Notes to Consolidated Financial Statements Sakata Inx Corporation and Consolidated Subsidiaries

Transcription

1 Notes to Consolidated Financial Statements Sakata Inx Corporation and Consolidated Subsidiaries 1. BASIS OF PRESENTING CONSOLIDATED FINANCIAL STATEMENTS Sakata Inx Corporation (the Company ) and its consolidated The accompanying consolidated financial statements have been domestic subsidiaries maintain their official accounting records in restructured and translated into English (with some expanded Japanese yen and in accordance with the provisions set forth in the descriptions and the inclusion of consolidated statements of shareholders equity) from the consolidated financial statements of the Japanese Commercial Code and accounting principles and practices generally accepted in Japan ( Japanese GAAP ). The accounts Company prepared in accordance with Japanese GAAP and filed of consolidated foreign subsidiaries are based on their accounting with the appropriate Local Finance Bureau of the Ministry of records maintained in conformity with generally accepted accounting principles and practices prevailing in the respective countries of supplementary information included in the statutory Japanese lan- Finance as required by the Securities and Exchange Law. Some domicile. Certain accounting principles and practices generally guage consolidated financial statements, but not required for fair accepted in Japan are different from International Accounting presentation is not presented in the accompanying consolidated Standards and standards in other countries in certain respects as to financial statements. application and disclosure requirements. Accordingly, the accompanying financial statements are intended for use by those who are informed about Japanese accounting principles and practices. 2. SIGNIFICANT ACCOUNTING POLICIES Consolidation The consolidated financial statements include the accounts of the Company and its twelve (eleven in 2002) significant subsidiaries. All significant intercompany transactions and accounts have been eliminated. The fiscal year-end of most of the consolidated foreign subsidiaries is December 31 and is different from the Company s. Significant transactions between December 31 and March 31 are reflected in the consolidated financial statements. In the elimination of investments in subsidiaries, the assets and liabilities of the subsidiaries, including the portion attributable to minority shareholders, are evaluated using the fair value at the time the Company acquired control of the respective subsidiaries. Differences between the cost of investments in consolidated subsidiaries and the equity in their net assets at dates of acquisition are amortized within twenty years. The equity method is applied to five affiliates. Five unconsolidated subsidiaries and three affiliates are not accounted for by the equity method because they are immaterial. Allowance for doubtful receivables The Company and its consolidated subsidiaries (the Companies ) mainly adopted the policy of providing the allowance for doubtful receivables in an amount sufficient to cover possible losses on collection by estimating individually uncollectible amounts and applying a percentage based on collection experience to the remaining receivables. Translation of foreign currencies Receivables and payables denominated in foreign currencies are translated into Japanese yen at the year-end-rates and resulting gains and losses are recognized in the statements of income. The financial statements of consolidated foreign subsidiaries are translated into Japanese yen at the year-end-rates, except that shareholders equity accounts are translated at historical rates. The resulting foreign currency translation adjustments are included in shareholders equity (and minority interests). 24 SAKATA INX Annual Report 2003

