Commission File No. 1-08346
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of June 2003
TDK CORPORATION
(Translation of registrant's name into English)
13-1, Nihonbashi 1-chome, Chuo-ku, Tokyo 103-8272, Japan
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F x Form 40-F
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2 (b) under the Securities Exchange Act of
1934.
Yes No x
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2 (b). 82-____________
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly Caused this to be signed on its behalf by the undersigned
thereunto duly authorized.
TDK Corporation
(Registrant)
June 2, 2003
BY: /s/ Noboru Hara
Noboru Hara
General Manager
General Administration Department
[Translation]
NOTICE OF THE CONVOCATION
OF
THE 107TH ORDINARY GENERAL MEETING OF STOCKHOLDERS
[This is translation from the Japanese language of
a notice distributed to stockholders in Japan.]
TDK Corporation
Tokyo, Japan
[Translation]
To: Stockholders
May 30, 2003
TDK Corporation (the "Company")
13-1, Nihonbashi 1-chome
Chuo-ku, Tokyo
Hajime Sawabe
President and CEO
NOTICE OF CONVOCATION OF
THE 107TH ORDINARY GENERAL MEETING OF STOCKHOLDERS
Dear Sirs:
You are hereby notified that the 107th Ordinary General Meeting of Stockholders
will be held as stated below. You are respectfully requested to attend the
meeting.
When you attend the meeting in person, please submit the voting right exercise
form enclosed herewith to the receptionist at the place of the meeting. In the
event that you are unable to attend the aforesaid meeting, please study the
reference documents below and indicate on the voting right exercise form
enclosed herewith your approval or disapproval of the items on the agenda,
since you may exercise your voting right by written form by returning the form
to the Company after affixing your seal impression.
Particulars
1. Date and 10:00 a.m. on June 27, 2003
Time: (Friday)
2. Place of Technical Center of the
the Company, 9th Floor 15-7,
Higashi-Ohwada 2-chome,
Meeting: Ichikawa-shi, Chiba
Prefecture
3. Purposes
of the
Meeting:
Matters Report on the balance sheet
to be as of March 31, 2003 and the
business report and the
Reported: statement of income for the
107th fiscal year (from April
1, 2002 to March 31, 2003)
Matters
to be
Resolved:
First Approval of proposal for
Item: appropriation of retained
earnings for the 107th fiscal
year
Second Partial amendments to the
Item: Articles of Incorporation The
substances of this item are
contained in the "Reference
Document Concerning Exercise
of Voting Rights" (from
Page 29 to page 35)
Third Acquisition of own shares of
Item: the Company The substances of
this item are contained
in the "Reference Documents
Concerning Exercise of Voting
Rights" (Page 35)
Fourth Item: Issuance of stock acquisition rights, in order to grant
such rights
to Directors, Corporate Officers and key employees of
the Company
and its associated companies
The substances of this item are contained in the
"Reference
Documents Concerning Exercise of Voting Rights" (from
Page 36 to page 38)
Fifth Item: Election of five (5) Corporate Auditors
Sixth Item: Presentation of retirement grants to the resigning
Corporate Auditors
Seventh Item: Appointment of Certified Public Accountants
- End -
(Documents Attached to the Notice of Convocation
of the Ordinary General Meeting of Stockholders)
Attachment (1)
BUSINESS REPORT
From: April 1, 2002
To: March 31, 2003
I. Outline of Business
(1) Business Progress and Results
Economic circumstances during the fiscal year ended March 31, 2003, were very
severe like the previous fiscal year, and continued throughout the fiscal year
under review. Similarly, while the world-leading U.S. economy seemed to show a
moderate emergence from recession at the beginning of 2002, consumers and
business sentiment deteriorated due to sluggish demand and struggling stock
markets, etc. from the fall onwards. Japan and Europe also stagnated under the
influence of the U.S. economy. Despite having made a relatively steady shift,
Asia, including China, is yet to be the leader of the global economy because of
its shallow-bottom economy.
Under these challenging management circumstances, however, sales of the Company
were boosted due to the increase of demand for electronic components
attributable to the development of digitilization of audio and visual equipment
and utilization of electronic parts in automobiles. The Company also continued
income structure reforms from the preceding year from the perspective of
improving efficiency and selection and concentration of businesses. As a
result, the Company marked, on a non-consolidated basis, net sales of �320,697
million (an increase of 0.9% compared with the preceding fiscal year), current
income of �9,078 million (an increase of 19.8% compared with the preceding
fiscal year), net income of �133 million (�3,794 million of net losses was
stated for the preceding fiscal year) and net income per share of �0.53 (�28.55
of net losses per share was stated for the preceding fiscal year),
respectively, for the fiscal year under review. On a consolidated basis, the
Company marked net sales of �608,880 million (an increase of 6.7% compared with
the preceding fiscal year), net income before income taxes of �18,081 million
(�43,697 million of net losses before income taxes was stated for the preceding
fiscal year), net income of �12,019 million (�25,771 million of net losses was
stated for the preceding fiscal year) and net income per share of �90.56 (�
193.91 of net losses per share was stated for the preceding fiscal year),
respectively.
The outline of each of the business divisions will be reported as follows and
it will mainly focus on the consolidated business results.
(2) The Outline of Each of the Divisions Are Reported as Follows by Focusing on
Consolidated Settlement:
Consolidated sales of this division amounted to �472,529 million (an increase
of 9.2 % compared with the preceding fiscal year). As a result of the boost in
sales of recording devices, which regained the market share of HDD heads, and
capacitors and inductive devices, whose increase of demand was attributable to
the development of digitilization of audio and visual equipment and utilization
of electronic parts in automobiles, overall sales of this division rose.
Non-consolidated sales amounted to �278,000 million (an increase of 2.3%
compared with the preceding fiscal year). While electronic materials and
electronic devices showed similar growth as the consolidated sales, sales of
recording devices dropped due to the changes of trading forms of the Company's
business partners.
An outline of each product is as follows:
Electronic materials
Consolidated sales of electronic materials increased as compared with the
preceding fiscal year.
Capacitors - Multilayer chip capacitors, the principal product in sales of
capacitors, marked an increase of sales due to a growing demand caused by
digitization of audio and visual equipment and utilization of electronic parts
in automobiles despite the Company's business partners' stringent requirement
for discounting.
Ferrite cores and magnets - Sales of ferrite cores used in LCD backlights and
ferrite cores for power supplies mainly used for audio and visual equipment
were both favorable. Demand for cores for IT-related information and
communications, however, was low because the market has not yet recovered, and
sales of deflection yoke cores, the principal component of TVs and computer
monitors, dropped due to intensified competition, which resulted in a decline
in overall sales for ferrite cores. Demand for magnets made a firm shift from
the preceding year in the automobile and parts sectors, which increased its
sales. Consequently, sales of ferrite cores and magnets as a whole were
slightly down as compared with the preceding fiscal year.
Non-consolidated sales also rose as compared with the preceding fiscal year for
the same reason as resulted in the increase in consolidated sales.
Electronic devices
Consolidated sales of electronic devices increased as compared with the
preceding fiscal year.
Inductive devices - Inductive devices, which is the principal product, marked
an increase in sales due to growing demand caused by expanding markets in
digital audio and visual equipment, such as DVD players and digital still
cameras, and the advancement in the utilization of electronic parts in
automobiles, which sufficiently absorbed negative factors such as in the case
with capacitors, the requirement for discount of labeled prices and the
adjustment of production by the Company's business partners mainly in the audio
and visual equipment section in the fourth quarter.
High-frequency components - Since the sales ratio of the products used for data
communications, mainly mobile phones, is high, high-frequency components have
been dependent upon mobile phone markets. Although sales quantity has improved
since the summer 2002 when the business partners completed inventory
adjustments, requirements for price reduction of high-frequency components due
to lingering oversupply was much more stringent than that of other electronic
components, thus the sales did not increase as much as the quantity did.
Other products - DC-DC converters for video game systems marked an increase
through the fiscal year under review as compared with the preceding fiscal year
despite the production adjustment by the Company's business partners from the
second half of the third quarter. Power supplies for PC related areas, such as
LCD projectors, shifted favorably, as well. Actuators, chip varistors and
others for PC related areas and communications area also did well. Overall
sales of other products were up.
Non-consolidated sales also rose as compared with the preceding fiscal year for
the same reason as resulted in the increase in consolidated sales.
Recording devices
Consolidated sales of recording devices increased as compared with the
preceding fiscal year. With respect to heads of hard-disc drive ("HDDs"), due
to the Company's HDD heads regaining the market share, mainly 40 gigabyte disk
products which enjoy high reputation from the Company's business partners, and
a decrease in the average number of heads used for one HDD that was less than
anticipated, aggregate demand of heads grew at a steady pace, which resulted in
an increase of sales. Sales of other head products decreased due to the
slowdown of demand, among other factors.
Non-consolidated sales dropped due to changes in the trading forms of the
Company's business partners, among other factors.
Semiconductors & others
Consolidated sales of semiconductors and other products decreased as compared
with the preceding fiscal year. Capital investment in communications
infrastructure-related plants and equipment was still low, and sales of
semiconductors used for set-top box modems and LAN/WAN dropped sharply. Sales
of anechoic chambers for noise control met with succession of cancelled and
rescheduled projects due to global recessions and uncertainty over the
prospects, and so declined.
Non-consolidated sales decreased, as well, yet most of the sales of
semiconductors were reported by the consolidated subsidiaries.
Recording media & systems segment
Sales in the recording media & systems segment amounted to �136,351 million (a
decrease of 0.9% compared with the preceding fiscal year).
Sales of audiotapes dropped from the preceding year due to a decline in
long-term demand attributed to transition to optical media. Despite a decline
in long-term demand attributed to transition to optical media and widespread
use of prerecorded DVD software, sales of videotapes grew slightly this year,
which is ascribed to the 2002 FIFA World Cup"(tm)". With respect to optical media,
sales stayed almost even, as demand for CD-Rs write-once disks and DVDs
increased, yet demand for MD and labeled price of CD-Rs were both down. Sales
of tape-based data storage media for computers, which had acquired regulatory
approval of the new standard called LTO* (Linear Tape-Open) during the
preceding year, and software related products rose.
Non-consolidated sales amounted to �42,690 million (a decrease of 7.3% compared
with the preceding fiscal year). Since a decline in demand of audiotapes
accounted not only for the drop of domestic shipment but also for the drop of
export shipment, the rate of decrease of non-consolidated sales is higher than
that of consolidated sales.
*Linear Tape-Open, LTO, the LTO Logo, Ultrium, Ultrium Logo are trademarks of
HP, IBM and Seagate RSS in the U.S. and other countries or both.
Breakdown of net sales by major products on a non-consolidated basis and
consolidated basis are as follows:
[Non-consolidated basis]
Amount Ratio Comparison
with the
preceding
term
Segment and Products Major use
(� million) (%) (%)
Electronic materials
&
components 278,006 86.7 2.3
Electronic materials TVs, OA, 133,325 41.6 6.3
telecommunications,
automobiles, etc.
