Eisai Co., Ltd. Annual Report 2001 - Eisai GmbH

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28 Consolidated Statements of Cash Flows Eisai Co., Ltd. and Consolidated Subsidiaries Thousands of Millions of yen U.S. dollars (Note 1) Years ended March 31, 2001 and 2000 2001 2000 2001 Operating Activities: Income before income taxes and minority interests ¥ 42,838 ¥25,536 $345,468 Adjustments for: Income taxes—paid (18,146) (24,791) (146,339) Depreciation and amortization 15,005 15,135 121,008 Loss on valuation of fixed assets 3,364 27,129 Gain on securities contributed to the retirement benefit trust (1,383) (11,153) Amortization of transitional obligation for employees’ retirement benefit 15,128 122,000 Provision for liability for retirement benefits 5,514 4,531 44,468 Changes in assets and liabilities: (Increase) decrease in trade receivables (5,997) 2,791 (48,363) (Increase) decrease in inventories 1,721 (3,584) 13,879 (Increase) decrease in interest and dividends receivable (6) 265 (48) Increase (decrease) in interest payable (82) 190 (661) Increase (decrease) in trade payables (2,032) 1,537 (16,387) Increase in accrued expenses 13,890 1,843 112,016 Other 15,182 3,721 122,435 Net cash provided by operating activities 84,996 27,174 685,452 Investing Activities: Purchases of short-term investments (11,733) (25,075) (94,621) Proceeds from sales and maturities of short-term investments 20,671 31,607 166,702 Purchases of property, plant and equipment (10,433) (13,022) (84,137) Proceeds from sales of property, plant and equipment 1,009 1,092 8,137 Purchases of intangible assets (3,485) (3,281) (28,105) Purchases of investment securities (29,149) (534) (235,073) Proceeds from sales and maturities of investment securities 14,056 221 113,355 (Increase) decrease in time deposits (exceeding 3 months) (1,743) 3,046 (14,056) Other 1,255 1,902 10,121 Net cash used in investing activities Financing Activities: (19,552) (4,044) (157,677) Increase (decrease) in short-term bank borrowings (34) 1,113 (274) Proceeds from long-term debt 345 200 2,782 Repayment of long-term debt (1,596) (59) (12,871) Corporate bond repayment (10,000) (10,200) (80,645) Dividends paid (6,373) (6,373) (51,395) Other (55) (38) (444) Net cash used in financing activities (17,713) (15,357) (142,847) Effect of exchange rate changes on cash and cash equivalents 6,051 (2,446) 48,798 Net increase in cash and cash equivalents Cash and cash equivalents of newly 53,782 5,327 433,726 consolidated subsidiaries at beginning of year 310 Cash and cash equivalents at beginning of year 52,556 46,919 423,839 Cash and cash equivalents at end of year ¥106,338 ¥52,556 $857,565 Non-Cash Financing Activities: Conversion of convertible bonds to common stock Assets increased by consolidation of ¥ 4 ¥ 63 $ 32 subsidiaries previously unconsolidated Liabilities increased by consolidation of 1,557 subsidiaries previously unconsolidated See Notes to Consolidated Financial Statements. 723 Eisai Annual Report 2001
Eisai Co., Ltd. and Consolidated Subsidiaries Years ended March 31, 2001 and 2000 Notes to Consolidated Financial Statements Note 1. Basis of Presenting Consolidated Financial Statements The accompanying consolidated financial statements of Eisai Co., Ltd. (the “Company”) and its consolidated subsidiaries have been prepared in accordance with the provisions set forth in the Japanese Securities and Exchange Law and its related accounting regulations, and in conformity with accounting principles and practices generally accepted in Japan, which are different in certain respects as to application and disclosure requirements of International Accounting Standards. The consolidated financial statements are not intended to present the financial position, results of operations and cash flows in accordance with accounting principles and practices generally accepted in countries and jurisdictions other than Japan. In preparing the consolidated financial statements, certain reclassifications and rearrangements have been made to the consolidated financial statements issued domestically in order to present them in a form which is more familiar to readers outside Japan. In accordance with accounting procedures generally accepted in Japan, certain comparative disclosures are not required to be and have not been presented herein. The consolidated financial statements are stated in Japanese yen, the currency of the country in which the Company is incorporated and principally operates. The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been made at the rate of ¥124 to $1, the approximate rate of exchange at March 31, 2001. Such translations should not be construed as representations that the Japanese yen amounts could be converted into U.S. dollars at that or any other rate. Certain reclassifications have been made in the 2000 consolidated financial statements to conform to the classifications used in 2001. These reclassifications had no effect on previously reported net income or retained earnings. Note 2. Significant Accounting Policies (a) Consolidation The consolidated financial statements as of March 31, 2001 include the accounts of the Company and all its subsidiaries (35 significant subsidiaries in 2000) (collectively, the “Group”). Under the control or influence concept, those companies in which the Company, directly or indirectly, is able to exercise control over operations are fully consolidated, and those companies over which the Group has the ability to exercise significant influence are accounted for by the equity method. Investments of ¥338 million in associated companies (¥139 million in an unconsolidated subsidiary and ¥356 million in associated companies in 2000) are accounted for by the equity method. Prior to April 1, 1999, the excess of the cost of the Company’s investments in consolidated subsidiaries, an unconsolidated subsidiary and associated companies accounted for by the equity method over its equity in the net assets at the respective dates of acquisition, is being amortized over a period of five years. Effective April 1, 1999, the excess of the cost of an acquisition over the fair value of the net assets of the acquired subsidiaries at the date of acquisition is being amortized over a period of five years. All significant intercompany balances and transactions have been eliminated in consolidation. All material unrealized profit included in assets resulting from transactions within the Group is eliminated. (b) Cash equivalents Cash equivalents are short-term investments that are readily convertible into cash and that are exposed to insignificant risk of changes in value. Cash equivalents include time deposits, certificates of deposit, commercial paper and mutual funds investing in bonds that represent short-term investment, all of which mature or become due within three months of the date of acquisition. (c) Short-term investments and investment securities Prior to April 1, 2000, marketable and investment securities listed on stock exchanges were stated at the lower of cost, determined by the moving average method, or market. Effective April 1, 2000, the Company and its consolidated domestic subsidiaries adopted a new accounting standard for financial instruments, including marketable and investment securities. The standard requires all applicable securities to be classified and accounted for, depending on management’s intent, as follows: i) trading securities, which are held for the purpose of earning capital gains in near term are reported at fair value, and the related unrealized gains and losses are included in the earnings, ii) held-to-maturity debt securities, which are expected to be held to maturity with the positive intent and ability to hold to maturity are reported at amortized cost and iii) available-for-sale securities, which are not classified as either of the aforementioned securities, are reported at fair value, with unrealized gains and losses, net of applicable taxes, reported in a separate component of shareholders’ equity. The effect of adoption of the new standard was to increase income before income taxes and minority interests by ¥2,605 million ($21,008 thousand). Marketable securities classified as current assets decreased by ¥76,091 million ($613,637 thousand) and investment securities increased by the same amount as of April 1, 2000. (d) Inventories Inventories are primarily stated at cost, determined by the weighted average method. Eisai Annual Report 2001 29
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Eisai Co., Ltd. Annual Report 2001 - Eisai GmbH

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