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Yaskawa Elec Corpn (48JE)

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Wednesday 25 May, 2005

Yaskawa Elec Corpn

Final Results

Yaskawa Electric Corporation
25 May 2005

May 25, 2005

                        Summary of Consolidated Results
                    for the Fiscal Year Ended March 20, 2005

Listed company name: Yaskawa Electric Corporation
President: Koji Toshima
Stock exchange listings: Tokyo, Fukuoka
Stock ticker number: 6506

1.Summary of Results for Fiscal Year 2004 (March 21, 2004 to March 20, 2005)

(1) Summary of Consolidated Statements of Income
                                                                     (Millions of yen, except ratio and per share data)

                                       Year ended                    Year ended                      Change
                                     March 20, 2005                March 20, 2004
          Net sales                                309,615                       263,045                         17.7%
      Operating income                              17,527                        12,407                         41.3%
       Ordinary income                              17,414                        12,010                         45.0%
         Net income                                  1,860                         5,819                       (68.0%)
 Earnings per share (basic)                           7.80                         24.80                       (68.5%)
Earnings per share (diluted)                          7.30                         23.32                       (68.7%)

1.Equity in earnings of affiliated companies
  Fiscal year ended 3/20/05: 268 million yen
  Fiscal year ended 3/20/04: 1,032 million yen

2.Average number of shares during the period (consolidated)
  Fiscal year ended 3/20/05: 231,328,828 shares
  Fiscal year ended 3/20/04: 231,398,161 shares

3.Changes in accounting methods: None

4.Percentage changes for fiscal year sales, operating income, ordinary income
and net income are relative to the fiscal year results from the previous year.

(2) Summary of Consolidated Financial Position
                                                                     (Millions of yen, except ratio and per share data)

                                                    Year ended                            Year ended
                                                  March 20, 2005                        March 20, 2004
             Total assets                                           254,438                               249,829
         Shareholders' equity                                        38,366                                36,715
    Shareholders' equity ratio (%)                                     15.1                                  14.7
    Shareholders' equity per share                                   165.63                                158.35

Recorded number of shares issued at the end of the period
  As of 3/20/05: 231,310,194 shares
  As of 3/20/04: 231,341,171 shares

(3) Summary of Consolidated Statements of Cash Flows
                                                                                                      (Millions of yen)

                                                    Year ended                            Year ended
                                                  March 20, 2005                        March 20, 2004
    Net cash provided by (used in)                                    5,789                                18,504
         operating activities
    Net cash provided by (used in)                                  (2,242)                                 1,118
         investing activities
    Net cash provided by (used in)                                   (2,823)                              (18,877)
         financing activities
     Cash and cash equivalents at                                     17,906                                17,098
            End of period

(4) Scope of consolidation and application under equity method accounting
  Total consolidated subsidiaries: 62 companies
  Non-consolidated subsidiaries to which equity method accounting is applied: 3
  Affiliated companies to which equity method accounting is applied: 18

(5) Changes in scope of consolidation and application under equity method
  Consolidated(new): 3 companies(eliminated): 3 companies
  Affiliated companies(new): 2 companies(eliminated): 3 companies

2.Projected Consolidated Results for the Fiscal Year Ending March 20, 2006
                                                                                                      (Millions of yen)

                                                   Year ending                         6 months ending
                                                 March 20, 2006                       September 20, 2005
              Net sales                                            314,000                                145,000
           Ordinary income                                          20,000                                  5,500
             Net income                                              7,000                                    900

Projected earnings per share for the year are 30.26 yen.
(The above projections were made as of the day of writing and may vary from
actual results.)

3.Management Policies

Fundamental Management Policies

The Yaskawa Electric Corporation, along with its subsidiaries and affiliated
companies, has long held to its policy of the advancement of society and
contribution to humanity through achievements in business. To accomplish these
goals, the Company follows three principles: develop state-of-the-art technology
with a mind for quality, respond to the market according to consumer trends and
needs and have an investor-focused view of value creation.

Yaskawa's number one priority is the improvement of capital efficiency. To make
this possible, customer satisfaction (CS) will be improved through products and
services that greatly satisfy our customers, and our employee satisfaction (ES)
will be increased so that our employees will feel more loyalty and pride to work
at Yaskawa. These activities will result in higher corporate value, greater
earning capacity and the restoration of shareholder value to our investors.