Electronic devices TVs, VTRs, OA, 86,274 26.9 9.7
telecommunications,
automobiles, etc.
Recording devices HDDs, printers, etc. 46,437 14.5 -10.3
Semiconductors & OA, communications, 11,968 3.7 -24.9
others etc.
Recording media & Entertainment,
systems education,
broadcasting, etc. 42,690 13.3 -7.3
Total 320,697 100.0 0.9
Overseas sales
(included in the 176,461 55.0 7.7
total)
(Note)
Any amount less than one million yen has been disregarded.
[Consolidated basis]
Amount Ratio Comparison
with the
preceding
term
Segment and Products Major use
(� million) (%) (%)
Electronic materials &
components 472,529 77.6 9.2
Electronic materials TVs, OA, 168,949 27.8 4.4
telecommunications,
automobiles, etc.
Electronic devices TVs, VTRs, OA, 112,729 18.5 6.4
telecommunications,
automobiles, etc.
Recording devices HDDs, printers, etc. 175,986 28.9 19.7
Semiconductors & OA, communications, 14,865 2.4 -17.9
others etc.
Recording media & Entertainment,
systems education,
broadcasting, etc. 136,351 22.4 -0.9
Total 608,880 100.0 6.7
Overseas sales
(included in the 443,377 72.8 9.3
total)
(Notes)
1. Any amount less than one million yen has been disregarded.
2. "Accounting for Consideration Given by a Vendor to a Customer (Including a
Reseller of the Vendor's Products)" (the Emerging Issues Task Force ("EITF")
01-9) has been adopted from the 107th fiscal year. Accordingly, the results of
the comparison with the preceding year have been restated based on the amended
net sales of the previous fiscal year.
(3) Capital Expenditures and Financing
Non-consolidated capital expenditures during the fiscal year under review
totaled �24,959 million. This was principally invested in rationalization of
production facilities as well as development facilities with respect to
electronic devices including capacitors, etc. This was appropriated by
internally generated funds.
Consolidated capital expenditures during the fiscal year under review totaled �
41,451 million. This was principally invested in facilities for production
expansion and rationalization with respect to recording devices.
The Company has endeavored to improve asset efficiencies by reducing
inventories and selecting investment targets, etc. As a result, cash
equivalents amounted to �170,551 million, an increase of �44,790 million from
the preceding fiscal year, without utilizing any external financing.
(4) Business Results and Summary of Assets
Non-consolidated Business Results:
104th 105th 106th 107th
Term (4/1/1999 - (4/1/2000 - (4/1/2001 - (4/1/2002 -
3/31/2000) 3/31/2001) (3/31/2002) 3/31/2003)
Category
(Yen)
Net Sales 434,833 mil 457,676 mil. 317,811 mil. 320,697 mil.
Net Income 24,373 mil. 8,739 mil. -3,794 mil. 133 mil.
Net Income per 183.00 65.62 -28.55 0.53
Share
Net Assets: 441,072 mil. 441,662 mil. 426,439 mil. 419,241 mil.
Total Assets 562,942 mil. 558,432 mil. 522,140 mil. 509,561 mil.
Consolidated Business Results:
104th 105th 106th 107th
Term (4/1/1999 - (4/1/2000 - (4/1/2001 - (4/1/2002 -
Category 3/31/2000) 3/31/2001) 3/31/2002) 3/31/2003)
(Yen)
Net Sales 664,713 mil. 679,086 mil. 570,511 mil. 608,880 mil.
Net Income 50,730 mil. 43,983 mil. -25,771 mil. 12,019 mil.
Net Income 380.89 330.54 -193.91 90.56
per Share
Net 571,013 mil. 637,749 mil. 583,927 mil. 553,885 mil.
Assets:
Total 775,992 mil. 820,177 mil. 749,910 mil. 747,337 mil.
Assets
Notes:
1. With respect to the non-consolidated business results, any amount less than
one million yen has been disregarded.
2. With respect to the consolidated business results, any amount less than 0.5
million yen has been disregarded and any amount not less than 0.5 million yen
has been rounded upward to a full one million.
3. Net income per share has been computed based on the average number of shares
issued during the relevant fiscal year.
4. Treasury stock has been deducted from the calculation of non-consolidated
income (in case of losses indicated with "-") per share for the 106th fiscal
year.
5. From the 107th fiscal year, net income (loss) per share is calculated by the
application of the "Accounting Standards for Net Income per Share" (Corporate
Accounting Standard No. 2) (September 25, 2002, Corporate Accounting Standards
Executive Committee) and "Application Guidelines for Accounting Standards
regarding Net Income per Share" (Application Guidelines for Corporate
Accounting No. 4).
6. "Accounting for Consideration Given by a Vendor to a Customer (Including a
Reseller of the Vendor's Products)" EITF 01-9 has been adopted to the
consolidated sales for the fiscal year under review. Accordingly, net sales
from the 104th to 106th fiscal year have been amended and restated.
During the 104th fiscal year, while each of sales and income on a
non-consolidated basis increased, sales decreased and income increased on a
consolidated basis in comparison with the preceding fiscal year.
During the 105th fiscal year, the Company marked an increase in sales but a
decrease in income on both a consolidated and non-consolidated basis. The
decrease in income on a non-consolidated basis is attributable to the
transition resulting from changes in the accounting method for the retirement
benefits.
During the 106th fiscal year, the Company marked a decrease in sales and income
on both a consolidated and non-consolidated basis and restructuring expenses
resulting from the implementation of the structural reform plan were incurred.
With respect to the 107th fiscal year, results are stated in sections (1)
Business Progress and Results and (3) Capital Expenditures and Financing above.
(5) Tasks to be Undertaken by the Company:
The Company was established in 1935 as the world's first company to
commercialize a magnetic material called ferrite. In the ensuing years, the
Company has grown as a result of its originality based on the Company's
founding spirit: "Contributes to culture and industry through creativity" and
with the flexibility to rapidly adjust to changes in the business environment.
Operating circumstances surrounding corporations have drastically changed as we
move towards a global society, as demonstrated by the rapid permeation of
broadband and vigorously growing demand for digital apparatus such as plasma
display and DVD recorders, where we are moving towards a "Ubiquitous"* society
on one hand, and worldwide economic recession, progression of globalization and
gaining of economic power by China on the other. Under such business
circumstances, each individual corporation is required to navigate increasingly
severe competition by providing higher corporate value to all stakeholders
concerned, which in turn is accomplished by fully utilizing true originality
and expertise. The Company will aim at the creation of a corporate structure,
which will be able to quickly adapt to changes and needs in this era, and
achieve new corporate value that is required in the 21st century.
* "Ubiquitous" in Latin means, "to exist everywhere simultaneously".
(Translator's note)
* Challenging business circumstances
Looking to the fiscal year ending March 2004, firstly, a stagnant macro-economy
will linger. Money flow to the U.S., the single leader of the world economy up
to this point, has changed because the U.S. stock prices faltered and each
country's foreign exchange reserves shifted into Euro, among other factors.
There was no shrinking of economy in the U.S. during which money was coming in.
However, as a result of the decrease in inflow of money, the economic growth
has slowed down. Nevertheless, it seems no country is able to replace U.S. as
the world economic leader for the moment. Another problem is prolonging
stagnant demand as well as continued reduction of sales prices in the
electronic industry. Furthermore, there is little hope for a strong demand
expansion in the immediate future for the following reasons among others: (1)
PCs and mobile phones have entered the replacement market, and demand will
plateau until applications making maximum use of broadband are brought out; (2)
Overinvestment made by corporations during the IT bubble economy will continue
to be rectified (cutting down capital expenditure); (3) Structural change of
economy attributed to the Internet. Downward trends in sales prices will also
probably continue for the following reasons: (1) Increase of supply capacity of
China and Asia, as well as oversupply attributed to excess production capacity
acquired during the IT bubble economy; and (2) Reduction of sales prices due to
distribution via the Internet. The Company considers that the business in this
fiscal year will be developed by knowing the seriousness of the prolonged tough
external environment as above.
* The second stage of structural reforms
Although it is forecasted that the business environment will be challenging as
above, the Company regards the fiscal year ending March 2004 as a starting year
for fresh growth of the Company. The Company puts the utmost emphasis on
building a structure that ensures profits even under circumstances that hinder
sales growth, and that ensures sales growth even when markets are sluggish.
During the fiscal year ending March 31, 2004, the Company will strive for
all-out implementation of such structural reforms as well as shift in terms of
the nature (or the way of thinking) of the Company in order to keep up with the
era of speed and the era of uncertainty and construct a sturdy foundation
resistant to sharp fluctuations of markets in an attempt to increase
profit-earning and growing capacities.
* Structural reforms aiming at increase of profit-earning capacity
1. To provide business partners at the right time with new products that are
really wanted by them
It is expected that the electronic industry will be able to achieve further
leaps in the medium term, yet, as mentioned before, hope for a strong expansion
in demand in the immediate future is unlikely to be realized. Corporations,
however, must grow. In order to ensure sales growth during periods when markets
are sluggish, timely supply of unique and new products that are wanted by the
markets is essential. In addition, a high degree of expertise should be
utilized to link such timely supply with profit earning.
We will strive towards the timely supply of products by further working on the
development of materials, one of our strengths, and enhancing the process
technology that utilizes such material development of the Company, as well as
knowing accurately what the business partners really want, and combining this
with making full use of the Company's strengths. In other words, we will
endeavor to strengthen the characteristics as an "e-material solution
provider", the fundamental position we pursue, and to carry out structural
reforms to increase the sales ratio of profitable new products. We have already
implemented some measures to lay the groundwork for these goals.
(1) "Narrowing Down Themes of Development and Reviewing of Such Themes on a
Short Period Cycle"
We have marked out "IT Home Electronic Appliances", "High-Speed and
Large-Capacity Networks" and "Car Electronics", all of which are expected to
grow in the future, as three key areas, and further narrowed down the existing
themes of development to themes that can make full use of the Company's
strengths. We will follow up the progress of these themes as well as review the
themes on a shorter period cycle in order to keep up with the speed of the
market movement.
(2) "Structural Reform for Sales Organization and Establishment of
Application Center"
To meet rapidly changing markets and needs of the business partners with the
Company's strengths effectively, we will change our sales systems to new
systems that place emphasis on the three key areas above, and try to grasp the
needs of the business partners quickly. In addition, the Company has newly
established an application center for the purpose of making appropriate
development and support, such as effective combination or utilization of the
Company's strengths, so that it can supply at the right time with new products
that are serving the needs it has grasped.
(3) "Establishment of Intellectual Property Center"
Intellectual property, such as patents, is becoming more important. The Company
will newly establish an intellectual property center as a specialized division
and pursue business development focusing equally on business, development and
intellectual property.