2 Securities The Companies examine the intent of holding each security and classify those securities as (a) securities held for trading purposes (hereafter, trading securities ), (b) debt securities intended to be held to maturity (hereafter, held-to-maturity debt securities ), (c) equity securities issued by subsidiaries and affiliated companies, and (d) all other securities that are not classified in any of the above categories (hereafter, available-for-sale securities ). The Companies do not hold trading securities. Held-to-maturity debt securities are stated at amortized cost. Equity securities issued by subsidiaries and affiliated companies which are not consolidated or accounted for using the equity method are stated at movingaverage cost. Available-for-sale securities with available fair market values are stated at fair market value. Unrealized gains and unrealized losses on these securities are reported, net of applicable income taxes, as a separate component of shareholders equity. Realized gains and losses on sales of such securities are computed using moving-average cost. Other securities with no available fair market value are stated at moving-average cost. If the market value of held-to-maturity debt securities, equity securities issued by unconsolidated subsidiaries and affiliated companies, and available-for-sale securities, declines significantly, such securities are stated at fair market value and the difference between fair market value and the carrying amount is recognized as loss in the period of the decline. If the fair market value is not readily available, such securities should be written down to net asset value with a corresponding charge in the income statement in the event net asset value declines significantly. In these cases, such fair market value or the net asset value will be the carrying amount of the securities at the beginning of the next year. Derivatives and hedge accounting The Companies state derivative financial instruments at fair value and recognize changes in the fair value as gains or losses unless derivative financial instruments are used for hedging purposes. If derivative financial instruments are used as hedges and meet certain hedging criteria, the Companies defer recognition of gains or losses resulting from changes in fair value of derivative financial instruments until the related losses or gains on the hedged items are recognized. However, in cases where forward foreign exchange contracts are used as hedges and meet certain hedging criteria, forward foreign exchange contracts and hedged items are accounted for in the following manner: 1. If a forward foreign exchange contract is executed to hedge an existing foreign currency receivable or payable: (a) the difference, if any, between the Japanese yen amount of the hedged foreign currency receivable or payable translated using the spot rate at the inception date of the contract and the book value of the receivable or payable is recognized in the statement of income in the period which includes the inception date, and (b) the discount or premium on the contract (that is, the difference between the Japanese yen amount of the contract translated using the contracted forward rate and that translated using the spot rate at the inception date of the contract) is recognized over the term of the contract 2. If a forward foreign exchange contract is executed to hedge a future transaction denominated in a foreign currency, the future transaction will be recorded using the contracted forward rate, and no gains or losses on the forward foreign exchange contract are recognized. Also, if interest rate swap contracts are used as hedges and meet certain hedging criteria, the net amount to be paid or received under the interest rate swap contract is added to or deducted from the interest on the assets or liabilities for which the swap contract was executed. Inventories Inventories of the Company and its consolidated domestic subsidiaries are stated at cost, cost being determined using the movingaverage method. Inventories of consolidated foreign subsidiaries are stated principally at the lower of cost or market, cost being determined using the first-in, first-out method. SAKATA INX Annual Report

3 Property, plant and equipment Property, plant and equipment are carried at cost. The Company and its consolidated domestic subsidiaries provide depreciation principally on a declining balance method over estimated useful lives. However, depreciation for buildings, except building fixtures, of the Company and its consolidated domestic subsidiaries acquired after March 31, 1998 is stated on the straight-line method. Certain consolidated foreign subsidiaries compute depreciation on the straight-line method over estimated useful lives. The range of useful lives is summarized as follows: Buildings and structures 3 to 60 years Machinery and equipment 2 to 20 years Finance leases Finance leases of the Company and certain consolidated subsidiaries which do not transfer ownership are accounted for in the same manner as operating leases in accordance with Japanese GAAP. Goodwill Effective January 1, 2002, certain consolidated foreign subsidiaries in the United States adopted Statement of Financial Accounting Standards (SFAS) No.142, Goodwill and Other Intangible Assets. The statement prescribes the accounting treatment for both identifiable intangibles and goodwill after initial recognition and provides that goodwill is no longer amortized over 40 years, but is tested for impairment using a fair value methodology. Under SFAS No.142, the U.S. subsidiaries were required to test all existing goodwill for impairment as of January 1, 2002 on a reporting unit basis. Accordingly, as of January 1, 2002, the U.S. subsidiaries ceased amortizing goodwill and evaluated its carrying value for impairment using an income approach in accordance with the Statement s guidance. The U.S. subsidiaries determined that goodwill was not impaired as of the date of adoption of SFAS No.142. As a result of adopting SFAS No.142, operating income for the year ended March 31, 2003 increased by 135 million compared with what would have been recorded under the previous accounting policy. Software costs The Company and its consolidated domestic subsidiaries account for software, which is included in intangible assets, and depreciate it using the straight-line method over the estimated useful life of five years. Research and development expenses Research and development expenses are charged to income as incurred. Research and development expenses for the years ended March 31, 2003 and 2002 were 2,152 million and 2,083 million, respectively. Income taxes The Companies recognize tax effects of temporary differences between the carrying amounts of assets and liabilities for tax and financial reporting. The asset and liability approach is used to recognize deferred income tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The aggregate statutory income tax rate used for calculation of deferred taxes assets and liabilities was 41.9% for the year ended March 31, Effective for the year commencing on April 1, 2004 or later, according to the revised local tax law, income tax rates for enterprise taxes will be reduced as a result of introducing the assessment by estimation on the basis of the size of business. Based on the change of income tax rates, for calculation of deferred taxes assets and liabilities, the Company and consolidated domestic subsidiaries used the aggregate statutory income tax rates of 41.9% and 40.6% for current items and non-current items, respectively, for the year ended March 31, As the result of the change in the aggregate statutory income tax rates, deferred taxes assets decreased by 36 million and provision for deferred income taxes and net unrealized holding gains on securities increased by 57 million and 21 million, respectively, compared with what would have been recorded under the previous local tax law. 26 SAKATA INX Annual Report 2003

