New value through constant innovation
KEIHIN CORPORATION
A n n u a l R e p o r t 2 0 0 5
The Company was established in December 1956 as Keihin Seiki Manufacturing Co., Ltd. In 1997,
through a merger with two other Honda Motor Co., Ltd.-affiliated automotive product makers, the
Company became Keihin Corporation, a comprehensive automotive systems manufacturer.
Keihin has grown to become a truly global company, expanding its network beyond the borders
of Japan to include operating units in China, Thailand, India, and other parts of Asia; North
America; Brazil in South America; and, in Europe, the United Kingdom.
Keihin boasts the top global market share in motorcycle carburetors, and its automobile fuel
injection systems are also highly regarded by customers the world over. To help meet new envi-
ronmental standards, the Company has also developed and now manufactures fuel injection sys-
tems for motorcycles, which it supplies to numerous manufacturers, both in Japan and overseas.
Keihin has also expanded its product range beyond fuel supply systems and now manufactures and
supplies customers worldwide with a wide range of automotive components, including air-
conditioning systems and electronic control units of all types.
With a strong concern for the natural environment, Keihin manufactures such environment-
friendly products as components for compressed natural gas and liquefied petroleum gas vehicles
and is currently developing components for fuel-cell vehicles and other products offering
significant potential.
Keihin will contribute to the success and development of the automotive industry by continuing
to supply products at the cutting edge of motorization.
Contents
1 Financial Highlights
2 To Our Shareholders, Employees, and Customers
5 Topics
6 Review by Business Segment
7 Expanding Our Global Operations
8 Five-Year Summary of Selected Financial Data
9 Financial Review
12 Consolidated Balance Sheets
14 Consolidated Statements of Income
15 Consolidated Statements of Shareholders’ Equity
16 Consolidated Statements of Cash Flows
17 Notes to the Consolidated Financial Statements
26 Report of Independent Auditors
27 Board of Directors
28 Network
29 Corporate Data
Forward-Looking StatementsThis annual report contains predictions and forecasts concerning Keihin’s futureplans, strategies, and results. These predictions and forecasts are not historicalfacts but represent judgments formed by management based on the informationavailable at the time they were formed. As such, actual results may differ signifi-cantly due to factors including, but not limited to, economic trends, changes in theautomobile and automobile component industries, market demand, foreignexchange rates, and tax systems.
Profile
Annual Report 2005 1
Thousands ofU.S. dollars
Millions of yen (except per(except per share amounts) share amounts)
2005 2004 2003 2005
For the year:
Net sales ..................................................................................................... ¥271,496 ¥253,051 ¥255,292 $2,528,127
Operating income ....................................................................................... 20,872 17,126 20,438 194,359
Income before income taxes and minority interests
in net income of consolidated subsidiaries .............................................. 20,191 16,317 18,855 188,011
Net income ................................................................................................. 10,856 8,380 9,610 101,089
At year-end:
Total shareholders’ equity .......................................................................... ¥ 90,085 ¥ 79,925 ¥ 75,010 $ 838,861
Total assets ................................................................................................ 170,365 150,772 149,405 1,586,411
Per share of common stock (yen and U.S. dollars):
Net income:
Basic .................................................................................................... ¥ 146.76 ¥ 112.46 ¥ 128.81 $ 1.37
Cash dividends ........................................................................................... 16.00 14.00 14.00 0.15
Notes: 1. The above amounts were prepared under generally accepted accounting principles in Japan.2. U.S. dollar amounts in this annual report are translated from Japanese yen, for convenience only, at the rate of ¥107.39=US$1. (See Note 3 to the Consolidated
Financial Statements.)
Financial HighlightsKeihin Corporation and Consolidated SubsidiariesYears ended March 31, 2005, 2004 and 2003
’05’04’03’02’01’05’04’03’02’01 ’05’04’03’02’01
Total Assets and Total Shareholders’ Equity (Millions of yen)
Total assets (left scale)Total shareholders’ equity (right scale)
0
30,000
60,000
90,000
120,000
180,000
150,000
0
20,000
40,000
60,000
80,000
100,000
Net Sales and Operating Income (Millions of yen)
Net sales (left scale)Operating income (right scale)
0
60,000
120,000
180,000
240,000
300,000
0
5,000
10,000
15,000
20,000
25,000
Net Income (Loss) and Net Income (Loss) per Share (Basic)(Millions of yen, yen)
Net income (loss) (left scale)Net income (loss) per share (basic) (right scale)
-3,000
0
3,000
6,000
9,000
12,000
-50
0
50
100
150
200
2005 ReviewI would like to begin my review of fiscal 2005, ended March 31,
2005, with the results of Keihin Corporation’s operations for the
term. Keihin turned in record earnings in fiscal 2005. While net
sales rose 7.3%, to ¥271.5 billion, operating income jumped
21.9%, to ¥20.9 billion, as strong earnings in Japan and other
regions in Asia, primarily China, more than offset the damage
from a strong yen and weak dollar. Net income climbed 29.5%,
to a record-high ¥10.9 billion, as a result of higher sales, Group-
wide rationalization measures, including measures to reduce the
cost of sales, and gains from the return of the substitutional por-
tion of the national employees’ pension plan. Reflecting this
strong performance, ROE was 12.8% and ROA was 6.8%.
Under its Eighth Medium-Term Business Plan, the Keihin Group
focused on the implementation of six key policies and business
strategies focused on specific product groups in order to achieve
“a dramatic expansion in development capability,” “the establish-
ment of a global supply framework,” and “the broadening of busi-
ness operations.” I am pleased to report that reform measures
enacted midway through the plan enabled the achievement of our
final-year targets (fiscal 2005) for both sales and earnings.
2 KEIHIN CORPORATION
(1) Fuel Supply Systems for Motorcycles, Recreational
Vehicles, and Power Products
The markets for motorcycles, recreational vehicles, and power
products saw an acceleration of the shift in fuel supply systems
from carburetors to electronic fuel injection, reflecting action on
the part of assemblers to comply with increasingly stringent glob-
al exhaust gas emission regulations. In response, Keihin has
teamed up with Honda Motor Co., Ltd., to develop electronic fuel
injection systems designed specifically for motorcycles. This joint
effort has mainly involved compact, high-performance injectors
that are competitively priced to further encourage the adoption of
electronic fuel injection systems in this market segment. Offering
precise fuel-flow control, these compact, lightweight injectors are
ideal for meeting emissions standards for motorcycles.
Meanwhile, in Europe, Keihin has started supplying throttle bod-
ies, electronic control units, fuel pump modules, and other elec-
tronic fuel injection system components to Triumph Motorcycles
Limited (United Kingdom) and KTM-Sportmotorcycle AG
(Austria).
In the motor-sports field, Keihin has developed and started
supplying several motorcycle manufacturers with its FCR-MX car-
buretor, which is designed for use in extreme off-road environ-
ments, including punishing terrains and muddy water. The
FCR-MX is based on the Company’s FCR carburetor, which has
already won high acclaim in the road-racing field. In recent years,
the motor-sports world has been hit with a tide of environmental
regulations, prompting a shift to four-stroke engines, and this has
in turn led to an increase in the number of models equipped with
Keihin’s FCR-MX carburetor.
(2) Automobile Products
In automobile products, Keihin makes fuel control systems and
electronic fuel injection systems for new models launched by
Honda, including the Elysion, Edix, and Legend in Japan and the
Odyssey, Accord hybrid, and Ridgeline next-generation truck in
North America. As further testimony to our enhanced develop-
ment capabilities, we supply the electronic control unit for
Honda’s Super Handling All-Wheel Drive (SH-AWD) system. The
world’s first all-wheel drive system, the SH-AWD freely distributes
the optimum amount of torque to all four wheels in accordance
with driving conditions, thereby achieving cornering performance
that responds faithfully to driver input as well as outstanding
To Our Shareholders, Employees, and Customers
Kentaro KatoPresident & CEO
Annual Report 2005 3
vehicle stability. For the Odyssey, marketed in North America, we
supply an electronic control unit that is heat and water resistant
and thus suitable for installation in the engine compartment. We
also supply a reasonably priced aluminum high-pressure die cast
(HPDC) intake manifold that features thinner walls and is 20%
lighter than comparable manifolds.
In addition, we began supplying several components used in
the fuel supply system of the Subaru Legacy B4 2.0 CNG, a
compressed natural gas vehicle introduced by Fuji Heavy
Industries Ltd. in July 2004. The Legacy B4 2.0 CNG is equipped
with Keihin’s two-stage pressure regulator, gaseous fuel injec-
tors, injector drivers, and water temperature sensors.
(3) Restructuring Measures
The Keihin Group is pursuing productivity improvement activities
(PIA) to strengthen its production bases. Aimed at restructuring
the Company’s manufacturing framework as well as further
developing and training personnel, these policies are based on
the concept of adding to our pool of expertise and creating prod-
ucts without recruiting more staff or increasing investment. These
policies are intended to boost productivity through methods
based on physical experience, practicality, and activities on-site.
These activities have been mainly conducted in our domestic
manufacturing facilities and we are currently in the process of
expanding them to our overseas locations as well.
We have also implemented a program termed “1/2
Investment” as part of an overall drive to strengthen our produc-
tion facilities and speed up production start-up processes
through greater integration among the development, engineering,
and production divisions. Underpinned by our commitment to
supplying parts at reasonable prices, this program involves the
deployment of highly efficient, zero-waste manufacturing lines as
part of a push to establish a production system that is among the
most competitive in the world. In fiscal 2005, such activities were
concentrated on production lines for models slated for release in
fiscal 2006.
(4) Establishment of a Global Supply Framework
In fiscal 2005, we made further progress in localizing production
as part of our push to establish a global supply framework.
In China, in September 2004, Dongguan Keihin Engine
Management System Co., Ltd., started producing electronic
control units for the Honda Fit to be marketed locally. In February
2005, the company started producing electronic control systems
and intake manifolds for the new Honda Odyssey for local
consumption. In March 2005, Nanjing Keihin Carburetor Co.,
Ltd., completed a plant expansion project that was carried out to
increase production capacity.