2. To improve variable cost ratio
During the fiscal year ended March 31, 2003, it was not possible for the
Company to improve the variable cost ratio enough, for the reasons including
the influence of the substantial price discount. It is expected that stringent
requirements for discount of labeled prices will continue for a while, however
the Company will gain a stronger structure only if it continues to offer the
price reduction. So, we will work on improvement of unprofitable products and
improvement of productivity.
* Reforms of the nature
Necessity for speeds has drastically increased including a reduction in the
lead-time of development, production and distribution. There is much that has
yet to be reformed at the Company to respond to such changes. In particular, we
consider reform of the Company's consciousness is a fundamental issue.
Therefore, we will innovate to change the corporate climates and cultures that
no longer adapt to the surrounding environment and the markets. The Company
will make every effort to originate a culture where it notes reality and the
sites more aggressively, as well as raises consciousness of speed and
consciousness of danger.
With respect to corporate governance, which is getting a great deal of
attention in terms of business operation, the Company has introduced the
Corporate Officer System as part of it in the fiscal year under review and
clearly defined responsibilities of management for the execution of business.
The Company will continue to enrich this point. This year, as for
macro-economy, unforeseeable circumstances seem to continue as in the previous
fiscal year. Meanwhile, it seems that the electronic industry, to which the
Company belongs and which is expected to achieve a further development in the
long-term, is at a plateau, heading towards the broadband age in the society
heading for "Ubiquitous", which is expected to bloom from 2005 to 2006. Under
these circumstances, in the fiscal year ending March 2004, the Company will
push ahead thoroughly with the second stage of structural reforms which places
the utmost emphasis on an increase of profit-earning capacity, and strive to
enhance value of the firm in the medium term by laying the groundwork.
We sincerely hope for your continued encouragement and support in the future.
II. Outline of the Company
(The following sets forth the conditions of the Company as of March 31, 2003
unless otherwise specifically indicated.)
(1) Principal Business
The Company is principally engaged in the manufacture and sale of electronic
materials and components as well as recording media. Major products by division
are as follows:
Division Major Products
Electronic materials ferrite cores, ferrite magnets, rare-earth
magnets, ceramic capacitors
Electronic devices high-frequency components, EMC components,
piezoelectric products, sensors, inductors,
transformers, switching power supplies,
DC-DC converters, DC-AC inverters
Recording devices GMR heads, thermal heads, optical heads
Semiconductors & others semiconductor ICs, organic
electroluminescent (EL), anechoic chambers
Recording media & systems audiotapes, videotapes, CD-Rs, MDs, DVDs,
"BS"/"CS" antenna, PC software, PC cards,
tape-based date storage media for computers
(2) Major Business Offices and Plants
Head Office: 13-1, Nihonbashi 1-chome, Chuo-ku, Tokyo
Osaka Branch: 5-7, Kawara-machi 3-chome, Chuo-ku, Osaka
Area Number of offices
Business Offices: Tohoku Sendai office
Kanto-Koshinetsu 5 including Tokyo office
Tokai-Hokuriku Nagoya office
Kinki Osaka office
Chugoku-Shikoku 2 including Hiroshima office
Kyushu Kyushu office
Plants: Chokai Plant (Akita)
Akita Plant (Akita)
Kisakata Plant (Akita)
Inakura Plant (Akita)
Narita Plant (Chiba)
Shizuoka Plant (Shizuoka)
Kofu Plant (Yamanashi)
Chikumagawa Plant (Nagano)
Mikumagawa Plant (Oita)
Research & Development Corporate Research & Development Center (Chiba)
Facilities: HMS Research Center (Chiba)
Materials Research Center (Chiba)
Information Technology Development Center (Nagano)
(3) Matters Concerning Shares
(a) Total Number of Shares:
Number of Shares Authorized to be Issued by the 480,000,000 shares
Company:
Number of Shares Issued: 133,189,659 shares
(b) Number of Stockholders: 34,230 stockholders
(an increase of 2,097 stockholders from the end of the
preceding fiscal year)
(c) Principal Stockholders (ten largest stockholders):
Investment to the Investment to the Principal
Company
Stockholders of the Company
Number of Percentage of Number of Percentage of
Name of stockholder shares voting rights shares voting rights
held held held held
(thousands (%) (thousands (%)
of of
shares) shares)
Japan Trustee Services
Bank, Ltd.
(Trust account) 10,149 7.65 - -
The Master Trust Bank of
Japan, Ltd.
(Trust account) 6,773 5.10
Matsushita Electric 6,249 4.71 999 0.04
Industrial Co., Ltd.
NATSCUMCO 6,015 4.53 - -
UFJ Trust Bank Limited 4,247 3.20 - -
(Trust account)
Nippon Life Insurance 3,659 2.76 - -
Company
Risona Bank, Ltd. 3,077 2.32 - -
The Chase Manhattan Bank,
NA London (SL
Omnibus account) 2,920 2.20 - -
The Bank of 2,817 2.12 - -
Tokyo-Mitsubishi, Ltd.
The Sansiao Trading 2,522 1.90
Company, Ltd.
Notes:
1. Any number of shares less than one thousand has been disregarded.
2. NATSCUMCO is a transfer agent of Citi Bank N.A., a depositary bank for the
American Depositary Receipts (the "ADRs") of the Company.
3. With respect to investments in UFJ Trust Bank Limited, the Company owns 200
shares of UFJ Holdings, Inc. (percentage of voting rights held: 0.00%), which
holds 100% shares of UFJ Trust Bank Limited.
4. With respect to investments in Resona Bank, Ltd., the Company owns 2,097
thousands shares of Resona Holdings, Inc. (percentage of voting rights held:
0.03%) which holds 100% shares of Resona Bank, Ltd.
5. With respect to investments in The Bank of Tokyo-Mitsubishi, Ltd., the
Company owns 2,877 shares of Mitsubishi Tokyo Financial Group, Inc. (percentage
of voting rights held: 0.04%), which holds 100% shares of The Bank of
Tokyo-Mitsubishi, Ltd.
6. With respect to the investment in each of Matsushita Electric Industrial
Co., Ltd., UFJ Holdings, Inc., Resona Holdings, Inc. and Mitsubishi Tokyo
Financial Group, Inc., the Company holds each of their shares through Mitsui
Asset Trust & Banking Co., Ltd., acting trustee holding as trust assets, who is
a transfer agent of the Company. The Company reserves the right to instruct the
exercise of voting rights of the shares held by the Company under the Trust
Deed.
(4) Acquisition, Disposal and Holding of the Company's Own Shares:
(1) Shares to be acquired:
Acquisition of own shares pursuant to resolutions in
accordance with Section 1, Article 210 of the
Commercial Code
Shares of common stock: 223,600 shares
Aggregate amount of acquisition cost �1,207,703,000
Acquisition of own shares through the purchase of
shares constituting less than one unit
Shares of common stock: 10,792 shares
Aggregate amount of acquisition cost �5,516,640
(2) Shares transferred: None.
(3) Shares disposed: None.
(4) Number of shares held for the fiscal year under review: 564,475 shares of
common stock
(5) Matters Concerning Employees
Comparison with the Average Working
Number of Employees preceding term Average Age Years
Male 5,467 857 (decreased) 39.7 17.5
Female 745 99 (decreased) 32.0 11.5
Total 6,212 956 (decreased) 32.0 11.5
Notes:
1. Temporary or part-time employees are not included in the list above.
2. Any portion of the average age or average working years totalling less
than one tenth of one year is disregarded.
(6) Matters Concerning Principal Business Combination
1. Matters Concerning Principal Subsidiaries:
Percentage of
Voting Rights Outline of
held
Name of Companies Common Stock by the Principal Business
Company
TDK U.S.A. (US$283,550 100.0% Management and supervision
of
Corporation thousand) �34,082 subsidiaries in the United
(U.S.A.) million States
TDK Electronics (US$62,849
Corporation thousand) �7,554 100.0% Manufacture and sale of
(U.S.A.) million recording media
& systems products
TDK Corporation (US$3,800 100.0% Sale of electronic materials
of thousand) & components
America (U.S.A.) �456 million
TDK Taiwan (NT$424,125 82.8% Manufacture and sale of
electronic
Corporation thousand) �1,467 materials & components
(Taiwan) million
SAE Magnetics (HK$50 thousand) � 100.0% Manufacture and sale of
(Hong Kong) 0 million electronic
Limited (Hong materials & components
Kong)
TDK Hong Kong (HK$25,500 100.0% Manufacture and sale of
Company electronic
Limited (Hong thousand) �392 materials & components
Kong) million
TDK Recording (Euro 82,846 100.0% Manufacture and sale of
Media recording media
Europe S.A. thousand) �10,755 & systems products
(Luxembourg) million
TDK Electronics (Euro 65,585 100.0% Sale of electronic materials
& components
Europe GmbH thousand) �8,514 and recording media &
(Germany) million systems products
TDK-MCC �1,800 million 100.0% Manufacture of electronic
Corporation materials &
(Japan) components
TDK Marketing �1,050 million 100.0% Sale of recording media &
systems products
Corporation
(Japan)
Notes:
1. The Company indirectly owns 100% of TDK Electronics Corporation, TDK
Corporation of America, SAE Magnetics (Hong Kong) Limited, TDK Recording Media
Europe S.A. and TDK Electronics Europe GmbH.
2. The figures in parentheses in the above column of "Common Stock" are stated
in local currencies. Yen amounts are translated at the exchange rates on the
balance sheet date. Any amount less than one million yen is disregarded.
3. Any portion less than one-tenth of one percent of the percentage of voting
rights held by the Company is disregarded.
2. Condition of Business Combination: The number of consolidated subsidiaries
for the fiscal year ended March 31, 2002 was 77 (domestic 26, overseas 51).
Eight manufacturing subsidiaries in the Akita and Yamagata regions were
integrated into three companies, and one subsidiary in Japan and one overseas
subsidiary were liquidated, respectively. On the other hand, the Company
acquired the U.S. company that manufactures and sells power supplies products
used for data communication equipment and established a subsidiary in Shanghai
in China. As a result, the total number of consolidated subsidiaries for the
fiscal year under review totaled 72 (domestic 20, overseas 52). The number of
affiliates as to investment in which the equity method of accounting had been
carried out was seven (domestic 4, overseas 3) for the fiscal year ended March
31, 2002; it totaled eight (domestic 5, overseas 3) for the fiscal year under
review.
3. Results of Business Combination: The number of consolidated subsidiaries
including the ten principal subsidiaries stated above is 72 and that of
affiliates as to investment in which the equity method of accounting has been
carried out is eight. Consolidated net sales for the fiscal year under review
amounted to approximately �608,880 million (an increase of 6.7% compared with
the preceding fiscal year) and consolidated net income amounted to
approximately �12,019 million (�25,771 million of consolidated net losses was
stated for the preceding fiscal year).
(7) Major Lenders, Amount of Loans and Number of the Shares of the Company
Owned Not applicable.
