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1

REVIEW OF OPERATIONS

CONTENTS

Ⅰ. SUMMARY OF NIPPON SEIKI. GROUP. FOR F.Y.2004/ 2005

● Instrument Sales Automotive instrument sales increased owing to an increase in sales for Japanese, European, and Asian makers. Motorcycle instrument sales decreased owing to a decrease in sales for European makers, but Motorcycle instrument sales increased thanks to Japanese makers, North and South American makers and Asian makers. Overall, instruments sales for the year totaled ￥95,163 million, a 10.8％ increase from the previous fiscal year.

● Liquid Crystal Display Sales LCD panel and module sales decreased by 15.8%, to ￥21,805 million from the previous fiscal year due to bad sales of reflective color LCD’s for mobile-telecommunications equipment and to a decrease in orders for them.

● Sales of Other Products Sales of other products totaled ￥19,206 million, an 8.4％ increase from the previous fiscal year, due to a sales increase in resin materials, car sales, and computer services.

Ⅰ SUMMARY FOR THE YEAR － REVIEW OF OPERATIONS 1 Ⅱ CONSOLIDATED BUSINESS RESULTS 2 Ⅲ NON-CONSOLIDATED FINANCIAL HIGHLIGHTS 3 Ⅳ OUTLINE OF THE COMPANY 4 Ⅴ PROFILE OF THE GROUP COMPANIES 6 Ⅵ OWNERSHIP OF THE COMPANY’S SHARE 7 Ⅶ BOARD OF DIRECTORS AND CORPORATE AUDITORS 9 Ⅷ CONSOLIDATED FINANCIAL STATEMENTS 10 Ⅸ OTHER INFORMATION 24

● Consumer Products and Electronic Device Sales Sales increased by 22.2％ to ￥11,561 million, due to an increase in orders for the start in production of mounting boards for plasma display and so-called “photo fine player”(a device that can stock many digital images).

In conclusion, the company’s consolidated business operations for fiscal year2005, ending March 31, 2005, resulted in annual sales of ¥147,737 million, up 6.3% from the previous year. At the same time, ordinary income for the year increased by 62.0%, to ¥13,719 million, and net income increased by 48.0%, to ¥7,253 million, respectively.

2

1.92.9

4.9

7.2

0

1

2

3

4

5

6

7

8

01/02 02/03 03/04 04/05

15.8

9.1

13.6

5.7

19.1

48.0

17.3

9.1

23.1

5.9

21.9

54.9

17.7

9.4

25.9

5.8

23.1

56.8

19.2

11.5

21.8

6.4

28.4

60.2

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

01/02 02/03 03/04 04/05

AutomotiveInstruments

MotorcycleInstruments

OtherInstruments

L.C.D.Products

Consumer-useProducts

Miscellaneous

-as of March 31, 2005

1. Consolidated Progress in Sales 2. Consolidated Progress in Net Income

● Consolidated Sales by business segment (¥ million)

Business Segment Annual sales in F.Y. 2004/2005

Increase (Decrease)

Annual sales in F.Y. 2003/2004

Instrument clusters for automobiles, motorcycles, agricultural/construction machines and boats

95,163 10.8% 85,922

LCD Products 21,805 △15.8% 25,901

Consumer-use products 11,561 22.2% 9,464

Other businesses 19,206 8.4% 17,718

Total 147,737 6.3% 139,007

● Consolidated Financial Highlights F.Y.2004 /2005

ending March 31 2005

F.Y.2003 /2004 ending March 31

2004


2003


2002

Sales (¥ million) 147,737 139,007 132,410 111,685

Ordinary income (¥ million) 13,719 8,467 6,655 4,849

Net income (¥ million) 7,253 4,902 2,927 1,957

Total assets (¥ million) 118,350 114,075 108,903 98,636

Net assets (¥ million) 53,483 42,955 38,272 39,681

Net income per share (¥) 128.32 85.60 48.80 34.62

Net assets per share (¥) 924.46 796.24 708.69 701.91

Consolidated sales for the fiscal year ending March 31, 2005, increased by 6.3% to ¥147,737 million; ordinary

income increased by 62.0% to ¥ 13,719 million, and net income increased by 48.0% to ¥ 7,253 million.

Ⅱ. Consolidated Business Results

In billions of Yen In billions of Yen

139.0

111.6

132.4

147.7

3

1.41.7

3.1

5.0

0

1

2

3

4

5

6

01/02 02/03 03/04 04/05

3.0

8.1

13.6

4.1

17.9

28.9

3.5

8.3

23.1

4.5

17.6

33.8

3.8

8.8

25.9

5.0

16.9

33.7

3.7

10.1

21.8

5.7

18.3

38.8

0.0

20.0

40.0

60.0

80.0

100.0

01/02 02/03 03/04 04/05

AutomotiveInstruments

MotorcycleInstruments

Other Instruments

L.C.D.Products

Consumer-useProducts

Miscellaneous

-as of March 31, 2005 1. Progress in Sales 2. Progress in Net Income

3．Progress in business results

Fiscal Year F.Y. 2004/2005 ending March 31 2005

F.Y. 2003/2004 ending March 31 2004

F.Y. 2002/2003 ending March 31 2003

F.Y. 2001/2002 Ending March 31 2002

Sales (¥ million) 98,620 94,405 91,098 76,041

Ordinary income (¥ million) 8,439 4,472 3,145 2,988

Net income (¥ million) 5,016 3,122 1,723 1,483

Net income per share (¥) 89.49 55.06 28.87 26.23

Dividend per share (¥) 15.00 10.00 8.00 8.00

Total assets (¥million) 95,373 93,282 89,041 77,740

Shareholders’ Equity (¥million) 47,324 38,750 35,130 37,338

Common stock capital (¥ million) 12,982 12,495 12,495 12,495

Equity ratio (%) 49.6 41.5 39.5 48.0

N.B.

※ Net income per share is calculated by the average number of all issued- shares in the F./Y.

Ⅲ.Non-Consolidated FINANCIAL HIGHLIGHTS

In billions of Yen 94.4

76.0

91.0

98.6 In billions of Yen

4

-as of March 31, 2005-

Nippon Seiki Co., Ltd.

● Incorporated : December 24, 1946

● Common stock capital : 12,982,041,236 Yen

● Main products

・Automotive instruments

・Heads Up Display※１

・Motorcycle instruments

・Instruments for agricultural and construction machines

and boats

・Sensors for automobiles

・Liquid crystal display panels for:

-Instruments, clocks, audio appliances, telecommunication

equipment, office/household equipment etc.

