Management’s Discussion and Analysisof Financial Condition and Results of Operations
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on information known tomanagement as of June 27, 2002. It includes forward-looking statements concerning the expected future performance of Toyota Industries
Corporation. Please refer to “Cautionary Statement with Respect to Forward-Looking Statements” at the beginning of this annual report,
which pertains to the report as a whole.

Liquidity and Capital Resources

Financial Position

Toyota Industries’ financial policy is to ensure sufficient

Total assets as of the end of the fiscal year ended March 31,

financing and liquidity for its business activities and to2002 (“fiscal 2002”) stood at ¥1,770.4 billion, a decrease ofmaintain the strength of its balance sheet. Currently, in¥99.2 billion (5.3%) from fiscal 2001.

principle, funds for investments and other long-term capital

Current assets decreased ¥6.0 billion (2.0%) to ¥295.3

needs are raised from retained earnings and long-term debt,

billion. This is mainly because decreases in cash and cash

and working capital needs are met through short-term bankequivalents and securities outweighed increases in trade notesloans. Long-term debt financing is carried out mainly throughand accounts receivable and inventories. Cash and cash

issuance of bonds, including convertible bonds, and bankequivalents decreased ¥24.2 billion (25.4%) to ¥71.1 billion.

loans.

Trade notes and accounts receivable increased ¥10.4 billion

Exceptionally, the 7.4 billion Swedish krona (¥89.2 billion)(10.6%) to ¥107.8 billion. This is due mainly to theused for the acquisition of BT Industries AB (“BT Industries”) in

consolidation of the industrial equipment sales operation ofJune 2000 was raised through issuance of commercial paper,

Toyota Motor Corporation (“TMC”) in April 2001. Short-termbonds and new shares. The decision to issue the new sharesinvestments decreased ¥14.6 billion (64.7%) to ¥8.0 billion.

was based on a comprehensive management evaluation madefrom a medium-term perspective. The aim was to maintain astrong financial condition and expand Toyota Industries’ rangeof shareholders and investors worldwide. Part of the funds

Total Assets, Shareholders’ Equity
and Shareholders’ Equity Ratio

raised through the issuance of new shares has been(¥ Billion)(%)

appropriated as investments in plant and equipment for the

2,000

80

1,500

60

1,000

40

500

20

Car Air-Conditioning Compressor Business and otheroperations.
In addition to current assets such as cash and cash
equivalents, time deposits and securities, Toyota Industries
maintains ¥100.0 billion of commercial paper issuance capacity
as of March 31, 2002. Toyota Industries’ financial condition
remains solid. Through the use of cash and cash equivalents,
current assets such as time deposits and securities, as well as
free cash flows and fund-raising from financial institutions,Toyota Industries believes that it will be able to provide
sufficient funds for the working capital necessary to expand
existing operations and develop new projects, and for future
investments.

0
FY

0

98

99

00

01

02

Total Assets
Shareholders’ Equity
Shareholders’ Equity Ratio (%)

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

43

Management’s Discussion and Analysisof Financial Condition and Results of Operations
Inventories increased ¥17.7 billion (33.6%) to ¥70.5 billion, andCash Flows

the inventory turnover period increased from 19.7 days to

Net cash and cash equivalents provided by operating activities

23.0 days.

was ¥81.1 billion, an increase of ¥2.7 billion (3.4%) over fiscal

Property, plant and equipment increased ¥42.9 billion

2001. Net cash and cash equivalents used in investing activities(14.6%) to ¥337.6 billion, attributable to an increase in

decreased ¥49.2 billion (31.5%) to ¥106.7 billion. Net cash andmachinery, equipment and vehicles, as well as buildings andcash equivalents provided by financing activities decreased

structures. Intangible assets increased ¥6.9 billion (7.8%) to¥93.2 billion (98.7%) to ¥1.2 billion. Including translation¥94.9 billion.

adjustments, cash and cash equivalents decreased ¥24.2 billion

Investments and other assets decreased ¥143.0 billion(25.4%) to ¥71.1 billion.