(8) Name, Position and Duty, or Major Occupation of Each Director and
Corporate Auditor
Position Name Duty and Major Occupation
President and Hajime Sawabe
CEO
Director Hirokazu General Manager of China Business Development
Nakanishi Group
Director Jiro Iwasaki General Manager of Administration Group and in
charge of Safety
& Environment
Director Shinji Yoko General Manager of Electronic Components Sales &
Marketing Group
Director Takeshi Nomura General Manager of Materials Research Center and
General
Manager of Intellectual Properties Center
Director Mitsuaki Konno General Manager of Management Review and Support
Department
Director Yasuhiro Lawyer, Partner of the Law Firm of Squire,
Hagihara Thunders and Dempcy
L.L.P. (U.S.A.)
Corporate Takuma Otsuka Full-time
Auditor
Corporate Yutaka Mori Full-time
Auditor
Corporate Hiromi
Auditor Kitagawa
Corporate Osamu Nakamoto Lawyer, Partner of the Law Firm of Mori Hamada &
Auditor Matsumoto
Notes:
1. Mr. Yasuhiro Hagihara is an outside Director prescribed in Paragraph 7-2,
Section 2, Article 188 of the Commercial Code.
2. Messrs. Hiromi Kitagawa and Osamu Nakamoto are outside Corporate Auditors
prescribed in Section 1, Article 18 of the "Law Concerning Special Exceptions
to the Commercial Code Concerning Audit, etc. of Kabushiki Kaisha".
3. Changes in Directors during the fiscal year under review are as follows:
(i) Assumption of office of Directors for the fiscal year under review:
Position Name Remarks
Executive Director Mitsuaki Konno Assumed on June 27, 2002
Executive Director Yasuhiro Hagihara Assumed on June 27, 2002
(ii) Retirement during the fiscal year under review:
Position Name Remarks
Executive Senior Managing Director Shunshijiro Saito retired on June 27, 2002
Executive Managing Director Joichiro Ezaki retired on June 27, 2002
Executive Director Suguru Takayama retired on June 27, 2002
Executive Director Takeshi Ohwada retired on June 27, 2002
Executive Director Yoshinori Hashimoto retired on June 27, 2002
Executive Director Kiyoshi Ito retired on June 27, 2002
Executive Director Katsuhiro Fujino retired on June 27, 2002
(9) Conditions of Issuance of Stock Acquisition Rights with Specially
Favorable Terms and Conditions to Persons other than Stockholders On August 9,
2002, the stock acquisition rights were issued as stock option pursuant to a
resolution of the meeting of the Board of Directors of the Company held on
August 1, 2002.
(1) Total number of stock acquisition rights issued: 2,226 shares (100 shares
per one stock acquisition right)
(2) Class and number of shares to be granted for stock acquisition rights:
222,600 shares of common stock
(3) Issue price of stock acquisition rights: Free of charge
(4) Amounts to be paid upon the exercise of each stock acquisition right: �
590,900 (�5,909 per share)
(5) Exercise period of stock acquisition rights: From August 1, 2004 to July
31, 2008
(6) Conditions of exercise of stock acquisition rights:
(a) Partial exercise of each stock acquisition right is only exercisable so
long as the number of shares to be granted for stock acquisition rights is any
integral multiples of a unit of shares of the Company.
(b) No transfer, pledge or any other disposition of stock acquisition rights
shall be approved.
(c) When Directors and corporate officers of the Company and officers of
associated companies, who have been granted such stock acquisition rights, are
removed from their respective offices, voluntarily resign, or lose their
positions due to disqualification, stock acquisition rights may not be
exercised.
(d) When certain employees of the Company and associated companies, who have
been granted such stock acquisition rights, are demoted or dismissed as a
result of disciplinary measures, stock acquisition rights may not be exercised.
(e) In case of the loss of position as Directors, corporate officers and
certain employees of the Company and associated companies due to the reason
other than (c) or (d) stated above, stock acquisition rights may be exercised
within two years following such loss of position.
(f) Other conditions relating to the exercise of such rights have been
provided for in accordance with the agreement with respect to the granting of
stock acquisition rights which was concluded between the Company and each of
the Grantees, pursuant to resolutions made at this Ordinary General Meeting of
Stockholders and the meeting of the Board of Directors.
(7) Events and conditions of cancellation of stock acquisition rights:
(a) If a proposal for approval of a merger agreement, under which the Company
is the dissolving company, is approved at a meeting of stockholders of the
Company, or if a proposal for approval of a stock exchange agreement or a
proposal for share transfer under which the Company becomes a wholly owned
subsidiary, is approved at a meeting of stockholders of the Company, stock
acquisition rights may be cancelled without any charge.
(b) In the event that the Company acquires and holds stock acquisition rights,
it may, at any time, cancel without any charge any and all of such stock
acquisition rights.
(8) Contents of specially favorable terms and conditions:
Stock acquisition rights have been issued free of charge to Directors,
corporate officers and key employees of the Company and officers and key
employees of associated companies.
(9) Name and number of stock acquisition rights allotted:
Directors of the Company
Number of stock acquisition rights
Name
Hajime Sawabe 186
Hirokazu Nakanishi 99
Jiro Iwasaki 92
Shinji Yoko 92
Takeshi Nomura 92
Mitsuaki Konno 52
Yasuhiro Hagihara 10
Corporate Officers of the Company
Name Number of stock acquisition rights
Joichiro Ezaki 92
Kiyoshi Ito 85
Katsuhiro Fujino 52
Takeshi Ohwada 52
Kunihiro Fukushima 45
Yukio Hirokawa 45
Takehiro Kamigama 45
Masatoshi Shikanai 45
Yukio Harada 45
Yoshitomo Suzuki 45
Michinori Katayama 45
KenryoNamba 45
Directors of SAE Magnetics (Hong Kong) Limited (subsidiary of the Company)
Name Number of stock acquisition rights
NG Wai Hung 10
Leung Siu Hong 8
Director of TDK Taiwan Corporation (subsidiary of the Company)
Name Number of stock acquisition rights
In Tzu Hsieh 5
Director of TDK Electronics Ireland Ltd. (subsidiary of the Company)
Name Number of stock acquisition rights
Stephen William James Seawright 5
Key employees of the Company and affiliates (Top 10)
Company Name Number of New Shares
The Company Tsutae Suzuki 10
The Company Shiro Nomi 8
The Company Kuniaki Goto 8
The Company Osamu Tazaki 8
The Company Kazutomo Onizuka 8
The Company Kenichi Hiruma 8
The Company Seiji Enami 8
The Company Akira Okamoto 8
The Company Noboru Hara 8
The Company Masao Ishihara 8
(10) Any events materially affecting the conditions of the Company occurred
after the settlement of accounts
None.
Attachment (2)
BALANCE SHEET
(Non-consolidated basis)
(As of March 31, 2003)
Amount
Item
(Millions of yen)
(ASSETS)
Current Assets: 224,917
Cash and deposits with banks 55,240
Trade receivables - notes 4,429
Trade receivables - accounts 70,136
Marketable securities 11,399
Products 10,517
Raw materials and supplies 5,821
Work in process 9,798
Advance payments 6,700
Accrued income taxes 1,054
Deferred tax assets 3,511
Short-term loans receivables 40,780
Other current assets 5,638
Allowance for doubtful receivables -112
Fixed Assets: 284,643
Property, plant and equipment: 123,737
Buildings 41,691
Structures 2,119
Machinery and equipment 52,555
Vehicles, tools, furniture and fixtures 4,896
Land 14,929
Construction in progress 7,545
Intangible fixed assets: 12,097
Patent rights 8,726
Software 3,106
Other intangible fixed assets 265
Investments and advances: 148,807
Investments in securities 8,885
Shares of subsidiaries 97,595
Investment in subsidiaries 5,489
Long-term loans receivable 11,763
Long-term prepaid expenses 4,006
Long-term deferred tax assets 20,103
Other investments 1,596
Allowance for doubtful receivables -632
Total Assets: 509,561
Amount
Item
(Millions of
yen)
(LIABILITIES)
Current 60,672
Liabilities:
Trade payables - accounts 32,843
Accounts payable 11,431
Accrued income taxes 52
Accrued expenses 8,387
Deposits received 7,658
Other current liabilities 299
Fixed Liabilities: 29,646
Retirement and severance benefits 29,337
Directors' and Corporate Auditors' 309
retirement allowance
(Total 90,319
Liabilities)
(STOCKHOLDERS' EQUITY)
Common Stock: 32,641
Capital Surplus 59,256
Additional paid-in capital 59,256
Legal Surplus: 332,160
Legal reserve 8,160
Special depreciation reserve 1,037
Other reserve 306,053
Unappropriated retained earnings for the 16,908
year
(Income for the year) (133)
Unrealized holding gain (loss) on 37
investments in shares
Treasury stock -4,854
Total Stockholders' Equity: 419,241
Total Liabilities and Stockholders' Equity: 509,561
(Notes)
1. Figures are stated in millions of yen by disregarding any amount less than
one million yen.
2. Principal Accounting Principles, etc. are stated separately.
Attachment (3)
STATEMENT OF INCOME
(Non-consolidated basis)
From: April l, 2002
To: March 31, 2003
Amount Total
Item
(Millions of (Millions of yen)
yen)
CURRENT INCOME AND LOSS
Operating Income and Loss:
Operating income:
Net sales 320,697
Operating expenses:
Cost of sales 262,053
Selling, general and 55,461 317,514
administrative expenses
Operating income: 3,182
Non-operating Income and Loss:
Non-operating income:
Interest and dividend income 2,847
Rental received 2,341
Other non-operating income 4,284 9,473
Non-operating expenses:
Interest paid 18
Exchange loss 532
Depreciation of leased assets 1,960
Other non-operating expenses 1,065 3,577
Current Income: 9,078
EXTRAORDINARY PROFIT AND LOSS
Extraordinary Profit:
Reversal of allowance for 102
doubtful receivables
Other extraordinary profit 249 351
Extraordinary Loss:
Loss on disposal of fixed 1,096
assets
Extraordinary loss from 2,840
business restructuring
Other extraordinary loss 3,869 7,806
Income before income taxes 1,623
Income tax, resident tax and enterprise 52
tax
Refunded income taxes -443
Reversal of prior year income taxes -595
Adjustments to income taxes 2,477
Net income 133
Retained earnings brought forward from the 20,090
preceding year
Interim dividends 3,315
Unappropriated retained earnings for the 16,908
year
(Notes)
1. Figures are stated in millions of yen by disregarding any amount less than
one million yen.
2. Principal Accounting Principles, etc. are stated separately.
(Separate notes)
PRINCIPAL ACCOUNTING PRINCIPLES
The principal accounting principles, procedures and methods of representation
adopted for the preparation of the Balance Sheet and the Statement of Income
are as follows:
1. Valuation standards and methods of securities are as follows:
(a) Shares of subsidiaries and affiliates:
They are valued at cost using a moving average cost method.
(b) Other securities:
Marketable securities:
Market price method on the fair market price as of the end of fiscal year (any
balance resulting from valuation of securities shall directly be entered into
stockholders' equity, while any cost of sales of marketable securities shall be
calculated using a moving average cost method.)