・Color liquid crystal display modules

・Applied products of organic electroluminescence

・Hybrid IC

・Remote controllers for air conditioners and household

appliances

・Control panels for household equipment

・System controllers for air conditioner equipment

・Educational card players

・LED printer heads for plotters

・Control panels for office equipment

・Diver computers

・Automatic liquid filling and packing machines

for the food industry

・Aftermarket car products

・Lettering sheets

※１The product, "Head Up Display(HUD)," uses projection technology to display vehicle information on the windshield.

● Head office and Factory

2-34, Higashi-Zaoh 2-chome, Nagaoka-shi, Niigata

940-8580 JAPAN

● Takami Division

2-8, Higashi-Takami 2-chome, Nagaoka-shi, Niigata

940-0006 JAPAN

● Research & Development Center

190-1,Fujihashi 1-chome,Nagaoka-shi, Niigata

940-2141 JAPAN

● Special Machine Business Operation Division

2-16, Jyoka 3-chome, Nagaoka-shi, Niigata

940-0021 JAPAN

● Branches

Tokyo, Hong Kong

● Offices

Utsunomiya, Ageo, Hamamatsu, Nagoya, Suzuka,

Osaka, Mizushima, Kumamoto

● Number of Employees

1,632

Ⅳ. OUTLINE OF THE COMPANY

5

Worldwide Network

● North America ● South America ・New Sabina Industries, Inc. / Sabina, Ohio, U.S.A. ・Nippon Seiki Do Brasil Ltda. / Manaus, Brazil

・N.S. International, Ltd. / Troy, Michigan U.S.A.

● Europe ・UK-NSI Co., Ltd. / Redditch, Worcs., U.K.

・Nippon Seiki (Europe)B.V. / Hoofddorp, Netherlands

● Asia ・Thai Nippon Seiki Co., Ltd. / Chonburi, Thailand

・Thai Matto NS Co., Ltd. / Chonburi, Thailand

・JNS Instruments Ltd. / Haryana, India

・Tatung Precise Meter Co., Ltd. / Taipei, Taiwan R.O.C.

・Cixi Zhengtong Erectronics Co.,Ltd./ Cixi Zhengtong,China

・Nantong NS Advantech Co.,Ltd./ Nantong, China

・Hong Kong Ek Chor Nissei Co., Ltd. / Hong Kong, China

・Hong Kong Nippon Seiki Co., Ltd. / Hong Kong, China

・Shanghai Nissei Display System Co., Ltd./ Shanghai, China

・PT. Indonesia Nippon Seiki / Banten, Indonesia

・Dongguan Nissei Electronics Co., Ltd. / Dongguan, China

Nippon Seiki Do Brasil Ltda.

Shanghai Nissei

Display System Co.,Ltd.

UK-NSI Co., Ltd. N.S.International, Ltd.

New Sabina Industries, Inc.

Tatung Precise Meter

Co., Ltd. Hong Kong Ek Chor

Nissei Co., Ltd.

Nippon Seiki Co., Ltd.

JNS Instruments Ltd

Hong Kong Nippon Seiki

Co., Ltd. Thai Nippon Seiki Co., Ltd.

Thai Matto NS Co., Ltd.

Nippon Seiki (Europe) B.V.

Dongguan Nissei Electronics

Co., Ltd. PT.Indonesia Nippon Seiki

Cixi Zhengtong Electronics

Co.,Ltd Nantong NS Advantech

Co.,Ltd

6

-as of March 31, 2005-

Nippon Seiki Group is composed of 22 consolidated subsidiaries and 3 affiliated companies. The main business of the group is responsible for the manufacture and sale of instrument clusters for automobiles, motorcycles, agricultural / construction machines and boats, and the manufacture and sale of Liquid Crystal Display panels and modules, consumer-products and other products.NS Group also has businesses related to transport, and research & development connected with the above products. NS Group is also involved in software development, car sales and other services.

Details of each company in the group and its main activities are as follows. ●Consolidated subsidiaries

Name of Company voting rights equity ratio Main activities Main trading with

the parent NS Advantech Co., Ltd. 85.6 Manufacturing of automotive and motorcycle

clusters and gauges / Plastic injection molding /Compounding, colouring of Plastics and Trading

Selling products and component parts

NS Electronics Co., Ltd. 100.0 Manufacturing of electronic subassemblies for instrument clusters and remote controllers

Selling products and component parts

YNS Inc. 80.0 Manufacturing and sales of automotive instrument clusters and peripheral systems

Purchasing component parts

NS Computer Service Co., Ltd. 91.9

Computer services, software development and office automation equipment sales

Software development

Nissei Service Co., Ltd. 100.0 Transport and car sales Packing and transporting products

Honda Car Sales Nagaoka Co., Ltd. 100.0

Honda car dealer

Car sales

Yamato Honda Co., Ltd.

100.0 Honda car dealer Car sales

NS Motors Co.,Ltd. 100.0 An imported car dealer Car sales NS Body Service Co., Ltd 100.0 Repairing of car bodies Repairing of cars Pretech. N Co., Ltd. 48.8 Manufacturing components of automotive

and motorcycle instrument clusters Selling products and component parts

UK-NSI Co., Ltd. 100.0

Manufacturing of automotive and motorcycle instrument clusters

Purchasing component parts

Nippon Seiki (Europe) B.V. 100.0 Sales of products made by Nippon Seiki Group in the European market

Purchasing products

New Sabina Industries, Inc. 100.0 Manufacturing and sales of automotive and motorcycle instrument clusters

Purchasing products and component parts

NS International, Ltd.

86.4 Sales of products made by Nippon Seiki Group in the North American market

Purchasing products

Nippon Seiki Do Brasil Ltda. 100.0 Manufacturing and sales of motorcycle instrument clusters


Thai Nippon Seiki Co., Ltd 55.4 Manufacturing and sales of automotive and motorcycle instrument clusters

Purchasing component parts and production equipment

Thai Matto NS Co., Ltd. 83.5 Compounding and colouring of plastics and trading

None

PT. Indonesia Nippon Seiki 70.0 Manufacturing and sales of motorcycle instrument clusters


Hong Kong Nippon Seiki Co., Ltd. 100.0 Manufacturing and sales of control panels for office equipment and remote controllers for air conditioners and household equipment

Buying and selling products

Dongguan Nissei Electronics Co.,Ltd

100.0 Manufacturing of control panels for office equipment and remote controllers for air conditioners and household equipment

Buying Products

Ⅴ．PROFILE OF THE GROUP COMPANIES

7

●Consolidated subsidiaries

Name of Company Voting rights equity ratio Main activities Main trading with

the parent Shanghai Nissei Display System Co., Ltd.

80.0 Manufacturing and sales of automotive and motorcycle instrument clusters


Hong Kong Ek Chor Nissei Co., Ltd.