Efforts focused on turning the company into a high-earning and high-efficiency
enterprise are being made this fiscal year through the quicker realization and
progression of successful structural reforms, which are based on the Win21 Plus

Policy on Profit Distribution

Our goal is to continually provide shareholders with a stable and continuing
dividend while reserving enough profit to enrich our operating base and expand
business. This will be done in conjunction with considering our business
performance, our financial conditions and the business environment.

Policy on Reduction of Share Trading Unit Size

The amendments to the Japanese Commercial Code that took effect in October 2001
allow listed companies to reduce the number of shares per unit for trading
(share trading unit) on stock markets in Japan. Among the reasons for not
availing ourselves of this change in the regulation is our belief that Yaskawa
currently has sufficient liquidity. Also, in consideration of our current share
price and the additional costs related to reducing the share trading units of
stock, we do not feel that it would create any additional value for the Company
or for our shareholders. We will continue to monitor stock market trends and
examine our options while considering the value to shareholders and the time
period of the change.

Management Goals

To ensure that the value for our shareholders, employees and other stakeholders
is maintained, our management performance is evaluated by two main methods: the
Return-on-Equity (ROE) and Debt-to-Equity (D/E) ratios.

Yaskawa seeks to achieve a maximum increase in earnings on invested
shareholders' equity. In addition to shareholders, the Company is also concerned
with the interests of all its stakeholders, including employees.

Furthermore, our purpose is to make Yaskawa's corporate structure such that it
will remain profitable even in the midst of difficult economic times. To
accomplish this goal, we aim to increase the profit ratio of the company and
strengthen the trust between the Company and the individuals and entities that
provide capital to the Company.

Business Strategies

The Yaskawa Group is currently carrying out the three-year Win21 Plus mid-term
plan, which will end in fiscal year 2005.

The plan aims to further expand the results of the original Win21 plan's
structural reforms in the four areas of business, corporate, management and
finance. Through these four areas and in combination with achieving the targets
of the original mid-term plan, Win21 Plus is focused on strengthening business
competitiveness and realizing greater efficiency of business operations.

Win21 Plus: Strategies

Yaskawa will promote real structural change in the finance and business areas
relating to the post-mechatronics shift. The company will also promote a policy
toward implementation that will build on the systematic reforms of Win21 in the
corporate and management areas. By reinforcing these changes through
cross-functional activities, Yaskawa will create a new cost model, advance
market strategy and innovation, and create a new business model, which are all
goals of Win21 Plus. At the same time, Yaskawa will transform its corporate
structure into one capable of maintaining profitability in the face of demand
changes greater than 30%.

Win21 Plus: Goals

1.Double added value productivity
2.Increase ordinary income ratio to 10%
3.Reduce D/E ratio to 1.0 or less

Win21 Plus: Financial Targets
                                              Fiscal Year 2005 Target               Fiscal Year 2005 Target
                                                  (consolidated)                       (unconsolidated)
       Net Sales (million yen)                                      300,000                               160,000
    Ordinary Income (million yen)                                    30,000                                16,000
      Ordinary Income Ratio (%)                                       10.00                                 10.00
       Beginning Employee Count                                       7,450                                 2,600

Management Initiatives and Challenges

With the Win21 Plus mid-term plan in its final fiscal year, we will continue to
advance the structural reforms in the four target areas and establish a solid
infrastructure, working towards a successful completion of Win21 Plus.

There was a large increase in consolidated sales over last year and the Win21
Plus sales target of 300,000 million yen was reached one year in advance. We
will continue to focus efforts on promotion to the automobile-related market,
which is expected to stably grow, and markets in Europe, U.S. and Asia. Also, we
will work towards successfully realizing a high-earnings enterprise and
implement policies that will reliably allow us to take advantage of the
recoveries in the semiconductor- and LCD-related markets.

To increase added value, the structural ratio of new products with reduced costs
will be increased and key promotion efforts will focus on high-profit markets
and products.

In the second half of this fiscal year, we increased our production capacity and
strengthened our production management in our efforts to construct a stable and
sturdy production structure. Combined with the reduction in lead time (the time
it takes from when an order is received to when it is shipped), cost reduction
measures were promoted and strengthened, such as through the increase of low
cost production overseas and procurement cost reduction. Also, we are striving
to make further profitability improvements and continually maximize earnings.