4 Bonuses The Company and its consolidated domestic subsidiaries follow the general Japanese practice of paying bonuses to employees in July and December. Accrued bonus liabilities at the balance sheet date are calculated based upon management s estimate of annual amounts thereof. Bonuses to directors and statutory auditors, which are subject to approval at the shareholders meeting, are accounted for as an appropriation of retained earnings. Retirement benefits (a) Employees: The Company and its consolidated domestic subsidiaries provide two types of post-employment benefit plans, unfunded lump-sum payment plans and funded contributory pension plans, under which all eligible employees are entitled to benefits based on the level of wages and salaries at the time of retirement or termination, length of service and certain other factors. The pension plans cover 50% of total retirement benefits. The liabilities and expenses for retirement benefits are determined based on the amounts actuarially calculated using certain assumptions. The Company and its consolidated domestic subsidiaries provide for employees retirement benefits at the balance sheet date based on the estimated amounts of projected benefit obligation and the fair value of the plan assets at that date. Actuarial gains and losses are recognized in expenses using the straight-line method within the average of the estimated remaining service lives (mainly 15 years) commencing with the following period. None of the consolidated foreign subsidiaries have provided allowances for employees retirement benefits at March 31, 2003 and (b) Directors and statutory auditors: The liability for directors and statutory auditors retirement benefits is provided based on the Company s internally decided criteria. Consolidated Statements of Cash Flows In preparing the consolidated statements of cash flows, cash on hand, readily-available deposits and short-term highly liquid investments with maturities of not exceeding three months at the time of purchase are considered to be cash and cash equivalents. Amounts per share (a) Net income per share of common stock Effective April 1, 2002, the Company adopted the new accounting standard for net income per share and related guidance (Accounting Standards Board Statement No. 2, Accounting Standard for Earnings Per Share and Financial Standards Implementation Guidance No. 4, Implementation Guidance for Accounting Standard for Earnings Per Share. Net income per share of common stock for the year ended March 31, 2002 would have been 17.37, if this new accounting standard were applied retroactively. (b) Cash dividends per share Cash dividends per share presented in the statements of income represent the cash dividends declared applicable to the year, including dividends paid after the end of the year. 3. ACCOUNTING STANDARD FOR TREASURY STOCK AND REVERSAL OF STATUTORY RESERVES Effective April 1, 2002, the Companies adopted the new accounting issued by the Accounting Standards Board of Japan on February standard for treasury stock and reversal of statutory reserves 21, 2002). (Accounting Standards Board Statement No.1, Accounting The effect on net income of the adoption of the new accounting Standard for Treasury Stock and Reduction of Statutory Reserves, standard was immaterial. SAKATA INX Annual Report

5 4. CHANGES IN PRESENTATION OF SHAREHOLDERS EQUITY IN THE BALANCE SHEET As a result of adopting this new accounting standard and application of the related revised disclosure requirements, shareholders accounts as of March 31, 2002 have been restated to the presenta are presented differently from prior years. Shareholders equity equity accounts in the accompanying balance sheet as of March 31, tion for EFFECT OF BANK HOLIDAY ON MARCH 31, 2002 As financial institutions in Japan were closed on March 31, 2002, amounts that would normally be settled on March 31, 2002 were collected or paid on the following business day, April 1, The effects of the settlements on April 1, 2002 instead of March 31 included the following: 2002 Notes and accounts receivable increase Notes and accounts payable increase SECURITIES The following table summarizes acquisition costs, book values and fair values of securities with available fair values as of March 31, 2003 and 2002: (a) Held-to-maturity debt securities Securities with available fair values exceeding book values: Book value Fair value Difference... 1 (b) Available-for-sale securities Securities with book values exceeding acquisition costs: Acquisition cost Book value Difference Equity securities... 2,949 3,801 4,760 5,082 1,811 1, SAKATA INX Annual Report 2003

6 Securities with book values not exceeding acquisition costs: Acquisition cost Book value Difference Equity securities... 1,899 1,648 1,719 1,235 (180) (413) Others (27) Total... 1,938 1,729 1,758 1,289 (180) (440) The following table summarizes book values of securities with no available fair values as of March 31, 2003 and 2002: Book value Held-to-maturity debt securities Available-for-sale securities: Non-listed equity securities Preferred securities Sub-total... 1, Equity securities issued by subsidiaries and affiliates... 5,384 5,812 Total... 6,432 6,767 Held-to-maturity debt securities mature as follows: Over one year but Within one year within five years Held-to-maturity debt securities: Government bonds Total sales of available-for-sale securities in the year ended March 31, 2003 amounted to 350 million ( 881 million in 2002) and related losses amounted 334 million ( 1,083 million in 2002), respectively. SAKATA INX Annual Report