90.0 Investment and holding company Investment in China on behalf of the parent

●Affiliated Companies by equity method

Name of Company Voting rights equity ratio Main activities Main Trading with

Nippon Seiki Adeon Co., Ltd. 50.0 Manufacturing and sales of Organic EL Selling products

Kashiwazaki Taxi Co., Ltd. 27.7 Taxicab operator None

Tatung Precise Meter Co., Ltd. 49.0 Manufacturing and sales of automotive and motorcycle instruments and peripheral systems


.

3,781 shareholders in total hold the company’s common shares. Details of the issued shares and shareholders are as follows. ● Total number of authorized shares : 220,000,000 shares ● Total number of issued shares : 57,605,752 shares ● Major shareholders ( 1000 shares)

Name Number of shares (Shareholder’s equity ratio)

Number of shares held by the Company

(Shareholder’s equity ratio)

Honda Motor Co., Ltd. 3,753(6.52%) 1,675(0.18%)

Yasuo Nagai 3,379(5.87%) N/A

The Bank of Tokyo-Mitsubishi, Ltd. 2,391(4.15%) N/A

Japan Trustee Services Bank,Ltd. 2,347(4.07%) N/A

Shareholding association of Nippon Seiki Employees 2,321(4.03%) N/A

The Master Trust Bank of Japan, Ltd. 2,211(3.84%) N/A

The Hokuetsu Bank, Ltd. 2,022(3.51%) 1,572(0.69%)

The Daishi Bank, Ltd. 1,568(2.72%) 240 (0.06%)

Atsuo Nagai 1,397(2.43%) N/A

Yamaha Motor Co., Ltd. 1,217(2.11%) 171(0.06%)

Ⅵ. OWNERSHIP OF THE COMPANY’S SHARE

8

● Distribution Ratio by type of Shareholder

0.78%10.65%

38.57%

15.42%

34.58%Banks(38.57%)

SecurityCompanies(0.78%)

OtherCorporations(15.42%)

Foreign Corporationsetc.(10.65%)

Individualsetc.(34.58%)

● Distribution Ratio by number of shares of total capital

0.57% 7.74%

2.79%

11.73%

30.44%

46.73%

Under 1,000shares(0.57%)

Over 1,000shares(7.74%)



Over 100,000shares(30.44%)

Over 1,000,000shares(46.73%)

9

-as of June, 2005-

President and Representative Director Directors

Shoji Nagai Ryuichi Yamazaki

Senior Managing and Takeyoshi Ikarashi

Representative Director Kazuyoshi Kishi Takashi Nagatsuka Norio Yakubo

Senior Managing Directors Yoshinobu Kimura Kazuo Nirasawa Takashi Komagata Managing Directors Yoshiki Takebe

Michio Hirokawa Soichi Fujita

Mitsuhiro Kawamata Akira Nakamura

Hitoshi Yoshikawa Hirotoshi Takada Yoshiaki Yazawa Hiroshi Araki Corporate Auditors

Yasuo Nagai

Kimiyuki Saito Tadao Endo Youichi Sakurai

Ⅶ．BOARD OF DIRECTORS AND CORPORATE AUDITORS

10

Consolidated Balance Sheets

March 31, 2005

March 31, 2004

ASSETS (Thousands of Japanese Yen) (Thousands of Japanese Yen)

Current Assets Cash and bank deposits (Note 8) Notes receivable Accounts receivable Inventories Deferred tax assets (Note 4) Other current assets Allowance for doubtful accounts

¥ 6,263,865 1,726,914

32,271,580 18,239,841 1,549,428 2,913,462

( 206,717

)

¥ 8,948,536 2,091,412

29,076,869 16,620,743 1,121,829 2,706,077

( 48,177

)

CURRENT ASSETS-TOTAL 62,758,369 60,517,292

Fixed Assets

Tangible Fixed Assets (Note 3) Buildings and Structures Machinery, Equipment and Vehicles Tools, Jigs and Fixtures Land Construction in Progress

10,135,740 9,369,057 3,904,812

13,304,709 1,545,957

10,032,919 9,053,945 3,269,446

13,892,904 860,950

Total 38,260,276 37,110,166

Intangible Fixed Assets Consolidation adjustment account - 245,421 Other intangible fixed assets 1,230,730 1,060,652

Total 1,230,730 1,306,073

Investment and Other Assets Investment securities (Note 3) Deferred tax assets (Note 4) Other investment and assets Allowance for doubtful accounts

13,813,166 1,160,802

894,319 ( 75,433 )

12,446,497 1,567,567

907,544 ( 74,559

)

Total 15,792,854 14,847,049

FIXED ASSETS-TOTAL 55,283,861 53,263,289

Deferred Assets

Research and Development expenses 308,349 295,188

TOTAL ASSETS ¥ 118,350,581 ¥ 114,075,770

Ⅷ. CONSOLIDATED FINANCIAL STATEMENTS of NIPPON SEIKI Co.,Ltd.

11

March 31, 2005

March 31, 2004

LIABILITIES (Thousands of Japanese Yen) (Thousands of Japanese Yen)

Current Liabilities Notes payable Accounts payable Short-term loans payable (Note 3) Accrued income taxes Accrued bonuses to employees Other current liabilities

¥ 3,748,918 25,395,091 8,373,590 3,404,304 1,666,484 6,379,083

¥ 3,246,318 22,918,807 16,922,688

895,483 1,444,731 5,021,110

CURRENT LIABILITIES-TOTAL 48,967,474 50,449,140

Long-term Liabilities Bonds Long-term loans payable (Note 3) Deferred tax liability (Note 4) Allowance for employees’ retirement benefits (Note 5) Allowance for directors’ retirement benefits Consolidation adjustment account Other long-term liabilities

3,782,000 3,979,464

649,044 1,886,582

593,102 28,719

1,093,239

7,500,000 4,712,624

459,377 2,460,004

665,870 -

1,374,288

LONG-TERM LIABILITIES-TOTAL 12,012,152 17,172,165

TOTAL LIABILITIES 60,979,627 67,621,306

MINORITY INTERESTS 3,886,963 3,499,373

SHAREHOLDERS’ EQUITY (Note 6)

Common stock 12,982,041 12,495,488

Additional paid-in capital 5,505,316 4,220,626

Retained earnings 33,504,480 27,185,627

Unrealized gain on investment securities 3,333,066 2,630,447

Adjustment from foreign currency translation ( 1,784,136 ) ( 1,672,621 )

Treasury stock ( 56,777 ) ( 1,904,477 )

TOTAL SHAREHOLDERS’ EQUITY 53,483,990 42,955,090 TOTAL LIABILITIES, MINORITY INTERESTS AND

SHAREHOLDERS’ EQUITY ¥ 118,350,581 ¥ 114,075,770

See notes to consolidated financial statements.

