2003
For the Year Ended March 31, 2003

Financial Highlights
Years ended March 31

Millions of yen

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

1999

2000

¥296,926
11,8398,030
229,181
115,094¥348,872
12,6984,150
241,931
126,927

2001

Thousands of U.S. dollars

2002

2003

¥337,208 ¥337,204 ¥341,667
6,923
5,090
12,741(7,438)(5,136)
3,947
250,764
240,752
247,671
116,730
112,244
114,863Yen

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

1999

2000¥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

2001¥(17.83)–
389.58¥13.57–405.492002

2003¥16.804.00
375.50¥7.42
5.00
406.02¥264,619 ¥246,087 ¥241,202
2,937
13
6,245
(6,447)(5,874)
2,333
39,971
39,971
39,971
211,991
185,633
181,221110,022
103,466
104,044¥(22.37)4.00
381.83$0.113–
3.373
Thousands of U.S. dollars

Yen

Per share data:
Net income (loss) –Basic
Cash dividends
Total shareholders’ equity$2,842,488
105,998
32,8372,060,491
955,599
U.S. dollars

Millions of yen

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

2003

2003

$2,006,672
51,955
19,410332,537
1,507,662
865,590
U.S. dollars¥(20.39)0.00
359.11¥7.99
5.00
367.35$0.0660.042
3.056

The dollar amounts in this report represent translations of yen, for convenience only, at the rate of ¥120.20=US$1.00, theexchange rate prevailing on March 31, 2003.

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
During fiscal year 2002, the Japanese economy continued to suffer from the negative effect of stagnating
investment and private spending, falling consumer prices, a sluggish stock market, and an increasing volume ofbad loans, although earnings showed some signs of improvement, mainly in the manufacturing sector. The
downward trend of the export market was largely due to the deceleration of the U.S. and European economies.
The situation in Iraq also made prospects uncertain.
Against this background, our Group made efforts to enhance marketability and sales, increase its costcompetitiveness, improve capital efficiency and streamline its workforce. These measures constitute the basic
policies in our Mid-term Management Plan that aims at building a highly profitable Group through structuralreform, as well as the promotion of innovation and creativity. Each division focused on the development andsales promotion of high value-added products with enhanced market competitiveness.
Overall net sales reached ¥341.667 billion, a 1% increase over the previous year. As for profit and loss,
operating income stood at ¥12.741 billion, 150% higher than in fiscal year 2001. Income before tax andminority interest amounted to ¥6.842 billion, an increase of ¥13.412 billion compared with the previous year,
owing to the reduction in both fixed and operating costs, and the effect of the exchange rate, which helped thenet income for this fiscal year reach ¥3.947 billion, an advance of ¥9.083 billion over the previous year.

PRODUCTS LINE UP (as of March, 2003)
Retail Information Systems

Document Processing & Telecommunication Systems

Main Products

Main Products•

Digital multi-function peripherals (MFP), digital full-color
MFP, analog copiers, plain paper facsimile machines,
thermal paper facsimile machines, specialized Terminals

POS Systems:
Systems for mass merchandiser headquarters and stores,
systems for shopping centers, systems for convenience
stores, systems for department stores, systems for specialty
stores, systems for catering establishments, e-businesssolutionsElectronic cash registers:
Electronic cash registers for specialty stores and generalretailersElectronic scales:
Electronic scales for commercial use, label printers
equipped with electronic scale, automatic compact packing
machineBar code systems:
Bar code printers/system, Two-dimensional code system
OA equipment:
JIMCOM(office computers), Personal computers, Electronic
meeting boards
Supplies:
Supplies and consumables for retails information systems
equipment

•
•
•
•
•

2

•

Home Electric Appliances & Others

Main Products
Vacuum cleaners, juicer-mixers, food processors, rice•polishingmachines, air massage systems, relaxation chairs,
compact motors
Components•

Consolidated Balance Sheets
March 31, 2003 and 2002

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

2003

2002

2003

¥49,303
60,06038,304
6,954
6,281(1,086)¥37,768
59,35842,421
5,264
8,671(1,007)$410,175
499,667
318,669
57,85452,254(9,035)

159,816

152,475

1,329,584

5,630
26,366
22,634
67,2491,262(88,596)
34,545

5,657
26,17421,751
65,975
1,740(84,368)
36,92946,839219,351
188,303559,476
10,499(737,072)
287,396

