home Electric Appliances & Others
Unaffiliated customers
18,83020,492
141,313Intersegment
110
77
826
Total
18,94020,569142,139
Eliminations(4,539)(5,761)(34,064)
Consolidated¥337,204 ¥337,208 $2,530,612
Operating Income
Retail Information Systems¥(844)
Document Processing &Telecommunication Systems
5,859
Home Electric Appliances & Others
33
Eliminations
42
Consolidated¥5,090Identifiable Assets
Retail Information Systems¥77,049
Document Processing &Telecommunication Systems 117,425
Home Electric Appliances & Others 20,720
Corporate and Eliminations
25,558
Consolidated¥240,752
Depreciation and Amortization
Retail Information Systems¥3,355Document Processing &Telecommunication Systems
7,370
Home Electric Appliances & Others 1,176
Consolidated¥11,901
Capital Expenditures
Retail Information Systems¥3,492Document Processing &Telecommunication Systems 10,488
Home Electric Appliances & Others 1,720
Consolidated¥15,700¥753$(6,334)

5,747
381
42
¥6,923

43,970248
315$38,199¥88,026$578,229

94,392881,239
19,613
155,497
48,733
191,805¥250,764 $1,806,770¥3,939$25,178

7,521
1,421
¥12,881

55,3108,825$89,313¥3,340$26,206

6,000
1,038
¥10,378

78,70912,908$117,823

North America
Unaffiliated customers
Intersegment
Total
EuropeUnaffiliated customers
Intersegment
Total
Asia
Unaffiliated customers
Intersegment
Total
Eliminations
Consolidated
Operating Income
Japan
North America
EuropeAsia
Eliminations
Consolidated
Identifiable Assets
Japan
North America
EuropeAsia
Corporate and Eliminations
Consolidated

4,151
1
4,152

4,858
6
4,864

31,152
8
31,16060,030300
60,33021,133416
21,549450,5072,251
452,758

30,23029,196
226,867
26,88926,356
201,793
57,11955,552428,660(62,117)(46,806) (466,169)¥337,204 ¥337,208 $2,530,612¥1,270
(41)
73
4,305
(517)
¥5,090¥3,698
2
162
3,336
(275)
¥6,923$9,531(308)
548
32,308(3,880)$38,199¥184,282 ¥181,939 $1,382,979
1,599
2,426
12,00044,183
14,963
331,580
26,28730,407
197,276(15,599)
21,029 (117,065)¥240,752 ¥250,764 $1,806,770(note 1) Criteria of geographical segmentation and the name ofcountries or areas mainly included in each segment are as
follows:(1) Criteria:geographical closeness(2) Countries & Areas
1North America U.S.A., Canada
2Europe
U.K., France, Germany, Belgium, Spain
3Asia
Singapore, Malaysia, Indonesia, China(note 2) Corporate assets mainly consist of cash, time deposits,
securities and investments with financial institutions of theCompany.
Corporate assets at March 31, 2002 and 2001, are ¥25,742
million (US$193,186 thousand) and ¥49,169 million,
respectively.

(C) Net Sales by Region(note) Corporate assets mainly consist of cash, time deposits,
securities and investments with financial institutions of theCompany.
Corporate assets at March 31, 2002 and 2001, are ¥25,742
million (US$193,186 thousand) and ¥49,169 million,
respectively.

(B) Geographic Segments
Millions of yen
2002

Net SalesJapan
Unaffiliated customers
Intersegment
Total

12

¥242,793
34,927
277,720

2001

Thousands of
U.S. dollars

Millions of yen
2002

Net Sales
Japan
North America
EuropeAsia and Others
Net sales¥176,154
66,44073,843
20,767¥337,204

2001

Thousands of
U.S. dollars
2002¥187,067 $1,321,981
75,807498,61253,957554,169
20,377
155,850¥337,208 $2,530,612

2002¥282,020 $1,822,086
20,029262,117
302,049 2,084,203(note) Net sales by region are determined based upon the locationsof the customers. Therefore, this information is different fromthe net sales for geographic segments, which are determinedbased upon where the sales originated.

Supplemental Information
Non-Consolidated Balance Sheets
March 31, 2002 and 2001

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

Thousands of U.S. dollars

2002

2001

2002

¥24,972
37,135¥46,899
49,357$187,407
278,687

15,129
7,272
4,215
8,632
(197)

17,191
8,710
2,585
8,261
(221)

113,538
54,574
31,63264,779(1,478)97,158132,782

729,139

4,857
19,642
14,66054,621
1,440(68,442)
26,778

4,868
18,06015,162
54,114300(66,300)
26,20436,450147,407110,019
409,914
10,807(513,636)
200,961

800
4,104
4,904

1,600
4,270
5,870

6,004
30,79936,80324,306
9,832
17,741
6,082(1,168)56,793

15,817
10,354
15,343
6,982(1,361)47,135

182,40973,786133,141
45,644(8,765)426,21588,47579,209663,979¥185,633¥211,991$1,393,118

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
Subsidiaries and affiliates
Other
Deferred income taxes
Other investments and other assets
Allowance for doubtful accounts

Total fixed assets
Total assets

13Millions of yen

LIABILITIES AND SHAREHOLDERS' EQUITYCurrent liabilities

Thousands of U.S. dollars

2002

2001

2002

¥42,979
27
53
19,849¥51,639
8,048
3,483
21,197$322,544
203
398
148,960

62,90884,367472,105

5,098
14,08873
19,25982,167

5,136
12,36997
17,602
101,969

38,259105,726
548
144,533
616,638

39,971
52,9832,640

39,971
52,9832,524

299,969
397,621
19,812

11,816(4,795)859(8)11,850
2,313
382
(1)