12

Consolidated Statements of Income

Year ended March 31, 2005


(Thousands of Japanese Yen) (Thousands of Japanese Yen)

Sales ¥ 147,737,711 ¥ 139,007,170

Cost of Sales 119,720,906 115,246,783

GROSS PROFIT 28,016,804 23,760,387 Selling, General and Administrative Expenses

Packing and Transportation Salaries Provision for doubtful accounts Provision for accrued bonuses to employees Provision for accrued retirement allowance Provision for accrued directors’ retirement allowance Depreciation Other expenses

3,199,464 5,293,857

157,131 318,846 176,894 60,541

581,500 5,430,864

2,943,231 4,803,635

40,081 305,785 389,168 65,004

562,169 5,374,538

Total 15,219,098 14,483,615

OPERATING INCOME 12,797,705 9,276,771 Non Operating Income

Interest income Dividend income Profits on sales of securities Profits on foreign exchange Other non operating income

157,504 116,970 -

454,553 482,055

45,446 239,057

72 -

322,776 Total 1,211,084 607,352

Non Operating Expenses Interest expense Bond issue costs Loss on foreign exchange Equity in loss of affiliates Other non operating expenses

136,762 - -

133,440 19,315

255,632 185,917 924,072 41,644 9,590

Total 289,518 1,416,858

ORDINARY INCOME 13,719,270 8,467,266 Special Income

Gain on sales of fixed assets Profits from termination of defined benefit pension plans Other special income

213,836 -

23,001

39,601 581,307 -

Total 236,837 620,909 Special Loss

Loss on sales of fixed assets Loss on disposal of fixed assets Impairment loss Loss on earthquakes Loss on investment security revaluation Amortization of transition difference of retirement allowance

due to change of accounting standard (Note 5) Loss on termination of defined benefit pension plans Provision for accrued director’s retirement allowance Other special loss

32,900 213,378 551,331 270,623 19,447

67,488

174,570 28,681 16,150

8,094 180,333 - -

85,479

277,899 -

34,032 49,557

Total 1,374,572 635,397

INCOME BEFORE TAXES 12,581,536 8,452,778

Income taxes (Note 4) 4,416,292 2,744,328

Minority Interests in Income 911,305 805,797

NET INCOME ¥ 7,253,938 ¥ 4,902,652


13

Consolidated Statements of Retained Earnings




Retained earnings at beginning ¥ 27,185,627 ¥ 23,009,432

Increase in retained earnings : Net income 7,253,938 4,902,652

Total 7,253,938 4,902,652

Decrease in retained earnings : Dividends Bonus to directors [Bonus to corporate auditors included] Decrease in retained earnings due to increase of

additional consolidated subsidiary Decrease due to change in ownership ratio of

consolidated subsidiary Employee welfare fund

592,581 296,781

[ 17,572

6,689

29,540 9,493

]

428,655 275,036

[ 15,905

22,764

-

]

Total 935,085 726,457

Retained earnings at end ¥ 33,504,480 ¥ 27,185,627


14

Consolidated Statements of Cash Flows


Year ended March 31, 2004 Cash flows from operating activities: (Thousands of Japanese Yen) (Thousands of Japanese Yen)

Income before income taxes and minority interests Depreciation and amortization Impairment loss Amortization of consolidation adjustment account Accrued bonuses to employees, net of payment Employees’ retirement benefits, net of payments Directors’ retirement benefits, net of payment Allowance for doubtful accounts Interest and dividend income Interest expense Gain on foreign exchange Equity in loss of affiliates Loss (gain) on sales of marketable securities Loss on sales or disposal of property, net Loss on earthquakes Loss on investment securities revaluation Decrease (increase) in accounts and notes receivable Increase in inventories Increase (decrease) in accounts and notes payable Bonuses to directors Other, net

¥ 12,581,536 5,338,750

551,331 37,715

221,753 ( 571,855 ( 72,768

157,131 ( 274,475

136,762 ( 80,623

133,440 ( 10,203

32,442 11,710 30,167

( 2,714,257 ( 1,672,992

2,929,139 ( 315,880

424,927

) ) ) ) ) ) ) )

¥ 8,452,778 5,481,228 -

88,922 ( 152,707 ( 3,321,545

46,654 39,725

( 284,503 255,632

( 46,824 41,644

( 72 148,826 -

97,679 1,022,375

( 534,119 ( 3,660,921 ( 290,200

2,218,167

) ) ) ) ) ) ) )

Sub-total 16,873,751 9,602,740 Interest and dividend received Interest paid Income taxes paid

313,457 ( 136,536 ( 2,202,440

) )

285,878 ( 254,852 ( 3,622,347

) )

Cash provided by operating activities 14,848,232 6,011,419

Cash flows from investing activities: Purchase of properties Proceeds from sale of properties Purchase of investment securities Proceeds from sales of investment securities Other, net

( 6,591,812 510,291

( 607,728 21,785

( 876,290

) ) )

( 5,986,790 1,320,264

( 1,545,184 8,668

( 836,162

) ) )

Cash used in investing activities ( 7,543,754 ) ( 7,039,205 )

Cash flows from financing activities: Increase (decrease) in short-term loans Proceeds from long-term loans Repayments of long-term loans Proceeds from bond issued Proceeds from stock issued to minority shareholders Cash dividend paid Cash dividend paid to minority shareholders Other, net

( 8,583,625 1,528,387

( 2,281,107 -

48,847 ( 592,850 ( 137,705 ( 191,741

) ) ) ) )

1,361,184 72,800

( 2,480,749 7,500,000 -

( 429,039 ( 121,396 ( 35,875

) ) ) )

Cash provided by (used in) financing activities ( 10,209,795 ) 5,866,923

Effect of exchange rate changes on cash and cash equivalents 48,119 69,575 Net (decrease) increase in cash and cash equivalents ( 2,857,198 ) 4,908,713 Cash and cash equivalents at beginning of year 8,879,216 3,786,620 Increase in cash and cash equivalents due to

inclusion of subsidiaries in consolidation 176,120 183,882

Cash and cash equivalents at end of year (Note 8) ¥ 6,198,138 ¥ 8,879,216


15

Notes to Consolidated Financial Statements

Nippon Seiki Co., Ltd. and Consolidated Subsidiaries

March 31, 2005

1. Summary of Significant Accounting Policies

(a) Basis of presentation

Nippon Seiki Co., Ltd. ( the "Company" ) and its domestic subsidiaries maintain their accounting records and prepare their

financial statements in accordance with accounting principles and practices generally accepted in Japan, and foreign

subsidiaries maintain their books of account in conformity with those of their countries of domicile. The accompanying

consolidated financial statements are prepared on the basis of accounting principles generally accepted in Japan, which are

different in certain respects as to application and disclosure requirements of International Financial Reporting Standards

and are compiled from the consolidated financial statements prepared by the Company as required by the Securities and

Exchange Law of Japan. For the purposes of this document, certain reclassifications have been made to present the

accompanying consolidated financial statements in a format that is familiar to readers outside Japan.