2,809
6,641
9,450

2,780
5,539
8,319

23,36955,25078,6199,090
11,153
17,302
6,807(492)
43,8606,578
9,984
19,521
8,148(1,202)43,02975,624
92,787
143,943
56,631(4,093)364,892

87,85588,277730,907¥247,671¥240,752$2,060,491

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 INTEREST AND SHAREHOLDERS’ EQUITYCurrent liabilities

Thousands of U.S. dollars

2003

2002

2003

¥41,927
25,9895,029
2,662
34,085¥48,708
19,12434
2,604
33,551$348,810
216,215
41,83922,146
283,569

109,692

104,021912,579

Total long-term liabilities

69
21,104
1,051
22,224

5,201
17,702691
23,594574
175,5748,744
184,892

Total liabilities

131,916

127,615

1,097,471

892

893

7,421

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

39,971

39,971

332,537

Capital surplus

52,98352,983440,790

Retained earnings
Unrealized holding gains on securities
Foreign currency translation adjustments
Less treasury stock, at cost:
5,041,923 shares in 2003
27,187 shares in 2002

23,783543(975)

19,068867(637)

197,862
4,517(8,110)(1,442)–(11,997)

–

(8)

–

114,863

112,244955,599¥247,671¥240,752$2,060,491

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 interest in consolidated subsidiaries
Shareholders’ equity

Total shareholders’ equity
Total liabilities, minority interest and shareholders’ equity

4

Consolidated Statements of Operations
Years ended March 31, 2003 and 2002

Millions of yen

Thousands of U.S. dollars

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

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

2003$2,842,488
1,767,438
1,075,050
969,052
105,998

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)

1,064
(897)
(1,613)(344)(4,109)968(777)(1,613)(4,633)(5,605)

8,852(7,463)(13,419)(2,862)(34,184)

Income (Loss) before income taxes and minority interest

6,842(6,570)56,922

1,694
988

1,851
(3,350)14,093
8,220

4,160

(5,071)

34,609213¥3,94765¥(5,136)

1,772$32,837

Net sales
Cost of sales

Gross profit
Selling, general and administrative expenses

Operating Income

Income taxes:
Current
DeferredIncome (Loss) before minority interest
Minority interest in income of consolidated subsidiaries

Net Income (Loss)

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

5Consolidated Statements of Shareholders’ Equity
March 31, 2003 and 2002

Millions of yen

Thousands of U.S. dollars

2003

2002

2003

¥39,971¥39,971¥39,971¥39,971$332,537$332,537¥52,983¥52,983¥52,983¥52,983$440,790$440,790¥19,068
3,947
–
–
–
613
–
–
155
¥23,783¥25,689(5,136)(1,152)
(0)
(430)
–
37
25
35
¥19,068$158,635
32,837
–
–
–
5,100
–
–
1,290
$197,862

¥867
(324)
¥543

¥397
470
¥867

$7,213(2,696)$4,517¥(637)(338)¥(975)¥(2,309)
1,672¥(637)$(5,299)(2,811)$(8,110)¥(8)(1,434)¥(1,442)

¥(1)
(7)
¥(8)

$(67)
(11,930)$(11,997)

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 Income (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 subsidiaries 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 year
Balance at end of year

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

Less treasury stock
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, 2003 and 2002

Millions of yen

Thousands of U.S. dollars

2003

2002

2003

¥6,842¥(6,570)$56,922

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

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

94,908(1,265)25,757(8,852)
7,463
4,967(1,938)
–
4,551
2,862

1,631
4,927
(9,290)(333)
19,217
1,272
(902)
(344)
(1,755)
2,916
20,404

17,836
10,673(15,246)768
28,150983(752)(4,633)(7,861)–
15,887

13,56940,990(77,288)(2,771)
159,875
10,582(7,504)(2,862)(14,601)
24,260169,750

36(6,964)(3,270)(4,792)
463
–
(392)
263
834
(13,822)122(12,112)(2,266)(1,036)564(8,200)
(579)
319
544
(22,644)300(57,937)(27,205)(39,867)
3,852–(3,261)
2,188
6,938(114,992)

5,560
–
(38)
–
(18)
(1,434)
4,070
(918)
9,734
37,768

383
100
(77)
(8,017)(1,168)16(8,763)361(15,159)
53,08546,256
–
(316)
–
(150)
(11,930)
33,860(7,636)80,982
314,210