In February 2005, P.T. Keihin Indonesia started producing car-
buretors for motorcycles, and in March 2005, Keihin (Thailand)
Co., Ltd., started producing fuel pump modules, throttle body
modules, and fuel injectors for motorcycles at a new plant.
Medium-Term Business PlanProposing Truly Innovative Solutions
Reflecting an increasingly free flow of people, goods, and capital
around the world, automobile markets are demonstrating rapid
growth, especially in China and other parts of Asia that are enjoy-
ing strong economic expansion. Escalating competition in the
automobile market has brought with it growing demand for ever-
higher levels of product quality, cost-competitiveness, and techni-
cal expertise from the components industry. Additionally,
component suppliers are facing significantly increased social
responsibilities in terms of safety and the environment. Taking
into account these challenging conditions, Keihin formulated its
Ninth Medium-Term Business Plan as a road map for becoming a
company that is widely recognized for proposing truly innovative
solutions in the automotive field.
This objective will entail refocusing our management policies
toward the creation of a corporate framework reaching the top
level in the industry by supplying products that fully address cus-
tomer needs and successfully implementing PIA efforts in every
aspect of our organization.
Specifically, we aim to 1) create a development system that is
driven by the proposal of innovative solutions, 2) achieve unparal-
leled levels of quality in our operations worldwide, 3) implement
PIA in all business areas of the Keihin Group around the globe,
and 4) enact policies that benefit all of our stakeholders and soci-
ety as a whole.
(1) Creating a Development System Driven by the Proposal
of Innovative Solutions
To realize products based on concepts generated by the propos-
al of innovative solutions, we will strengthen departments involved
4 KEIHIN CORPORATION
in the development of core technologies and enhance our devel-
opment infrastructure. We will also establish a system for
developing future strategic products, while utilizing the Keihin
Group’s entire collective expertise and implementing new PIA
efforts to shorten the time it takes for new product ideas to evolve
from concept to concrete realization and market application. As
always, our overriding goal in these endeavors is to create new
value for which Keihin can be acclaimed.
(2) Achieving Unparalleled Levels of Quality in Operations
Worldwide
For manufacturers, establishing a global production system capa-
ble of making products of unparalleled quality increasingly hinges
on their relationships with their product’s users, especially when it
comes to ensuring the ability to pinpoint the particular needs of
individual automakers and specific geographic regions. Another
essential element is the logical construction of a quality assurance
program based on these needs. Always proactive, Keihin has
upgraded and expanded its quality assurance system, beginning
with the establishment of a new Reliability Engineering Division.
We are confident that these moves will ensure that our global
production system turns out products of unmatched quality.
(3) Implementing PIA in All Business Areas of the Keihin
Group around the Globe
Under our previous medium-term business plan, we implemented
PIA mainly as a means to boost manufacturing efficiency.
However, starting with our Ninth Medium-Term Business Plan,
we will expand our PIA efforts to cover research & development
and other indirect areas as well as our overseas locations, as part
of a program to re-engineer our complete corporate structure.
We will be proceeding with this plan in close cooperation with our
suppliers, both in Japan and abroad. In addition, we are upgrad-
ing our product supply systems in China and other areas of Asia,
where the automobile markets are expanding. In conjunction with
the above, we are also in the process of reinforcing our systems
for the localization of components.
(4) Enacting Policies that Benefit All Stakeholders and
Society as a Whole
In accordance with the concepts of the “Keihin Philosophy,” we
continually strive to share joy with society, our customers, our
suppliers, our shareholders, and among ourselves. These activi-
ties are carried out not only at our facilities in Japan but also by
overseas members of the Keihin Group, thereby ensuring that the
“Keihin Philosophy” extends throughout our global business
operations. Rather than simply developing technologies that
improve safety and help protect the environment, as summarized
in our corporate principle of “contributing to the future of mankind
by the continuous creation of new value,” our goal is to ensure
that all of our activities embody the “Keihin Philosophy.”
Additionally, we will continue to be actively engaged in the develop-
ment of personnel who hold themselves true to Keihin’s principles.
We are confident that these policies, which entail a shift to cre-
ating a corporate framework reaching the top level in the industry
through the proposal of innovative solutions and the pursuit of
PIA efforts in all areas of our operations, will enable us to meet
the final-year targets of our Ninth Medium-Term Business Plan,
which calls for an ordinary profit ratio of at least 8% in the fiscal
year ending March 31, 2008.
July 2005
Kentaro Kato
President & CEO
Annual Report 2005 5
Topics
Thai Plant Starts Production of Fuel Injection Systems forMotorcyclesKeihin (Thailand) Co., Ltd., started production of fuel injection systems for motor-
cycles in March 2005. In view of projections that exhaust gas emission regulations
will continue to tighten, Keihin has quickly met demand for motorcycle fuel injection
systems that help reduce exhaust gas pollutants and taken steps to strengthen its
supply system capabilities for responding to future growth in the market for such
systems.
Indonesia Plant Starts Mass ProductionP.T. Keihin Indonesia started full-fledged mass production in February 2005, as a
result of solid preparations made following the completion of plant construction in
July 2004. Demand for motorcycle carburetors is expected to expand in Indonesia,
which is experiencing rapid economic growth and is starting to rival China and India
in terms of demand for motorcycles. In addition to supplying products that meet ris-
ing demand for motorcycles in Indonesia, P.T. Keihin Indonesia is positioned as a
key base in the global, optimal supply system that the Company is constructing.
Support for People Affected by the Sumatra Earthquakes and Resulting TsunamisTo provide support for people along the coastlines bordering the Indian Ocean who have suffered and continue to face hardship due to
the devastating Sumatra earthquakes and resulting tsunamis, Keihin Group companies and employees both in Japan and overseas
donated approximately ¥8 million, which was contributed to the Japan Red Cross Society and other aid groups. In the future, Keihin
intends to continue proactively promoting various activities designed to contribute to society.
The motorcycle fuel injection systems manufacturingplant of Keihin (Thailand) Co., Ltd.
The new plant of P.T. Keihin Indonesia
6 KEIHIN CORPORATION
Review by Business Segment
Strong revenues in Japan, Asia, and the Americas
boosted sales by 13.5% from the previous fiscal
year, to ¥57,207 million.
Despite lower revenues in North America due to
foreign exchange effects, brisk sales in Japan, Asia,
and Europe increased sales by 7.6%, to ¥99,016
million.
Electronic Control Units
Air-Conditioning Systems
Fuel Control Systems for Automobiles
Sales in Thailand and Indonesia were strong, but
foreign exchange effects and lower revenues in
North America restrained growth in sales, which
rose only 0.1%, to ¥58,010 million.
Fuel Supply Systems for Motorcycles,Recreational Vehicles, and Power Products
¥50,398 million
19.9%
¥57,207 million
21.1%
¥99,016 million
36.5%
¥57,262 million
21.1%
¥58,010 million
21.3%
As a result of a large increase in product sales in
Japan and despite the liquidation of a domestic
subsidiary, sales rose 8.6%, to ¥57,262 million, on
brisk revenues in Japan, North America, and Asia.
*
*
*
*
* Segment sales as a percentage of consolidated net sales
Annual Report 2005 7
EUROPE
ASIA
Sales surged 18.7% on strong sales of automobile
parts. Keihin expects sales to decline in fiscal 2006
due to lower sales of electronic control units and
automobile parts.
Strong sales in China, Taiwan, India, and Southeast
Asia helped boost sales 25.0% year on year. In fis-
cal 2006, the Company expects sales to rise
sharply again on the start of operations at a new
plant in Indonesia and strong demand for motorcy-
cle parts in India.
0
2,000
4,000
6,000
8,000
’05’04’03’02’01
6,098
Net Sales (Millions of yen)
0
10,000
20,000
30,000
40,000
50,000
’05’04’03’02’01
43,033
Net Sales (Millions of yen)
Sales rose 9.1% from the previous fiscal year on
strong demand for parts for motorcycles and auto-
mobiles. Although the Company projects a rise in
sales of electronic control units and automobile parts
in fiscal 2006, it expects overall performance to be
largely unchanged owing to such factors as the
transfer of motorcycle product manufacturing over-
seas and lower sales of air-conditioning products.
Despite brisk sales of electronic control units and
general-purpose and motorcycle parts, the signifi-
cant impact of exchange rate fluctuations and lower
sales of air-conditioning products caused sales on
the whole to drop 1.9% from the previous fiscal year.
In fiscal 2006, the Company projects a slight rise in
overall sales, with higher sales of electronic control
units and general-purpose and motorcycle parts
compensating for lower sales of air-conditioning
products.
JAPAN
AMERICAS
0
30,000
60,000
90,000
120,000
150,000
’05’04’03’02’01
127,898
Net Sales (Millions of yen)
0
20,000
40,000
60,000
80,000
100,000
’05’04’03’02’01
94,467
Net Sales (Millions of yen)
Expanding Our Global Operations
8 KEIHIN CORPORATION
Thousands ofU.S. dollars
Millions of yen (except per(except per share amounts) share amounts)
2005 2004 2003 2002 2001 2005
For the year:
Net sales .................................................................... ¥271,496 ¥253,051 ¥255,292 ¥219,442 ¥192,133 $2,528,127
Fuel Supply Systems for Motorcycles,
Recreational Vehicles, and Power Products..... 57,207 50,398 45,307 39,906 532,703
Fuel Control Systems for Automobiles ............... 99,016 91,989 97,306 85,277 922,050
Electronic Control Units ...................................... 57,262 52,712 57,545 47,519 533,215
Air-Conditioning Systems ................................... 58,010 57,952 55,133 46,741 540,181
Cost of sales .............................................................. 229,911 218,913 219,145 191,017 169,662 2,140,896
Selling, general and administrative expenses............ 20,713 17,012 15,710 13,001 11,720 192,872
Operating income ...................................................... 20,872 17,126 20,438 15,424 10,751 194,359
Income (loss) before income taxes
and minority interests in net income
of consolidated subsidiaries .................................... 20,191 16,317 18,855 14,033 (1,296) 188,011
Net income (loss) ....................................................... 10,856 8,380 9,610 7,312 (1,518) 101,089
Depreciation and amortization................................... 12,428 11,744 11,194 11,139 9,987 115,723
Research and development expenses ...................... 12,154 11,606 10,573 9,228 8,505 113,178
Capital expenditures.................................................. 14,109 16,750 15,483 13,336 14,545 131,383
At year-end:
Total shareholders’ equity ......................................... ¥ 90,085 ¥ 79,925 ¥ 75,010 ¥ 69,534 ¥ 61,804 $ 838,861
Total assets................................................................ 170,365 150,772 149,405 141,090 130,664 1,586,411
Per share of common stock (yen and U.S. dollars):
Net income (loss):
Basic ................................................................... ¥ 146.76 ¥ 112.46 ¥ 128.81 ¥ 98.84 ¥ (22.38) $ 1.37
Cash dividends .......................................................... 16.00 14.00 14.00 14.00 14.00 0.15
Shareholders’ equity .................................................. 1,217.88 1,079.67 1,012.93 939.95 835.36 11.34
Notes: 1. The above amounts were prepared under generally accepted accounting principles in Japan.2. U.S. dollar amounts in this annual report are translated from Japanese yen, for convenience only, at the rate of ¥107.39=US$1. (See Note 3 to the Consolidated
Financial Statements.)3. In the year ended March 31, 2003, Keihin changed the segmentation of its operations. Amounts for the year ended March 31, 2002 have been restated.