(b) Basis of consolidation and accounting for investments in affiliates

The consolidated financial statements include the accounts of the Company and its 22 significant subsidiaries (the

“Companies”) at March 31, 2005, except for certain subsidiaries whose gross assets, net sales, and net income were not

significant in the aggregate in relation to the comparable figure in the consolidated financial statements. All significant

inter-company balances and transactions have been eliminated in consolidation.

Investments in three affiliates have been accounted for by the equity method. Investments in two affiliates were stated at

cost because the effect of application of the equity method would be immaterial.

One domestic subsidiary is consolidated on the basis of fiscal period ending February 28, and eight foreign subsidiaries are

consolidated on the basis of fiscal period ending December 31. Significant transactions, which occurred during the period

between these fiscal year-ends and March 31, are adjusted in the accompanying consolidated financial statements.

All assets and liabilities of the subsidiaries are revaluated at fair values on acquisition and the excess of cost over

underlying net assets at the date of acquisition is amortized over a period of five years on a straight-line basis.

(c) Foreign currency translation

Monetary assets and liabilities of the Company and its domestic subsidiaries denominated in foreign currencies are

translated at the current exchange rates in effect at each balance-sheet date. Resulting gains and losses are included in net

profit or loss for the period.

Assets and liabilities of the foreign consolidated subsidiaries are translated at the current exchange rates in effect at each

balance-sheet date and revenue and expense accounts are translated at the average rate of exchange in effect during the

year. The Company has presented translation adjustments as a component of shareholders’ equity and minority interests in

consolidated financial statements.

(d) Cash and cash equivalents

All highly liquid investments, generally with a maturity of three months or less when purchases, which are readily

convertible into known amounts of cash and are so near maturity that they represent only an insignificant risk of any

change in value attributable to changes in interest rates, are cash equivalents.

16

(e) Securities

Equity securities not classified as trading securities are stated at fair value and the changes in fair value, net of applicable

income taxes, have been directly included in shareholders’ equity as unrealized gain on investment securities.

Other securities, for which fair values are unavailable, are stated at cost as determined by the moving average method.

(f) Inventories

Finished goods and Work in process;

Instruments Stated at cost by the weighted average method

Others Stated at cost by the identified method Materials Stated at cost by the weighted average method Supplies Stated at cost by the most recent purchase price method

(g) Depreciation and Amortization

Depreciation of tangible assets is mainly calculated by the declining-balance method. Useful lives of the respective assets

are based on the Corporation Tax Law.

Depreciation of intangible assets is mainly calculated by the straight-line method. Useful lives of the respective assets are

based on the Corporation Tax Law.

(h) Allowance for doubtful accounts

The allowance for doubtful accounts is provided at an amount sufficient to cover possible losses on the collection of

receivables. For the Company and its consolidated subsidiaries, the amount of the allowance is determined based on (1) past

write-off experience, and (2) an estimated amount for probable doubtful accounts based on a review of the collectibility of

individual receivables.

(i) Accrued bonuses to employees

Accrued bonuses are recognized based on expected total expenditure at the end of fiscal year.

(j) Pension and retirement benefits

Employees’ retirement benefits

Effective the year ended March 31, 2001, the Company and its domestic subsidiaries adopted a new accounting standard for

retirement benefits. In accordance with this standard, allowance for employees’ retirement benefits has been provided based

on the projected retirement benefit obligation and the pension fund assets.

The transition difference from the initial adoption of the new accounting standard is being amortized by the straight-line

method over 5 years.

Past service costs are amortized by the straight-line method over 10 years which are shorter than the average remaining

years of service of the employees.

Actuarial gain and loss are amortized in the year following the year in which the gain or loss is recognized primarily by the

straight-line method over 10 years which are shorter than the average remaining years of service of the employees.

Directors’ retirement benefits

The Company and seven domestic subsidiaries provide 100% allowance for retirement benefits for the directors under their

internal rules.

17

(k) Leases

Finance leases for which ownership does not transfer to lessees are principally accounted for as ordinary rental

transactions.

(l) Income taxes

Deferred income taxes are recognized by the asset and liability method. Under this method, deferred assets and liabilities

are determined based on the difference between financial reporting and the tax basis of the assets and liabilities and are

measured using the enacted tax rates and laws which will be in effect when the differences are expected to reverse.

(m) Appropriation of retained earnings

Under the Commercial Code of Japan, the appropriation of 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.

2. Changes in Accounting Policies

Accounting Standard for Impairment of Fixed Assets

As permitted by “Accounting Standard for Impairment of Fixed Assets” (“Opinion Concerning Establishment of Accounting

Standard for Impairment of Fixed Assets” (Business Accounting Council Report, August 9, 2002)) and “Guidelines on

Implementation of Accounting Standard for Impairment of Fixed Assets” (Guidelines on Implementation of Business

Accounting Standard No. 6, October 31, 2003) effective the fiscal year beginning on April 1, 2004, the impairment

accounting in accordance with the above standard and guidelines were applied. The effect of this change on operations was

to decrease income before income taxes by ¥551,331 thousand.

3. Short-term Loans and Long-term Debt

The weighted average interest rate of short-term loans payable to banks was 0.8% at March 31, 2005.

Long-term debt as of March 31, 2005 consisted of the following:

Thousands of Yen Loans from banks and insurance companies, due through 2013 At average rates of 1.1% and 1.0% for current and non-current portion, respectively ¥ 6,044,574 Less: Current portion 2,065,109 ¥ 3,979,464

Aggregate annual maturities of long-term debt subsequent to March 31, 2005 are as follows:

Year ending March 31,

Thousands of Yen

2006 ¥ 2,065,109 2007 1,537,550 2008 1,130,694 2009 906,000 2010 and thereafter 405,219 ¥ 6,044,574

18

The assets mortgaged for short-term and long-term loans payable as of March 31, 2005 were as follows:

Thousands of Yen Property, plant and equipment, net of accumulated depreciation ¥ 5,073,572 Securities 4,779,300

4. Income Taxes

Income taxes applicable to the Company and its domestic subsidiaries comprised corporation tax, inhabitant’s taxes and

enterprise tax which, in aggregate, resulted in a statutory tax rate of approximately 40% for the year ended March 31,2005.