To promote business expansion, we reorganized Yaskawa's headquarters in order to
strategically boost our sales, production and product development strengths.
Through the new structure, coordination between the strategies for marketing and
product development will be strengthened, and increased market share along with
the timely introduction of strategic, new products will be carried out through
corporate-wide marketing efforts.

Also, efforts are being made to improve financial results in Synetics Solutions,
Inc., our subsidiary in the U.S. that makes systems for semiconductor equipment

Concerning our policies implemented with a mid-term view, we are developing,
fostering and advancing next-generation new core technology and strengthening
our brand value, which is dependent upon quality as well as technology, in order
to ensure future growth and competitiveness. This will lead the company towards
its goal of realizing a high-earnings enterprise.

In addition to further strengthening an internal control system for risk control
and legal compliance, Disclosure Committee meetings will be held and information
will be publicized in a proper and timely manner.

Governance Policy and Actions

Basic Premise on Governance

We believe that increasing shareholder value is based upon developing a healthy
business with managerial decision making that quickly reflects an ever-changing
society. Staying in accordance with the law is also an extremely important goal.

To accomplish these goals, Yaskawa will enrich its corporate governance in
accordance with the law as we strengthen, improve and further develop the system
of how our current shareholders' meetings, board of directors, auditors and
certified public accountants operate. At the same time, we plan to establish
better relationships starting with our stockholders and customers, as well as
those with clients, local society, and our employees.

Furthermore, we will provide our shareholders and other capital providers with
both quick and accurate information as well as a broad range of information and
will thereby increase the transparency of our company's management.

Governance Status and Actions

An auditing system is being adopted to handle the oversight of managerial
decision-making, both the execution thereof as well as the assessment. Be it our
investors, customers or any other entity familiar with us examining our company,
they will find it evident that Yaskawa is complying with the law through the
adoption of one outside director and two outside auditors. Furthermore, no
people from within the Company who are involved in the auditing system nor our
outside directors and auditors are interested parties in either financing or
trading relationships with Yaskawa.

In addition to the Board of Directors holding regularly scheduled meetings,
special meetings will be held based on the materiality of the issue to the
management of the company, when the execution of certain business conditions
requires specific supervision by the shareholders or directors or when warranted
by law.

Shin Nihon is the auditing firm for Yaskawa. As part of the contract for
auditing services, we are required to provide accurate management information.
The auditors provide an environment in which an open and impartial point of view
can be attained. In any situation where the auditors' judgment is necessary,
Yaskawa will consult with the auditors to receive the necessary support.

Concerning legal counsel, Yaskawa will consult with a legal advisor and receive
legal advice whenever we find it necessary do so.

In regard to our company activity standards, the Company has enacted the Company
Credo along with the Corporate Code of Conduct. In order to progress and promote
the Company-wide observance, enlightenment and abiding structure of the Yaskawa
Electric Corporate Conduct Standards, the Company president was named Chairman
of the Corporate Ethics Committee.

Yaskawa distributes compliance guidelines to all employees and is establishing
an information window within the company as part of a compliance structure.
Also, efforts are being made to protect individual information through
establishing a privacy policy.

During the past fiscal year, we fully implemented our corporate governance
program. The Board of Directors met a total of 12 times to handle business
matters of material importance and items required by law as well as to carry out
business decisions. In May and November 2004, we held analyst presentations as
part of our Investor Relations program.

4.Business Performance for 2004

In the first half of the past fiscal year, the business recovery trends in Japan
strengthened due to increased exports to the steadily growing Europe, U.S. and
Asia, a recovery in corporate profits brought upon by increases in capital
expenditures and improvements in employment conditions, and a pick up in
personal consumption. In the second half, a slowdown was observed as the result
of a sudden rise in the price of raw materials such as oil and steel, the
continuation of a weak dollar and inventory adjustments in the semiconductor

In the markets that Yaskawa Electric and its consolidated subsidiaries included
in the Yaskawa Group focuses on, the automobile-related market experienced
stable, even steady growth, and the semiconductor- and LCD-related markets grew
until the first half of the fiscal year. By region, high growth continued in
Asian markets, most notably China, and Europe and the U.S. also experienced
steady growth.