7 7. INVENTORIES Inventories at March 31, 2003 and 2002 consisted of the following: Finished goods... 4,566 5,151 Merchandise Work in process Raw materials and supplies... 2,452 2, ,365 9, BANK LOANS AND LONG-TERM DEBT Bank loans at March 31, 2003 and 2002 were represented by short-term notes generally for one year, bearing interest ranging from 0.59% to 16.50%. Long-term debt at March 31, 2003 and 2002 consisted of the following: Secured: Loans principally from banks 0.60% 11.00% maturing serially through ,885 2,096 Unsecured: Loans principally from banks 0.60% 11.75% maturing serially through ,300 15, ,185 17,785 Less amounts due within one year... 4,799 4, ,386 13,419 The aggregate annual maturities of long-term debt at March 31, 2003 were as follows: Year ending March 31, , , and there after... 2, , SAKATA INX Annual Report 2003

8 At March 31, 2003 assets pledged as collateral for short-term banks loans of 330 million, transaction guarantees and secured long-term bank loans were as follows: Year ending March 31, Cash and cash equivalents... 5 Marketable securities Receivables Property, plant and equipment net of accumulated depreciation... 4,908 Investments in other , FINANCE LEASES Information on non-capitalized finance leases of the Companies as lessee at March 31, 2003 and 2002 was as follows: Original lease obligations for machinery and equipment... 3,052 3,744 Payments remaining... 1,348 1,550 Lease payments for such leases for the years ended March 31, 2003 and 2002 were 500 million and 543 million, respectively. Future minimum lease payments due under such leases at March 31, 2003 and 2002 were as follows: Payments due within one year Payments due after one year ,051 Total... 1,348 1, DERIVATIVE TRANSACTIONS The Companies have entered into forward foreign exchange contracts, as required, to hedge risks of changes in foreign currency exchange rates associated with their foreign trade and interest swap agreements to convert interest on floating rate debt to a fixed rate. The Companies do not use any other derivative transactions. The Companies adopted hedge accounting for all derivative transactions. The following summarizes hedging derivative financial instruments used by the Companies and items hedged: Hedging instruments: Forward foreign exchange contracts Interest rate swap contracts SAKATA INX Annual Report

9 Hedged items: Foreign currency trade receivables and trade payables (existing and expected) Interest on loans payable The Companies evaluate hedge effectiveness by comparing the cumulative changes in fair value of hedged items and corresponding changes in the hedging derivative instruments. If interest rate swap contracts meet certain hedging criteria, the judgement of the effectiveness is omitted. The Companies use the derivative financial instruments only for the purpose of hedging future risks, not for the purpose of speculation. As a normal business risk, the Companies are exposed to market risk for the above contracts; however, counterparties to these financial instruments are major financial institutions which are expected to fully perform under the terms of the agreements, thereby mitigating credit risk. The derivative transactions are executed and managed by each company s financial departments and approval of each transaction has to be obtained from the directors before execution. 11. CONSOLIDATED STATEMENTS OF CASH FLOWS There is no difference between cash and cash equivalents in the consolidated balance sheet and in the consolidated statements of cash flows. 12. EMPLOYEES RETIREMENT BENEFITS The Company and its consolidated domestic subsidiaries provide two types of retirement benefit plans, unfunded lump-sum payment plans and funded non-contributory pension plans. The liabilities for retirement benefits included in the liability section of the consolidated balance sheets as of March 31, 2003 and 2002 consist of the following: Projected benefit obligation... 20,501 19,263 Less unrecognized actuarial differences... (6,838) (3,948) Less fair value of pension assets... (10,177) (10,678) Liability for retirement benefits... 3,486 4, SAKATA INX Annual Report 2003