Income taxes of the foreign subsidiaries are based generally on the tax rates applicable in their countries of incorporation.

The major components of deferred tax assets and liabilities as of March 31, 2005 were as follows;

Thousands of Yen Deferred tax assets

Accrued bonuses ¥ 674,764 Retirement benefits 956,649 Accrued pension contribution 763,552 Unrealized gains on inventories, property and equipment Loss on devaluation of unused property

615,393 222,738

Others 2,269,915 Valuation allowance for deferred tax assets

5,503,012 (59,541)

Total deferred tax assets 5,443,471 Deferred tax liabilities

Reserve for special depreciation ( 157,053) Unrealized gains on investment securities ( 2,627,428) Undistributed earnings of foreign subsidiaries ( 493,419) Others ( 104,383)

Total deferred tax liabilities ( 3,382,285) Net deferred tax assets ¥ 2,061,186

5. Retirement Benefits

The Company and its consolidated subsidiaries have mainly defined contribution plans.

The Company and certain consolidated subsidiaries also have defined benefit pension plans, welfare pension fund plans,

tax-qualified pension plans and lump-sum payment plans. The amount of benefits under the plans is determined on the

basis of years of service at the time of termination of employment.

On December 1, 2004, one consolidated subsidiary transferred defined benefit pension plans and tax-qualified pension to

defined contribution plans.

The following table sets forth the funded and accrued status for the plans, and the amounts recognized in the consolidated

balance sheet as of March 31, 2005 for the Company and consolidated subsidiaries’ defined benefit plans;

Thousands of Yen Projected benefit obligation ¥ 1,958,575 Plan assets at fair value ( 16,306) 1,942,268 Unrecognized actuarial gain or loss 55,686 Allowance for employees’ retirement benefits ¥ 1,886,582

19

The effect of a transfer from the welfare pension fund plan, tax-qualified pension plan and lump-sum payment plan to

defined contribution plans was as follows;

Thousands of Yen Decrease in retirement benefit liabilities ¥ 1,251,174 Unrecognized transitional difference at the accounting change ( 23,005) Unrecognized actuarial difference ( 63,887) Unrecognized past service cost ( 41,357) Transfer of plan assets ( 387,346) Decrease in allowance for retirement benefit ¥ 735,577

The assets yet to be transferred to defined contribution plans at March 31, 2005 amounted to ¥1,882,488 thousands and

were included in accounts payable-other and long-term payables.

The components of retirement benefit expenses for the year ended March 31, 2005 were outlined as follows;

Thousands of Yen Service cost ¥ 222,996 Interest cost 52,711 Expected return on plan assets ( 2,797) Amortization of past service cost 4,772 Amortization of actuarial gain or loss 28,699 Amortization of net retirement obligation at transition 67,488 Net retirement benefit expenses ¥ 373,870

The amount of cost recognized for the contribution to the plans for the year ended March 31, 2005 was ¥585,384 thousands.

The assumptions used in accounting for the above plans are as follows:

Discount Rate 2.0%-2.5%

Expected return rate on plan assets 1.0%

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 retirement benefits obligation at transition 5 years (straight-line method)

6. Shareholders' Equity

In accordance with provisions of the Commercial Code of Japan, the Company has provided a legal reserve as an

appropriation of retained earnings. The Code provides that neither additional paid-in capital nor the legal reserve is

available for dividends, but both may be used to reduce or eliminate a deficit by resolution of the shareholders or may be

transferred to stated capital (ordinary share / common stock ) by resolution of the Board of Directors.

7. Amounts per Share

Net income per share shown below is based on the weighted average number of shares of common stock outstanding during

the year.

Net assets per share is based on the number of shares of common stock outstanding at each balance sheet date.

Net income per share and net assets per share for the year ended or as of March 31, 2005 were as follows;

Net income per share ¥ 128.32 Net income per share, fully diluted ¥ 112.61 Net assets per share ¥ 924.46

20

8. Supplementary Cash Flow Information

The following table represents a reconciliation of cash and cash equivalents as of March 31, 2005 and 2004.

Thousands of Yen 2005 2004 Cash and bank deposit ¥ 6,263,858 ¥ 8,948,536 Time deposit with a maturity of more than three months ( 65,720 ) ( 69,320 ) Cash and cash equivalents ¥ 6,198,138 ¥ 8,879,216

9. Derivatives

The Companies, which operate globally, are exposed to market risk arising from fluctuations in foreign currency exchange

rates and enter into derivative financial instruments to the purpose of reducing such risk. The Companies also enter into

interest rate swap agreements as a means of managing their interest rate exposure. The Companies do not hold or issue

derivatives for speculative or dealing purposes. The counterparties to these derivatives are limited to authentic financial

institutions, the Companies do not anticipate any losses arising from credit risk.

All derivative transactions are entered into to hedge foreign currency exposures incorporated within business. Accordingly,

market risk in these derivatives is basically offset by opposite movements in the value of hedged assets or liabilities.

Derivative transactions entered into by the Companies have been made in accordance with the Companies’ policies. The

execution and control of derivatives are controlled by the Corporate Finance Department.

Fair Value of Derivative Financial Instruments:

The fair value of the Companies’ derivative financial instruments at March 31, 2005 and 2004 were as follows:

Interest-Related Transactions

Thousands of Yen

As of March 31, 2005 Notional Amount Fair Value

Unrealized Gain/Loss

Interest rate swaps Receive/fixed and pay/floating - - -

Thousands of Yen

As of March 31, 2004 Notional Amount Fair Value

Unrealized Gain/Loss

Interest rate swaps Receive/fixed and pay/floating ¥125,000 ¥245 ¥245

21

10. Segment Information

The Companies primary business activities include (1) Instrument clusters for automobiles, motorcycles,

agricultural/construction machines and boats (“Instrument”), (2) LCD products, (3) Consumer-use products and (4) Others.