Non-marketable securities:
They are valued at cost using a moving average cost method.
2. Valuation standards and methods of derivatives are as follows:
They are valued at market price.
3. Valuation standards and methods of inventories are as follows:
(a) Products and work in progress:
They are valued at the lower of cost using a periodic average method.
(b) Raw materials and supplies:
They are value at the lower of cost using a monthly moving average cost method.
4.Method of depreciation of cost of fixed assets
(a) Property, plant and equipment:
Depreciation of buildings (other than facilities attaching to the buildings) is
principally computed using the straight-line method, and property other than
buildings is principally computed using the declining balance method.
The estimated useful lives of assets are as follows:
Buildings: 3 to 50 years
Machine and equipment 4 to 22 years
(b) Intangible fixed assets:
Depreciation of intangible fixed assets is computed using the straight-line
method.
Software for the in-house use is computed using the straight-line method based
on the utilizable period (5 years) within the Company.
5. Accounting basis of principal allowances
(a) Allowance for doubtful receivables:
In order to prepare for losses from bad debts, it is stated an estimated
incollectible amount, in consideration of the past experience for bad debt
ratio with respect to doubtful receivables in general, and the individual
estimate on possibility of collection with respect to doubtful receivables.
(b) Retirement and severance benefits:
It is stated estimated amounts of benefit obligations and plan assets as at
March 31, 2003 for the future payment of retirement and severance benefits
payable to employees.
Actuarial gains and losses are amortized from the next year following the year
in which such gains and losses occurred using the straight-line method over
certain periods within the estimated average remaining service years of
employees. Prior service costs of employees are amortized in the year in which
such costs occurred using the straight-line method over certain periods within
the estimated average remaining service years of employees.
(c) Directors' and Corporate Auditors' retirement allowance:
In order to prepare for future payment of retirement grants for Directors and
Corporate Auditors to resign, it is stated an amount to be required at the end
of the fiscal year in accordance with the internal regulations of the Company.
Provided, however, that the reserve for Directors' retirement allowance to be
accrued following the date after the date of the 106th Ordinary General Meeting
of Stockholders has been suspended upon resolutions of the meeting of the Board
of Directors. Directors' prior retirement grants shall be paid when a Director
resigns upon resolution of the General Meeting of Stockholders.
It is the allowance as prescribed in Article 287-2 of the Commercial Code of
Japan before amendments in 2002.
6. Method of accounting for lease transactions
Finance leases, except for those in which ownership is deemed to be transferred
to the lessee, are accounted for as operating leases, that is, the rental of
property.
7. Method of accounting consumption tax, etc.
No consumption tax, etc. is included in the financial statements.
8. Accounting for treasury stock and reversal of statutory reserve, etc.:
As a result of the application of "Accounting Standards regarding Treasury
Stock and Reversal of Statutory Reserve, etc. (Corporate Accounting Standard
No. 1)" after April 1, 2002, the Company adopted such standards for the fiscal
year under review. Such change has not adversely affected the income and loss
of the Company for the fiscal year under review.
The presentation of stockholders' equity of the accompanying balance sheet for
the fiscal year under review has been changed in accordance with the provisions
of "Commercial Code Enforcement Regulations" (Ordinance of Ministry of Justice
No. 22, March 29, 2002).
9. Information per share:
As the "Accounting Standards regarding Current Net Income Per Share (Corporate
Accounting Standards No. 2)" and "Guideline for Application of Accounting
Standards Regarding Current Net Income Per Share (Guideline for Application of
Corporate Accounting Standards No. 4)" have been applied for fiscal year
commencing from April 1, 2002, the Company has adopted such standards and
guidelines for the fiscal year under review.
Notes with respect to Balance Sheet
1. Pecuniary credits and debts to subsidiaries:
(a) Short-term credits �66,493 million
(b) Long-term credits �11,572 million
(c) Short-term debts �19,780 million
2. In addition to the fixed assets stated in the balance sheet, there are
computers and other related machinery and equipment as principal assets used
pursuant to lease contracts.
3. There is no pecuniary credit or debt to Directors or Corporate Auditors of
the Company.
4. Current assets, investments and liabilities include those denominated in
foreign currencies. Accounts of major items translated into yen are as follows:
(a) Trade receivables - accounts �23,382 million
(b) Other current assets �1,265 million
(c) Shares of subsidiaries �84,565 million
(d) Investments in subsidiaries �5,489 million
(e) Trade payables - accounts �1,392 million
5. Assets pledged or collateral:
Securities �1,399 million
Investments in securities �1,097 million
6. Contingent liabilities including guaranteed liabilities:
Outstanding guaranteed liabilities �7,184 million
7. Accumulated amount of depreciation of �249,384 million
property,
plant and equipment:
8. Consumption taxes are included in the "other current assets" after
offsetting the amount paid in advance against the amount received in advance.
9. The number of the outstanding and unexercised stock acquisition rights is
2,226 and 100 shares of common stock per stock acquisition right upon exercise
thereof will be issued at the issue price of �590,900 (�5,909 per share).
10. Net income per share: �0.53 (It is calculated on the basis of the
average number of shares in issue during the fiscal year under review.)
The difference between the income for the fiscal year under review amounting to
�133 million and the income for common shares used for the calculation of the
income per share for the fiscal year under review amounting to �69 million,
both of which are stated in the accompanying Statement of Income, is Directors'
bonuses.
Also, the average number of shares of common stock in issue during the fiscal
year under review, which has been used for the calculation of the income per
share is 132,716 thousands of shares.
Notes with respect to Statement of Income
1. Sales to subsidiaries: �178,337 million
2. Purchases from subsidiaries: �149,181 million
3. Non-operating transactions with subsidiaries: �7,804 million
Notes with respect to Retirement and Severance Benefits
1. Components of retirement and severance benefits:
107th Business year
(As at March 31,
2003)
(� million)
(1) Retirement and severance benefit obligation: -233,671
(2) Plan assets: 143,216
(3) Unfunded obligations for benefit obligation (1) + (2): -90,454
(4) Unrecognized actuarial loss (gain) 81,553
(5) Unrecognized prior service costs -20,436
(6) Accrued retirement and severance benefits (3) + (4) + -29,337
(5):
2. Components of retirement benefit costs:
107th Business year
(From April 1, 2002 to
March 31, 2003)
(� million)
Retirement benefit costs 12,855
(1) Service cost 7,804
(2) Interest cost 5,687
(3) Expected return on plan assets -3,375
(4) Amortization of prior service costs -1,362
(5) Amortization of actuarial loss (gain) 3,708
(6) Extra retirement money, etc. specially paid: 393
3. Calculation basis of for retirement and severance benefits obligations:
107th Business year
(As at March 31, 2003)
(1) Discount rates: 2.00%
(2) Expected rates of return on investment: 2.00%
(3) Distribution method of estimated amount Period fixed amount standard
of retirement and severance benefits
during the period:
(4) Amortization of prior service obligations Average remaining years of
service of the employees when it
occurs
(5) Years to amortize actuarial gain/loss: Average remaining years of
service of the employees when it
occurs
Attachment (4)
PROPOSAL FOR APPROPRIATION OF RETAINED EARNINGS
Appropriation of Unappropriated Retained Earnings for the Fiscal Year ended
March 31, 2003
(yen) (yen)
I. Unappropriated retained earnings for the 16,908,905,979
year:
Reversal of general reserve:
Reversal of special depreciation reserve: 278,776,113
Total 17,187,682,092
We propose that the above income will be
disposed as follows:
II. Appropriated retained earnings
Dividends: 3,315,629,600
(�25 per share)
Directors' bonuses: 64,150,000
General reserve:
Special depreciation reserve 159,865,000
Total 3,539,644,600
III. Balance Carried Forward 13,648,037,492
Notes:
1.Dividends are calculated excluding treasury stock of 564,475 shares.
2.Interim dividends (�25 per share) in the aggregate amount of �3,315,852,300
were paid on December 6, 2002.
3.A special depreciation reserve is reversed or set up in accordance with the
Special Taxation Measurement Law.
Attachment (5)
CERTIFIED COPY OF PUBLIC ACCOUNTANTS' REPORT
PUBLIC ACCOUNTANTS' REPORT
May 6, 2003
To: The Board of Directors of TDK Corporation
Shin Nihon & Co.
Shinobu Miyauchi (Seal)
Representative partner and engagement partner
Certified Public Accountant
Kenji Yumoto (Seal)
Representative partner and engagement partner
Certified Public Accountant
Hideaki Koyama (Seal)
Engagement partner
Certified Public Accountant
We have examined the financial statements of TDK Corporation, including balance
sheet, the statement of income, the business report (limited to the part
regarding the accounts of the Company) and the Proposal for Appropriation of
Retained Earnings and attached schedules thereto (limited to the part regarding
the accounts of the Company) for the 107th fiscal year from April 1, 2002 to
March 31, 2003 pursuant to the provisions of Article 2 of the "Law Concerning
Special Exceptions to the Commercial Code Concerning Audit, Etc. of Joint-Stock
Corporations (Kabushiki Kaisha)". Further, the part regarding the accounts of
the Company of the Business Report and attached schedules are described based
on the records of accounting books of the Company and its subsidiaries.
The management of the Company is responsible for the preparation of the
financial statements and the schedules related thereto and our responsibility
as certified public accountants is to express an independent opinion regarding
the financial statements and the schedules related thereto.
Our examination was carried out in accordance with generally accepted auditing
standards in Japan. The auditing standards require us to be guaranteed to a
reasonable extent as to whether or not the financial statements and the
schedules related thereto contain any material misrepresentations. Our audit
has been carried out on the basis of trial examination and includes overall
examination of representations which are indicated in the financial statements
and schedules related thereto, including valuation of the accounting standards
adopted, and the methods thereof employed, by the management of the Company as
well as valuation of the projections made therein by the management of the
Company. Our audit corporation has judged that it has been guaranteed to a
reasonable extent that it has a basis for expressing an opinion as a result of
the audit. The audit includes the auditing procedures for the Company's
subsidiaries with respect to which we carried out as we considered it
necessary.
We, after examination, hereby report as follows:
(1) The Balance Sheet and the Statement of Income fairly set forth the
financial condition and state the profit and loss of the Company in accordance
with laws and ordinances and the Articles of Incorporation.
(2) The Business Report (limited to the part regarding the accounts of the
Company) fairly sets forth the situation of the Company in accordance with laws
and ordinances and the Articles of Incorporation.
(3) The Proposal for Appropriation of Retained Earnings is in conformity with
laws and ordinances and the Articles of Incorporation.
(4) There exists no matters in the attached schedules (limited to the part
regarding the accounts of the Company) to be pointed out in accordance with the
provisions of the Commercial Code of Japan.
Shin Nihon & Co. or engagement partners in charge have no interests with the
Company which are defined by the provisions of the Law Concerning Certified
Public Accountants.