10 Included in the consolidated statements of income for the years ended March 31, 2003 and 2002 are retirement benefit expenses comprised of the following: Service costs benefits earned during the year Interest cost on projected benefit obligation Expected return on plan assets... (321) (444) Reversal of prior service costs (*)... (1,419) Amortization of actuarial differences Retirement benefits expenses... (257) 840 (*) Return of substitutional portion of Employees Pension Insurance The discount rate and the rate of expected return on plan assets used by the Company are 2.0% (3.0% in 2002) and 3.0% (4.0% in 2002), respectively. The estimated amount of all retirement benefits to be paid at future retirement dates is allocated equally to each service year using the estimated number of total service years. Prior service costs and net transition obligation are recognized as current costs and actuarial gains and losses are recognized in the consolidated statements of income using the straight-line method within the average of the estimated remaining service lives (mainly 15 years) commencing with the current period. Employees of Japanese companies are compulsorily included in the Welfare Pension Insurance Scheme operated by the government. Employers are legally required to deduct employees welfare pension insurance contributions from their payroll and to pay them to the government together with employers own contributions. For companies that have established their own Employees Pension Fund which meets certain legal requirements, it is possible to transfer a part of their welfare pension insurance contributions (so-called substitutional portion of the government s scheme) to their own Employees Pension Fund under the government s permission and supervision. Based on the newly enacted Defined Benefit Corporate Pension Law, the Company and its consolidated domestic subsidiaries decided to restructure their Employees Pension Fund and were permitted by the Minister of Health, Labor and Welfare on February 17, 2003 to be released from their future obligation for payments for the substitutional portion of the Employees Pension Insurance Scheme. Pension assets for the substitutional portion maintained by the Employees Pension Fund are to be transferred back to the government s scheme. The Company and its consolidated domestic subsidiaries did not apply the transitional provisions as prescribed in paragraph 47-2 of the JICPA Accounting Committee Report No. 13, Practical Guideline for Accounting of Retirement Benefits (Interim Report), which allows recognition of the effect of transferring the substitutional portion on the date permission was received from the Ministry of Health, Labor and Welfare for financial accounting purpose. It will be recognized on the date transfer of the substitutional portion is actually executed. The effect if the Company and its consolidated domestic subsidiaries had applied the transitional provisions as prescribed in paragraph 47-2 of guidelines, would be to report a gain of 940 million. SAKATA INX Annual Report

11 13. DEFERRED INCOME TAXES The significant differences between the aggregate statutory income tax rate and the effective income tax rate for the year ended March 31, 2002 are as follows Aggregate statutory income tax rate % Permanently non-deductible expenses Permanently non-taxable dividend income... (2.1) Per capita inhabitant tax Other Effective income tax rate % There is no disclosure of the difference between the aggregate statutory income tax rate and the Company s effective tax rate for financial statement purposes for the year ended March 31, 2003 in accordance with Japanese GAAP in case the difference is less than 5% of the effective tax rate. Significant components of the Companies deferred income tax assets and liabilities as of March 31, 2003 and 2002 are as follows: Deferred income tax assets Allowance of doubtful receivables Write-down of inventories Retirement benefits... 1,410 1,877 Accrued employees bonuses Tax loss carryforwards Accrued enterprise taxes Other Total deferred income tax assets... 3,784 3,579 Deferred income tax liabilities Net unrealized holding gains on securities... (662) (352) Special reserves... (444) (466) Other... (686) (1) Total deferred income tax liabilities... (1,792) (819) Net deferred income tax assets... 1,992 2, SAKATA INX Annual Report 2003

12 14. CONTINGENT LIABILITIES At March 31, 2003 and 2002, the Companies were contingently liable as follows: Endorsement of notes discounted or endorsed As guarantors of indebtedness... 1,279 1, ,279 1,358 Letters of awareness, which the Company has given to banks for bank loans of unconsolidated subsidiaries and affiliated companies at March 31, 2003 and 2002, were 8 million and 383 million, respectively. 15. SEGMENT INFORMATION (a) Information by operational segment Segment Main products and merchandise Printing inks Products Printing inks, mainly used for printing on corrugated paper, newsprint and plastic film and for offset printing, related chemical additives and overprinting varnish Graphic arts materials Merchandise Graphic arts materials such as graphic film and chemicals, materials for the printing process, machinery and equipment for graphic and printing industries Other businesses Products Toner for copying machines and related materials, pigment dispersion and color film developing and printing services and other technical services, Merchandise Equipment for color matching systems, photograph related materials such as film, chemicals, printing paper and electronic components Year ended March 31, 2003 Graphic Other Eliminations Printing inks arts materials businesses Total and corporate Consolidated Outside customers... 68,231 20,744 8,012 96,987 96,987 Intersegment ,402 1,680 (1,680) Total sales... 68,234 21,019 9,414 98,667 (1,680) 96,987 Operating costs... 61,837 20,721 8,997 91,555 1,009 92,564 Operating income... 6, ,112 (2,689) 4,423 Assets... 45,230 11,943 8,143 65,316 14,724 80,040 Depreciation... 2, , ,205 Capital expenditures... 2, , ,119 SAKATA INX Annual Report