Five-Year Summary of Selected Financial DataKeihin Corporation and Consolidated SubsidiariesYears ended March 31, 2005, 2004, 2003, 2002 and 2001
Annual Report 2005 9
Net Sales by Geographic Area(Millions of yen)
Japan
Asia
Americas
Europe
’05’04’03’02’010
60,000
120,000
180,000
240,000
300,000
The scope of consolidation includes 23
of the Company’s 24 subsidiaries.
Principal companies among these
are Keihin (Thailand), Keihin Indiana
Precision Technology, Inc., Keihin
Carolina System Technology, Inc.,
and Dongguan Keihin Engine Manage-
ment System. Keihin R&D China Co.,
Ltd., was newly consolidated during
fiscal 2005 due to its increased impor-
tance within the Keihin Group. The
equity method has not been applied
to Keihin’s one non-consolidated sub-
sidiary and one affiliate. The apprecia-
tion of the yen during the term resulted
in a yen-dollar exchange rate at fiscal
year-end of ¥107.39 to US$1.00, com-
pared with ¥105.69 to US$1.00 at the
previous fiscal year-end. The average
yen-dollar exchange rate was ¥107.60
for fiscal 2005 and ¥112.76 for the pre-
vious fiscal year.
Results of OperationsNet Sales
In fiscal 2005, consolidated net sales
were negatively affected by the appre-
ciation of the yen vis à vis the U.S. dol-
lar, but strong sales performance in
Japan as well as China and other Asian
markets helped boost consolidated net
sales to ¥271,496 million (US$2,528
million), up 7.3% from the level in the
previous fiscal year.
By geographic segment, sales in
Japan rose 9.1%, to ¥127,898 million
(US$1,191 million), owing to the strength
of domestic sales of components for
automobiles.
Sales in the Americas declined
1.9%, to ¥94,467 million (US$879 mil-
lion), as the strength of fuel supply
systems for motorcycles, recreational
vehicles, and power products was
more than offset by the effects of cur-
rency exchange rate fluctuations and
a drop in air-conditioner products.
Sales in Asia surged 25.0%, to
¥43,033 million (US$401 million), reflect-
ing increased sales in China, Taiwan,
India, and Southeast Asian markets.
Sales in Europe advanced 18.7%,
to ¥6,098 million (US$57 million), as a
result of robust sales of components
for automobiles.
Overall, overseas sales increased
6.1%, to ¥148,415 million (US$1,382
million).
Income and Expenses
The Company’s endeavors to reduce
costs and increase efficiency enabled
it to restrain the rate of year-on-year
growth in cost of sales to 5.0%, and
cost of sales amounted to ¥229,911
million (US$2,141 million). Due to in-
creased expenses related to struc-
tural improvements for future growth,
selling, general and administrative
expenses rose 21.8%, to ¥20,713 mil-
lion (US$193 million). As a result of the
rise in net sales, operating income
rose 21.9%, to ¥20,872 million
(US$194 million).
By geographic segment (before
the elimination of intersegment trans-
actions), operating income in Japan
rose 51.5%, to ¥8,451 million (US$79
million). Operating income in the
Americas rose 3.7%, to ¥6,694 million
(US$62 million). Benefiting from firm
sales in the region, operating income in
Asia climbed 18.4%, to ¥5,737 million
(US$53 million), and operating income
Financial Review
Net Sales by Business Segment(Millions of yen)
Fuel Supply Systems for Motorcycles, Recreational Vehicles, and Power Products
Fuel Control Systems for Automobiles
Electronic Control Units
Air-Conditioning Systems
’05’04’03’02’010
60,000
120,000
180,000
240,000
300,000
10 KEIHIN CORPORATION
in Europe rose 48.1%, to ¥353 million
(US$3 million).
The Company continued to make
progress in reducing costs and other
streamlining initiatives across the entire
Group, and consolidated recurring
profit rose 23.9%, to ¥20,756 million
(US$193 million).
Interest and dividend income, net of
interest expense, amounted to ¥64 mil-
lion (US$1 million), compared with a net
expense of ¥209 million in the previous
fiscal year, and a foreign exchange
gain of ¥118 million (US$1 million) was
recorded in fiscal 2005, whereas the
foreign exchange loss logged in the
previous year was ¥932 million.
Income before income taxes and
minority interests in net income of con-
solidated subsidiaries amounted to
¥20,191 million (US$188 million), com-
pared with ¥16,317 million in the previ-
ous fiscal year, and net income worked
out to ¥10,856 million (US$101 million),
compared with ¥8,380 million in the
previous year.
Net income per share, basic,
amounted to ¥146.76 (US$1.37),
compared with ¥112.46 in the pre-
vious year.
R&D Expenses
The basic policy for the R&D activities
of the Keihin Group is to support the
core needs of automobile manufactur-
ing. The primary goal of these pro-
grams is to promote the advancement
of environmental friendliness, safety,
and comfort through the systemati-
zation and modularization of these
commodities—as well as the devel-
opment of intelligent features—
undertakings that are being conducted
by the development departments of
Keihin. Production on a global scale,
adaptation to alternative energy sources,
and environmental businesses are
also proactively incorporated into the
Company’s R&D activities. Total R&D
expenses for the year under review
amounted to ¥12,154 million (US$113
million).
Capital Expenditures
Capital expenditures for the year under
review were down 15.8%, to ¥14,109
million (US$131 million). Of this, ¥2,563
million (US$24 million) was invested in
motorcycle and power product prod-
uction facilities, ¥4,070 million (US$38
million) in automobile part production
facilities, ¥2,356 million (US$22 million)
in electronic control unit production
facilities, ¥886 million (US$8 million) in
air-conditioning unit production facili-
ties, ¥2,094 million (US$20 million) in
R&D investments, and ¥2,140 million
(US$19 million) in buildings and struc-
tures. Depreciation and amortization
increased 5.8%, to ¥12,428 million
(US$116 million).
Cash Flows
Cash and cash equivalents at end of
year totaled ¥22,609 million (US$211
million). Although purchases of tangible
and intangible assets amounted to
¥14,109 million (US$131 million) and
trade notes and accounts receivable
grew ¥5,537 million (US$52 million),
these items were compensated for
by net cash provided by operating
activities, and the addition of newly
consolidated subsidiaries also drove
up cash and cash equivalents.
-5
0
5
10
15
20
ROE and ROA (%)
ROEROA
’05’04’03’02’01
-5,000
0
5,000
10,000
15,000
20,000
25,000
-2,500
0
2,500
5,000
7,500
10,000
12,500
Operating Income and Net Income (Loss) (Millions of yen)
Operating income (left scale)Net income (loss) (right scale)
’05’04’03’02’01
Annual Report 2005 11
Net cash provided by operating
activities declined ¥1,141 million, or
4.3% compared with the previous fiscal
year, to ¥25,243 million (US$235 mil-
lion). This reflected rises in trade notes
and accounts receivable and invento-
ries, which partially offset the effect of
the strength of income before income
taxes and minority interests in net
income of consolidated subsidiaries.
Net cash used in investing activities
was down ¥1,738 million, or 10.1%, to
¥15,532 million (US$145 million), mainly
on account of the acquisition of proper-
ty, plant and equipment and investment
securities.
Net cash used in financing activities
declined ¥3,555 million, to ¥1,075 mil-
lion (US$10 million), primarily as a result
of a decrease in loan repayment.
Financial Position
Total assets at fiscal 2005 year-end
increased 13.0%, to ¥170,365 million
(US$1,586 million), compared with the
previous fiscal year-end, and current
assets decreased 21.0%, to ¥94,707
million (US$882 million). Cash climbed
¥9,791 million, to ¥23,788 million
(US$222 million), and property, plant
and equipment rose ¥2,430 million,
to ¥60,567 million (US$564 million).
Investments and other assets
increased ¥703 million, to ¥15,091
million (US$140 million).
Current liabilities increased ¥7,657
million, to ¥53,182 million (US$495 mil-
lion), primarily as a result of growth in
trade notes and accounts payable and
in provisions for product warranties.
Shareholders’ equity increased
12.7%, to ¥90,085 million (US$839 mil-
lion). Shareholders’ equity per share
climbed ¥138.21, from ¥1,079.67 in the
previous year to ¥1,217.88 (US$11.34).
The equity ratio declined 0.1 percent-
age point, to 52.9%.