- End -
Attachment (6)
CERTIFIED COPY OF REPORT OF BOARD OF CORPORATE AUDITORS
AUDIT REPORT
This Board of Corporate Auditors prepared and report upon the following audit
report regarding the performance of duties of the Directors of the Company
during the 107th fiscal year from April 1, 2002 to March 31, 2003, upon
deliberation, based on the reports from each Corporate Auditor regarding the
method and the result of audit.
1. Summary of method of audit
Each Corporate Auditor, subject to, inter alia, the audit policy and the
business assignment, etc. set up by the Board of Corporate Auditors and the
duties assigned to each Corporate Auditor, has attended meetings of the Board
of Directors and other meetings as deemed important, received from Directors
reports on the business, perused the documents whereby the important decisions
were made, and examined business and financial conditions at the head office
and the principal offices. Each of Corporate Auditors has also required reports
on business from the Company's subsidiaries, has visited the principle
subsidiaries when deemed it necessary, and has examined business and financial
conditions. In addition, we received from the Independent Accountants reports
on audit and examined the accounting statements and attached schedules.
As for the transactions between Directors acting on their own behaves and the
companies which businesses are competitive to the Company, transactions between
Directors and the Company in which interests in both parties are contradictory,
the provision, free of charge, of profits conducted by the Company,
transactions not in the ordinary course of business between its subsidiaries
and the Company or between its stockholders and the Company and acquisition and
disposal of its own shares and the like, we each examined such transactions in
detail by receiving reports from the Directors, as necessary, in addition to
the method of audit mentioned above.
2. Result of audit
(1) The method and results of auditing carried out by Shin Nihon & Co.,
Independent Public Accountants, are appropriate.
(2) The Business Report fairly sets forth the situation of the Company in
accordance with laws and ordinances and the Articles of Incorporation.
(3) With respect to the item concerning the proposal for appropriation of
retained earnings, nothing unusual is to be pointed out in accordance with the
financial condition of the Company and other circumstances.
(4) The attached schedules fairly set forth the matters to be stated and
nothing unusual is to be pointed out.
(5) With respect to the performance of their duties by the Directors, no
illegal act nor any fact which is in violation of the laws and ordinances and
the Articles of Incorporation is ascertainable.
We confirm that there is no illegal acts of Directors with respect to
transactions between Directors acting on their behaves and the companies which
businesses are competitive to the Company, transactions between Directors and
the Company in which interests in both parties are contradictory, the
provision, free of charge, of profits conducted by the Company, transactions
not in the ordinary course of business between its subsidiaries and the Company
or between its stockholders and the Company and acquisition and disposal of its
own shares and the like.
May 6, 2003
Board of Corporate Auditors of
TDK Corporation
Corporate Auditor (full-time)
Takuma Otsuka (Seal)
Corporate Auditor (full-time)
Yutaka Mori (Seal)
Corporate Auditor
Hiromi Kitagawa (Seal)
Corporate Auditor
Osamu Nakamoto (Seal)
(Note) Messrs. Hiromi Kitagawa and Osamu Nakamoto are outside Corporate
Auditors prescribed in Section 1, Article 18 of the Law Concerning Special
Exceptions to the Commercial Code Concerning Audit, etc. of Kabushiki Kaisha.
Reference Documents Concerning the Exercise of Voting Rights
1. Aggregate number of voting rights owned by all stockholders: 1,325,515
voting rights
2. Matters to be Resolved and Matters for Reference:
First Item: Approval of proposal for appropriation of retained earnings for the
107th fiscal year
The appropriation of retained earnings for the fiscal year under review is
proposed as stated in Attachment (4) (page 25) above. The Company considers
that returning income to its stockholders is an important management duty, and
will distribute such income with comprehensive consideration given to the level
of return on equity (ROE), dividends on equity (DOE), etc. and business
results, among other factors. Consequently, with respect to the appropriation
of retained earnings as at the end of the fiscal year under review, the year-
end dividend during the fiscal year under review will be �25.00 per share, as a
result of the Company taking into account the level of ROE and DOE, etc. in
accordance with the Company's basic policy. Together with the interim dividends
of �25.00 per share, which were paid in December 6, 2002, the total dividends
for the fiscal year under review will be �50.00 per share, the same amount as
the previous fiscal year.
Second Item: Partial amendments to the Articles of Incorporation
1. Reason for amendments:
(1) In accordance with the enforcement of the "Law regarding the Partial
Amendments to the Commercial Code, etc. of Japan" (Law No. 128, 2001) as of
April 1, 2002, the computerization of corporate documents has been approved.
The Company, therefore, shall make the necessary changes to the relevant
provisions of the Articles of Incorporation in response to the computerization
of corporate documents.
(2) As a result that the establishment of a system for invalidation of share
certificates, the adoption of a system for making a request to the Company for
sale of shares constituting less than one unit, and the reduction in number of
the quorum required for the special resolution at the general meeting of
shareholders have been approved due to the enforcement of the "Law regarding
the Partial Amendments, etc. to the Commercial Code, etc. of Japan" (Law No.
44, 2002) as of April 1, 2003, the necessary changes to the relevant provisions
of the Articles of Incorporation shall be made.
(3) The Company intends to change the chairman of the General Meeting of
Stockholders and meetings of the Board of Directors as one of the policies for
management system reform. Also, it will shorten the term of office of Directors
to 1 year in order to flexibly establish the optimum management system and
increase chances for stockholders to entrust management to Directors, to comply
with changes in operating environment. Supplemental provisions will be
established to clearly define that the current provisions before amendment
shall be applied to the term of Directors who were elected at the 106th
Ordinary General Meeting of Stockholders held on June 27, 2002.
(4) In addition, necessary changes including renumbering of Articles, etc.
will be made in connection with the establishment and deletion of Articles, and
some expressions will be amended.
2. Details of amendments
Details of the proposed amendments are as follows.
(Parts proposed to be amended are underlined.)
Present Articles of Incorporation Proposed amendment
(Name) (Name)
Article 1. The Company shall Article 1. The Company shall be
be called TDK called TDK Kabushiki
Kabushiki Kaisha Kaisha and indicated as
and indicated as TDK Corporation in
TDK Kabushiki English.
Kaisha in the
commercial
register.
2. It shall be called (To be deleted)
TDK Corporation in
English.
(Number of Shares Authorized to be
Issued,
Number of Shares of One Unit and
Non-Issuance of Share Certificates
for
Shares Constituting Less Than One (Aggregate Number of Shares Authorized to
Unit) be Issued)
Article 5. Article 5.
2. The number of (To be deleted)
shares of one unit
of shares of the
Company shall be
one hundred (100)
shares.
2-2. The Company shall (To be deleted)
not issue share
certificates for
shares constituting
less than one unit
of shares
(hereinafter
referred to as the
"shares
constituting less
than one unit).
(To be newly established) (Number of Shares of One Unit and
Non-Issuance of Share
Certificates for Shares Constituting Less
Than One Unit)
Article 6. The number of shares of
one unit of shares of the
Company shall be one
hundred (100) shares.
2. The Company shall not
issue share certificates
for shares constituting
less than one unit of
shares (hereinafter
referred to as the
"shares constituting less
than one unit). Provided,
however, that the
foregoing shall not be
applicable, in the event
that the Share Handling
Regulations provides for
otherwise.
(To be newly established) (Purchase of Shares Constituting Less
Than One Unit)
Article 7. A shareholder (including
beneficial shareholder,
the same shall be applied
hereinafter) who holds
shares constituting less
than one unit of the
Company may request the
Company to sell the
relevant number of shares
which shall constitute
one unit of shares if
combined with the shares
constituting less than
one unit already held by
such shareholder,
pursuant to the
provisions of the Share
Handling Regulations.
Article 5-2. (To be deleted) (To be deleted)
Article 6. (To be deleted) (To be deleted)
Article 7. (To be deleted) (To be deleted)
Present Articles of Incorporation Proposed amendment
(Transfer Agent) (Transfer Agent)
Article 8. Article 8.
2. The shareholders' 2. The shareholders'
register (including register (including
the beneficial the beneficial
shareholders' shareholders'
register; the same register; the same
shall be applied shall be applied
hereinafter) of the hereinafter) and
Company shall be the register of
kept at the place lost share
of business of the certificates of the
transfer agent, and Company shall be
the registration of kept at the place
transfer of shares, of business of the
registration of transfer agent, and
pledge and the registration of
indication of trust transfer of shares,
assets or purchase of shares
cancellation representing less
thereof, than one unit and
registration or sale of shares
recordation in the constituting less
beneficial than one unit by
shareholders' the Company and
register, purchase other matters
of shares relating to shares
representing less shall be handled by
than one unit, the transfer agent,
delivery of share but not by the
certificates, Company.
non-possession of
share certificates,
acceptance of
notices and other
notice and other
matters relating to
shares shall be
handled by the
transfer agent, but
not by the Company.
(Share Handling Regulations) (Share Handling Regulations)
Article 9. Denominations of Article 9. Denominations of
share certificates share certificates
and registration of and the
transfer of shares registration of
of the Company, transfer of shares
registration or of the Company,
recordation in the purchase of shares
beneficial representing less
shareholders' than one unit and
register, purchase sale of shares
of shares constituting less
representing less than one unit by
than one unit and the Company and
other matters other matters
concerning the concerning the
handling of shares handling of shares
and handling fees and handling fees
shall be governed shall be governed
by the Share by laws and
Handling regulations, the
Regulations Articles of
established by the Incorporation as
Board of Directors. well as the Share
Handling
Regulations
established by the
Board of Directors.
(Record Date) (Record Date)
Article 10. The Company shall Article 10. The Company shall
deem those deem those
shareholders whose shareholders whose
names have been names have been
entered or recorded entered or recorded
in the in the
shareholders' shareholders'
register as of the register as of the
date of each day of each closing
closing of accounts of accounts as the
as the shareholders shareholders
who may exercise holding voting
shareholders' rights who may
rights at the exercise
ordinary general shareholders'
meeting of rights at the
shareholders held ordinary general
with respect to the meeting of
business period shareholders held
concerned. with respect to the
business period
concerned.
(General Meetings of Shareholders) (General Meetings of Shareholders)
Article 11. Article 11.
2. General meetings of 2. General meetings of
shareholders may be shareholders may be
convened at the convened at the
Head Office and any Head Office or any
adjacent place adjacent place
thereto or at thereto or at
Ichikawa-city, Ichikawa-city,
Chiba Prefecture. Chiba Prefecture.
Present Articles of Incorporation Proposed amendment
3. The Chairman of the 3. Representative
Board of Directors Director shall
shall act as the preside over the
chairman of general general meetings of
meetings of shareholders. In
shareholders. If case of two or more
the Chairman of the Representative
Board of Directors Directors, one of
is prevented from Representative
so acting or if the Directors shall act
office thereof is as the Chairman in
vacant, another the order of
Director shall act precedence
in his/her place in previously fixed by
the order the Board of
previously fixed by Directors. In the
the Board of event that the
Directors. Representative
Director is
prevented from so
acting, another
Director shall act
in his/her place in
the order
previously fixed by
the Board of
Directors.