A summary of net sales, operating costs and expenses, and operating income by segment of business activities for the years

ended March 31, 2005 and 2004 were as follows:

Thousands of Yen

Year ended March 31, 2005 Instruments LCD Products Consumer-Use

Products Others Total Elimination

and Corporate Consolidated

Total

Sales Unaffiliated customers....... ¥ 95,163,692 ¥ 21,805,658 ¥ 11,561,571 ¥ 19,206,788 ¥ 147,737,711 ¥ - ¥ 147,737,711 Intersegment ...................... - - - 7,895,965 7,895,965 (7,895,965) -

Total sales ................................ 95,163,692 21,805,658 11,561,571 27,102,753 155,633,676 (7,895,965) 147,737,711 Operating costs and expenses................................. 83,745,366 21,642,094 11,209,846 26,338,210 142,935,518 (7,995,512) 134,940,005

Operating income.................... ¥ 11,418,325 ¥ 163,564 ¥ 351,725 ¥ 764,542 ¥ 12,698,157 ¥ 99,547 ¥ 12,797,705

Total assets .............................. ¥ 61,655,716 ¥ 12,340,903 ¥ 9,391,465 ¥ 18,733,232 ¥ 102,121,318 ¥ 16,229,262 ¥ 118,350,581 Depreciation and amortization.......................... ¥ 3,544,408 ¥ 668,348 ¥ 418,548 ¥ 412,199 ¥ 5,043,504 ¥ 71,772 ¥ 5,115,277

Impairment loss...................... ¥ - ¥ - ¥ - ¥ - ¥ - ¥ 551,331 ¥ 551,331 Capital expenditure................ ¥ 5,605,377 ¥ 45,353 ¥ 813,385 ¥ 1,033,860 ¥ 7,497,976 ¥ 18,730 ¥ 7,516,706

Thousands of Yen

Year ended March 31, 2004 Instruments LCD Products Consumer-Use

Products Others Total Elimination


Total

Sales Unaffiliated customers....... ¥ 85,922,733 ¥ 25,901,039 ¥ 9,464,927 ¥ 17,718,469 ¥ 139,007,170 ¥ - ¥ 139,007,170 Intersegment ...................... - - - 7,134,878 7,134,878 (7,134,878) -


Operating income.................... ¥ 8,585,203 ¥ 189,482 ¥ 298,338 ¥ 262,524 ¥ 9,335,548 ¥ (58,777) ¥ 9,276,771

Total assets .............................. ¥ 56,635,602 ¥ 14,340,253 ¥ 7,432,371 ¥ 16,960,541 ¥ 95,368,769 ¥ 18,707,001 ¥ 114,075,770 Depreciation and amortization.......................... ¥ 3,529,297 ¥ 791,929 ¥ 307,223 ¥ 408,505 ¥ 5,036,956 ¥ 75,069 ¥ 5,112,025

Capital expenditure................ ¥ 4,695,096 ¥ 311,888 ¥ 617,525 ¥ 656,644 ¥ 6,281,155 ¥ 1,409 ¥ 6,282,564

22

Geographic Information

Thousands of Yen

Year ended March 31, 2005 Japan Americas Europe Asia Total Elimination


Total

Sales Unaffiliated customers....... ¥ 93,987,931 ¥ 25,007,008 ¥ 9,995,804 ¥ 18,746,966 ¥ 147,737,711 ¥ - ¥ 147,737,711 Intersegment ...................... 29,290,261 107,279 785 3,826,330 33,224,657 (33,224,657) -


Operating income.................... ¥ 8,951,680 ¥ 1,009,882 ¥ 453,858 ¥ 2,282,737 ¥ 12,698,157 ¥ 99,547 ¥ 12,797,705

Total assets .............................. ¥ 87,045,478 ¥ 11,471,944 ¥ 5,746,120 ¥ 13,902,866 ¥ 118,166,410 ¥ 184,170 ¥ 118,350,581

Thousands of Yen

Year ended March 31, 2004 Japan Americas Europe Asia Total Elimination


Total

Sales Unaffiliated customers....... ¥ 94,046,320 ¥ 23,932,733 ¥ 10,207,529 ¥ 10,820,587 ¥ 139,007,170 ¥ - ¥ 139,007,170 Intersegment ...................... 23,468,484 667,141 1,484 5,520,573 29,657,683 (29,657,683) -


Operating income.................... ¥ 6,209,013 ¥ 962,364 ¥ 468,366 ¥ 1,695,804 ¥ 9,335,548 ¥ (58,777) ¥ 9,276,771

Total assets .............................. ¥ 83,389,608 ¥ 10,168,325 ¥ 6,849,147 ¥ 10,104,991 ¥ 110,512,073 ¥ 3,563,696 ¥ 114,075,770

Overseas Sales

Overseas sales, which include export sales of the Company and its domestic consolidated subsidiaries and sales (other than

exports to Japan) of the foreign consolidated subsidiaries, for the years ended March 31, 2005 and 2004 were summarized

as follows:

Thousands of Yen Year ended March 31, 2005 Americas Europe Asia Total Overseas sales............................................................. ¥ 25,023,482 ¥ 10,450,293 ¥ 21,132,780 ￥ 56,606,556 Consolidated net sales................................................ 147,737,711 Overseas sales as a percentage of consolidated net sales...................................................................... 16.9％ 7.1％ 14.3％ 38.3％

Thousands of Yen Year ended March 31, 2004 Americas Europe Asia Total Overseas sales............................................................. ¥ 23,858,626 ¥ 10,671,326 ¥ 15,190,866 ￥ 49,720,819 Consolidated net sales................................................ 139,007,170 Overseas sales as a percentage of consolidated net sales...................................................................... 17.2％ 7.7％ 10.9％ 35.8％

副 B印も汀&YouN6-5用 rNN■HON

Report of lndependent Auditors

The Board of Directors

Nippon Seiki Co.,Ltd.

We have audited the accompanying consolidated balance sheets of Nippon Seiki Co.,Ltd。

and consolidated subsidiaries as of March 31,2005 and 2004,and thc related consolidated

statcmcnts of income, retained eamings, and cash ユ ows for thc years then ended, all

expressed in yen. These inancial statements are the responsibility of the Company's

management. Our responsibility is to cxpress an opinion on these inancial statements

based on our audits。

We conducted our audits in accordance with auditing standards gencrally accepted in Japan.

Those standards require that we plan and perform■ the audit to obtain rcasonable assurance

about whethcr thc inancial statements are free of material Hlisstatement. An audit

includes examining,on a test basis,evidence supporting the amounts and disclosures in the

nnancial statements. An audit also includes assessing the accounting principles used and

signincant estilnates made by management, as well as evaluating the overall 宜 nancial

statement presentation. We believc that our audits provide a rcasonablc basis for our

oplnlon.