(12.1%) to ¥1,042.6 billion. This is attributable largely to adecrease in the market prices of shares of Toyota Group
companies, including TMC, and other shares held by Toyota

Cash Flows

Industries. Toyota Industries, primarily in its Automobile(¥ Billion)

Segment, has a very close business relationship with each of100

the Toyota Group companies, and it recognizes that holding
securities of each of these business partners contributes tomutual management stability. From a long-term point of view,

50

0Toyota Industries firmly believes that maintaining andimproving the competitive strength of the Toyota Group
raises its own profitability and contributes to increasing

(50)

(100)

shareholder value.
Current liabilities increased ¥23.0 billion (10.8%) from fiscal(150)

2001 to ¥236.6 billion. This is due mainly to increases in shortterm bank loans, reflecting the consolidation of materials
handling equipment sales subsidiaries. Trade notes andaccounts payable was ¥111.3 billion, an increase of ¥7.8 billion(7.5%). Short-term bank loans increased ¥10.2 billion (43.9%)

(200)
FY

98

99

00

01

02

Net Cash Provided by Operating Activities
Net Cash Used in Investing Activities
Net Cash Provided by (Used in) Financing Activities

to ¥33.4 billion.
Long-term liabilities were ¥636.1 billion, a decrease of ¥50.5
billion (7.4%). This is because deferred tax liabilities decreased¥71.6 billion as a result of a decrease in the market value ofinvestment securities, and long-term debt increased
Minority interest in consolidated subsidiaries increased ¥0.7

change in accounting standards for retirement benefits was
charged to income in fiscal 2001. In fiscal 2002, depreciation

billion (4.0%) to ¥18.9 billion.
Shareholders’ equity decreased ¥72.5 billion (7.6%) to¥878.8 billion. This is mainly because net unrealized gains onother securities decreased ¥102.3 billion and retained earnings
increased ¥20.6 billion. Shareholders’ equity per share at yearend decreased to ¥2,809.54 from ¥3,036.77.

TOYOTA INDUSTRIES CORPORATION

Depreciation and amortization increased ¥8.7 billion to ¥55.2
billion, which was offset by the fact that cumulative effect of¥13.5 billion.

44

The increase in net cash provided by operating activities
reflects mainly the increase in income before income taxes.

ANNUAL REPORT 2002

was ¥48.7 billion, and amortization of intangibles and goodwill
were ¥1.5 billion and ¥5.0 billion, respectively.

Depreciation and Amortization

The amounts used for purchase of property, plant andequipment by principal segment were ¥53.7 billion, up ¥3.4(¥ Billion)

billion (6.8%), in the Automobile Segment, and ¥9.4 billion, up

60¥1.2 billion (14.6%), in the Materials Handling Equipment
Segment. In January 2002, Toyota Industries made an
additional investment of ¥10.0 billion in ST Liquid Crystal
40

Display Corp. (“ST-LCD”), a 50-50 joint venture with Sony
Corporation, in order to establish a second production line forlow-temperature polysilicon TFT-LCD panels in the fall of 2001.

20

Sony also invested an additional ¥10.0 billion. As a result, thetotal paid-in capital of ST-LCD reached ¥50.0 billion.
A decrease in net cash provided by financing activities

0
FY

98

99

00

01

02

reflected the fact that the fiscal 2001 figure included proceedsfrom issuance of common stock and bonds in amounts ofAutomobile
Materials Handling Equipment
Textile Machinery
Others (Including Corporate or Elimination)

Net cash used in investing activities decreased due mainly¥55.2 billion and ¥39.8 billion, respectively. For fiscal 2002,
Toyota Industries paid ¥5.6 billion in cash dividends.