88,675(35,985)
6,448
(60)

Total shareholders' equity

103,466

110,022776,480

Total liabilities and shareholders' equity¥185,633¥211,991$1,393,118

Trade notes and accounts payable
Current portion of long-term debt
Accrued income taxes
Other payables and current liabilities

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

Total long-term liabilities
Total liabilities

Shareholders' equity
Common stock
Authorized-1,000,000,000 shares
Issued-288,145,704 shares
Capital surplus
Legal reserve
Retained earnings:
Voluntary reserve
UnappropriatedUnrealized holding gains on securities
Less treasury stock14

Supplemental Information
Non-Consolidated Statements of Operations and Retained Earnings
Years ended March 31, 2002 and 2001

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
Expenses of extra pension for early retirement
Other, net

Loss before income taxes
Income taxes:
Current
Deferred

Net loss
Unappropriated retained earnings at beginning of year
Transfer from voluntary reserve
Appropriation of retained earnings:
Transfer to legal reserve
Cash dividends paid
Bonuses to directors and statutory auditors
Transfer to voluntary reserve
Unappropriated retained earnings (undisposed deficit)
at end of year

Thousands of U.S. dollars

2002¥246,087
180,933

2001¥264,619
192,388

2002$1,846,807
1,357,846

65,154
65,141

72,231
69,294

488,961
488,863

13

2,937

98

2,116
(348)
(1,300)(4,600)(5,886)(10,005)

3,120
(415)
(13,662)–(3,083)(11,103)

15,880(2,612)(9,756)(34,522)(44,173)(75,085)242(4,373)(5,874)

4,901(9,557)(6,447)

1,816(32,818)(44,083)2,313
34

12,71937

17,359255(116)(1,152)
–
–

(91)
(865)
(40)
(3,000)(871)(8,645)––¥(4,795)¥2,313$(35,985)

15

Shin Nihon & Co.

Certified Public Accountants
Hibiya Kokusai Bldg.
2-2-3, Uchisaiwai-cho,
Chiyoda-ku, Tokyo 100-0011
C.P.O. Box 1196, Tokyo 100-8641
Phone: 03 3503-1100
Fax: 03 3503-1197

Report of Independent Certified Public Accountants

The Board of Directors
TOSHIBA TEC CORPORATION
We have audited the consolidated balance sheets of TOSHIBA TEC CORPORATION and consolidated subsidiaries as ofMarch 31, 2002 and 2001, and the related consolidated statements of operations, shareholders' equity, and cash flows for theyears then ended, all expressed in Japanese yen. Our audits were made in accordance with auditing standards, procedures andpractices generally accepted and applied in Japan and, accordingly, included such tests of the accounting records and such otherauditing procedures as we considered necessary in the circumstances.
In our opinion, the accompanying consolidated financial statements referred to above, expressed in yen, present fairly the
consolidated financial position of TOSHIBA TEC CORPORATION and consolidated subsidiaries at March 31, 2002 and 2001,
the consolidated results of their operations and their cash flows for the years then ended, in conformity with accounting
principles and practices generally accepted in Japan consistently applied on a consistent basis.
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March 31, 2002,
are presented solely for convenience. Our audit also included the translation of Japanese yen amounts into U.S. dollar amounts
and, in our opinion, such translation has been made on the basis described in Note 1 to the consolidated financial statements.

Shin Nihon & Co.
Tokyo, Japan
June 27, 2002

See Note 1 to the consolidated financial statements which explains the basis of preparing the consolidated financial statementsof TOSHIBA TEC CORPORATION under Japanese accounting principles and practices.

16

CORPORATE DATA
1-1, Kanda Nishiki-cho, Chiyoda-ku, Tokyo, 101-8442 Japan
Tel : (03)3292-6223
Fax : (03)3292-6440
http : //www. toshibatec. co. jp/
Established : February 21, 1950
Employees : 4,600 (as of June 2002)
Common Stock : ¥39,970 million (as of June 2002)
Stock Listing : Tokyo Stock Exchange (1st Section)
Board of Directors and Corporate
Auditors (as of June 27, 2002)
President and Chief Executive Officer＊Ken-ichi Mori
Director＊Yasuhiro Hatakeyama＊Tetsuo Satofuka＊Hitoshi Yoshii
Tetsuo Hashimura
Masahiro Hirata
Haruo Asada
Yoshihiro Maeda
Corporate Auditor
Shunki Yatsunami
Masaru Yoshikawa
Teruo Miyamoto＊Representative Director

Hiroshi Igashira
MAIN CONSOLIDATED COMPANIES(as of March 31, 2002)
FUJI KEN CO., LTD.
TOSEI DENKI CO., LTD.
TEC IZU DENSHI CO., LTD.
TEC SHOJI CO., LTD.
TEC ENGINEERING CO., LTD.

TEC INFORMATION SYSTEMS CORPORATIONTOSHIBA TEC DOCUMENT PROCESSING SYSTEMS CO.,LTDTEC SINGAPORE ELECTRONICS PTE. LTD.
TIM ELECTRONICS SDN. BHD
TOSHIBA TEC EUROPE IMAGING SYSTEMS S.A.
TOSHIBA COPYING MACHINE(Shenzhen)CO.,LTD.
P.T. TEC INDONESIATOSHIBA TEC U.K. IMAGING SYSTEMS LTD.
TOSHIBA TEC GERMANY IMAGING SYSTEMS GmbHTOSHIBA TEC FRANCE IMAGING SYSTEMS S.A.
TEC AMERICA, INC.
TEC CANADA INC.
TOSHIBA TEC EUROPE RETAIL INFORMATION SYSTEMS S.A.