In our opinion, the Snancial statements rcfcrrcd to above present fairly, in all material

rcspccts, thc consolidated financial position of Nippon Seiki Co., ]し td. and consolidated

subsidiaries at March 31,2005 and 2004,and thc consolidatcd results of their operations

and thcir cash nows for the years then cnded in confoェェェェity with accounting principles

generally acceptcd in Japan。

И筋 ″Jοれαレ玉ギorttαすどθれ

As described in Note 2 to the consolidatcd inancial statcments, the Company adopted

accounting standards for impaiェェェェent of ixed assets in the year ended March 31,2005.

kJunc 25,2005

A卜 711卜11;IR()I FRN、1&Y()にド(i(il()|ぅヽ1

24

Non-consolidated Financial Statements of NIPPON SEIKI Co., Ltd. for the Fiscal Year 2004/2005 Balance Sheets

March 31, 2005

March 31, 2004

ASSETS (Thousands of Japanese Yen) (Thousands of Japanese Yen)

Current Assets

Cash and bank deposits Notes receivable Accounts receivable Finished goods Raw materials and Parts Work in process Supplies Prepaid expenses Deferred tax assets Short-term loans Sundry receivable Other current assets Allowance for doubtful accounts

¥ 2,448,023 1,194,171

29,834,449 1,583,648 3,687,379

814,072 94,054 38,890

626,736 6,186,949 1,847,415

140,171 ( 19,277

)

¥ 5,604,468 1,597,307

26,240,356 1,338,628 4,230,404

793,350 90,663 38,394

426,520 5,235,452 1,608,726

159,092 ( 17,164

)

CURRENT ASSETS-TOTAL 48,476,683 47,346,202

Fixed Assets

Tangible Fixed Assets

Buildings Structures Machinery and Equipment Vehicles Tools, Jigs and Fixtures Land Construction in progress

4,545,082 226,684

3,827,462 62,469

2,912,033 8,936,303

389,742

4,813,732 237,664

4,187,760 55,340

2,546,129 9,507,506

131,959

Total 20,899,778 21,480,092

Intangible Fixed Assets

Software Other intangible assets

770,678 12,202

750,597 33,744

Total 782,881 784,341

Investment and Other Assets

Investment securities Investment in subsidiary and affiliate companies Long-term loans Prepaid expenses Deferred tax assets Other investments and assets Allowance for doubtful accounts

12,763,256 11,609,187

345,000 188,737 168,154 214,254

( 74,103

)

11,566,284 11,155,070

100,000 214,961 501,199 208,789

( 74,103

)

Total 25,214,486 23,672,202

FIXED ASSETS-TOTAL 46,897,147 45,936,636

TOTAL ASSETS ¥ 95,373,830 ¥ 93,282,838

Ⅸ. OTHER INFORMATION

25

March 31, 2005

March 31, 2004

LIABILITIES (Thousands of Japanese Yen) (Thousands of Japanese Yen)

Current Liabilities

Notes payable Accounts payable Short-term loans payable Current maturities of long-term loans payable Accrued liabilities Accrued expenses Accrued income taxes Advance received Deposits received Accrued bonuses to employees Bills payable - capital investment

¥ 705,744 23,905,944 5,970,947 1,473,700 1,256,567 1,847,284 2,292,359

808 193,564 775,709 152,024

¥ 349,947 22,173,934 12,940,047 1,413,600 1,128,523 1,433,769

120,575 1,091

152,322 732,119 112,794

CURRENT LIABILITIES-TOTAL 38,574,654 40,558,727

Long-term Liabilities

Bonds Long-term loans payable Allowance for employees’ retirement benefits Allowance for directors’ retirement benefits Other long-term liabilities

3,782,000 3,568,500 1,289,198

295,317 539,637

7,500,000 3,692,200 1,319,792

403,434 1,057,928

LONG-TERM LIABILITIES-TOTAL 9,474,652 13,973,354

TOTAL LIABILITIES 48,049,307 54,532,082

SHAREHOLDERS’ EQUITY

Common stock 12,982,041 12,495,488

Additional paid-in capital 5,505,316 4,220,626

Retained earnings

Legal reserves Allowance for special depreciation General reserve Unappropriated retained earnings

[Net income for the period included]

960,230 184,998

18,880,000 5,552,815

[ 5,016,675

]

960,230 194,997

16,480,000 3,691,722

[ 3,122,913

]

Total 25,578,044 21,326,950

Unrealized gain on investment securities 3,315,898 2,612,169

Treasury stock ( 56,777 ) ( 1,904,477 )

TOTAL SHAREHOLDERS’ EQUITY 47,324,523 38,750,756

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY ¥ 95,373,830 ¥ 93,282,838

26

Statements of Income




Sales ¥ 98,620,411 ¥ 94,405,985

Operating Expenses

Cost of Sales Selling, General and Administrative Expenses

85,021,160 7,466,308

82,966,265 7,440,135

Total 92,487,468 90,406,401

OPERATING INCOME 6,132,942 3,999,584

Non Operating Income

Interest and Dividend income Other non operating income

990,908 1,411,260

838,573 512,675

Total 2,402,169 1,351,248

Non Operating Expenses

Interest expenses Other non operating expenses

84,419 11,094

110,427 768,035

Total 95,514 878,463

ORDINARY INCOME 8,439,597 4,472,369

Special Income

Gain on sales of fixed assets Profits from termination of defined benefit pension plans Amortization of transition difference of retirement allowance

due to change of accounting standard

2,289 -

58,003

96 249,051

-

Total 60,292 249,148

Special Loss

Loss on disposal of fixed assets Impairment loss Loss on earthquakes Loss on investment security revaluation Amortization of transition difference of retirement allowance

due to change of accounting standard Other special loss

93,224 551,331 130,471 17,447

-

44,935

119,372 - -

85,479

30,431 16,374

Total 837,410 251,656

INCOME BEFORE TAXES 7,662,479 4,469,860

Income Taxes 2,645,804 1,346,947

NET INCOME 5,016,675 3,122,913

Retained earnings brought forward from previous period 807,420 783,085

Interim dividend paid 271,280 214,276

Unappropriated retained earnings ¥ 5,552,815 ¥ 3,691,722

27

Statements of Retained Earnings

Year ended March 31, 2005 Year ended March 31, 2004


Unappropriated retained earnings for the period ¥ 5,552,815 ¥ 3,691,722

Disposition of special depreciation allowance 45,684 42,470

Total 5,598,500 3,734,193

Appropriations of surplus

Dividends [¥4 per share for ordinary dividend and ¥6 per share for special dividend for F.Y.2005]

575,245

321,300

Bonus to directors [Bonus to corporate auditors included]

170,000 [ 10,500

]

173,000 [ 9,600

]

Allowance for special depreciation 22,729 32,472

General reserve 3,800,000 2,400,000

Retained earnings brought forward to the next period ¥ 1,030,526 ¥ 807,420

* Interim dividend: ¥214,276thousand at December 16, 2003 [ ¥ 4 per share for dividend ] * Interim dividend: ¥271,280thousand at December 14, 2004 [ ¥ 5 per share for dividend ]

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