13 Year ended March 31, 2002 Graphic Other Eliminations Printing inks arts materials businesses Total and corporate Consolidated Outside customers... 71,389 23,059 8, , ,093 Intersegment ,304 1,450 (1,450) Total sales... 71,390 23,204 9, ,543 (1,450) 103,093 Operating costs... 66,186 22,740 9,436 98,362 1,116 99,478 Operating income... 5, ,181 (2,566) 3,615 Assets... 48,510 13,951 8,106 70,567 15,014 85,581 Depreciation... 2, , ,394 Capital expenditures... 1, , ,445 Corporate costs and expenses of 2,766 million and 2,666 million for the years ended March 31, 2003 and 2002 mainly consist of expenses of the administrative departments of the Company. Corporate assets of 15,492 million and 15,492 million for the years ended March 31, 2003 and 2002 mainly consist of assets of the administrative departments of the Company. As a result of adopting SFAS No.142 as described in Note 2, operating income of the Printing inks segment for the year ended March 31, 2003 increased by 135 million compared with what would have been recorded under the previous accounting policy. (b) Information by geographic segment Year ended March 31, 2003 North Eliminations Japan Asia America Others Total and corporate Consolidated Outside customers... 59,845 4,263 30,550 2,329 96,987 96,987 Intersegment (986) Total sales... 60,580 4,263 30,797 2,333 97,973 (986) 96,987 Operating costs... 55,521 3,888 29,316 2,142 90,867 1,697 92,564 Operating income... 5, , ,106 (2,683) 4,423 Assets... 57,415 2,708 17,337 1,683 79, , SAKATA INX Annual Report 2003

14 Year ended March 31, 2002 North Eliminations Japan Asia America Others Total and corporate Consolidated Outside customers... 62,719 3,276 35,009 2, , ,093 Intersegment (776) Total sales... 63,179 3,276 35,325 2, ,869 (776) 103,093 Operating costs... 58,090 2,921 34,713 1,925 97,649 1,829 99,478 Operating income... 5, ,220 (2,605) 3,615 Assets... 59,706 2,241 20,917 1,423 84,287 1,294 85,581 The regions mainly include the following countries: Year ended March 31, 2003 (1) Asia Indonesia, Malaysia and India (2) North America United States and Canada (3) Others Spain and United Kingdom Year ended March 31, 2002 (1) Asia Indonesia and Malaysia (2) North America United States and Canada (3) Others Spain and United Kingdom Corporate costs and expenses of 2,766 million and 2,666 million for the years ended March 31, 2003 and 2002 mainly consist of expenses of the administrative departments of the Company. Corporate assets of 15,492 million and 15,492 million for the years ended March 31, 2003 and 2002 mainly consist of assets of the administrative departments of the Company. As a result of adopting SFAS No.142 as described in Note 2, operating income of North America for the year ended March 31, 2003 increased by 135 million compared with what would have been recorded under the previous accounting policy. SAKATA INX Annual Report

15 (c) Overseas sales Overseas sales, which consist of the total sales of the Companies made outside Japan, were as follows: Year ended March 31, 2003 North Asia America Others Total Overseas sales... 5,224 29,495 3,588 38,307 The percentage of overseas sales to consolidated net sales % 30.4% 3.7% 39.5% Year ended March 31, 2002 North Asia America Others Total Overseas sales... 4,482 34,352 2,840 41,674 The percentage of overseas sales to consolidated net sales % 33.3% 2.7% 40.4% The regions mainly include the following countries: Year ended March 31, 2003 (1) Asia China, Indonesia, Malaysia and India (2) North America United States and Canada (3) Others Spain, United Kingdom and Brazil Year ended March 31, 2002 (1) Asia China, Indonesia and Malaysia (2) North America United States and Canada (3) Others Spain, United Kingdom and Brazil 16. SUBSEQUENCE EVENT At the ordinary shareholders meeting of the Company held on June 27, 2003, appropriations of retained earnings for the year ended March 31, 2003, were duly approved as follows: Cash dividends 3 per share Bonuses to directors and statutory auditors SAKATA INX Annual Report 2003