Cash Provided by Operating Activities (Millions of yen)
0
5,000
10,000
20,000
15,000
30,000
25,000
’05’04’03’02’01
0
5,000
10,000
15,000
20,000
Capital Expenditures (Millions of yen)
’05’04’03’02’01
12 KEIHIN CORPORATION
Thousands ofMillions of yen U.S. dollars
ASSETS 2005 2004 2005
Current assets:
Cash .................................................................................................................................. ¥ 23,788 ¥ 13,997 $ 221,509
Notes and accounts receivable—trade:
Third-party customers ................................................................................................ 41,542 36,183 386,830
Unconsolidated subsidiaries and affiliates ................................................................. 469 54 4,372
............................................................................................................................. 42,011 36,237 391,202
Inventories ......................................................................................................................... 22,703 20,929 211,407
Deferred income taxes ...................................................................................................... 3,588 2,660 33,415
Other current assets.......................................................................................................... 2,617 4,424 24,361
Total current assets ............................................................................................. 94,707 78,247 881,894
Property, plant and equipment:
Land................................................................................................................................... 6,567 6,077 61,147
Buildings and structures.................................................................................................... 29,787 27,925 277,369
Machinery and equipment................................................................................................. 99,877 93,988 930,043
Furniture and tools ............................................................................................................ 25,790 24,371 240,150
Construction in progress ................................................................................................... 4,892 5,359 45,567
............................................................................................................................. 166,913 157,721 1,554,276
Less: Accumulated depreciation ....................................................................................... (106,346) (99,583) (990,282)
............................................................................................................................. 60,567 58,137 563,994
Investments and other assets:
Investments in securities ................................................................................................... 5,741 5,352 53,457
Investments in unconsolidated subsidiaries and affiliates ............................................... 1,393 1,816 12,970
Long-term loans to employees.......................................................................................... 468 595 4,356
Intangible assets................................................................................................................ 2,980 2,641 27,757
Deferred income taxes ...................................................................................................... 2,044 2,877 19,032
Other assets ...................................................................................................................... 2,496 1,118 23,241
............................................................................................................................. 15,122 14,399 140,813
Less: Allowance for doubtful accounts ............................................................................. (31) (12) (290)
............................................................................................................................. 15,091 14,388 140,523
Total assets.......................................................................................................... ¥170,365 ¥150,772 $1,586,411
The accompanying notes are an integral part of these financial statements.
Consolidated Balance SheetsKeihin Corporation and Consolidated SubsidiariesAs of March 31, 2005 and 2004
Annual Report 2005 13
Thousands ofMillions of yen U.S. dollars
LIABILITIES, MINORITY INTERESTS AND SHAREHOLDERS’ EQUITY 2005 2004 2005
Current liabilities:
Short-term bank loans....................................................................................................... ¥ 4,466 ¥ 3,912 $ 41,585
Notes and accounts payable—trade................................................................................. 30,309 27,433 282,237
Accrued expenses............................................................................................................. 8,690 8,022 80,922
Warranty reserve ............................................................................................................... 1,557 32 14,500
Income taxes payable ....................................................................................................... 3,230 2,675 30,075
Other current liabilities....................................................................................................... 4,930 3,451 45,902
Total current liabilities................................................................................................. 53,182 45,525 495,221
Accrued retirement benefits:
Directors and statutory auditors........................................................................................ 437 378 4,072
Employees ......................................................................................................................... 10,255 11,366 95,494
Deferred income taxes .......................................................................................................... 2,116 1,908 19,702
Other non-current liabilities .................................................................................................. 1,466 1,119 13,646
Total liabilities ............................................................................................................. 67,456 60,296 628,135
Minority interests ................................................................................................................... 12,824 10,551 119,415
Shareholders’ equity:
Common stock:
Authorized:
2004 and 2005—240,000,000 shares
Issued:
2004 and 2005—73,985,246 shares.................................................................... 6,932 6,932 64,553
Capital surplus................................................................................................................... 7,941 7,941 73,943
Earnings surplus ................................................................................................................ 77,738 68,091 723,886
Net unrealized gains on securities..................................................................................... 2,288 2,072 21,308
Adjustment for foreign currency statement translation ..................................................... (4,795) (5,094) (44,650)
............................................................................................................................. 90,104 79,942 839,040
Less: Treasury common stock, at cost
2004—14,275 shares, 2005—16,044 shares....................................................... (19) (16) (179)
Total shareholders’ equity .......................................................................................... 90,085 79,925 838,861
Contingent liabilities
Total liabilities, minority interests and shareholders’ equity ............................................. ¥170,365 ¥150,772 $1,586,411
14 KEIHIN CORPORATION
Thousands ofMillions of yen U.S. dollars
2005 2004 2005
Net sales.................................................................................................................................. ¥271,496 ¥253,051 $2,528,127
Cost of sales ........................................................................................................................... 229,911 218,913 2,140,896
Gross profit........................................................................................................................ 41,585 34,138 387,231
Selling, general and administrative expenses ..................................................................... 20,713 17,012 192,872
Operating income.............................................................................................................. 20,872 17,126 194,359
Other income (expenses):
Interest and dividend income ............................................................................................ 211 417 1,967
Interest expense ................................................................................................................ (147) (208) (1,364)
Foreign exchange gain (loss)............................................................................................. 118 (932) 1,102
Loss on disposal of property and equipment.................................................................... (224) (91) (2,089)
Compensation cost for dies .............................................................................................. (223) (88) (2,078)
Social insurance taxes for previous year........................................................................... — (298) —
Provision for warranty reserve........................................................................................... (600) — (5,587)
Other, net........................................................................................................................... 184 391 1,701
Income before income taxes and minority interests
in net income of consolidated subsidiaries .............................................................. 20,191 16,317 188,011
Income taxes:
Current............................................................................................................................... 6,297 4,747 58,640
Deferred............................................................................................................................. 253 825 2,352
Income before minority interests in net income
of consolidated subsidiaries..................................................................................... 13,641 10,745 127,019
Minority interests in net income of consolidated subsidiaries .......................................... (2,785) (2,365) (25,930)
Net income ........................................................................................................................ ¥ 10,856 ¥ 8,380 $ 101,089
Yen U.S. dollars
Per share of common stock:
Net income:
Basic ........................................................................................................................... ¥146.76 ¥112.46 $1.37
Cash dividends.................................................................................................................. 16.00 14.00 0.15
The accompanying notes are an integral part of these financial statements.
Consolidated Statements of IncomeKeihin Corporation and Consolidated SubsidiariesFor the years ended March 31, 2005 and 2004
Annual Report 2005 15
Millions of yen
AdjustmentNumber of Net for foreign Treasuryshares of unrealized currency commoncommon Common Capital Earnings gains on statement stock,
stock stock surplus surplus securities translation at cost
Balance at March 31, 2003 .................................. 73,985,246 ¥6,932 ¥7,941 ¥60,977 ¥1,431 ¥(2,256) ¥(16)Net income for the year ..................................... — — — 8,380 — — —Cash dividends paid .......................................... — — — (1,036) — — —Bonuses to directors and statutory auditors ..... — — — (96) — — —Decrease due to inclusion of a subsidiary into consolidation............................................. — — — (120) — — —
Decrease due to change in interests in a consolidated subsidiary ............................ — — — (3) — — —
Decrease due to exclusion of a subsidiary from consolidation ........................................... — — — (12) — — —
Unrealized gains on securities ........................... — — — — 641 — —Foreign currency translation adjustment ........... — — — — — (2,838) —Treasury common stock acquired ..................... — — — — — — (1)
Balance at March 31, 2004 .................................. 73,985,246 6,932 7,941 68,091 2,072 (5,094) (16)Net income for the year ..................................... — — — 10,856 — — —Cash dividends paid .......................................... — — — (1,110) — — —Bonuses to directors and statutory auditors ..... — — — (99) — — —Unrealized gains on securities ........................... — — — — 216 — —Foreign currency translation adjustment ........... — — — — — 299 —Treasury common stock acquired ..................... — — — — — — (3)
Balance at March 31, 2005 .................................. 73,985,246 ¥6,932 ¥7,941 ¥77,738 ¥2,288 ¥(4,795) ¥(19)
Thousand of U.S. dollars
Adjustment Net for foreign Treasury
unrealized currency commonCommon Capital Earnings gains on statement stock,
stock surplus surplus securities translation at cost
Balance at March 31, 2004 ........................................................... $64,553 $73,943 $634,049 $19,295 $(47,434) $(152)Net income for the year............................................................... — — 101,089 — — —Cash dividends paid ................................................................... — — (10,332) — — —Bonuses to directors and statutory auditors .............................. — — (920) — — —Unrealized gains on securities .................................................... — — — 2,013 — —Foreign currency translation adjustment .................................... — — — — 2,784 —Treasury common stock acquired .............................................. — — — — — (26)
Balance at March 31, 2005 ........................................................... $64,553 $73,943 $723,886 $21,308 $(44,650) $(178)
The accompanying notes are an integral part of these financial statements.
Consolidated Statements of Shareholders’ EquityKeihin Corporation and Consolidated SubsidiariesFor the years ended March 31, 2005 and 2004
16 KEIHIN CORPORATION
Thousands ofMillions of yen U.S. dollars
2005 2004 2005
Cash flows from operating activities:Income before income taxes and minority interests in net income of consolidated subsidiaries.................................................................................................. ¥20,191 ¥16,317 $188,011
Adjustments to reconcile income before income taxes and minority interests in net income of consolidated subsidiaries to net cash provided by operating activities:
Depreciation and amortization.......................................................................................... 12,428 11,744 115,723Amortization of goodwill ................................................................................................... — 278 —Loss on disposal of property and equipment ................................................................... 217 133 2,017Increase (decrease) in warranty reserve ........................................................................... 1,523 (107) 14,187Decrease in accrued retirement benefits of employees ................................................... (2,267) (489) (21,109)Increase (decrease) in accrued retirement benefits of directors and statutory auditors ................................................................................. 59 (79) 551
Interest and dividend income ........................................................................................... (211) (417) (1,967)Interest expense ............................................................................................................... 147 208 1,364(Increase) decrease in notes and accounts receivable—trade......................................... (5,537) 3,296 (51,559)(Increase) decrease in inventories .................................................................................... (1,730) 1,094 (16,106)Increase (decrease) in notes and accounts payable—trade............................................. 2,664 (168) 24,809Payment of directors’ bonuses......................................................................................... (99) (96) (920)Other, net .......................................................................................................................... 3,731 (573) 34,741
Subtotal...................................................................................................................... 31,116 31,139 289,742Proceeds from interest and dividend income................................................................... 326 632 3,038Payment of interest expenses .......................................................................................... (147) (208) (1,364)Payment of income taxes ................................................................................................. (6,052) (5,180) (56,354)
Net cash provided by operating activities ................................................................. 25,243 26,384 235,062Cash flows from investing activities:
Payment for purchases of property, plant and equipment and intangible assets................... (14,109) (16,750) (131,383)Proceeds from sales of property, plant and equipment .......................................................... 809 366 7,532Payment for purchases of investment securities..................................................................... (33) (1,985) (303)Proceeds from sales of investment securities......................................................................... 2 982 14Proceeds from collections on loans ........................................................................................ 22 76 205Payment for purchases of investments in capital.................................................................... — (0) —Other, net................................................................................................................................. (2,223) 41 (20,692)
Net cash used in investing activities.......................................................................... (15,532) (17,270) (144,627)Cash flows from financing activities:
Increase (decrease) in short-term loans, net ........................................................................... 651 (2,657) 6,063Repayment of long-term debt ................................................................................................. — (437) —Issuance of common stock ..................................................................................................... — 36 —Payment for purchases of treasury stock................................................................................ (3) (1) (26)Payment of cash dividends by parent company ..................................................................... (1,110) (1,036) (10,332)Payment of cash dividends to minority interest shareholders................................................. (613) (536) (5,718)
Net cash used in financing activities.......................................................................... (1,075) (4,630) (10,013)Effect of exchange rate changes on cash and cash equivalents ............................................ 113 (1,983) 1,051Net change in cash and cash equivalents.................................................................................. 8,749 2,500 81,473Cash and cash equivalents at beginning of year....................................................................... 13,614 10,677 126,772Increase in cash and cash equivalents due to inclusion of a subsidiary into consolidation .... 246 650 2,289Decrease in cash and cash equivalents due to exclusion of a subsidiary from consolidation.. — (213) —Cash and cash equivalents at end of year ................................................................................. ¥22,609 ¥13,614 $210,534The accompanying notes are an integral part of these financial statements.