Overview of Performance

to a decrease of ¥85.4 billion in payments for acquisition ofManagement of Foreign Exchange Risks

subsidiaries’ stock. In addition, Toyota Industries used ¥73.6

The average exchange rate of the yen to the U.S. dollar (TTM)billion to purchase property, plant and equipment, an increasein fiscal 2002 was ¥125.09, a year-on-year depreciation ofof ¥18.5 billion over fiscal 2001, and ¥23.7 billion for¥14.51 (13.1%).
Overseas sales increased ¥97.7 billion (32.7%) over fiscal

acquisition of business.

2001 to ¥396.5 billion, accounting for 40.4% of total sales. Thisis due primarily to the large increases in sales in Europe andNorth America which accompanied the consolidation of BT

Capital Expenditures

Industries’ results into Toyota Industries’ accounts for the full(¥ Billion)

year, as well as the transfer of TMC’s industrial equipment sales

150

operation.
Overseas sales and the ratio of overseas sales to total sales
are likely to remain at this high level as sales of TOYOTA- and100

BT-brand materials handling equipment are expected tocontinue to increase in Europe and the U.S., and the overseas
operations of the Car Air-Conditioning Compressor Business

50

will also expand.
To hedge the foreign exchange risks arising from the export
and import of materials, parts and products, Toyota Industries

0
FY

98

99

00

01

02

Automobile
Materials Handling Equipment
Textile Machinery
Others (Including Corporate or Elimination)

uses derivative instruments (foreign currency forward
contracts and foreign currency option contracts). Toyota
Industries is also making efforts to procure materials and parts
and to produce finished goods in areas closer to overseas
markets in order to reduce currency exchanges.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

45

Management’s Discussion and Analysisof Financial Condition and Results of Operations
Operating Performance Highlights
by Business Segment

Net Sales, Overseas Sales andOverseas Sales Ratio(¥ Billion)(%)

Net sales figures for each segment described below do not

1,000

50

include intersegment transactions.

800

40

up ¥106.0 billion (23.2%) over fiscal 2001. Within this segment,

600

30

400

20

200

10

Net sales of the Automobile Segment totaled ¥563.6 billion,
net sales of the Vehicle Business totaled ¥280.1 billion, an
increase of ¥84.2 billion (43.0%). In April 2001, Toyota
Industries started production of the RAV4, a compact sportutility vehicle. However, production of the Vitz (Yaris in Europe)decreased because TMC started production of the Yaris in

0
FY

0

98

99

00

01

02

France. Total production decreased 29,000 units (10.4%) to
247,000 units. The increase in net sales reflects the fact that
TMC started charging for engines and other parts, whereas
previously such parts had been supplied free of cost. As thisNet Sales
Overseas Sales
Overseas Sales Ratio (%)

change caused an increase of ¥67.5 billion in both sales andcost of sales, there was no effect on the gross profit of Toyota
Industries. Net sales of the Engine Business totaled ¥114.9
billion, an increase of ¥12.8 billion (12.5%), due mainly to

Operating Performance
In fiscal 2002, the Japanese economy remained sluggish. A
global economic slowdown resulted in decreased exports,
production and capital investment, while a weakening of thedomestic jobs market kept consumer spending stagnant.
Although the global economy was severely affected by theterrorist attacks in September 2001, it showed signs of an
upturn from the beginning of 2002.
In this operating environment, Toyota Industries focused its
efforts on product quality and retaining the trust of its
customers. It also made efforts to strengthen its corporate
structure by stepping up the development of attractive
products, aggressively conducting sales promotions andcarrying out a company-wide program to reduce costs.
Toyota Industries’ net sales for fiscal 2002 increased ¥212.8
billion (27.7%) over fiscal 2001 to ¥980.2 billion, and net
income increased ¥4.7 billion (20.6%) to ¥27.3 billion, marking
a record high for a second consecutive year. The increase in net
sales is due primarily to an increase in sales of the Automobile
Segment and Materials Handling Equipment Segment. The
increase in net income is due largely to the growth in net sales,
as well as the success of efforts to reduce costs and increase
productivity.