In the midst of these economic conditions, the Yaskawa Group actively promoted
Win21 Plus, which ends in fiscal year 2005 and focuses on structure reforms in
the four areas of business, corporate, management and finance in order to become
a high-earnings enterprise. The Win21 Plus plan aims to realize stronger
business competitiveness and greater efficiency of business operations.

This fiscal year we implemented policies and positioned the Yaskawa Group for a
year of greater added value and business expansion through market strategy and

Core products that have a competitive advantage and large market share, such as
industrial robots, AC servomotors and controllers and inverters, received
concentrated promotion in our specialty fields like the automobile,
semiconductor, LCD and air conditioning and elevator fields. While planning for
increased orders, efforts were made for improved profits through cost reductions
in each product. Furthermore, efforts for profitability improvements were made
through the quick introduction of new products with cost reductions and
promotion to high-profit markets and customers.

As a result, sales greatly increased 17.7% from last fiscal year to 309,615
million yen. While the influence of intense competition and sudden increases in
the prices of raw materials contributed to some losses, the increase of sales
resulted in operating income increasing 41.3% to 17,527 million yen and ordinary
income increasing 45.0% to 17,414 million yen, setting record highs for sales,
operating income and ordinary income.

However, as the result of the incurrence of an extraordinary loss due to the
impairment of goodwill at Synetics Solutions, Inc., a subsidiary of Yaskawa that
makes systems for semiconductor equipment manufacturers, net income decreased
68.0% to 1,860 million yen.

Results by Segment

Motion Control

AC servomotor and controller domestic sales as well as sales in North America
and Asia increased during the first half of the fiscal year compared to the
corresponding period in the previous fiscal year. This was the result of the
active promotion of new products and increased demand from the semiconductor-
and LCD-related markets as well as the stably growing machine tools and metal
working machinery markets. However, since the fall season of last year, demand
has decreased in the domestic semiconductor- and LCD-related markets. In the
case of inverters, sales continued to steadily grow for the air conditioning and
elevator markets, particularly in China and the rest of Asia.

As a result, sales for this segment increased 17.0% to 122,944 million yen over
the previous fiscal year and operating income increased 125.9% to 9,121 million

Robotics Automation

In the automobile-related industry, many large car manufacturers and parts
suppliers employed painting robots and new robots designed for optimum end-user
use, such as in arc and spot welding. This contributed to increased market share
domestically and in the U.S. and Europe.

Also, transfer robots for LCD panels showed strong growth especially in Korea
and Taiwan due to the increased demand for LCD televisions and cell phones and
the timely introduction of new robots for handling large panels.

While focusing on clean and vacuum robots for semiconductor manufacturing
devices, one of our specialty fields, we promoted cooperative development with
existing customers and continued to cultivate relationships with new customers.

Due to the increase in orders, we strengthened our production capacity and
better equipped and advanced our production structure.

As a result, sales for this segment increased 30.7% to 105,164 million yen and
operating income increased 38.3% to 7,282 million yen.

System Engineering

While steel plant-related renovation demand increased as the result of growth in
exports of steel materials, promotion efforts were exerted for new products such
as high-voltage inverters, compressor drive systems and electric products for
elevators. Although we implemented cost reduction measures in automation systems
for wastewater process equipment, a slowdown in public investment and intense
competition had an impact on sales and profits.

As a result, sales for this segment increased 11.3% to 44,930 million yen, but
there was an operating loss of 2,092 million yen.

Information Technologies

In the information services industry, steadily growing investments related to IT
and demand for information appliances experienced a downturn entering the second
half of the fiscal year, and market competition became more intense. Intense
market competition also continued in the market for computer peripherals.

As a result, sales for this segment increased 4.1% to 25,421 million yen and
operating income increased 28.0% to 1,500 million yen.


Sales for this segment decreased 12.2% to 11,154 million yen and operating
income increased 62.4% to 1,739 million yen.