4. A shareholder may 4. A shareholder may
exercise his/her exercise his/her
voting rights by voting rights by
proxy by proxy by
authorizing another authorizing another
shareholder who shareholder who
holds voting rights holds voting rights
of the Company as of the Company as
his/her proxy. his/her proxy.
Provided, however,
that the
shareholder or
proxy is required
to submit to the
Company a document
evidencing his/her
representation at
every general
meeting of
shareholders.
(To be newly established) 6. Special resolutions
of a general
meeting of
shareholders
provided in Article
343 of the
Commercial Code
shall be adopted by
an affirmative vote
of two-thirds (2/3)
or more of the
voting rights of
shareholders
present at the
general meeting of
shareholders, a
quorum of which
shall be one-third
(1/3) or more of
the voting rights
owned by all
shareholders.
6. A summary of 7. A summary of
proceedings and the proceedings and the
resultant actions resultant actions
taken at a general taken at a general
meeting of meeting of
shareholders shall shareholders shall
be recorded in the be stated or
minutes. The recorded in the
chairman and the minutes. The
Directors present chairman and the
shall affix their Directors present
names and seals shall affix
thereto. The signatures
minutes shall be (including affixing
kept at the Head their names and
Office of the seals) or make
Company for ten electronic
years and copies signatures thereto.
thereof shall be The minutes shall
kept at branches be kept at the Head
for five years. Office of the
Company for ten
years and copies
thereof shall be
kept at branches
for five years.
(Number of Directors) (Number of Directors)
Article 12. Article 12.
3. Proposal for 3. Resolution for
elections of election of
Directors shall Directors shall be
require the adopted by an
presence of affirmative vote of
shareholders who majority of the
hold one third or voting rights of
more of the voting shareholders
rights owned by all present at the
shareholders. general meeting of
shareholders, a
quorum of which
shall be one-third
(1/3) or more of
the voting rights
owned by all
shareholders.
4. The election of 4. Resolution for
Directors shall not election of
be by cumulative Directors shall not
voting. be by cumulative
voting.
Present Articles of Incorporation Proposed amendment
(Term of Office of Directors) (Term of Office of Directors)
Article 13. The term of Article 13. The term of
office office
of Directors of Directors
shall shall
expire at the expire at the
close close
of the ordinary of the ordinary
general meeting general meeting
of of
shareholders held shareholders held
with respect to with respect to
the the
last closing of last closing of
accounts within accounts within
two one
years after their year after their
assumption of assumption of
office. office.
(Directors with Executive Power and (Representative Directors)
Representative Directors) Article 14. (To be deleted)
Article 14. By resolution of
the Board of
Directors, a
Chairman of the
Board of
Directors
and a President
and
Director may be
chosen.
2. By resolution of By resolution of
the Board of the Board of
Directors, Directors, two or
several
Representative more
Representative
Directors shall Directors shall
be be
chosen from among chosen.
the Directors of
the preceding
paragraph.
3. The Chairman of (To be deleted)
the
Board of
Directors
shall superintend
the general rules
of business
operation. The
President and
Director shall
execute the
resolutions of
the
Board of
Directors
and control the
overall business
operation of the
Company.
4. Directors shall (To be deleted)
by
assisting the
President and
Director take
partial charge of
business
operations
and if the
President and
Director is
prevented from
carrying out
his/her duties,
act
in the order
previously fixed
by
the Board of
Directors, shall
act in his/her
place, in the
order
previously
determined by the
Board of
Directors.
(The Board of (The Board of
Directors) Directors)
Article 15. In addition to Article 15. In addition to
the the
matters provided matters provided
for by the laws for by the laws
and and
ordinances or the ordinances or the
Articles of Articles of
Incorporation, Incorporation,
the the
Board of Board of
Directors Directors
shall make shall make
decisions on the decisions on the
execution of execution of
important important
business business
of the Company. of the Company.
(No changes in English translation) (No changes in English translation)
2. The Chairman of 2. The
the Representative
Board of Director shall
Directors
shall convene convene meetings
of
meetings of the the Board of
Board of Directors, and
Directors,
and notice of notice of
convocation shall convocation shall
be sent to each be sent to each
Director and Director and
Corporate Auditor Corporate Auditor
at least 3 days at least 3 days
prior to the date prior to the date
of each meeting; of each meeting;
provided, provided,
however, however,
that in case of that in case of
urgency, such urgency, such
period may be period may be
shortened. If the shortened. In
case
Chairman of the of two or more
Board of Representative
Directors
is prevented from Directors, one of
so acting or if the
the Representative
office thereof is Directors shall
act
vacant, another as the Chairman
in
Director shall the order of
act
in his/her place precedence
in
the order previously fixed
by
previously fixed the Board of
by
the Board of Directors. In the
Directors. event that the
Representative
Director is
prevented from so
acting, another
Director shall
act
in his/her place
in
the order
previously fixed
by
the Board of
Directors.
Present Articles of Incorporation Proposed amendment
3. The Chairman of the Board of 3. The Representative Director
shall
Directors shall act as preside over the meetings of
chairman at the
the meetings of the Board of Board of Directors. In case
of two
Directors, and a majority in or more Representative
the Directors,
number of Directors shall one of the Representative
constitute a quorum of the Directors shall act as the
meetings of the Board of Chairman in the order of
Directors, and resolutions of precedence previously fixed
the by the
meetings of the Board of Board of Directors. If the
Directors
shall be adopted by a Representative Director is
majority
vote of the Directors present prevented from so acting,
another
thereat; provided, however, Director shall act in his/her
that
if the Chairman of the Board place in the order previously
of
Directors is prevented from fixed by the Board of
so Directors.
acting or is vacant, another
Director shall act in his/her
place in the order previously
fixed by the Board of
Directors.
(To be newly established) 4. Resolutions of the Board of
Directors shall be adopted by
an
affirmative vote of majority
of
the shareholders present at
meetings, a quorum of which
shall
be majority of shareholders.
4. A summary of proceedings and 5. A summary of proceedings and
the the
resultant actions taken at a resultant actions taken at a
meeting of the Board of meeting of the Board of
Directors Directors
shall be recorded in the shall be stated or recorded
minutes. in the
The Directors and Corporate minutes. The Directors and
Auditors present shall affix Corporate Auditors present
their shall
names and seals thereto, and affix signatures (including
the
minutes shall be kept at the affixing their names and
Head seals) or
Office of the Company for ten make electronic signatures
years. thereto, and the minutes
shall be
kept at the Head Office of
the
Company for ten years.
(Consultants and Advisors) (To be deleted)
Article Consultants and advisors may
17. be
commissioned by resolution of
the
Board of Directors when
necessary.
(Number of Corporate Auditors) (Number of Corporate Auditors)
Article Article
18. 17.
3. Proposal for election of 3. Resolution for election of
Corporate
Auditors shall require the Corporate Auditors shall be
presence of shareholders who adopted by an affirmative
hold vote of
one third or more of voting majority of the voting rights
rights of
owned by all shareholders. shareholders present at the
general meeting of
shareholders, a
quorum of which shall be
one-third
(1/3) or more of the voting
rights
owned by all shareholders.
(Term of Office of Corporate Auditors) (Term of Office of Corporate Auditors)
Article The term of office of Article The term of office of
19. Corporate 18. Corporate
Auditors shall expire at the Auditors shall expire at the
close close
of the ordinary general of the ordinary general
meeting of meeting of
shareholders held with shareholders held with
respect to respect to
the last closing of accounts the last closing of accounts
within four years after their within four years after their
assumption of office. assumption of office.
(No changes in English (No changes in English
translation) translation)
(Full-time Corporate Auditors) (Full-time Corporate Auditors)
Article (Intentionally omitted) Article (Same as the current Article
20. 19. 20.)
Present Articles of Incorporation Proposed amendment
(The Board of Corporate Auditors) (The Board of Corporate Auditors)
Article 21. Article 20.
4. A summary of 4. A summary of proceedings and
the
proceedings and resultant actions taken at a
the meeting
resultant actions of the Board of Corporate
Auditors
taken at a shall be recorded in the
meeting of minutes. The
the Board of Corporate Auditors present
Corporate shall affix
Auditors shall be signatures (including
affixing their
recorded in the names and seals) or make
electronic
minutes. The signatures thereto, and the
Corporate minutes
Auditors present shall be kept at the Head
shall Office of
affix their names the Company for ten years.
and
seals thereto,
and the
minutes shall be
kept
at the Head
Office of
the Company for
ten
years.
Article 22. ~ 25. (Intentionally Article 21. (Same as the current Article
omitted) ~ 24. 22. ~ 25.)
Article 26. (To be deleted)
(Period of Limitation of Dividends, (Period of Limitation of Dividends, etc.)
etc.)
Article 27. In the event that Article 25. In the event that payment of
the
payment of the dividends and interim
dividends
dividends and declared is not received
interim after elapse
dividends of three (3) full years from
declared is the date
not received by a of offer of payment, the
Company shall
shareholder be discharged from liability
within for
three (3) full payment of such dividends and
years interim
from the date of dividends.
offer
of payment, the
Company shall be
discharged from
liability for
payment
of such dividends
and
interim
dividends.
Supplement (To be deleted)
Notwithstanding
the
provisions of
Article
19 (Term of
Office of
Corporate
Auditors),
the term of
office of
Corporate
Auditors who
are in office
before
the close of the
ordinary general
meeting of
shareholders held
with
respect to the
first
accounting period
after May 1, 2002
shall remain the
same
as three years.
(To be newly Notwithstanding the
established) provisions of
Article 13 (Term of Office of
Directors), the term of
office of
Directors who were elected at
the
ordinary general meeting of
shareholders held on June 27,
2002
shall continue by the closing
of the
ordinary general meeting of
shareholders to be held in
2004.
Third Item: Acquisition of own shares of the Company
You are requested to approve that the Company will acquire 500,000 shares of
common stock of the Company, with a maximum aggregate acquisition cost of �2.3
billion, pursuant to Article 210 of the Commercial Code of Japan during the
period from the closing of this Ordinary General Meeting of Stockholders to the
closing of next Ordinary General Meeting of Stockholders, in order to enable
the Company to execute flexible capital policies responsive to changes in the
operating environment.
Fourth Item: Issuance of stock acquisition rights, in order to grant
such rights to Directors, corporate officers and key employees of the Company
and its associated companies
You are requested to approve the issuance by the Company of stock acquisition
rights in accordance with the following terms and conditions, pursuant to
Article 280-20 and Article 280-21 of the Commercial Code of Japan, in order to
grant such rights as a stock option to Directors, corporate officers and key
employees of each of the Company and associated companies.
1. Reason for the issuance of stock acquisition rights with specially
favorable terms and conditions to persons other than stockholders:
In order to further raise motivation and enhance morale for contributing to the
improvement of consolidated business results of the Company, improve business
results of the Company and associated companies and stockholder values, stock
acquisition rights will be issued to Directors, corporate officers and key
employees of the Company and associated companies in accordance with the
conditions of the issuance as stated in 2. below.