46

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

increased sales of CD-type diesel engines. Net sales of the Car
Air-Conditioning Compressor Business totaled ¥153.1 billion,
an increase of ¥13.6 billion (9.7%). Sales were up both in Japanand overseas, due mainly to new product development,
strengthened sales promotion and increased production
capacity.
Net sales of the Materials Handling Equipment Segment
totaled ¥353.0 billion, an increase of ¥116.5 billion (49.3%) overfiscal 2001. The increase reflected steady domestic sales andthe consolidation of the operating results of BT Industries forthe full year (Note 2(1)). These factors were partially offset byadverse market conditions in North America.
Net sales of the Textile Machinery Segment totaled ¥30.7
billion, a decrease of ¥2.5 billion (7.6%) from fiscal 2001.
Though Toyota Industries engaged in vigorous sales andservice activities, including the display of selections of its latest
products, from current models to next-generation models, atinternational exhibitions, these efforts could not make up for
decreased exports to Indonesia, Thailand and South Korea.
Net sales of the Others Segment totaled ¥32.8 billion,a decrease of ¥7.2 billion (18.0%) from fiscal 2001.

Cost of Sales andSelling, General and Administrative Expenses

Operating Income

Toyota Industries’ cost of sales for fiscal 2002 increased ¥165.6

fiscal 2002 decreased ¥1.0 billion (2.1%) from fiscal 2001 to

billion (25.0%) over fiscal 2001 to ¥828.6 billion. This reflects¥46.3 billion. Operating income ratio decreased from 6.2% tothe fact that TMC charged Toyota Industries for engine and

4.7%.

Due to the factors summarized above, operating income forother parts in an amount of ¥67.5 billion in the Automobile
Segment, as well as the increase in sales of the Materials
Handling Equipment Segment. The ratio of cost of sales to net
sales improved from 86.4% to 84.5%, due primarily to the

Operating Income andOperating Income Ratio

effects of increases in productivity and capacity utilization(¥ Billion)(%)

ratio driven by increased production and cost reduction

50

10

40

8

30

6

20

4

10

2

activities.
Selling, general and administrative (SGA) expenses
increased ¥48.1 billion (84.4%) to ¥105.2 billion. The ratio of
SGA expenses to net sales increased from 7.4% to 10.7%,
largely as a result of the consolidation of materials handlingequipment sales subsidiaries, including BT Industries.
Amortization of goodwill increased ¥3.5 billion over fiscal
2001, of which an amount of approximately ¥2.0 billion wasused for a one-time amortization of goodwill following theconsolidation of materials handling equipment sales

0FY

subsidiaries.

0

98

99

00

01

02

Operating Income
Operating Income Ratio (%)

Research and development expenses, included in SGA andmanufacturing costs, increased ¥3.8 billion (14.5%) to ¥30.0
billion, representing 3.1% of net sales. By principal segment,
research and development expenses were ¥18.1 billion in the
Automobile Segment and ¥9.2 billion in the Materials

Non-Operating Income and Expenses
Non-operating income for fiscal 2002 increased ¥6.9 billion(42.3%) over fiscal 2001 to ¥23.1 billion. This was because

Handling Equipment Segment.

interest income increased ¥4.4 billion as a result of theconsolidation of BT Industries for the full year.
Non-operating expenses increased ¥2.6 billion (13.5%) over

R&D Expenses andR&D Expenses to Net Sales Ratio

fiscal 2001 to ¥21.6 billion. This was because interest expenses(¥ Billion)

increased ¥4.4 billion as a result of the consolidation of BT

(%)

30

6

Industries for the full year.

Ordinary Income
204Ordinary income increased ¥3.3 billion (7.5%) over fiscal 2001
to ¥47.9 billion.