5.Balance Sheet Highlights


Current assets increased from the previous period by 5,894 million yen, ending
at 175,505 million yen. Trade notes and accounts receivable increased by 6,942
million yen and inventories decreased by 1,664 million yen. While investments
and other assets increased by 2,770 million yen, intangible fixed assets
decreased by 4,669 million yen due to the impairment of goodwill at Synetics
Solutions, Inc. Fixed assets decreased by 1,284 million yen to end the period at
78,933 million yen

Total Assets increased from the previous period by 4,609 million yen to end the
fiscal year at 254,438 million yen.


Although there were increases in trade notes and accounts payable and accrued
income taxes, current liabilities decreased by 13,827 million yen as the result
of, among other things, bond repayments totaling 15,000 million yen. Long-term
liabilities increased by 16,976 million yen due to the issuance of convertible
bonds totaling 15,000 million yen, an increase in accrued retirement benefits by
3,147 million yen and other increases.

Total Liabilities increased from the previous period by 3,150 million yen to end
the fiscal year at 212,002 million yen.


Shareholders' Equity, partially as a result of an increase in retained earnings,
increased from the previous period by 1,651 million yen to end the fiscal year
at 38,366 million yen.

6.Cash Flow

Cash flows from operating activities ended at a positive 5,789 million yen. This
was due to earnings before taxes of 9,222 million yen, non-cash expenses such as
depreciation and retirement allowances which totaled 13,695 million yen, an
increase of 6,859 million yen in trade notes and accounts receivable due to
increased sales and the payment of income taxes totaling 5,447 million yen.

Cash flows from investing activities ended at a negative 2,242 million yen.
While there was a cash inflow of 2,775 million yen from sales of tangible fixed
assets, the acquisition of tangible fixed assets totaled 6,889 million yen and
purchases of investment securities totaled 2,812 million yen. Free Cash Flow
ended at a positive 3,547 million yen.

Cash flows from financing activities ended at a negative 2,823 million yen.
Although there were cash inflows of 5,391 million yen from proceeds from
long-term debt and 14,903 million yen from the issuance of bonds, short-term
debt decreased by 1,901 million yen, repayments of long-term debt totaled 5,356
million yen and the redemption of bonds totaled 14,998 million yen.

Cash and cash equivalents as a result of these activities ended at 17,906
million yen for the 2004 fiscal year.

7.Cash Flow Indicator Trends

Cash Flow Indicator Trends for the Group are shown below.
                                                            Fiscal Year 2002       Fiscal Year 2003  Fiscal Year 2004
            Shareholders' equity ratio (%)                     11.8          12.9     13.4     14.7     14.2     15.1
              Shareholders' equity ratio                       33.1          24.8     75.0     75.8     48.6     56.5
              based on market value (%)
              Repayment of debt (years)                        13.6          11.7      6.8      4.3        -     13.4
           Interest coverage ratio (times)                      3.5           3.6      7.8     12.2        -      4.9

  shareholders' equity = shareholders' equity/total assets
  shareholders' equity based on market value = market value of total shares/
total assets
  repayment of debt in years = interest incurring debt/operating cash flow
  interest coverage ratio = operating cash flow/interest expense
  All calculations were made on a consolidated base.
  Interest incurring debt consists of all debt appearing on the balance sheet
that incurs interest.
  Amounts used for operating cash flow and interest expense were taken from
'operating cash flow' and
'interest expense' totals as calculated in first half and annual financial

8.Outlook for Fiscal Year 2005

The unpredictable economic conditions are expected to continue in the near
future. Domestically, varied outlooks exist concerning a recovery period in the
semiconductor-related market, which was experiencing a downturn since the fall
season of last year. Also, rising prices in raw materials and the continuation
of a strong yen/weak dollar are expected. Concerning overseas business
conditions, the U.S. and China are expected to steadily improve while conditions
in Europe are expected to continue a downward trend.

Forecasted business results for the fiscal year 2005 are shown below in millions
of yen.

Fiscal Year 2005 Consolidated
                                           Fiscal Year 2005 (forecast)                Year-on-year Change
              Net Sales                                             314,000                                 4,385
          Operating Income                                           20,500                                 2,973
           Ordinary Income                                           20,000                                 2,586
             Net Income                                               7,000                                 5,140

Fiscal Year 2005 Unconsolidated
                                           Fiscal Year 2005 (forecast)                Year-on-year Change
              Net Sales                                             192,000                                   619
          Operating Income                                            7,800                                 4,023
           Ordinary Income                                           10,000                                 1,967
             Net Income                                               2,600                                 6,582

  1. Assumed exchange rates for fiscal year 2005 are 105 yen/dollar and 135 yen/
  2. Dividends for fiscal year 2005 are undecided at the current time.