Consolidated Statements of Cash FlowsKeihin Corporation and Consolidated SubsidiariesFor the years ended March 31, 2005 and 2004
1. Basis of Presentation of Consolidated Financial StatementsThe accompanying consolidated financial statements of Keihin
Corporation (the “Company”) and its subsidiaries (together, the
“Companies”) are prepared on the basis of accounting principles
generally accepted in Japan, which are different in certain respects
as to application and disclosure requirements of International
Financial Reporting Standards, and are compiled from the consoli-
dated financial statements prepared by the Company as required
by the Securities and Exchange Law of Japan.
2. Summary of Significant Accounting Policies(1) Consolidation and Investments in Affiliates
The consolidated financial statements include the accounts of the
Company and all significant subsidiaries where the Company has
the ability to exercise significant influence over the subsidiaries’
operating and financial policies. All significant intercompany transac-
tions, accounts and unrealized intercompany profits are eliminated
on consolidation. Certain consolidated subsidiaries are consolidated
on the basis of their fiscal years ended December 31 and material
differences in intercompany transactions and accounts arising from
the use of the different fiscal year-end are appropriately adjusted on
consolidation. The difference between the cost and the underlying
net equity of investment in consolidated subsidiaries at the time of
acquisition is charged to income when recognized.
Investments of 50% or less in companies over which the parent
company does not have control but has the ability to exercise signifi-
cant influence and investments in unconsolidated subsidiaries are
stated at cost or less. The carrying value of the investments is written
down to fair value when a decline in the fair value below cost is deter-
mined to be a permanent impairment of value. The equity method of
accounting for investments in affiliates and unconsolidated subsidiaries
has not been applied by the Company since the effect of its applica-
tion is not material.
(2) Translation of Foreign Currency Transactions and Accounts
Foreign currency transactions are recorded using the prevailing for-
eign exchange rates at the transaction dates. Receivables and
payables in foreign currencies are valued at year-end using the cur-
rent exchange rates.
All the asset and liability accounts of foreign subsidiaries are trans-
lated at appropriate year-end current rates and income and expense
accounts are translated using average rates in the respective years.
The resulting translation adjustments are accumulated as a compo-
nent of shareholders’ equity.
(3) Valuation of Securities
Investment securities expected to be held in the long term are
classified as other securities. Other securities whose fair values are
readily determinable are carried at fair value, with unrealized gains
and losses recorded in shareholders’ equity, net of applicable
income taxes. Other securities without fair values are carried at
moving average cost.
(4) Derivative Financial Instruments
Derivative financial instruments, which include foreign currency
forward exchange contracts and currency options, are used in the
Company’s risk management of foreign currency risk exposures of
its financial assets and liabilities based on an internal policy that stip-
ulates that at least 60% of the foreign currency receivables balance is
to be hedged. The Company evaluates the effectiveness of its hedg-
ing activities by reference to the accumulated gains or losses on the
hedging instruments and the related hedged items from their inception.
The Company enters into foreign currency forward exchange
contracts and currency options to limit exposure to changes in for-
eign currency exchange rates on accounts receivable and cash
flows generated from anticipated transactions denominated in for-
eign currencies. With regard to foreign currency forward exchange
contracts, which are designated and effective as hedges of such
currency exchange rate risks on existing assets and liabilities, the
Company adopted the accounting method whereby foreign curren-
cy denominated assets and liabilities are measured at the contract
rate of the respective foreign currency forward exchange contract.
With respect to foreign currency forward contracts and currency
options on anticipated transactions, the contracts are marked to
market and unrealized gains/losses are deferred in the balance
sheets to be recorded in operations when exchange gains/losses
on the hedged items or transactions are recognized.
(5) Inventories
Inventories are generally stated at cost determined by the first-in,
first-out method.
Notes to the Consolidated Financial Statements
Annual Report 2005 17
18 KEIHIN CORPORATION
(6) Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation is
computed at rates based on the estimated useful lives of assets using
the declining balance method, except for depreciation of buildings
of the Company and its domestic consolidated subsidiaries acquired
on or after April 1, 1998, for which the straight-line method is applied.
Depreciable assets of more than ¥100,000 and less than ¥200,000 are
depreciated by the straight-line method over three years in accor-
dance with corporate income tax laws in Japan. When assets are sold
or otherwise disposed of, the profits or losses thereon, computed on
the basis of the difference between depreciated cost and proceeds,
are credited or charged to operations in the year of disposal, and cost
and accumulated depreciation are removed from the respective
accounts.
The ranges of estimated useful lives are as follows:
Buildings and structures 2-50 years
Machinery and equipment 2-12 years
(7) Amortization of Intangible Assets
The amortization of intangible assets is computed using the straight-
line method. Software for internal usage purposes is amortized over
five years, the estimated useful life, using the straight-line method.
(8) Research and Development
Research and development expenses are charged to income when
incurred.
(9) Income Taxes
The asset-and-liability approach is used to recognize deferred tax
assets and liabilities for the expected future tax consequences of
temporary differences between the carrying amounts and the tax
bases of assets and liabilities. Valuation allowances are recorded
to reduce deferred tax assets when it is more likely than not that
a tax benefit will not be realized.
(10) Warranty Reserve
The reserve for warranty claims is provided based on the estimated
amount of future expenditures for the servicing of after-sales returns
of products based on the warranty agreement with customers.
(11) Retirement Benefits and Pension Plans
Employees of the Companies whose services are terminated are,
under most circumstances, entitled to lump-sum severance indem-
nities or are eligible for pension benefits.
Lump-sum severance indemnities provided for employees are
determined by reference to an employee’s current basic rate of pay,
length of service, position in their respective companies and termina-
tion circumstances. The Company maintains a contributory defined
benefit welfare pension plan, which is pursuant to the Japanese
Welfare Pension Insurance Law. Also, the Company and certain
consolidated subsidiaries act as trustees for non-contributory
defined benefit pension plans.
Retirement benefits, including pension costs and related liabilities,
were recognized and computed using an actuarial appraisal approach
known as the projected unit credit method. Under a defined benefit
plan, the net pension cost for a period includes: i) service cost,
ii) interest cost, iii) expected return on plan assets, iv) amortization
of unrecognized prior service cost, v) amortization of unrecognized
actual differences and vi) amortization of transition assets or liabilities
at the date of initial application of the accounting standard. Any differ-
ence between the net pension cost and the amount actually funded
for the period is reported as unfunded accrued retirement benefits or
prepaid pension costs on the balance sheets. In respect of the policy
for the amortization of prior service cost and unrecognized actuarial
differences, the Companies amortize on a straight-line basis over 3
years and 17 years, respectively, those that are within the period of
the estimated remaining service periods.
Keihin participates in the Honda Motor employees’ pension fund
(mutually established by Honda and Keihin). Under the Defined
Benefit Corporate Pension Law, Keihin received approval from the
Ministry of Health, Labour and Welfare on April 1, 2004, to forego
future contributions to the substitutional portion of the employees’
welfare pension fund. Additionally, procedures are now under way
for the return of past contributions of the substitutional portion.
The amount to be returned with regard to the substitutional portion
(the minimum actuarial liability) on March 31, 2005, was estimated at
¥11,802 million (US$109,898 thousand). Assuming that this amount
was paid on the above date, the Company estimates a related extra-
ordinary gain of ¥6,793 million (US$63,254 thousand), based on the
application of Section 44-2 of the interim report of the Practical
Guideline for Accounting for Retirement Benefits (the 13th issue of
the Accounting Committee Report issued by the Japanese Institute
of Certified Public Accountants).
The Company and its consolidated subsidiaries provide for future
severance payments to directors and statutory auditors at the full
amount which would be required under the Companies’ policies if
all eligible directors and statutory auditors retired at the balance
sheet date.
Annual Report 2005 19
(12) Appropriations of Retained Earnings
Under the Commercial Code of Japan and the Articles of lncorpora-
tion of the Company, the appropriations of retained earnings (includ-
ing year-end cash dividend payments) proposed by the Board of
Directors must be approved at the shareholders’ meeting, which
must be held within three months after the end of each financial year.
The appropriation of retained earnings reflected in the accompanying
consolidated financial statements represents the results of appropria-
tions which were applicable to the immediately preceding financial
year and approved at the shareholders’ meeting and disposed of
during that year. Year-end cash dividends are paid to shareholders
on the shareholders’ register at the end of each financial year.
As is customary practice in Japan, the payment of bonuses to
directors and statutory auditors is made out of retained earnings,
instead of being charged to operations for the year, and constitutes
a part of the appropriations cited above.