10

2

0
FY

0

98

99

00

01

02

R&D Expenses
R&D Expenses to Net Sales Ratio (%)

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

47

Management’s Discussion and Analysisof Financial Condition and Results of Operations
Extraordinary Gains and Losses

Net Income, ROE and ROS

No item was registered for fiscal 2002. The adoption of new
accounting standards for retirement benefits, which became(¥ Billion)

(%)

30

12

20

8

10

4

effective on April 1, 2000, led to an aggregate funding shortfallof ¥19.1 billion in retirement benefit obligation for fiscal 2001,
and the whole shortfall was accounted for as an extraordinary
loss. To compensate for this loss, ¥15.1 billion was posted as an
extraordinary gain by an employee retirement benefit trust,established through the contribution of certain investment
securities held by Toyota Industries. Also, a change was made in
the treatment of Toyota Industries’ retirement and severance
benefits for directors and corporate auditors. This had beentreated as an expense recorded at the time of payment. In

0
FY

0

98

99

00

01

02

order to make period earnings more appropriate and the
Net Income
ROE (%)ROS (%)

financial statements healthier beginning from fiscal 2001,
Toyota Industries changed the accounting method to provide
for actual amounts payable during the term based on its
internal rules. Accordingly, a ¥2.3 billion provision for
retirement and severance benefits for directors and corporate
auditors was recorded as an extraordinary loss.

Net Income per Share(¥)
100

Income before Income Taxes
Income before income taxes was ¥47.9 billion, an increase of80¥9.6 billion (25.2%) over fiscal 2001.
60

Income Taxes
Net of current and deferred income taxes was ¥19.7 billion, up

40¥4.9 billion (32.9%) over fiscal 2001. The effective income tax
20

rate increased from 38.8% to 41.2%.

Minority Interest in Consolidated Subsidiaries
Minority interest in consolidated subsidiaries increased ¥0.1
billion to ¥0.8 billion over fiscal 2001.

Net Income
Net income for fiscal 2002 was ¥27.3 billion, an increase of ¥4.7
billion (20.6%) over fiscal 2001. Return on sales (ROS)
decreased from 2.9% to 2.8%. Return on equity (ROE), using the
average at fiscal 2002 and fiscal 2001 year-ends, decreased
from 3.6% to 3.0%. Net income per share increased from ¥75.90
to ¥87.28, and diluted net income per share increased from
¥67.77 to ¥78.26.

48

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

0
FY

98

Basic
Diluted

99

00

01

02

Strategies and Projections
for the Fiscal Year Ending March 31, 2003

The second category, which comprises the Car
Air-Conditioning Compressor Business, the Materials Handling
Equipment Business and the Textile Machinery Business, isBusiness Strategies

identified as a business field in which Toyota Industries must

Since its establishment as a textile machinery manufacturer

cultivate further development of global markets by precisely

over 75 years ago, Toyota Industries has expanded the scope ofgrasping customers’ needs, and developing and marketingits specific characteristics. The operational strategies for thesestate-of-the-art products that meet these needs through thecategories are based on the mission assigned to each.

application of original technologies. Firmly believing thattechnological improvement is the key to competitiveness,

First Category: Vehicle Business and Engine BusinessToyota Industries strives to strengthen its technological<Mission>development capabilities by fostering the training and

As a member of the Toyota Group, to contribute to the highdevelopment of superior engineers. Since the Car Air-

quality and technological advances of TOYOTA-brand cars.

