Yebisu Garden Place Tower 20-3, Ebisu 4-chome Shibuya-ku, Tokyo 150 Telephone 03-5424-8100
May 19, 1995
To the Board of Directors and Shareholders of NEC Corporation
(Nippon Denki Kabushiki Kaisha)
We have audited the accompanying consolidated balance sheets of NEC Corporation and its consolidated subsidiaries as of March 31, 1994 and 1995, and the related consolidated statements of income and retained earnings and of cash flows for each of the three years in the period ended March 31, 1995, stated in yen. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
The company has not applied Statement of Financial Accounting Standards ("SFAS") No. 115 in accounting for certain investments in debt and equity securities but has provided the disclosures as required by the provisions of SFAS No. 115. The effects on the consolidated financial statements of not adopting SFAS No. 115 are summarized in Note 4 to the consolidated financial statements.
The company has not presented segment information for each of the three years in the period ended March 31, 1995. The presentation of segment information concerning operations in different industries, and foreign operations and export sales is required by accounting principles generally accepted in the United States of America for a complete presentation of consolidated financial statements.
In our opinion, except for the effects of the departure from SFAS No. 115 in accounting for certain investments in debt and equity securities as discussed in the third paragraph, and the omission of segment information as discussed in the fourth paragraph of this report, the consolidated financial statements audited by us present fairly, in all material respects, the financial position of NEC Corporation and its consolidated subsidiaries at March 31, 1994 and 1995, and the results of their operations and their cash flows for each of the three years in the period ended March 31, 1995, in conformity with accounting principles generally accepted in the United States of America.
As discussed in Note 1 to the consolidated financial statements, in the year ended March 31, 1994, the company changed its method of accounting for income taxes as required by the provisions of SFAS No. 109, "Accounting for Income Taxes."