The Commercial Code of Japan provides that interim cash
dividends may be distributed upon the approval of the Board of
Directors. The Company has paid such interim cash dividends
to shareholders of record as of September 30 each year.
(13) Net Income and Dividends per Share
Net income per share of common stock is based upon the weighted
average number of shares of common stock outstanding during
each year. Cash dividends per share shown for each year in the
consolidated statements of income represent dividends declared
as applicable to the respective period.
As there was no dilutive effect of convertible bonds and bonds with
warrants on net income per share, such information is not required
to be disclosed.
(14) Consumption Taxes
Consumption taxes are imposed at the flat rate of 5% on all domestic
consumption of goods and services (with certain exemptions).
The consumption tax withheld upon sales is not included in net
sales in the accompanying consolidated statements of income but
is recorded as a liability. The balances of consumption tax withheld
and consumption tax paid (an asset item), which is borne by the
Company and its consolidated subsidiaries on purchases of goods
and services, are not included in revenue and expenses in the con-
solidated statements of income but are offset, and the net balance
is included in other current assets or other current liabilities in the
consolidated balance sheets at March 31, 2004 and 2005.
(15) Accounting for Leases
Leases that transfer substantially all the risks and rewards of owner-
ship of the assets are accounted for as capital leases, except for
leases that do not transfer ownership of the assets at the end of the
lease term, which are accounted for as operating leases, in accordance
with accounting principles and practices generally accepted in Japan.
(16) Cash and Cash Equivalents
Cash and cash equivalents in the consolidated statements of cash
flows are composed of cash on hand, bank deposits able to be with-
drawn on demand and short-term investments with original maturities
of three months or less and which represent a minor risk of fluctua-
tions in value.
(17) Reclassification
Certain accounts in the consolidated financial statements for the year
ended March 31, 2004 have been reclassified to conform to the 2005
presentation.
(18) Accounting Standard for Impairment of Fixed Assets
On August 9, 2002, the Business Accounting Council in Japan issued
the “Accounting Standard for Impairment of Fixed Assets.” The stan-
dard requires that fixed assets be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable. An impairment loss shall be rec-
ognized in the income statement by reducing the carrying amount of
impaired assets or a group of assets to the recoverable amount to be
measured as the higher of net selling price and value in use.
The standard shall be effective for fiscal years beginning April 1,
2005. However, an earlier adoption is permitted for fiscal years begin-
ning April 1, 2004 and for fiscal years ending between March 31, 2004
and March 30, 2005.
The Company has not yet applied this new standard nor has it
determined the effect of applying it on the Company’s consolidated
financial statements.
3. U.S. Dollar AmountsThe consolidated financial statements are prepared in yen. The U.S.
dollar amounts included in the consolidated financial statements and
notes thereto represent the arithmetical results of translating yen to
dollars on the basis of ¥107.39=US$1, the approximate rate of
exchange prevailing at March 31, 2005. The inclusion of such dollar
amounts is solely for the convenience of readers and is not intended
to imply that yen amounts have been or could be converted, realized
or settled in dollars at ¥107.39=US$1 or at any other rate.
20 KEIHIN CORPORATION
4. Cash and Cash EquivalentsA reconciliation of cash in the consolidated balance sheets and cash
and cash equivalents in the consolidated statements of cash flows is
as follows:Thousands of
Millions of yen U.S. dollars
2005 2004 2005
Cash (balance sheets) .................... ¥23,788 ¥13,997 $221,509
Time deposits with deposit terms
of over three months .................... (1,179) (383) (10,975)
Cash and cash equivalents ............ ¥22,609 ¥13,614 $210,534
5. Investment SecuritiesAs of March 31, 2005 and 2004, the carrying values and acquisition
costs of investment securities were set out as follows:
(1) Investment Securities with Market Value
Millions of yen
AcquisitionAs of March 31, 2005 Cost Carrying Value Difference
Carrying value exceeds
acquisition cost:
Shares............................. ¥ 872 ¥4,667 ¥3,795
Others ............................. 990 991 1
Subtotal .............................. 1,862 5,658 3,796
Carrying value does not exceed
acquisition cost:
Shares............................. — — —
Others ............................. 20 19 (1)
Subtotal .............................. 20 19 (1)
Total ....................................... ¥1,882 ¥5,677 ¥3,795
Millions of yen
AcquisitionAs of March 31, 2004 Cost Carrying Value Difference
Carrying value exceeds
acquisition cost:
Shares............................. ¥ 872 ¥4,290 ¥3,418
Others ............................. 990 1,010 21
Subtotal .............................. 1,862 5,300 3,438
Carrying value does not
exceed acquisition cost:
Shares............................. — — —
Others ............................. 21 19 (2)
Subtotal .............................. 21 19 (2)
Total ....................................... ¥1,883 ¥5,319 ¥3,436
Thousand of U.S. dollars
AcquisitionAs of March 31, 2005 Cost Carrying Value Difference
Carrying value exceeds
acquisition cost:
Shares ................................ $ 8,122 $43,462 $35,340
Others................................. 9,214 9,221 7
Subtotal .................................. 17,336 52,683 35,347
Carrying value does not
exceed acquisition cost:
Shares ................................ — — —
Others................................. 189 178 (11)
Subtotal .................................. 189 178 (11)
Total ........................................... $17,525 $52,861 $35,336
(2) Other Investment Securities without Market Value
Thousands ofMillions of yen U.S. dollars
2005 2004 2005
Carrying value of investment
securities not listed except
for over-the-counter dealings.................. ¥32 ¥32 $295
6. Short-Term Bank LoansShort-term bank loans consist principally of bank overdrafts, bearing
interest at average annual rates of 3.1% and 2.9% in the years ended
March 31, 2005 and 2004, respectively.
Short-term bank loans as at March 31, 2005 and 2004 were as follows:
Thousands ofMillions of yen U.S. dollars
2005 2004 2005
Bank overdrafts:
Unsecured ...................................... ¥4,466 ¥3,912 $41,585
Annual Report 2005 21
7. Income TaxesThe statutory tax rate used for calculating deferred tax assets and
deferred tax liabilities as of March 31, 2005 was 39.7% and as of
March 31, 2004 was 41.0%.
Reconciliations of the difference between the statutory tax rate
and the effective income tax rate in the accompanying consolidated
statements of income for the years ended March 31, 2005 and 2004
are as follows:
2005 2004
Statutory tax rate ........................................................ 39.7% 41.0%
(Adjustment)
Inhabitants’ tax on a per-capita basis..................... 0.2 0.2
Differences in subsidiaries’ tax rates ...................... (2.2) (2.8)
Foreign tax credits .................................................. (1.4) (1.6)
Tax reduction for research
and development expenses.................................. (2.4) (1.7)
Others ..................................................................... (1.5) (1.0)
Effective income tax rate ............................................ 32.4% 34.1%
At March 31, 2005 and 2004, significant components of deferred tax
assets and liabilities were as follows:Thousands of
Millions of yen U.S. dollars
2005 2004 2005
Current:
Deferred tax assets:
Unrealized profits on inventories..... ¥ 478 ¥ 343 $ 4,448
Write-down of inventories ............... 299 207 2,784
Bonus reserve ................................. 1,177 1,142 10,963
Accrued enterprise taxes ................ 252 110 2,350
Accrued expenses........................... 455 479 4,238
Other ............................................... 944 379 8,792
Total deferred tax assets ......... 3,605 2,661 33,575
Offset against deferred
tax liabilities ........................... 17 1 160
Net deferred tax assets ........... ¥3,588 ¥2,660 $33,415
Deferred tax liabilities:
Other ............................................... ¥ 17 ¥ 6 $ 160
Total deferred tax liabilities...... 17 6 160
Offset against deferred
tax assets .............................. 17 1 160
Net deferred tax liabilities ........ ¥ — ¥ 5 $ —
Non-Current:
Deferred tax assets:
Accrued retirement benefits:
Directors and statutory auditors.. ¥ 167 ¥ 150 $ 1,551
Employees................................... 3,531 4,333 32,878
Unrealized profits
on depreciable assets ................... 317 308 2,955
Other ............................................... 322 56 3,001
Total deferred tax assets ......... 4,337 4,847 40,385
Offset against deferred
tax liabilities ........................... 2,293 1,970 21,353
Net deferred tax assets ........... ¥2,044 ¥2,877 $19,032
Deferred tax liabilities:
Depreciation of overseas
subsidiaries ................................... ¥2,242 ¥1,869 $20,880
Valuation of securities ..................... 1,507 1,365 14,033
Other ............................................... 660 643 6,142
Total deferred tax liabilities....... 4,409 3,878 41,055
Offset against deferred
tax assets .............................. 2,293 1,970 21,353
Net deferred tax liabilities ........ ¥2,116 ¥1,908 $19,702
22 KEIHIN CORPORATION
8. Lease TransactionsThe Companies lease furniture and tools. Pro-forma information relat-
ing to acquisition costs, accumulated depreciation and future mini-
mum lease payments for property held under finance leases which do
not transfer ownership of the leased property to the lessee on an “as if
capitalized” basis for the years ended March 31, 2005 and 2004 is as
follows:Thousands of
Millions of yen U.S. dollars
2005 2004 2005
Furniture and Tools
Acquisition costs.................................... ¥27 ¥27 $253
Accumulated depreclation ..................... 27 20 253
Net leased property ............................... ¥— ¥ 7 $ —
Future minimum lease payments under finance leases as of March
31, 2005 and 2004 were as follows:Thousands of
Millions of yen U.S. dollars
2005 2004 2005
Due within one year ............................... ¥— ¥ 7 $—
Due after one year.................................. — — —
Total ................................................... ¥— ¥ 7 $—
The acquisition costs and future minimum lease payments under
finance leases include the imputed interest expense portion.
Depreciation expense, which is not reflected in the accompanying
consolidated statements of income, computed by the straight-line
method and with zero residual value for the years ended March 31, 2005
and 2004, would have been ¥7 million (US$63 thousand) and ¥7 million,
respectively.
Lease expenses on finance lease contracts without ownership
transfer for the years ended March 31, 2005 and 2004 are summa-
rized as follows:Thousands of
Millions of yen U.S. dollars
2005 2004 2005
Lease expenses ....................................... ¥7 ¥7 $63
9. Derivative TransactionsThe Company’s policy is to enter into derivative transactions, such as
foreign currency forward exchange contracts, only for hedging, rather
than for speculative purposes.
