(1) The following appropriations of retained earnings of the Company for the year ended March 31, 2000 were approved at the general meeting of shareholders held on June 29, 2000.
Thousands of Millions of yen U.S. dollars
Cash dividends ¥1,297 $12,219
Directors’ and For the year ended March 31, 1999 the business
seg-ments were the office goods segment and the personal goods segment, as shown below:
Year ended Millions of yen
March 31, 1999 Office Personal
goods goods Consolidated
segment segment Corporate total
Net sales ¥236,990 ¥54,674 ¥ — ¥291,664 Costs and
expenses 227,092 53,142 — 280,234
Operating
income ¥ 9,898 ¥ 1,532 ¥ — ¥ 11,430
Assets ¥188,429 ¥41,756 ¥78,914 ¥309,099
Depreciation 6,185 1,155 419 7,759
Capital
expenditure 2,805 629 939 4,373
In prior years, the Companies’ operations were classified as the office goods segment and personal goods segment from the point of view of the buyers.
From the year ended March 31, 2000, due to the revision of segment classification, the Companies’ operations are the stationery products segment and the furniture segment from the point of view of the type and nature of the products and services. This revision was made to clarify the
Companies’ operations and reflects the trend of demand of products and the actual conditions of diversified business.
Segment information for the year ended March 31, 1999 under the new segment classifications of the year ended March 31, 2000 is as follows:
Year ended Millions of yen
March 31, 1999 Stationery
products Furniture Corporate Consolidated
segment segment total
Net sales ¥142,488 ¥149,176 — ¥291,664 Costs and
expenses 131,461 148,773 — 280,234
Operating
income ¥ 11,027 ¥ 403 ¥ — ¥ 11,430
Assets ¥105,619 ¥124,565 ¥78,915 ¥309,099
Depreciation 3,334 4,006 419 7,759
Capital
expenditure 1,708 1,725 939 4,373
The amounts of the Corporate column are the common accounts of the head office which cannot be allotted to each segment.
The ratio of domestic net sales and assets to consolidat-ed net sales and assets is over 90% . The international sales of the Company and its consolidated subsidiaries for the years ended March 31, 2000 and 1999, were less than 10%
of consolidated net sales.
“ Corporate” in the “ assets” column of the above schedule
(2) Transfer of business
On May 24, 2000, the Company entered into a transfer agreement with Kokuyo Office System Co., Ltd., which was a wholly owned subsidiary of the Company, in accor-dance with resolutions of the Board of Directors, to sepa-rate the office furniture sales division and construction materials division. This agreement was approved at the shareholders’ meeting held on June 29, 2000. A summary is as follows:
(a) The contents of the contract
The dates of the transfer of business are July 1, 2000, October 1, 2000, and April 1, 2001. As the transfer will take place in steps, the assets that will be transferred will be the relevant assets of the division on each date.
The transfers will be at book value and terms of pay-ment will be determined by mutual consent.
(b) At March 31, 2000, book values of the applicable assets were as follows:
Thousands of Millions of yen U.S. dollars
Accounts receivable ¥20,717 $195,167
Inventories 431 4,060
(c) Revenue from operations and operating loss of the divi-sions for the year ended March 31, 2000 were ¥60,872 million ($573,453 thousand) and ¥1,304 million ($12,285 thousand), respectively.
(d) Information on the subsidiary
Name: Kokuyo Office System Co., Ltd.
Nature of business: Sales of office furniture and construction materials Date of establishment: March 10, 2000
The location of the head office: Chiyoda-ku, Tokyo Amount of capital: ¥490 million ($4,616 thousand) Shareholder: the Company
R E P O R T O F I N D E P E N D E N T C E R T I F I E D P U B L I C A C C O U N T A N T S
To the Shareholders and the Board of Directors of Kokuyo Co., Ltd.:
We have audited the accompanying consolidated balance sheets of Kokuyo Co., Ltd. (a Japanese corporation) and subsidiaries as of March 31, 1999 and 2000 and the related consolidated statements of income, sharehold-ers’ equity and cash flows for the years then ended expressed in Japanese yen. Our audits were made in accor-dance with generally accepted auditing standards in Japan and, accordingly, included such tests of the
accounting records and such other auditing procedures as we considered necessary in the circumstances.
In our opinion, the consolidated financial statements referred to above present fairly the consolidated finan-cial position of Kokuyo Co., Ltd. and subsidiaries as of March 31, 1999 and 2000 and the consolidated results of their operations and their cash flows for the years then ended in conformity with accounting principles gener-ally accepted in Japan applied on a consistent basis during the periods, except for the new accounting policies and changes in accounting policies, with which we concur, in the following paragraph.
As explained in Note 2, in the year ended March 31, 2000, Kokuyo Co., Ltd. and subsidiaries prospectively adopted new Japanese accounting standards for consolidation and equity method accounting, income taxes and software costs. Also, effective April 1, 1999, Kokuyo Co., Ltd. and subsidiaries changed their methods of accounting for fund trust investments as referred to in Note 2, retirement benefits as referred to in Note 2 and segmentation as referred to Note 12.
Also, in our opinion, the U.S. dollar amounts in the accompanying consolidated financial statements have been translated from Japanese yen on the basis set forth in Note 1.
Osaka, Japan June 29, 2000
Asahi & Co.
(Member Firm of Andersen Worldwide SC)
Statement on Accounting Principles and Auditing Standards
This statement is to remind users that accounting principles and auditing standards and their application in practice may vary among nations and therefore could affect, possibly materially, the reported financial position and results of operations.