The information within this document is made as of the date of writing. Any
forward-looking statements are made according to the assumptions of management
and are subject to change as a result of risks and uncertainties. Yaskawa
Electric undertakes no obligation to update or revise these forward-looking
statements, whether as a result of new information, future events, or otherwise.


1.Consolidated Balance Sheet (summary)

                    (Millions of yen)
                                                            As of March 20, 2005   As of March 20, 2004      Change
                                                                      % of Total              % of Total
Current assets
  Cash and time deposits                                     17,976                 16,194                           -
  Trade notes and accounts receivable                        91,128                 84,186                           -
  Short-term investments                                        152                   1,142
  Inventories                                                52,681                 54,345
  Deferred tax assets                                         5,689                  5,337
  Other current assets                                        8,646                  9,235
  Allowance for doubtful accounts                             (770)                  (830)
Total current assets                                        175,505         69.0   169,611          67.9         5,894

Fixed assets
  Tangible fixed assets
    Buildings and structures                                 16,198                 16,335
    Machines and transportation devices                       7,812                  7,004
    Land                                                      9,040                  9,103
    Other tangible fixed assets                               4,407                  4,400
    Total tangible fixed assets                               37,459        14.7    36,844          14.7           615

  Intangible fixed assets
    Goodwill                                                  1,658                  5,858
    Software                                                  7,064                  6,147
    Other intangible fixed assets                               605                  1,991
    Total intangible fixed assets                             9,328          3.7    13,997           5.6       (4,669)

  Investments and other assets
    Investments                                              18,006                 14,857
    Long-term loans                                             194                    265
    Deferred tax assets                                      11,488                 10,784
    Other investments                                         2,792                  3,763
    Allowance for doubtful accounts                           (337)                  (295)
  Total investments and other assets                         32,145         12.6    29,375          11.8         2,770

Total fixed assets                                           78,933         31.0    80,217          32.1       (1,284)

Total Assets                                                254,438        100.0   249,829         100.0         4,609

Current liabilities
    Trade notes and accounts payable                         65,478                 63,382
    Short-term bank loans                                    39,067                 40,372
    Current portion of convertible notes                          -                 15,000
    Accrued expenses                                         15,423                 14,812
    Accrued income taxes                                      6,292                  2,791
    Other current liabilities                                12,575                 16,306
Total current liabilities                                   138,837         54.6   152,664          61.1      (13,827)

Long-term liabilities
    Corporate bonds                                          10,000                 10,000
    Convertible bonds                                        15,000                      -
    Long-term debt                                           13,740                 14,590
    Accrued retirement benefits for employees                32,423                 29,276
    Other long-term liabilities                               2,000                  2,320
Total long-term liabilities                                  73,164         28.7    56,188          22.5        16,976

Total liabilities                                           212,002         83.3   208,852          83.6         3,150

Minority interests                                            4,069          1.6     4,261           1.7         (192)

Shareholders' equity
    Common stock                                             15,541          6.1    15,540           6.2             1
    Additional paid-in capital                               14,001          5.5    13,999           5.6             2
    Retained earnings                                         7,291          2.9     6,171           2.5         1,120
    Net unrealized holding gain on securities                 1,933          0.7     1,040           0.4           893
    Foreign currency translation adjustments                  (115)        (0.0)       154           0.1         (269)
    Treasury stock, at cost                                   (286)        (0.1)     (191)         (0.1)          (95)
Total shareholders' equity                                   38,366         15.1    36,715          14.7         1,651

Total liabilities, shareholders' equity                     254,438        100.0   249,829         100.0         4,609

2.Consolidated Statements of Income (summary)

                     (Millions of yen)
                                                                  Year ended              Year ended          Change
                                                                March 20, 2005          March 20, 2004
                                                                        % of Total              % of Total
Net sales                                                    309,615           100   263,045           100      46,570
Cost of sales                                                229,498          74.1   192,786          73.3      36,712
Gross profit                                                  80,116          25.9    70,259          26.7       9,858