All counterparties are financial institutions with high credit ratings;
management believes that the credit risk through potential default is
very low.
These derivative transactions are entered into in compliance with
the Company’s internal procedures, which include a requirement for
reporting to the financial director and to the Board of Directors where
appropriate.
10. Contingent LiabilitiesAt March 31, 2005, the Company was contingently liable as follows:
Thousands ofMillions of yen U.S. dollars
As a guarantor of indebtedness of:
Employees ........................................... ¥ 386 $ 3,590
11. Related Party TransactionsThe Company is a 42.2%-owned affiliate of Honda Motor Co., Ltd.
Consolidated net sales included sales to Honda Motor Co., Ltd. in the
amounts of ¥103,496 million (US$963,744 thousand) and ¥97,092 mil-
lion for the years ended March 31, 2005 and 2004, respectively.
The terms of transactions referred to above were negotiated and
have been determined on an arm’s-length basis.
The receipt of raw materials and components totaled ¥12,544 mil-
lion (US$116,811 thousand) in fiscal 2005, compared with ¥14,883
million in the previous fiscal year.
Annual Report 2005 23
12. Segment Information(1) Geographic Areas
The operations of the Company and its consolidated subsidiaries for the years ended March 31, 2005 and 2004 by geographic area were as follows:
Millions of yen
EliminationDomestic and/or Corporate
Year ended March 31, 2005 (Japan) Americas Asia Europe Total Assets Consolidated
Sales:
Outside customers ......................................... ¥127,898 ¥94,467 ¥43,033 ¥6,098 ¥271,496 ¥ — ¥271,496
Intersegment................................................... 58,001 1,790 6,193 119 66,103 (66,103) —
Total ................................................................ 185,899 96,257 49,226 6,217 337,599 (66,103) 271,496
Operating costs and expenses....................... 177,448 89,563 43,489 5,864 316,364 (65,740) 250,624
Operating income ............................................... ¥ 8,451 ¥ 6,694 ¥ 5,737 ¥ 353 ¥ 21,235 ¥ (363) ¥ 20,872
Identifiable assets............................................... ¥115,597 ¥48,817 ¥32,461 ¥2,262 ¥199,137 ¥(28,772) ¥170,365
Millions of yen
EliminationDomestic and/or Corporate
Year ended March 31, 2004 (Japan) Americas Asia Europe Total Assets Consolidated
Sales:
Outside customers ......................................... ¥117,224 ¥96,265 ¥34,427 ¥5,135 ¥253,051 ¥ — ¥253,051
Intersegment................................................... 55,986 1,528 4,171 96 61,781 (61,781) —
Total ................................................................ 173,210 97,794 38,598 5,231 314,832 (61,781) 253,051
Operating costs and expenses....................... 167,632 91,337 33,754 4,992 297,714 (61,789) 235,925
Operating income ............................................... ¥ 5,578 ¥ 6,457 ¥ 4,844 ¥ 239 ¥ 17,118 ¥ 8 ¥ 17,126
Identifiable assets............................................... ¥104,795 ¥43,754 ¥27,738 ¥3,290 ¥179,577 ¥(28,805) ¥150,772
Thousands of U.S. dollars
EliminationDomestic and/or Corporate
Year ended March 31, 2005 (Japan) Americas Asia Europe Total Assets Consolidated
Sales:
Outside customers........................................ $1,190,968 $879,664 $400,720 $56,775 $2,528,127 $ — $2,528,127
Intersegment ................................................. 540,101 16,671 57,668 1,110 615,550 (615,550) —
Total .............................................................. 1,731,069 896,335 458,388 57,885 3,143,677 (615,550) 2,528,127
Operating costs and expenses ..................... 1,652,375 834,001 404,966 54,594 2,945,936 (612,168) 2,333,768
Operating income ............................................. $ 78,694 $ 62,334 $ 53,422 $ 3,291 $ 197,741 $ (3,382) $ 194,359
Identifiable assets ............................................. $1,076,426 $454,574 $302,272 $21,061 $1,854,333 $(267,922) $1,586,411
24 KEIHIN CORPORATION
(2) Overseas Sales
Overseas sales, which include export sales of the Company and sales (other than exports to Japan) of its foreign consolidated subsidiaries, for the
years ended March 31, 2005 and 2004 were as follows:
Millions of yen
Year ended March 31, 2005 Americas Asia Europe Others Consolidated
Overseas sales ............................................................................................................... ¥94,553 ¥43,645 ¥10,081 ¥136 ¥148,415
Consolidated net sales ................................................................................................... — — — — 271,496
Ratio of overseas sales to consolidated sales ............................................................... 34.8% 16.1% 3.7% 0.1% 54.7%
Millions of yen
Year ended March 31, 2004 Americas Asia Europe Others Consolidated
Overseas sales ............................................................................................................... ¥96,456 ¥34,893 ¥8,362 ¥125 ¥139,836
Consolidated net sales ................................................................................................... — — — — 253,051
Ratio of overseas sales to consolidated sales ............................................................... 38.1% 13.8% 3.3% 0.1% 55.3%
Thousands of U.S. dollars
Year ended March 31, 2005 Americas Asia Europe Others Consolidated
Overseas sales.............................................................................................................. $880,460 $406,412 $93,868 $1,279 $1,382,019
Consolidated net sales.................................................................................................. — — — — 2,528,127
13. Retirement Benefit PlanThe accrued retirement benefits for employees as of March 31, 2005
and 2004 are summarized as follows:Thousands of
Millions of yen U.S. dollars
2005 2004 2005
Projected benefit obligations ....... ¥(58,033) ¥(60,389) $(540,399)
Plan assets ................................... 36,908 33,083 343,679
Unrecognized prior service cost .. (2,529) 146 (23,553)
Unrecognized actuarial
differences.................................. 14,555 15,795 135,542
Prepaid pension expense............. (1,156) — (10,763)
Reserve for retirement benefits .. ¥(10,255) ¥(11,366) $ (95,494)
Note: The above table includes the amounts related to the portion subjectto the Japanese Welfare Pension Insurance Law.
The net pension expense related to retirement benefits for the years
ended March 31, 2005 and 2004 was as follows:Thousands of
Millions of yen U.S. dollars
2005 2004 2005
Service cost ..................................... ¥1,650 ¥2,554 $15,366
Interest cost ..................................... 1,115 1,172 10,386
Expected return on plan assets ....... (1,156) (877) (10,765)
Amortization of unrecognized
actuarial differences....................... (1,119) 1,406 (10,419)
Amortization of prior service cost .... 1,084 (335) 10,089
Net pension expense................ ¥1,574 ¥3,921 $14,657
Annual Report 2005 25
Assumptions used in the calculation of the preceeding information
are as follows:
As of March 31 2005 2004
Discount rate........................... 2.0% 2.0%
Expected rate of return
on plan assets ....................... 3.5% 3.5%
Method of attributing
the projected benefits
to periods of service.............. Straight-line basis Straight-line basis
Amortization of unrecognized
prior service cost................... 3 years 3 years
Amortization of unrecognized
actuarial differences.............. 17 years 17 years
14. Research and Development ExpensesResearch and development expenses included in selling, general
and administrative expenses for the years ended March 31, 2005
and 2004 were as follows:Thousands of
Millions of yen U.S. dollars
2005 2004 2005
Research and development
expenses............................................ ¥735 ¥952 $6,849
15. Appropriations of Retained EarningsThe appropriations of retained earnings with respect to the year ended
March 31, 2005 proposed by the Board of Directors and approved at
the shareholders’ meeting held on June 22, 2005 were as follows:
Thousands ofMillions of yen U.S. dollars
Cash dividends
(¥8 (US$0.07) per share)...................... ¥ 592 $ 5,510
Transfer to voluntary reserves, net........ 2,895 26,957
Total appropriations .......................... ¥3,487 $32,467
