April 4, 2003
Revised Forecast of Financial Results for Fiscal 2002 and
Revaluation Loss on Securities |
To whom it may concern:
NIPPONKOA Insurance Co., Ltd
President: Ken Matsuzawa
1. Revision of the Forecast of Financial Results
NIPPONKOA Insurance Co., Ltd. ("the Company") has revised its forecast of non-consolidated financial results for fiscal 2002
(from April 1, 2002 to March 31, 2003), published on November 22, 2002, and its forecast
of consolidated financial results for the same period, published on December 2, 2002.
(1)Revision of Forecast of Non-consolidated Financial Results for
Fiscal 2002 (From April 1, 2002 to March 31, 2003)
Note: Figures for fiscal 2001 are the combined total of those of NIPPONKOA Insurance Co.,
Ltd. and Taiyo Fire & Marine Insurance Co., Ltd.
<Reason for Revision of Forecast of Non-consolidated Financial
Results >
Revaluation loss on securities has expanded as described below in 2.,
due to the impact of stock market decline and the Company's adoption of a stricter rule for write-down of securities. And
also, loss on the sale of securities has increased as the Company proceeds with the plan
to reduce its equity holdings. Mainly because of these factors, the Company has revised
downward its forecasts of ordinary profit and net income respectively.
(Reference)
Even in the case where the Company records ordinary loss and net loss
for fiscal 2002 as mentioned above, its shareholders' equity excluding net unrealized gain/loss on "other securities" (*) will be 282.5 billion yen, and the valuation difference before
taxes (market value less cost) on "other securities" will
be maintained at a level of over 240 billion yen (of which that of domestic equities is
194.4 billion yen). Therefore, the solidity of shareholders' equity and the financial soundness of the Company remain
steadfast.
Consequently, we do not revise the previously forecast annual dividend
of 7 yen per share.
(*) "Other securities" are defined as securities other than trading securities,
held-to-maturity debt securities and equity investments in subsidiaries and affiliates.
Net unrealized gain/loss on "other
securities" is recognized,
net of applicable taxes, as a component of shareholders' equity.
(2)Forecast of Consolidated Financial Results for
Fiscal 2002 (From April 1, 2002 to March 31, 2003)
Note: Consolidated figures for fiscal 2001 do not include
the figures of Taiyo Fire & Marine Insurance Co., Ltd.
<Reason for Revision of Forecast of
Consolidated Financial Results >
Following the revision of forecast of non-consolidated financial
results as described above in (1), the Company has revised its forecast of consolidated
financial results as well.
2. Revaluation Loss on Securities
The Company records the valuation difference resulting from application
of the mark-to-market method to "other securities",
which are defined under the Article 8, paragraph 21 of Regulations Concerning Financial
Statements, as a component of shareholders' equity, using the full direct equity method.
On the other hand, revaluation loss on securities resulting from
write-down due to impairment as of March 31, 2003 is shown as follows:
Notes:
- In judging the materiality of revaluation loss on securities, the Company uses the
average ordinary profit and average net income for the last five fiscal years. This is
because the Company recorded ordinary loss and net loss for fiscal 2001, for which period
the ordinary profit and the net income are regarded as zero in this calculation.
- Figures for fiscal 2001 and prior years are the combined total of those of NIPPONKOA
Insurance Co., Ltd. and Taiyo Fire & Marine Insurance Co., Ltd.
- In respect of write-down of securities with market value due to impairment, the Company
formerly recognized revaluation loss on all securities the market value of which had
declined by 50% or more to the book value. As for securities whose decline ratio was 30%
or more but less than 50%, it formerly recognized revaluation loss in cases where there
was no possibility of recovery. However, starting from FY2002, the Company uses a stricter
rule to recognize revaluation loss on all securities the market value of which has
declined by 30% or more to the book value.
Cautionary Statement
Estimates, projections, targets and other statements contained in this
material that are not historical facts are forward-looking statements about the future
performance and plans of NIPPONKOA Insurance Co., Ltd. (the "Company"). Such forward-looking statements
are based on the Company's
assumptions and beliefs in light of the information currently available to it. Therefore,
those statements do not guarantee future performance, but involve risks and uncertainties.
The Company cautions you that a number of important factors could cause actual results to
differ materially from those contained in the forward-looking statements. Such factors
include, but are not limited to, (1) general economic conditions in the Company's market, mainly Japan, (2) business
conditions in the insurance industry, especially, increased competition, (3) fluctuation
of exchange rates, and (4) the regulatory environment.
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