Selling, general and administrative expenses                  62,589          20.2    57,851          22.0       4,738
Operating income                                              17,527           5.7    12,407           4.7       5,120

Non-operating income
Interest and dividends received                                  328                     230

Equity in earnings of associated companies                       268                   1,032
Miscellaneous income                                             837                   1,070
Total non-operating income                                      1,433          0.4     2,333           0.9       (900)

Non-operating expenses
Interest expense                                               1,170                   1,506
Miscellaneous expenses                                           376                   1,223
Total non-operating expenses                                   1,546           0.5     2,730           1.0     (1,184)

Ordinary income                                               17,414           5.6    12,010           4.6       5,404

Extraordinary gains
Proceeds from sales of fixed assets                            1,790                   1,055
Proceeds from sales of investment securities                   1,029                   1,883
Other extraordinary gains                                         40                   2,542
Total extraordinary gains                                      2,861           0.9     5,481           2.0     (2,620)

Extraordinary losses
Loss from disposal of fixed assets                               392                     678
Loss on devaluation of investment securities                      29                      33
Loss from one-off alteration to pension accounts               3,576                   3.576
Impairment of goodwill                                         4,055                       -
Other extraordinary losses                                     3,000                   2,114
Total extraordinary losses                                    11,053           3.6     6,402           2.4       4,651

Income before income taxes and minority interests              9,222           2.9    11,089           4.2     (1,867)

Provision for income taxes- current                            8,968           2.9     4,206           1.6
Provision for income taxes- deferred                         (1,753)         (0.6)       796           0.3
Minority interests                                               147           0.0       265           0.1
Net income                                                     1,860           0.6     5,819           2,2     (3,959)

3.Consolidated Statements of Cash Flows (summary)

                               (Millions of yen)
                                                                                    Year ended          Year ended
                                                                                  March 20, 2005      March 20, 2004

Cash flows from operating activities
  Income before income taxes and minority interests                                          9,222              11,089
  Depreciation and amortization                                                              6,499               6,047
  Provision for employees' retirement benefits, net of payments                              3,140               4,255
  Gain on sales of investment securities                                                   (1,029)             (1,883)
  Loss on devaluation of investment securities                                                  29                  33
  Impairment of goodwill                                                                     4,055                   -
  Gain on expropriation of property, plant and equipment                                         -             (2,420)
  Interest and dividend income                                                               (328)               (230)
  Interest expense                                                                           1,170               1,506
  (Increase) decrease in trade receivables                                                 (6,859)            (13,226)
  (Increase) decrease in inventories                                                         1,440               (202)
  Increase (decrease) in trade payables                                                      2,255              14,253
  Increase (decrease) in accrued expenses                                                  (3,159)               1,088
  Other, net                                                                               (4,376)               3,447
  Subtotal                                                                                  12,059              23,757

  Interest and dividends received                                                              355                 237
  Interest paid                                                                            (1,178)             (1,512)
  Income taxes paid                                                                        (5,447)             (3,978)
Net cash provided by (used in) operating activities                                          5,789              18,504

Cash flows from investing activities
  Purchases of property, plant and equipment and intangible assets                         (6,889)             (6,178)
  Proceeds from sales of property, plant and equipment                                       2,775               1,359
  Purchases of investment securities                                                       (2,821)             (1,404)
  Proceeds from sales of investment securities                                                 938               3,254
  Purchases of stock of affiliated companies                                                 (133)                   -
  Proceeds from sales of stock of affiliated companies                                         870                 221
  Proceeds from expropriation of property, plant and equipment                               3,555               3,555
  Other, net                                                                                 (548)                 309
Net cash provided by (used in) investing activities                                        (2,242)               1,118

Cash flows from financing activities
  Increase (decrease) in short-term debt                                                   (1,901)            (14,071)
  Proceeds from long-term debt                                                               5,391               7,846
  Repayments of long-term debt                                                             (5,356)            (12,210)
  Proceeds from issuance of convertible bonds, net                                          14,903                   -
  Redemption of bonds                                                                     (14,998)                   -
  Other, net                                                                                 (861)               (441)
Net cash provided by (used in) financing activities                                        (2,823)            (18,877)