–
1,654
147
¥49,303(213)
55–¥37,768–
13,7601,223$410,175

Cash flows from operating activities
Income (Loss) before income taxes and minority interests
Adjustment to reconcile income (loss) before income taxes andminority interest 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
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 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 debt
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 increase (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
merger of non-consolidated subsidiaries
subsidiaries 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
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 the format which ismore familiar to readers outside Japan.
Solely for the convenience of the readers, theconsolidated financial statements have been presented in
U.S. dollars by translating Japanese yen amounts at theexchange rate of ¥120.20 = US$1,00 prevailing as of March
31, 2003.The translation should not be construed as arepresentation that the Japanese 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 Affillated Companies
The consolidated financial statements include theaccounts of parent company (the “Company”) and its
significant majority-owned subsidiaries (together the“Companies”). For the years ended March 31, 2003 and2002, accounts of 29 and 23 subsidiaries are consolidated
respectively. All significant inter-company transactions andaccounts are eliminated in consolidation.
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 lnc. formerly accounted
by the equity method is excluded from the consolidation as
the Company has sold some of its shares.
There are no companies included in the consolidation onequity basis in the years ended March 31, 2003 and 2002.
The main consolidated companies are presented on thelast 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.
The balance sheet accounts, except for the components ofshareholders’ equity, are translated at the rate in effect at thebalance 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 interest.
Generally gains and losses on foreign currencytranslations are recognized in current net income, unlesshedged by foreign exchange contracts.
8(C) Appropriation of Retained Earnings
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 generally 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 changed 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” arereported at fair value with unrealized holding gains orlosses, net of taxes, included in shareholders’ equity.
Non-marketable securities classified as “Other securities”
are carried at cost, which is determined by the moving
average method.
Cost of securities sold is determined by the moving
average method.

(H) Inventories
Finished goods, merchandise and semi-finishedcomponents 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 principallystated at the lower of cost or market by the moving averagemethod, or are stated at cost by the specific cost method.
Raw materials are principally stated at the lower of cost or
market by the moving average method.

(I) Property, Plant and Equipment andDepreciation
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 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

Millions of yen(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 basedon the differences between financial reporting and the tax
bases of 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.

(N) Derivative Financial Instruments
The Company and certain subsidiaries have entered into
forward exchange contracts to hedge the foreign currencytransactions related to foreign accounts receivable andpayable.
Derivative financial instruments are reported at fair value
with unrealized gain or loss charged or credited tooperations, except for those which meet the criteria fordeferral hedge accounting under which unrealized gains orlosses is deferred as assets or liabilities. Receivables andpayables hedged by qualified forward foreign exchange
contracts are translated at the corresponding foreignexchange contract rates.

3. Short-Term Loans and Long-Term Debt
The average interest rate for short-term bank loans
outstanding at March 31, 2003 is 3.3 %The long-term debt at March 31, 2003 and 2002, consistsof the following:

2003

Straight bonds:
Due 2004, with interest rate of 3.0% ¥5,000
Long-term loans:
Due serially through 2023, with interest
rate of 1.20% to 5.80%
98
5,098
Less current portion
5,029
¥69

Thousands of
U.S.dollars

2002

2003

¥5,000$41,597

235
5,235
34
¥5,201816
42,413
41,839$574

The aggregate annual maturities of long-term debt(including the current portion) outstanding at March 31,
2003 are as follows:
Millions Thousands ofof yenU.S.dollars

Year ending March 31

2004
2005
2006
2007 and thereafter¥5,02924
14
31¥5,098$41,839200
116
258$42,413

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, 2003 and 2002
for the Companies’ defined benefit plans:Millions of yen
2003

Retirement benefit obligation¥(57,056)
Plan assets
19,628
Unfunded retirement benefit obligation (37,428)
Unrecognized net retirement
benefit obligation at transition
3,226
Unrecognized actuarial gain or loss 12,367
Unrecognized past service cost731
Net retirement benefit obligation ¥(21,104)

2002

Thousands of
U.S. dollars
2003¥(57,689) $(474,676)
25,043
163,295(32,646) (311,381)
4,838
26,8399,283
102,887
823
6,081¥(17,702) $(175,574)

The components of retirement benefit expenses for theyears ended March 31, 2003 and 2002 are as follows:
Millions of yen
2003

Service cost
¥3,044
Interest cost
1,450
Expected return on plan assets(243)
Amortization of net retirement
benefit obligation at transition
1,613
Amortization of actuarial gain or loss 965
Amortization of past service cost
91
Total
¥6,920Thousands of
U.S. dollars

