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Non-Consolidated Semiannual Financial Report for fiscal 1997

BASIS OF PRESENTING NON-CONSOLIDATED SEMIANNUAL FINANCIAL STATEMENTS

  1. 1The accompanying financial statements of Eisai Co., Ltd. (hereafter "the Company") have been prepared in accordance with generally accepted accounting principles in Japan.
  2. 2Calculation of operating expenses
    1. 1)Depreciation represents one-half of the estimated total annual depreciation for fixed assets as of September 30, 1997.
    2. 2)Provision for retirement allowances represents one-half of the estimated total amount of the annual provision for retirement allowances for employees and for directors and corporate auditors.
  3. 3Corporate and inhabitant taxes are calculated at a rate appropriate for the total amount of taxable income earned in the six-month period.
  4. 4Inventories are stated at average cost.
  5. 5The assets valued using methods other than historical cost are as follows: Marketable securities: the lower of cost, determined using the moving average cost method, or market.
  6. 6Depreciation is computed by the declining-balance method at rates based on the estimated useful lives of the assets.
    The estimated useful lives of property, plant and equipment other than buildings and structures of the head office, branches, and laboratories are twice as long as those used in prior years. This change was made based on the fact that the buildings and structures of plants acquired are longer lived and that refurbishment and repair to machinery and equipment have improved. The effect of this change for the six-month period ended September 30, 1997, was to decrease depreciation by yen1,575 million and increase operating income, ordinary income, and income before corporate and inhabitant taxes by yen1,078 million.
  7. 7Leases
    Finance leases other than those that transfer ownership of the leased property to the lessee are accounted for as rental transactions.
  8. 8Consumption tax received from customers and paid to suppliers is excluded from profit and loss. Net balance of received but unpaid consumption tax is included in consumption tax payable in the balance sheet.

NOTES TO BALANCE SHEETS

  Sep-30-1997 Sep-30-1996 Mar-31-1997
1. Accumulated depreciation of property,
plant and equipment fixed assets
¥99,456 mil. ¥94,320 mil. ¥98,233 mil.
2. Guarantees of obligations ¥103 mil. ¥178 mil. ¥122 mil.
3. Treasury stock 10,695 shares 23,267 shares 14,881 shares
  Number of shares issued Increase of Common stock Conversion price
4. Shares issued during the period:
Shares issued on the conversion of convertible bonds:
- 3rd unsecured convertible bond
- 4th unsecured convertible bond
(Shares)
 
1,257,863
633,451
(Millions of yen)
 
¥1,027
¥547
(yen)
 
¥1,632.90
¥1,728.60

NOTES TO LEASE TRANSACTIONS

1 Finance leases other than those that transfer ownership of the leased property to the lessee

(1) Acquisition cost, Accumulated depreciation, Net balance

(Millions of yen)

Vehicles: Sep-30-1997 Sep-30-1996 Mar-31-1997
Acquisition cost,
Accumulated depreciation
¥11
2
¥37
21
¥12
6
Net balance ¥9 ¥16 ¥6
Tools, furniture and fixtures: Sep-30-1997 Sep-30-1996 Mar-31-1997
Acquisition cost,
Accumulated depreciation
¥5,042
2,099
¥3,951
1,920
¥4,595
1,580
Net balance ¥2,942 ¥2,031 ¥3,015
Long-term prepaid expenses: Sep-30-1997 Sep-30-1996 Mar-31-1997
Acquisition cost,
Accumulated depreciation
¥38
21
¥42
24
¥46
24
Net balance ¥17 ¥17 ¥21
Total: Sep-30-1997 Sep-30-1996 Mar-31-1997
Acquisition cost,
Accumulated depreciation
¥5,092
2,122
¥4,032
1,966
¥4,654
1,611
Net balance ¥2,970 ¥2,066 3,043

(2) Future minimum lease payments

(Millions of yen)

  Sep-30-1997 Sep-30-1996 Mar-31-1997
Due within one year
Due over one year
¥1,246
1,804
¥951
1,191
¥1,130
1,984
Total ¥3,051 ¥2,142 ¥3,114

(3) Actual lease payments, Depreciation charges, Interest payments

(Millions of yen)

  Sep-30-1997 Sep-30-1996 Mar-31-1997
Actual lease payments
Depreciation charges
Interest payments
¥670
616
63
¥585
527
54
¥1,178
1,075
107

(4) Depreciation charges for leased assets are calculated using the straight-line method. The lease period is considered to be the useful life of the leased asset and its residual value as its cost.

(5) Interest payments for leased assets are calculated based on the differences between the lease fees and the respective assets' acquisition cost, which is considered to be interest-bearing. The allocation of interest payments to specific terms is in accordance with the interest method.

2. Operating Leases

(Millions of yen)

  Sep-30-1997 Sep-30-1996 Mar-31-1997
Due within one year
Due over one year
¥9
9
-
-
¥9
14
Total ¥18 - ¥23