Conditioning Compressor Business and the Materials Handling
Equipment Business are positioned as core businesses, Toyota

Second Category: Car Air-Conditioning Compressor

Industries places a priority on them in its allocation ofBusiness, Materials Handling Equipment Business andmanagement resources. In addition, on April 1, 2001, Toyota

Textile Machinery BusinessIndustries established TOYOTA Material Handling Company as a<Mission>uniquely independent company within Toyota Industries. The

To aggressively expand global markets through themain purpose of this move was to strengthen independent

development of products using Toyota Industries’ uniquemanagement in the unit by giving it the authority needed totechnologies.

respond flexibly and speedily to changes in the businessenvironment and to emerge a winner in the face of intensifying

Third Category: Electronics Business<Mission>
To be a key source of Toyota Industries’ future growth.

global competition.
The third category, the Electronics Business, which includes
the production of LCDs, will also be made a priority in Toyota
Industries’ allocation of management resources in order to

The first category, the Vehicle Business and the Engine

develop this activity into a core business in the future. This is a

Business, handles mainly the production of vehicles consigned

field characterized by rapid advances in technologicalby TMC and production of engines for TOYOTA-brand cars. To

innovation. Toyota Industries recognizes that it must

play a more important role in the Toyota Group, Toyota

strengthen its research and development capability to

Industries is making continual efforts to improve its

maintain competitiveness in this field. Continuing capital

production technologies and strengthen quality control. For

expenditures will be required to do this. Swift decision-making

Toyota Industries, this field of business provides a stable

is also required for success in this business, which depends on

platform for its own growth, while also contributing to therapidly getting production on track, improving the rejection

success of the Toyota Group. Aiming to play a more important

rate of products and achieving a return on investment. Aimingrole in the development and production of TOYOTA-brand cars

to participate in the Electronics Business and expand

and engines, Toyota Industries will step up its efforts tooperations in the short term, and to diversify risks by enteringstrengthen its research and development capability andnew areas of this business, Toyota Industries has not only

improve productivity. In its work in this category for TMC,

carried out independent product development, but has also

Toyota Industries will also make proposals for the design andentered into joint ventures with both Sony Corporation andlaunch of auto parts and compact cars, and actively work to

Ibiden Co., Ltd. Toyota Industries believes that this strategy has

ensure that such proposals are adopted.

been successful to date and views this category as a key sourceof future corporate growth.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

49

Management’s Discussion and Analysisof Financial Condition and Results of Operations
More Efficient Management of Funds

34% of Aichi’s total shares issued, for which we paid ¥3.2

Until March 2002, the full amount of deposits in financial

billion. We also obtained a warrant that when exercised in May

institutions that have headquarters in Japan was fully

2003 will raise our holding to 51%. This will turn Aichi into one

protected by the Deposit Insurance Corporation of Japanof our subsidiaries, and raise our total investment amount to(DICJ), a government organization under the Deposit¥7.0 billion.

Insurance Law. Effective April 2002, the guaranteed sum
insured was reduced to a maximum principal of ¥10 million

Forecast for Fiscal 2003

per depositor per financial institution, plus interest (limited

For fiscal 2003, ending March 31, 2003, Toyota Industries

coverage). To achieve more efficient fund utilization, Toyota

forecasts consolidated net sales of ¥990.0 billion, ordinary

Industries Group is pushing ahead with localized fundincome of ¥48.0 billion and net income of ¥23.5 billion. These

management by region.

projections are based on an exchange rate of ¥125=US$1.

At Toyota Industries Group, we are spreading risk by
switching to more secure credits and reviewing relationships
with banks with a view to establishing deposit limits in

Dividend Policy

accordance with bank credit ratings. Also, to minimize risks to

Toyota Industries Corporation’s dividend policy is to continue

the working capital of the Group, Toyota Industries has started

paying stable dividends, while giving overall consideration toto take in the surplus funds of its subsidiaries. In Northbusiness results and dividends payout ratio, in order to meet

America, Toyota Industries North America, Inc. (“TINA”), one of

the expectations of shareholders.

our holding companies, is promoting intensive management

Toyota Industries’ Ordinary General Meeting ofof funds. TINA is mainly responsible for efficient appropriation

Shareholders, held on June 27, 2002, approved a year-end cashof funds by coordinating surpluses and shortfalls among

dividend of ¥10.0 per share. Including the interim cash

Group companies and borrowing directly from Toyota

dividend of ¥9.0 per share, cash dividends for the year totaled

Industries Corporation. From fiscal 2001, ended December 31,¥19.0 per share, an increase of ¥2.0 per share over fiscal 2001.