2002

2003

¥2,552
1,785(258)$25,325
12,063(2,021)

1,613
295
91
¥6,07813,4198,028
757$57,571

The assumption used in accounting for the above plans in2003 were as follows:
Discount rates
2.3%~2.5%
Expected return on assets
0.0%~2.0%
9

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, 2003 and 2002.
Millions of yen
2003

Investment securities
Land
Buildings and structures
Machinery and equipment

¥16
533
78
43
¥670

Thousands of
U.S. dollars

2002

$133
4,434
649
358
$5,574The obligations collateralized by the above assets at
March 31, 2003 and 2002, are as follows:

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

Thousands of
U.S. dollars

2003

2002

2003

¥90
146
¥236

¥135
164
¥299

$749
1,214
$1,963

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, 2003 and 2002, are as
follows:
Thousands ofMillions of yen

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

2002

2003

¥9,161314
2,119¥8,511–
2,399$76,215
2,612
17,6297. Non-Operating Income andExpenses-Other, Net,,“Other, net for the years ended March 31, 2003 and2002, consists of the following:Thousands ofMillions of yen

2003

9. Income Taxes and Deferred Tax Assets
and Liabilities
The following table summarizes the difference between
the statutory tax rate and the Company's effective tax rate
for the years ended March 31, 2003 and 2002.
Statutory tax rate
Effect of:Different tax rates applied toincome of foreign subsidaries
Expenses not deductible forincome tax purposes
Valuation allowance for deferred tax assets
Valuation allowance for eliminatedinter-company transactions
Adjusment due from tax regulation changes(*)
Other,net

2003

2002

42.0%

42.0%

(10.3)

5.5

4.1
–

(4.0)
(0.4)

–
5.3
(1.9)
39.2%

(16.3)
–
(4.0)
22.8%

( ) Due to the change in the corporate enterprise tax rate
effective for tax peroid ending March 31, 2005, theCompany's normal statutory tax rate will change from 42.0%
to 40.6% for the year ending March 31, 2005. As a result, netdeferrd tax assets decreased by ¥347 million ($2,887
thousand) at March 31, 2003, and deferred tax expenses forthe year ended March 31, 2003 and unrealized holding gains
on securities at March 31, 2003 increased by ¥359 million($2,987 thousand) and ¥12 million ($100 thousand),
respectively.

*

Significant components of the Companies’ deferred tax
assets and liabilities at March 31, 2003 and 2002, are as
Thousands offollows:
Millions of yen
U.S. dollars
2003

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

U.S. dollars

2002

2003

Write-down and disposal of inventories ¥(1,125) ¥(1,204) $(9,359)
Expenses for business center integration
–
(910)
–
Write-down of investment securities(547)(889) (4,551)
Loss on sales or disposals
of fixed assets(597)(651) (4,967)
Foreign exchange loss
(597)(358) (4,967)
Profit on sales of investment securities
233
–
1,939
Profit on sales of affiliate securities–
254–
Other, net(1,476) (1,847) (12,279)¥(4,109) ¥(5,605) $(34,184)

8. Research and Development Expenses
Research and development expenses charged to income
for the years ended March 31, 2003 and 2002 are as follows:
10

2002

U.S. dollars

2003

2003

2003

Thousands of
U.S. dollars¥24,477 ¥25,291 $203,636

2003

¥24
533
84
53
¥694

Millions of yen

Millions of yen

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

2002

2003

¥9,091 ¥8,674 $75,632
7,080
6,883
58,902
1,777
4,337
14,7842,958
2,243
24,609
939
1,926
7,812
4,081
3,062
33,95225,926 27,125 215,691(619)(532) (5,150)
25,307 26,593 210,541
528
564
4,393
371
629
3,087
152
615
1,264
1,051
1,808
8,744
¥24,256 ¥24,785 $201,797

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, 2003 and 2002 which would have

been reflected in the consolidated balance sheet if financelease accounting had been applied to the finance leasetransactions currently accounted for as operating leases:
Millions of yen
2003
2002
Acquisition Accumulated New bookAcquisition Accumulated New bookcost
depreciation
value
cost
depreciation
value