26 KEIHIN CORPORATION
Report of Independent Auditors
Annual Report 2005 27
President & CEO
Kentaro Kato
Senior Managing Directors
Katsumi Ichida
Yoshitada Sato
Eiji Yamamoto
Managing Directors
Akihiro Yamato
Kanji Fujikawa
Rikio Otomo
Kazuyuki Sasa
Tomio Aoi
Directors
Fumio Yamagata
Masami Watanabe
Sosuke Sese
Kazuhiro Hashiyama
Kouzou Kusakari
Syoichi Hatanaka
Hiroshi Irino
Auditors
Jitsuro Ikeshita
Tadashi Endo
Hitoshi Ohara
Katsumi Oya
(As of June 22, 2005)
Board of Directors
28 KEIHIN CORPORATION
Domestic Offices and Plants
Head OfficeShinjuku Nomura Bldg. 39F,1-26-2, Nishi-Shinjuku, Shinjuku-ku, Tokyo 163-0539, JAPANTel: 03-3345-3411 Fax: 03-3345-3414
Iwate Plant8-58-1, Ikkatai, Iwate-machi, Iwate-gun, Iwate 028-4421, JAPANTel: 0195-62-5137 Fax: 0195-62-5138
Kakuda Plant 1213, Takabatake-minami, Kajika, Kakuda-shi, Miyagi 981-1581, JAPANTel: 0224-63-1111 Fax: 0224-62-1283
Kakuda Plant 23, Miyayachi, Sakura, Kakuda-shi, Miyagi 981-1582, JAPANTel: 0224-63-3111 Fax: 0224-63-2886
Kakuda Plant 34-3, Miyayachi, Sakura, Kakuda-shi, Miyagi 981-1583, JAPANTel: 0224-63-3611 Fax: 0224-63-3616
Marumori Plant97, Terauchi-mae, Marumori-cho, Igu-gun, Miyagi 981-2112, JAPANTel: 0224-72-2772 Fax: 0224-72-6852
Kakuda Research & Development Center(Training & Welfare Center)197-1, Nagare, Kakuda, Kakuda-shi, Miyagi 981-1505, JAPANTel: 0224-63-3480 Fax: 0224-63-3490
Tochigi Research & Development Center2021-8, Hoshakuji, Takanezawa-machi, Shioya-gun, Tochigi 329-1233, JAPAN Tel: 028-680-1500 Fax: 028-680-1520
Sayama Plant481-1, Hiranoshita, Nakashinden, Sayama-shi, Saitama 350-1311, JAPANTel: 042-958-6000 Fax: 042-956-1122
Asaka Office T-BLD Asaka 5F, 2-4-25, Hon-cho, Asaka-shi,Saitama 351-0011, JAPANTel: 048-469-1208 Fax: 048-469-0674
Kawasaki Plant386, Ichinotsubo, Nakahara-ku, Kawasaki-shi, Kanagawa 211-8580, JAPANTel: 044-411-6301 Fax: 044-433-0086
Kawasaki Development Division386, Ichinotsubo, Nakahara-ku, Kawasaki-shi, Kanagawa 211-8580, JAPANTel: 044-411-6331 Fax: 044-433-2545
Suzuka Plant3361-1, Ichigaya, Kou-cho, Suzuka-shi, Mie 513-0836, JAPANTel: 0593-78-6701 Fax: 0593-78-1024
Hamamatsu OfficeKI Bldg. 7F, 2-4, Tokiwacho, Hamamatsu-shi, Shizuoka 430-0917, JAPAN Tel: 053-457-3031 Fax: 053-457-3036
Domestic Subsidiaries
Nasu Seiki Mfg. Co., Ltd.818, Kanaga, Karasuyama-machi, Nasu-gun, Tochigi 321-0632, JAPANTel: 0287-82-3641 Fax: 0287-84-3751
Kanazu Mfg. Co., Ltd.125-3, Aramachi, Oyama, Kakuda-shi, Miyagi 981-1502, JAPANTel: 0224-63-2202 Fax: 0224-63-1201
Keihin Sogyo Co., Ltd.7, Kurouchi, Oda, Kakuda-shi, Miyagi 981-1514, JAPANTel: 0224-62-0650 Fax: 0224-62-5910
Keihin Watari Co., Ltd.1-5, Doda, Okuma-koya, Watari-cho, Watari-gun, Miyagi 989-2324, JAPANTel: 0223-34-0451 Fax: 0223-34-0453
Keihin Electronics Technology Inc.Senshu Bldg. 2F, 5-1-12 Tsutsujigaoka, Miyagino-ku, Sendai-shi, Miyagi 981-1581, JAPAN Tel: 022-257-6201 Fax: 022-257-6217
Keihin Valve Corp.1-9-1 Maruyama, Isogo-ku, Yokohama-shi,Kanagawa 235-0011, JAPANTel: 045-752-6391 Fax: 045-752-6281
Overseas Network
United StatesKeihin Fuel Systems, Inc.16341 West Lincoln Ave., New Berlin, WI 53151, U.S.A.Tel: +1-262-860-6000 Fax: +1-262-860-6001
Keihin Indiana Precision Technology, Inc.400 West New Rd., Greenfield, IN 46140, U.S.A.Tel: +1-317-462-3015 Fax: +1-317-462-2983
Keihin IPT Manufacturing, Inc.400 West New Rd., Greenfield, IN 46140, U.S.A.Tel: +1-317-462-3015 Fax: +1-317-462-2983
Keihin Carolina System Technology, Inc.4047 McNair Rd., Tarboro, NC 27886, U.S.A.Tel: +1-252-641-6750 Fax: +1-252-824-1446
Keihin Aircon North America, Inc.4400 North Superior Dr., Muncie, IN 47303, U.S.A.Tel: +1-765-213-4915 Fax: +1-765-213-4930
CanadaKeihin Canada Service, Inc. 46 Wellington St. West, Unit #5, Alliston, ON L9R 2B8, CANADATel: +1-705-434-4973 Fax: +1-705-434-4978
BrazilKeihin Tecnologia do Brasil Ltda.Av. Torquato Tapajos, No 8003-Taruma, Manaus, Amazonas, BRAZIL 69048-660Tel: +55-92-228-4611 Fax: +55-92-228-4107
Keihin Tecnologia do Brasil Ltda. - São PauloRua Galvão Bueno, 212-Sala 71São Paulo, SP, BRAZIL 01506-000Tel: +55-11-3277-8644 Fax: +55-11-3271- 0793
TaiwanTaiwan Keihin Carburetor Co., Ltd.No. 7, 7th Rd., Industrial Zone, Shi-ton District,Taichung, TAIWANTel: +886-4-2359-1483 Fax: +886-4-2359-3625
ThailandKeihin (Thailand) Co., Ltd.Northern Region Industrial Estate 74, Moo 4,Tambon Ban-klang, Amphur Muang, Lamphun 51000, THAILANDTel: +66-53-58-1189 Fax: +66-53-58-1193
Keihin (Thailand) Co., Ltd., Bangkok Office22nd Flr., UBC II Bldg., 591 Sukhumvit Rd., North Klongton, Wattana, Bangkok 10110, THAILANDTel: +66-2-261-0251 Fax: +66-2-261-0254
Keihin Auto Parts (Thailand) Co., Ltd.Rojana Industrial Park 1/74, Moo 5, Rojana Road, Tambol Karnharm, Amphur U-tahi, Pranakorn, Sri Ayutthaya Province 13210, THAILANDTel: +66-35-33-0916 Fax: +66-35-33-0915
PhilippinesKeihin Philippines Corp.105 Trade Ave., Phase 4, Laguna Technopark Brgy Loma, Binan, Laguna 4024, PHILIPPINESTel: +63-49-541-1840 Fax: +63-49-541-1855
Keihin Auto Parts (Philippines) Corp.105 Trade Ave., Phase 4, Laguna Technopark Brgy Loma, Binan, Laguna 4024, PHILIPPINESTel: +63-49-541-1840 Fax: +63-49-541-1855
IndonesiaP.T. Keihin IndonesiaKawasan Industri MM2100, Blok JJ-1 ChikarangBarat, Bekasi 17520, INDONESIATel: +62-21-8998-1645 Fax: +62-21-8998-1644
IndiaKeihin Panalfa Ltd.A-1 & A-2, Sector 81, NOIDA Phase-II, Uttar Pradesh 201 301, INDIATel: +91-120-256-8941 Fax: +91-120-256-8155
Keihin FIE Pvt. Ltd.B-3, MIDC, Chakan, Phase 1, Village Mahalunge, Taluka-Khed, District-Pune, Maharashtra, INDIATel: +91-2135-561451~3 Fax: +91-2135-561454
ChinaNanjing Keihin Carburetor Co., Ltd.Economic Development Area, Luhe Nanjing, Jiangsu, CHINATel: +86-25-5715-2305 Fax: +86-25-5715-2800
Zhanjiang Deni Carburetor Co., Ltd.27 Hai Tian Rd., Chikan, Zhanjiang, Guangdong, CHINATel: +86-759-336-3245 Fax: +86-759-332-4974
Dongguan Keihin Engine Management SystemCo., Ltd.Guancheng Science of Dongguan China’s Famous Universities HI-TECH City, Guanlong Road, Dongguan City, Guangdong, CHINATel: +86-769-265-8290 Fax: +86-769-265-5622
Keihin R&D China Co., Ltd.No. 3988 Wenxiang Road,West New Area of Songjiang Industrial Zone,Shanghai, CHINATel: +86-21-5776-0208 Fax: +86-21-5776-0207
United KingdomKeihin Europe Ltd.Craven House, 40 Uxbridge Rd.,London W5 2BS, U.K.Tel: +44-20-8810-1266 Fax: +44-20-8810-1277
Keihin Europe Ltd., Scotland FactoryUnit D, Watt Place, Hamilton InternationalTechnology Park, Hamilton, Glasgow, G72 0AG, U.K.Tel: +44-(0)-1698-727100Fax: +44-(0)-1698-727101
(As of July 31, 2005)
Network
Annual Report 2005 29Annual Report 2005 29
Date Established December 19, 1956
Capital ¥6,932,340,000
Network Head Office Shinjuku Nomura Bldg. 39F,
1-26-2, Nishi-Shinjuku,
Shinjuku-ku,
Tokyo 163-0539, Japan
Plants 8
Research and
Development Centers 3
Offices 2
Subsidiaries Japan: 6
Americas: 7
Asia: 11
Europe: 1
(As of July 31, 2005)
Number of Employees 11,444
Independent Auditors ChuoAoyama
PricewaterhouseCoopers
Common Stock Authorized: 240,000,000 shares
Issued: 73,985,246 shares
Number of Shareholders 4,059
Stock Listing Tokyo Stock Exchange
Transfer Agent The Mitsubishi Trust and Banking
Corporation
1-4-5, Marunouchi, Chiyoda-ku,
Tokyo 100-8212, Japan
Home Page http://www.keihin-corp.co.jp
Principal Shareholders
Number of Percentage of shares total shares
held outstanding(thousands) (%)
Honda Motor Co., Ltd. 30,581 41.33
The Master Trust Bank of Japan, Ltd. 4,989 6.74
Japan Trustee Services Bank, Ltd. 3,923 5.30
The Bank of Tokyo-Mitsubishi, Ltd. 1,691 2.29
Dexia-Bil S/A Julius Baer Multistock
Japan Leading Stock Fd 1,227 1.66
Trust & Custody Services Bank, Ltd. 1,190 1.61
UFJ Bank Limited 1,067 1.44
Mellon Bank Treaty Clients Omnibus 1,044 1.41
The Nomura Trust and Banking Co., Ltd. 999 1.35
State Street Bank and Trust Company 505103 834 1.13
Stock Price (¥)
FY2001 FY2002 FY2003 FY2004 FY2005
First High 910 1,300 1,460 1,270 1,417
Quarter Low 671 950 1,214 1,004 1,084
Second High 865 1,510 1,440 1,258 1,767
Quarter Low 720 854 1,151 940 1,215
Third High 1,028 1,200 1,375 1,218 1,834
Quarter Low 786 978 1,070 954 1,420
Fourth High 1,010 1,329 1,273 1,195 2,000
Quarter Low 778 1,051 1,020 966 1,669
Retroactively adjusted for stock split
(As of March 31, 2005)
Corporate Data
This annual report was printed on 100% recycled paper with soy ink.
Printed in Japan