Effect of exchange rate changes on cash and cash equivalents                                    84                (31)
Net increase (decrease) in cash and cash equivalents                                           808                 714
Cash and cash equivalents at beginning of year                                              17,098              16,267
Increase due to inclusion of subsidiaries in consolidation                                       -                 148
Decrease due to exclusion of subsidiaries from consolidation                                     -                (32)
Cash and cash equivalents at end of year                                                    17,906              17,098

4.Segment Information
(Business Segments)

(Millions of yen)
                                                      Year ended March 20, 2005
              Motion   Robotics    System    Information            Other             Total   Eliminations Consolidated
              Control Automation Engineering Technologies                                     & Corporate

Net sales
  Sales to    122,944   105,164      44,930       25,412                      11,154  309,615           -      309,615
third parties
Intersegment  15,918      2,666       1,969        3,460                      21,431  45,446     (45,446)            -
sales and
Total sales   138,863   107,830       46,900      28,881                      32,585  355,062    (45,446)      309,615
Operating     129,741   100,548      48,992       27,381                      30,846  337,511    (45,423)      292,087
costs and
Operating      9,121      7,282     (2,092)        1,500                       1,739  17,550         (23)       17,527
income (loss)

                                                      Year ended March 20, 2004
              Motion   Robotics    System    Information            Other             Total   Eliminations Consolidated
              Control Automation Engineering Technologies                                     & Corporate

Net sales
  Sales to    105,069    80,478      40,373       24,414                      12,709  263,045           -      263,045
third parties
Intersegment  11,195      4,669       2,007        2,933                      15,274  36,079     (36,079)            -
sales and
Total sales   116,265    85,147       42,380      27,347                      27,983  299,124    (36,079)      263,045
Operating     112,227    79,881      41,421       26,175                      26,911  286,618    (35,980)      250,637
costs and
Operating      4,037      5,266         958        1,172                       1,071  12,506         (98)       12,407
income (loss)

(Geographical Areas)
(Millions of yen)
                                                      Year ended March 20, 2005
                    Japan           North       Europe               Asia              Total  Eliminations Consolidated
                                   America                                                    & Corporate
Net sales
  Sales to              214,809      41,785       34,306                      18,633  309,615           -      309,615
third parties
Intersegment             42,471         175          514                       5,178  48,340     (48,340)            -
sales and
Total sales             257,362       41,960      34,821                      23,811  357,955    (48,340)      309,615
Operating               247,636      38,648       31,719                      21,955  339,959    (47,871)      292,087
costs and
Operating                 9,725       3,312        3,101                       1,856  17,996        (468)       17,527
income (loss)

                                                      Year ended March 20, 2004
                    Japan           North       Europe               Asia              Total  Eliminations Consolidated
                                   America                                                    & Corporate
Net sales
  Sales to              184,113      34,915       31,300                      12,715  263,045           -      263,045
third parties
Intersegment             34,990         239        1,189                       4,127  40,547     (40,547)            -
sales and
Total sales             219,104      35,154       32,490                      16,843  303,593    (40,547)      263,045
Operating               211,705      33,762       30,145                      15,650  291,264    (40,626)      250,637
costs and
Operating                 7,398       1,392        2,344                       1,192  12,328           79       12,407
income (loss)

(Overseas sales)
(Millions of yen)
                                                      Year ended March 20, 2005
                North America             Europe                         Asia                    Other        Total
Overseas                 40,725                   34,588                              51,538        3,402      130,254
Consolidated                  -                        -                                   -            -      309,615
net sales
Overseas                    13%                      11%                                 17%           1%          42%
sales as a
percentage of
net sales

                                                      Year ended March 20, 2004
                North America             Europe                         Asia                    Other        Total
Overseas                 34,456                   31,233                              30,356        2,437       98,483
Consolidated                  -                        -                                   -            -      263,045
net sales
Overseas                    13%                      12%                                 11%           1%          37%
sales as a
percentage of
net sales

1) Geographical areas are divided into categories based on their geographical
2) Major nations or regions included in each geographical area are as follows:
  (1) North America - U.S.A.
  (2) Europe - Germany, Sweden, The United Kingdom
  (3) Asia - Singapore, Korea, The People's Republic of China
3) Overseas sales consist of all sales in countries and regions outside of

                      This information is provided by RNS
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