Machinery and equipment ¥252
Tools, furniture and fixtures 668
¥920

¥139
571
¥710

¥113
97
¥210

¥71
¥49
1,617 1,422¥1,688 ¥1,471

¥22
195
¥217

Thousands of U.S. dollars
2003
Acquisition Accumulated New bookcost
depreciation
value(2) The proceeds from sales of securities for the years
ended March 31, 2003 and 2002 were ¥463 million ($3,852
thousand) and ¥310 million, respectively. The realized gains
on those sales for the year ended March 31, 2003 were ¥233
million ($1,938 thousand) and the realized losses for theyear ended March 31, 2002 were ¥191 million.
(3) Contractual maturities of Other Securities as of March
31, 2003 is summarized as follows:
Millions of yen
Due after one
year throughfive years

Due in one
year or lessDue after one
year throughfive years

¥10
¥10

–
–

$83
$83

–
–

Corporate debt securities
Total

Machinery and equipment $2,097 $1,156 $941
Tools, furniture and fixtures 5,557 4,751
806$7,654 $5,907 $1,747(1) Future minimum lease payments (including theinterest portion thereon) subsequent to March 31, 2003 forfinance lease transactions accounted for as operating leases
are summarized as follows:

Thousands of U.S. dollars

Due in one
year or less

12. Supplemental Cashflow Information(1) Summary of transferred assets and liabilities of thecompany included in consolidation through merger as ofJuly 1, 2002.

Millions of yen

Thousands of U.S. dollars

Millions of yen

2003

2003

2003

2003

¥73
137
¥210

$607
1,140
$1,747

¥290
16
306
211
18
229

$2,413
133
2,546
1,755
150
1,905

Due within one year
Due after one year

(2) Lease payments for the years ended March 31, 2003
and 2002, are ¥124 millions($1,032 thousand) and ¥214
million, respectively.

(B) Operating leases
Future minimum lease payments subsequent to March 31,
2003 for noncancelable operating leases are summarized asfollows:
Millions of yen

Thousands of U.S. dollars

2003

2003

¥125
318
¥443

$1,0402,646$3,686

Due within one year
Due after one year(2) Summary of transferred assets and liabilities of thecompany included in consolidation through merger as of
October 1, 2002.
Current Assets
Fixed Assets
Total Assets
Current Liabilities
Total Liabilities

Millions of yen

Thousands of U.S. dollars

2003

2003

¥108
1
109
130
130

$899
8
907
1,082
1,082

13. Segment Information

11. Securities(1) Information regarding marketable Other Securities asof March 31, 2003 and 2002 is as follows:
Millions of yen
2003
Acquisition Carrying
value
cost

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

Thousands of U.S. dollars

Unrealizedgain(loss)

2002
Acquisition Carrying
value
cost

Securities whose carrying value exceeds their acquisition cost:
Stocks¥820 ¥1,079 ¥259
¥717 ¥1,051
Securities whose acquisition cost exceeds their carrying value:
Stocks699
634(65)
1,493 1,183
Total¥1,519 ¥1,713 ¥194
¥2,210 ¥2,234
Thousands of U.S. dollars
2003
Acquisition Carrying Unrealized
cost
value
gain(loss)

Securities whose carrying value exceeds their acquisition cost:
Stocks$6,822 $8,977 $2,155
Securities whose acquisition cost exceeds their carrying value:
Stocks5,815 5,274 (541)
Total$12,637 $14,251 $1,614

Unrealizedgain(loss)

¥334
(310)
¥24

(A) Business Segment
The Companies operate in three business areas as follows:(1) Retail Information Systems
POS systems
Electronic cash registers
Electronic scales
Bar code systems
OA equipment(2) Document Processing & Telecommunication Systems
Digital multi-function-peripherals
Copiers
Facsimile
Specialized terminals(3) Home Electric Appliances & Others
Home electric appliances
Components

11Thousands of
U.S. dollars

Millions of yen
2003

2002

2003

EuropeUnaffiliated customers
Intersegment
Total
Asia and Others
Unaffiliated customers
Intersegment
Total
Eliminations
Consolidated

64,707376
65,08360,030300
60,330538,3283,128
541,456

Net Sales
Retail Information Systems
Unaffiliated customers¥153,455 ¥152,786 $1,276,664
Intersegment
3,234
2,353
26,905
Total
156,689
155,139 1,303,569
Document Processing & Telecommunication Systems
Unaffiliated customers
169,808
165,589 1,412,712
Intersegment
1,577
2,075
13,120
Total
171,385
167,664 1,425,832
Home Electric Appliances & Others
Unaffiliated customers
18,404
18,830153,111
Intersegment
298
110
2,480
Total
18,702
18,940155,591
Eliminations(5,109)(4,539)(42,504)
Consolidated¥341,667 ¥337,204 $2,842,488