2. Summary of the issuance of stock acquisition rights:
(1) Class and number of shares to be issued upon exercise of stock
acquisition rights:
The maximum number shall be 500,000 shares of common stock of the Company.
In case of adjustment of the number of shares attached to each stock
acquisition rights (defined as below) in accordance with (2) below, the number
of shares to be issued upon exercise of stock acquisition rights shall be
adjusted to a number obtained by multiplying the number of shares attached to
each stock acquisition right after adjustment by the aggregate number of stock
acquisition rights.
(2) Aggregate number of stock acquisition rights to be issued:
The maximum number shall be 5,000.
The number of shares attached to one stock acquisition right (hereinafter
referred to as the "number of shares attached") shall be 100 shares. Provided,
however, that on or after the date that stock acquisition rights are issued
(hereinafter referred to as the "issue date"), in case the Company makes a
stock split or stock consolidation of shares of common stock, the number of
shares granted shall be adjusted in accordance with the following formula and
any number of share less than one share arising out of such adjustment shall be
disregarded:
Number of shares Number of shares Percentages of
attached = attached X stock split or
after adjustment before adjustment consolidation
Furthermore, on or after the issue date, in case the Company enters into a
merger, corporate division or a reduction of paid-in capital, etc., that
requires adjustments to the number of shares attached, the number of shares
attached shall be adjusted to the reasonable extent.
(3) Issue price of stock acquisition rights: Free of charge
(4) Amounts to be paid for the exercise of each stock acquisition right:
Amounts to be paid for the exercise of each stock acquisition right shall be
the amount to be paid per share (hereinafter referred to as the "Exercise
Price") of shares to be issued or transferred upon exercise of the stock
acquisition right, multiplied by the number of shares attached.
The exercise price shall be an amount which is the average of the closing
prices (regular way) of the Company's shares of common stock on the Tokyo Stock
Exchange on each day (other than any day on which no sale is reported) of the
month immediately preceding the issue date, multiplied by 1.05. Any amount less
than one yen arising out of such adjustment shall be rounded upward to the
nearest yen. Provided, however, that if such price is less than the closing
price as of the issue date, then such closing price reported on the issue date
shall instead be the Exercise Price (if no closing price is reported on such
day, then the closing price reported on the day immediately preceding that
day).
On or after the issue date, in case the Company issues new shares of its common
stock or disposes of its treasury stock at a price less than the current market
price (except for issue or transfer upon exercise of stock acquisition rights
or transfer of its treasury stock pursuant to the provisions of Section 2,
Article 5 of the Supplement of the "Law regarding the Partial Amendments, etc.
to the Commercial Code, etc. of Japan (Law No. 79, 2001)), the Exercise Price
shall be adjusted in accordance with the following formula and any amount less
than one yen arising out of such adjustment shall be rounded upward to the
nearest yen:
Number of Amount paid
shares
newly issued X per share
Number of +
shares Market Price
issued
Exercise Exercise Number of new
Price Price shares
after = before X Number of + increased after
stock
adjustment adjustment shares split or new
issued issuance
"Number of shares issued" in the above formula means the number of shares
obtained by deducting the number of treasury stock from the number of
outstanding shares of the Company. In case of disposal of treasury stock,
"Number of shares newly issued" shall instead read as "Number of treasury stock
to be disposed of".
Furthermore, on or after the issue date, in case of a stock split or stock
consolidation of the Company's shares of common stock, the Exercise Price shall
be adjusted in accordance with the following formula and any amount less than
one yen arising out of such adjustment shall be rounded upward to the nearest
yen:
Exercise Price Exercise Price 1
after adjustment = before adjustment X Percentages of stock
split or consolidation
Furthermore, on or after the issue date, in case the Company enters into a
merger, corporate division or a reduction of paid-in capital, etc. that
requires adjustments to the Exercise Price, it shall be adjusted to the
reasonable extent, in light of the conditions of merger, corporate division or
the extent of the reduction of paid-in capital, etc.
(5) Exercise period of stock acquisition rights:
From August 1, 2005 to July 31, 2009
(6) Conditions of exercise of stock acquisition rights: Partial exercise of
each stock acquisition right is only exercisable so long as the number of
shares to be issued upon exercise of stock acquisition rights is any integral
multiple of a unit of shares of the Company.
(7) Events and conditions of cancellation of stock acquisition rights:
(a) If a proposal for approval of a merger agreement, under which the Company
is the dissolving company, is approved at a general meeting of stockholders of
the Company, or if a proposal for approval of a stock exchange agreement or a
proposal for share transfer is approved at a general meeting of stockholders of
the Company, the Company may cancel stock acquisition rights without any
charge.
(b) The Company may, at any time, cancel without any charge such outstanding
and unexercised stock acquisition rights as is acquired and owned by itself.
(8) Restrictions on transfer of stock acquisition rights:
Any transfer of stock acquisition rights shall be subject to approval from the
Board of Directors of the Company.
3. Summary of the allotment of stock acquisition rights:
The Board of Directors of the Company shall determine the number of stock
acquisition rights to be granted to each grantee (the "Grantee"), taking into
consideration the responsibilities on his/her duties and the contribution of
each of the Grantees to the consolidated business results of the Company.
In addition, when granting stock acquisition rights to each Grantee, the
Company shall enter into the "Granting of Stock Acquisition Right Agreement"
with each of the Grantees, which shall provide for the following conditions
deemed reasonable by the Board of Directors for the purpose of the issuance of
stock acquisition rights.
(1) In the event that Directors of the Company and corporate officers of its
associated companies, who have been granted such stock acquisition rights, are
removed from their respective offices, voluntarily resign, or lose their
positions due to disqualification, stock acquisition rights may not be
exercised.
(2) In the event that the relevant employee of the Company and its associated
companies, who has been granted such stock acquisition rights, is demoted or
removed due to disciplinary punishment, or resigns for his/her own cause, stock
acquisition rights may not be exercised.
(3) In case of the loss of position as Directors, corporate officers and
certain employees of the Company and its associated companies of the Company
due to the reason other than 1. or 2. stated above, stock acquisition rights
may be exercised within two years following such loss of position.
(4) In addition, causes for the required return of stock acquisition rights
from the respective Grantees to the Company, a limit on the exercise of stock
acquisition rights and any other matters related to stock acquisition rights
shall be provided for in the Granting of Stock Acquisition Right Agreement.
Fifth Item: Election of five (5) Corporate Auditors
The terms of offices of all four (4) Corporate Auditors will expire at the
closing of this Ordinary General Meeting of Stockholders. You are requested to
elect five (5) Corporate Auditors, increased by one, in order to further
reinforce the auditing system. The Board of Corporate Auditors has already
approved this proposal. Candidates for Corporate Auditors are as follows:
Name Resume and Status as Other Company's
Candidate (Date of Representative, if any Number of
Birth) Shares of
No.
the Company
Owned
1 Takuma 1962: entered into the Company 1,000 shares
Otsuka
(Feb. 23, 1991: General Manager of Ferrite Magnet
1944) Products Div.
of Magnet Business Group of the
Company
1998: Director, Deputy General Manager of
Magnetic
Products Business Group of the
Company
1999: Director, Deputy General Manager of
Electronic
Components Business Group of the
Company
2000: Full-time Corporate Auditor
(to present)
2 * Masaaki 1970: entered into the Company 900 shares
Miyoshi
(Sep. 3, 1998: General Manager of Corporate
1947) Planning Department
2000: President of Korea TDK Co., Ltd. (to
present)
3 Osamu 1974: registered as lawyer 0 share
Nakamoto
(April 8, 1975: entered into the law firm of Hamada
1942) & Matsumoto
1981: Lawyer, Partner of the said law firm
2000: Corporate Auditor of the Company (to
present)
2002: Lawyer, Partner of the law firm of
Mori Hamada
& Matsumoto (to present)
4 * Kazutaka 1966: entered into The Saitama Bank, Ltd. 0 share
Kubota
(Oct. 11, 1992: General Manager of Institutions
1942) Business
Department of The Asahi Bank, Ltd.
1994: Full-time Corporate Auditor of the
said bank
1996: Director of the said bank
2000: Vice President of the said bank
2002: retired the said bank
2002: President of Asahigin Research
Institute, Ltd.
Part-time Corporate Auditor of
Saitama Railway
Corporation (to present)
5 * Kaoru 1971: Joined Nakajima Accounting Office 0 share
Matsumoto
(Dec. 8, 1976: registered as a certificated public
1947)
accountant
1977: resigned from Nakajima & Co.
established Kaoru
Matsumoto & Co. (to present)
(Notes)
1. None of the above five (5) candidates has any special interests in the
Company.
2. Names with mark "*" refers to candidates for new Corporate Auditors.
3. Messrs. Osamu Nakamoto, Kazutaka Kubota and Kaoru Matsumoto are candidates
for outside Corporate Auditors as prescribed in Section 1, Article 18 of the
Law Concerning Special Exceptions to the Commercial Code Concerning Audit, etc.
of Kabushiki Kaisha.
4. The law firm of Hamada & Matsumoto changed its name into Mori Hamada &
Matsumoto as a result of the consolidation with Mori Sogo effective on December
1, 2002.
Sixth Item: Presentation of retirement grants to the resigning Corporate
Auditors
It is proposed that retirement grants shall be presented to Corporate Auditors,
namely, Messrs. Yutaka Mori and Hiromi Kitagawa, who will resign as Corporate
Auditors at the closing of this meeting upon the completion of their respective
term of office, in appreciation of their meritorious services to the Company,
within a reasonable amount based on specified standards of the Company. The
amount, the date of presentation and procedures are requested to be entrusted
to the determination among the Board of Corporate Auditors. Resume of the above
person is as follows:
Name Resume
Yutaka Mori June assumed the office of full-time Corporate Auditor of the
2000: Company (to present)
Hiromi June assumed the office of Corporate Auditor of the Company (to
Kitagawa 2000: present)
Seventh Item: Appointment of Certified Public Accountants
The Company's independent certified public accountants, Shin Nihon & Co. will
resign as the accountant of the Company due to the expiry of the term of office
at the closing of this Ordinary General Meeting of Stockholders. You are hereby
requested to appoint new certified public accountants.
The Board of Corporate Auditors has already approved this proposal.
A candidate for the certified public accountants is as follows:
Name AZSA & Co.
Office
Hibiya Kokusai Building, 2-3, Uchisaiwai-cho 2-chome
Chiyoda-ku, Tokyo
History Established on February 26,
2003
Outline �45,000,000
Partners (CPA) 10 (including 7 representative
partners)
Employees (CPA) 89
(Assistant 110
Accountant)
(Others) 71
Total 280
International
business Affiliated with KPMG as a
member firm
- End -
Map to Technical Center of TDK Corporation
(Translation omitted)
END