Subsequent Events

current fiscal year amounted to ¥66,970 million ($557,155 thousand). As the action to this net loss and to increase the capital, the Company obtained the forgiveness of debt amounting to

¥110,000 million ($915,141 thousand) from UFJ Bank and issued preferred stocks amounting to

¥72,000 million ($599,001 thousand) to UFJ Bank and other major banks, as the financial sup-port in March 2003. The Company also entered into an agreement with Toyota Group to increase the capital by third party allotment of new stocks amounting to ¥10,000 millions, which will be executed on September 29, 2003. The Company continues to obtain the understanding of its medium-term management plan from financial institutions and to keep close transaction rela-tionship with them. As well as keeping the stable capital financing, it is planned to reduce part of interest-bearing debt in future.

To the Board of Directors and Stockholders of TOMEN CORPORATION

We have audited the accompanying consolidated balance sheet of TOMEN CORPORATION and its consolidated subsidiaries as of March 31, 2003, and the related consolidated statements of income, stockholders’ equity, and cash flows for the year then ended, all expressed in Japanese Yen. These consolidated financial statements are the responsi-bility of the Company’s management. Our responsiresponsi-bility is to express an opinion on these consolidated financial state-ments based on our audits. The financial statestate-ments of TOMEN CORPORATION as of March 31, 2002 and for each of the two years in the period ended March 31, 2002 were audited by other independent accountants who have ceased operations. Those independent accountants expressed an unqualified opinion on those financial statements in their report dated June 27, 2002.

We conducted our audits in accordance with auditing standards, procedures and practices generally accepted and applied in Japan. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the con-solidated financial position of TOMEN CORPORATION and its concon-solidated subsidiaries as of March 31, 2003, and the consolidated results of their operations and their cash flows for the year then ended in conformity with accounting principles and practices generally accepted in Japan.

As described in Note 19 “Subsequent Events,”capital reduction plan and its schedule were resolved at the stockhold-ers’ meeting held on June 27, 2003, and capital increase plan by third party allotment of new stocks to Toyota Tsusho Corporation and Toyota Motor Corporation was also resolved at the meeting of Board of Directors held on May 30, 2003.

The amounts expressed in U.S. dollars, which are provided solely for the convenience of the readers outside Japan, have been translated on the basis set forth in Note 3 to the consolidated financial statements.

Osaka, Japan June 27, 2003

Notice to Readers:

The accompanying consolidated financial statements are not intended to present the consolidated financial positions, results of operations and cash flows in accordance with accounting principles and practices generally accepted in countries and jurisdic-tions other than Japan. The standards, procedures and practices to audit such financial statements are those generally accepted and applied in Japan.

R

I

A

The following is a copy of the audit report previously issued by Mizuho Audit Corporation in connection with Tomen’s Annual Report for the year ended March 31, 2002. This audit report has not been reissued by Mizuho Audit Corporation. The consolidated balance sheet as of March 31, 2001 and the consolidated statements of income, stockholders’ equity and cash flows for the year ended March 31, 2000 have not been included in the accompanying financial statements.

MIZUHO AUDIT CORPORATION (Certified Public Accountants)

KOBE-NANKOMAE BLDG.

3-9, 3-CHOME TAMON-DORI, CHUO-KU, KOBE, JAPAN

The Board of Directors TOMEN CORPORATION

We have examined the consolidated balance sheets of TOMEN CORPORATION as of March 31, 2002 and 2001, and the related consolidated statements of income, stockholders’ equity and cash flows for each of the three years in the period ended March 31, 2002, stated in Japanese yen. Our examinations were made in accordance 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 identified above present fairly the financial position of TOMEN CORPORATION as of March 31, 2002 and 2001, and the results of their operations and their cash flows for each of the three years in the period ended March 31, 2002, in conformity with generally accepted accounting principles in Japan.

There are no interests between the Company and our audit corporation or its assigned employees that require disclo-sure under the provisions of the Certified Public Accountants Law.

The translations of Japanese yen amounts into United States dollar amounts are arithmetically correct on the basis described in Note 1 to the consolidated financial statements.

June 27, 2002

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