Operating Income
Japan
North America
EuropeAsia and others
Eliminations
Consolidated¥7,759
37
(505)
5,620
(170)
¥12,741

Operating Income
Retail Information Systems¥3,345Document Processing &Telecommunication Systems
9,547
Home Electric Appliances & Others(127)
Eliminations(24)
Consolidated¥12,741

Identifiable Assets
Japan
North America
EuropeAsia and others
Corporate and Eliminations
Consolidated¥176,357 ¥184,282 $1,467,196
1,762
1,599
14,65952,29644,183435,075
30,65726,287
255,050(13,401)(15,599) (111,489)¥247,671 ¥240,752 $2,060,491

Identifiable Assets
Retail Information Systems¥72,747
Document Processing &Telecommunication Systems 120,671
Home Electric Appliances & Others 20,047
Corporate and Eliminations
34,206
Consolidated¥247,671
Depreciation and Amortization
Retail Information Systems¥3,268Document Processing &Telecommunication Systems
7,019
Home Electric Appliances & Others 1,121
Consolidated¥11,408
Capital Expenditures
Retail Information Systems¥2,666
Document Processing &Telecommunication Systems
6,565
Home Electric Appliances & Others 1,392
Consolidated¥10,623¥(844)$27,829

5,859
33
42
¥5,09079,426(1,057)(200)$105,998¥77,049$605,216

117,425 1,003,919
20,720166,780
25,558284,576¥240,752 $2,060,491¥3,355$27,188

7,370
1,176
¥11,901

58,394
9,326$94,908¥3,492$22,180

10,488
1,720¥15,700

54,617
11,581$88,378(note 1) Corporate assets mainly consist of cash, time deposits,
securities and investments with financial institutions of theCompany.
Corporate assets at March 31, 2003 and 2002, are ¥34,299
million (US$285,349 thousand) and ¥25,742 million,
respectively.

(B) Geographic Segments

Thousands of
U.S. dollars

Millions of yen
2003

Net SalesJapan
Unaffiliated customers
Intersegment
Total¥239,184
37,178276,362

North America
Unaffiliated customers
Intersegment
Total

4,263
0
4,263

12

2002

2003

¥242,793 $1,989,884
34,927309,301
277,720 2,299,185
4,151
1
4,152

35,466
035,46633,51330,230278,810
32,232
26,889268,153
65,745
57,119546,963(69,786)(62,117) (580,582)¥341,667 ¥337,204 $2,842,488¥1,270$64,551(41)308
73(4,201)
4,305
46,755(517)(1,415)¥5,090 $105,998(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 and others Singapore, Malaysia, Indonesia, China,
Australia(note 2) Corporate assets mainly consist of cash, time deposits,
securities and investments with financial institutions of theCompany.
Corporate assets at March 31, 2003 and 2002, are ¥34,299
million (US$285,349 thousand) and ¥25,742 million,
respectively.

(C) Net Sales by Region
Millions of yen
2003

Net Sales
Japan
North America
EuropeAsia and Others
Net sales¥169,282
70,55076,63325,202¥341,667

2002

Thousands of
U.S. dollars
2003¥176,154 $1,408,336
66,440586,938
73,843
637,546
20,767
209,668¥337,204 $2,842,488(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, 2003 and 2002

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

2003

2002

2003

¥33,062
34,105¥24,972
37,135$275,058
283,735

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

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

96,09850,17545,45859,226(2,246)

97,062

97,158807,504

4,857
19,925
15,10354,9601,131(70,856)
25,1204,857
19,642
14,66054,621
1,440(68,442)
26,77840,408
165,765
125,649
457,238
9,409(589,484)
208,985

–
4,256
4,256

800
4,104
4,904

35,40835,40823,991
11,024
15,4604,760(452)
54,78324,306
9,832
17,741
6,082(1,168)56,793

199,592
91,714
128,619
39,600(3,760)455,765

84,15988,475700,158¥181,221¥185,633$1,507,662

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

2003

2002

2003

¥33,473
5,025
100
21,507¥42,979
27
53
19,849$278,478
41,805832
178,927

60,10562,908500,04269
16,92380
17,072
77,177

5,098
14,08873
19,25982,167574
140,790666
142,030
642,072

39,971
52,98339,971
52,983

332,537
440,790–

2,640
11,816(4,795)859

56,44843,3284,484(1,442)–(11,997)