2001, TINA and its subsidiaries have paid taxes on a

The dividend payout ratio was 23.8%.

consolidated basis. Tax planning through consolidated tax

Toyota Industries views retained earnings as an important

payment is expected to reduce Toyota Industries’ effective

resource for securing future profits for its shareholders, and it

income tax rate.

intends to strategically invest to aggressively pursue businessexpansion and strengthen its management foundations.

Capital and Business Collaboration

Toyota Industries also use reserves to repurchase treasury

On April 25, 2002, the Boards of Directors of both Toyota

stocks.

Industries and Aichi Corporation (“Aichi”) voted to conclude acomprehensive agreement on capital and businesscollaboration between the two companies. Aichi is listed on

Stock Repurchase Program

the Tokyo and Nagoya Stock Exchanges as a manufacturer of

On May 10, 2002, the Board of Directors of Toyota Industries

special-purpose vehicles such as aerial lift equipment for

Corporation resolved to propose an agenda item asking forconstruction works. Through this collaboration, both

authorization to repurchase its shares by a shareholder

companies will be able to offer product lineups that best

resolution to be adopted at the Ordinary General Meeting of

exploit the strengths of each company. Toyota Industries will

Shareholders held on June 27, 2002. This will allow theconcentrate on the manufacture of materials handling

Company to implement flexible capital policies in accordance

equipment such as forklift trucks, while Aichi will specialize inwith the business environment. The Board of Directors ofspecial-purpose vehicles.

Toyota Industries Corporation is authorized to repurchase up

On May 14, 2002, Aichi issued and allocated 20,056,000

to 20 million of the Company’s common shares (representing

shares of common stock to Toyota Industries. This amounts to

6.4% of the Company’s issued shares) at a total purchase pricenot exceeding ¥50 billion.

50

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

Change in Share Trading Unit
To broaden the range of investors in Toyota Industries’ stockand to promote the trading of its shares, Toyota Industries
lowered the minimum trading unit of its shares from 1,000 to
100 with effect from August 1, 2001. Accordingly, Toyota
Industries’ shares listed on the Tokyo Stock Exchange, Nagoya
Stock Exchange and Osaka Securities Exchange have since
been traded in units of 100 shares. As a result, the number ofshareholders increased by 2,867—from 14,937 as of March 31,
2001 to 17,804 as of March 31, 2002.

Toyota Industries’ Relationship to Toyota
Motor Corporation
In 1933, Kiichiro Toyoda, eldest son of founder Sakichi Toyoda
and Managing Director of Toyota Industries (then Toyoda
Automatic Loom Works, Ltd.) at the time, established theAutomobile Division within the Company. In 1937, theAutomobile Division was spun off and became an
independent company, Toyota Motor Co., Ltd. (the present
Toyota Motor Corporation).
As of March 31, 2002, Toyota Industries holds 5.4% (196,725
thousand shares) of TMC’s total shares issued. As of the samedate, TMC holds 24.7% (77,282 thousand shares) of Toyota
Industries’ total shares issued. Toyota Industries is one of TMC’s
affiliates accounted for by the equity method.
TMC assigns the assembly of certain cars and the
production of automobile engines to us. We also directly or
indirectly manufacture and sell other automobile components
to TMC. In fiscal 2002, our net sales to TMC totaled ¥411.0
billion and accounted for 41.9% of consolidated net sales.
As a member of the Toyota Group, we intend to enhance
the competitiveness of TMC and other Toyota Group members
by contributing in such areas as quality, cost, delivery andtechnologies. We believe that this will be reflected in increases
in sales and profits for the Toyota Group, thus increasing theshareholder value of Toyota Industries.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

51