The accompanying financial statements are prepared based on accounting principles generally accepted in Japan, and the auditing standards and their application in practice are those generally accepted in Japan. Accordingly, the accompanying financial statements and the auditors’ report presented above are for users familiar with Japanese accounting principles, auditing standards and their application in practice.
G R O U P C O M P A N I E S
Subsidiaries
Tokyo Kokuyo Co., Ltd.
Kyoto Kokuyo Co., Ltd.
Osaka Kokuyo Co., Ltd.
Ibaraki Kokuyo Co., Ltd.
Nishikanto Kokuyo Co., Ltd.
Miyazaki Kokuyo Co., Ltd.
Kitakanto Kokuyo Co., Ltd.
Tokyo Naka Kokuyo Co., Ltd.
Saitama Kokuyo Co., Ltd.
Shimane Kokuyo Co., Ltd.
Kokuyo Logitem Co., Ltd.
Kokuyo Office System Co., Ltd.
Kokuyo Business Service Co., Ltd.
Kokuyo Stationery Industry Co., Ltd.
Kokuyo Meibel Co., Ltd.
Iwami Paper Products Co., Ltd.
Kokuyo Product Shiga Co., Ltd.
Wilkhahn Japan Co., Ltd.
Kokuyo Engineering Kansai Co., Ltd.
Kokuyo Engineering Tokyo Co., Ltd.
Kokuyo Engineering Tohoku Co., Ltd.
Kokuyo Engineering Nagoya Co., Ltd.
Kokuyo Engineering Kyushu Co., Ltd.
Kokuyo Customer Service Co., Ltd.
Kinki Office Supply Logistics Co., Ltd.
Tokyo Office Supply Logistics Co., Ltd.
Kokuyo Showroom Service Co., Ltd.
Kokuyo Finance Co., Ltd.
Kokuyo World Co., Ltd.
Kokuyo International (Hong Kong) Co., Ltd.
Kokuyo International (Singapore) Pte. Ltd.
Kokuyo (Malaysia) Sdn. Bhd.
Shanghai Kokuyo Hero Stationery Co., Ltd.
Kokuyo USA Inc.
Kokuyo-IK (Thailand) Co., Ltd.
Affiliates
Aomori Kokuyo Co., Ltd.
Mie Kokuyo Co., Ltd.
Hamamatsu Kokuyo Co., Ltd.
Kanazawa Kokuyo Co., Ltd.
Kitanihon Kokuyo Co., Ltd.
Fukuyama Kokuyo Co., Ltd.
Hiroshima Kokuyo Co., Ltd.
Yamaguchi Kokuyo Co., Ltd.
Okayama Kokuyo Co., Ltd.
Fukuoka Kokuyo Co., Ltd.
Nagasaki Kokuyo Co., Ltd.
Fukuoka Minami Kokuyo Co., Ltd.
Net Kokuyo Co., Ltd.
Takano Co., Ltd.
Nikkan Co., Ltd.
Houkoku Co., Ltd.
EPK Co., Ltd.
Facility Planning Systems Co., Ltd.
Kagioka Co., Ltd.
SpAce• Jay Co., Ltd.
Kokuyo Henkel Co., Ltd.
USAGIYA Co., Ltd.
Hokkaido Office Supply Logistics Co., Ltd.
Kamibunki Kyohai Co., Ltd.
B O A R D O F D I R E C T O R S
(As of June 29, 2000)
Chairman
Shounosuke Kuroda
President Akihiro Kuroda
Senior Managing Directors Kingo Kuroda
Yasuhiro Kuroda Hiromi Ishikawa Takaji Kumano
Managing Directors Fumio Kawata Mitsutaka Yoshida
Statutory Auditors Fumio Nakamura Katsuhiro Ohara Takeji Isshiki Yukio Harima
Head Office
1-1, Oimazato-minami 6-chome, Higashinari-ku, Osaka 537-8686, Japan Telephone: 06-6976-1221
Facsimile: 06-6975-0815
Established October 1905
Paid-in Capital
¥15,847 million
Number of Employees 3,113
Total Number of Shares Authorized 399,000,000
Total Number of Shares Issued 129,742,462
Number of Shareholders 9,130
Stock Exchange Listings Tokyo, Osaka, Nagoya
Transfer Agent
The Sumitomo Trust & Banking Co., Ltd., 5-33, Kitahama 4-chome,
Chuo-ku, Osaka 541-0041, Japan
C O R P O R A T E D A T A
KOKUYO CO., LTD.
(As of March 31, 2000)
K O K U Y O ’ S S T R A T E G I C A L L Y C O N N E C T E D S A L E S N E T W O R K
Kokuyo’s sales network is composed of 60 exclusive agents located in almost all of Japan’s prefectures; 105 sales agents;
and approximately 20,000 retailers, including 4,626 large retailers that are Kokuyo Jewelry Members (KJMs).
Direct Marketing
and Special Procurement
Exclusive Agents (60 companies)
Sales Agents (105 companies)
Mass Merchandising
Agents
Home Furnishing
Agents
Direct Trading Outlets
Supermarkets Furniture Retailers
Camera Stores and Other
Large Corporations
Companies and
Personal Users Personal Users
Approximately 20,000 Retailers
Small and Medium-Sized
Retailers Large
Retailers (KJMs) (4,626 companies)
Indirect Sales Routes