–

(8)

–

Total shareholders’ equity

104,044

103,466

865,590

Total liabilities and shareholders’ equity¥181,221¥185,633$1,507,662

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
Retained earnings:
Legal reserve
Voluntary reserve
UnappropriatedUnrealized holding gains on securities
Less treasury stock, at cost:
5,041,923 shares in 2003
27,187 shares in 2002

14

6,785
5,208
539

–

Supplemental Information
Non-Consolidated Statements of Operations and Retained Earnings
Years ended March 31, 2003 and 2002

Millions of yen

Thousands of U.S. dollars

2003¥241,202
171,639

2002¥246,087
180,933

2003$2,006,672
1,427,945

69,56363,31865,154
65,141

578,727
526,772

6,245

13

51,9552,171(171)(1,300)–(3,418)
3,527

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

18,062(1,423)(10,815)–(28,436)
29,343

(90)
1,284
2,333

242
(4,373)(5,874)(749)
10,682
19,410

Unappropriated retained earnings at beginning of year
Transfer from voluntary reserve
Appropriation of retained earnings:
Transfer to legal reserve
Cash dividends paid
Transfer from legal reserve(4,795)
5,030

2,313
34

(39,892)
41,847

–
–
2,640

(116)
(1,152)–––
21,963

Unappropriated retained earnings (undisposed deficit)
at end of year

¥5,208¥(4,795)$43,328

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

Income (Loss) before income taxes
Income taxes:
Current
Deferred

Net income (loss)

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

Independent Auditors' Report

The Board of Directors
TOSHIBA TEC CORPORATION
We have audited the accompanying consolidated balance sheets of TOSHIBA TEC CORPORATION and consolidated
subsidiaries as of March 31, 2003 and 2002, and the related consolidated statements of operations, shareholders' equity, andcash flows for the years then ended, all expressed in yen. These financial statements are the responsibility of the Company's
management. Our responsibility is to independently express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards, procedures and practices generally accepted and applied inJapan. Those standards, procedures and practices require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial
position of TOSHIBA TEC CORPORATION and consolidated subsidiaries at March 31, 2003 and 2002, and 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.
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March 31, 2003
are presented solely for convenience. Our audit also included the translation of 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.
June 27, 2003
See Note 1 to the consolidated financial statements which explains the basis of preparation of the consolidated financial
statements of TOSHIBA TEC CORPORATION and consolidated subsidiaries under Japanese accounting principles andpractices.

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 : 4,500 (as of June 2003)
Common Stock : ¥39,970 million (as of June 2003)
Stock Listing : Tokyo Stock Exchange (1st Section)

Board of Directors and Corporate Auditors
President and Chief Executive Officer (as of June 27, 2003)＊Yoshihiro Maeda
Directors＊Yasuhiro Hatakeyama＊Tetsuo Satofuka＊Hitoshi Yoshii＊Masahiro Hirata＊Haruo Asada＊Hisatsugu Nonaka＊Representative Director

Corporate Auditors＊Teruo Miyamoto＊Masaru Yoshikawa＊Hiroshi Inazuka＊Yuzo Kato

MAIN CONSOLIDATED COMPANIES (as of March 31, 2003)＊TOSEI DENKI CO., LTD.
＊TEC PRECISION CO., LTD.
＊TEC SHOJI CO., LTD.
＊TEC ENGINEERING CORPORATION＊TER LTD.
＊TEC INFORMATION SYSTEMS CORPORATION＊FUJIKEN CO., LTD.
＊TEC KASHIYA DENKI CO., LTD.
＊TOSHIBA TEC DOCUMENT PROCESSING SYSTEMS CO., LTD＊T·T · BUSINESS SERVICE LTD.
＊TEC AMERICA, INC.
＊TEC CANADA INC.
＊TOSHIBA TEC EUROPE RETAIL INFORMATION SYSTEMS S.A.
＊TEC AUSTRALIA PTY. 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 INDONESIA＊TOSHIBA TEC U.K. IMAGING SYSTEMS LTD.
＊TOSHIBA TEC GERMANY IMAGING SYSTEMS GmbH＊TOSHIBA TEC FRANCE IMAGING SYSTEMS S.A.
＊TOSHIBA TEC (H.K.) LOGISTICS & PROCUREMENT LIMITED