6 TOSHIBA CORPORATION TO OUR SHAREHOLDERS resources available to each business group will be directed to the areas where they can have the biggest impact. In recent years, we have rolled out significant reforms. In 1998, we introduced an executive officer system, and in 1999 we initiated an in-house company system. A year later, we established the Nomination and Compensation Commit- tees, and in June 2001 we increased the number of external directors to three, while lowering the tenure period of each director to one year. Through these measures, we anticipated changes in the wider world and assured Toshiba’s place in the vanguard of reform. We remain there today through our decision to make Toshiba a “Company with Committees.” Adoption of this new sys- tem allows us to take reform even further, as it defines a clear supervisory function for the Board of Directors and enhanc- es management authority and flexibility. As we promote these measures to improve transparency and corporate gover- nance, we are also reinforcing our risk management and compliance systems. Forecasts for fiscal 2003 show no easing in the severity of the business environment. If Toshiba Group is going to over- come these conditions and achieve further growth, it must continue to rebuild and to reinforce its operating structures. We must also utilize our technological assets, production strengths and business acumen to stimulate new demand, and to assure that the positive results we recorded in fiscal 2002 are the foundations for sustained growth and higher profit in fiscal 2003. Toward that objective, we will make every effort to promote business development, particularly through investments in our high-growth domains, the foundation for creating new demand. We will continue to adhere to our slogan, “Innovation-driv- en, Customer-focused Growth,” and to build a highly profitable group of companies that is active in both high- growth and stable-growth businesses. As we do so, we hope we may rely on your continued understanding and support. In 128 years of operations, Toshiba and Toshiba Group have won a vast number of customers, built up an abundance of technological know-how and assets, and developed a brand name that has become a byword for high quality and trust- worthy products. That is our heritage, and the base from which we will work to create new value that meets the needs and expectations of our customers around the world. Through our efforts, we will open a new chapter in Toshiba’s history, and assure a dynamic Toshiba Group that contrib- utes to society. In fiscal 2003, to March 31, 2004, Toshiba forecasts a 1% increase against fiscal 2002 in consolidated net sales, to ¥5,700 billion. Operating income is projected to rise ¥54.5 billion, to ¥170 billion. We anticipate an increase of ¥36.9 billion in net income before taxes, to ¥90 billion, and a gain of ¥21.5 billion in net income, to ¥40 billion. Another way in which Toshiba will progress toward growth is through evolutionary improvements in its culture and busi- ness practices. One area where this is particularly important is our “TM1 Movement,” or “Time to Market No. 1.” This program is dedicated to cutting lead times at every stage of product development and manufacture, from the planning process through to customers. To realize our goal of a mar- ket-centric approach to management, we are doing all we can to remove barriers between product development, pro- curement, production, distribution and sales and marketing, while raising efficiency in each of these activities. This will assure our ability to cut lead times and launch differentiated products in advance of other companies. Management Forecast for Fiscal 2003 Closing Remarks Pursuing Further Growth Developments for Fiscal 2003 Becoming a Company with Committees Taizo Nishimuro Chairman of the Board Tadashi Okamura Director, President and Chief Executive Officer F