Contents
1

An Outline of the Toshiba Machine Group
Corporate Information2

Foreword

4

Financial Highlights (consolidated)

5

Overseas Operations for Fiscal 20126

Overseas Offices
Financial Review

8

Consolidated Balance Sheet

10

Consolidated Statement of Income

11

Consolidated Statement of Comprehensive Income
Consolidated Statement of Changes in Net Assets

12

Consolidated Statement of Cash Flows13

Notes to Consolidated Financial Statements

31

Report of Independent Auditors

32

Directors & Auditors

An Outline of the Toshiba Machine GroupA highly respected integrated machine building group, internationallyrespected for its total capability in the production of quality plastic processing
machinery, die-casting machines, machine tools, precision machinery, hydraulicequipment, and electronic controls.

Based on their highly innovative technology, expertise, and experience
nurtured over decades as one of the world’s leading machine builders, the Toshiba
Machine Group’s global-type solution business provides customers, in suchvarious industries as nano-technology, optics, electronics and automotives withtotal satisfaction by careful analysis and the recommendation of optimum-type
solutions to their requirements.

Corporate Information (as of March 31, 2012)
Company Name:TOSHIBA MACHINE CO., LTD.

Headquarters: 	2068-3, Ooka, Numazu-shi,
Shizuoka-ken 410-8510, Japan
Established:

1938

Capital:¥12,484million (US$152million)

Shares of Common Stock
Issued and Outstanding:

166,885,530 shares

Number of Shareholders:

13,612

Number of Employees:

1,837 (Consolidated: 3,157)

1

Foreword 2012
The Toshiba Machine Group focused on midterm management plan, “TM AC Plan (Toshiba
Machine Adapt to the Change Plan)”, begun April 1st, 2010. In the TM AC Plan, we aim topromote "advancement strategies" and "expansion strategies" in tandem.
The "advancement strategies" focus on advanced products using our core technologies tocontribute to the new industrial pyramid aiming at "energy" and "ecology" using our coretechnologies whereas the "expansion strategies "revitalize our existing products to expand themarkets in developing countries that are in the skirt of the current industrial pyramid.
Fiscal year 2012 was characterized by a gradual recovery of the global economy against abackground of firming demand in China, Southeast Asia, and U.S.A., though influenced by
Europe’s financial crisis and China’s monetary policy in overseas markets. The domestic economy
was greatly influenced by the yen’s long-term appreciation, as well as the beginnings of economic
relief in the wake of the Great East Japan Earthquake.
The outlook for machinery firms in general is one of recovery due to demand in China, otherdeveloping countries, and U.S.A.
Under these severe management circumstances and the changing industrial structure, from
April 1st, 2011 we initiated TM AC Plan2, and worked hard on developing new products fordomestic and overseas markets, expanding markets, gaining orders, and reforming our financial
structure.
As a result, in this fiscal year, consolidated orders received totaled 123,075million(US$1,479million), a 18.2% increase over the previous term. Consolidated net sales totaled\119,519million (US$1,454million), a 24.9% increase over the previous term, and, end of this fiscal
year, consolidated backlog totaled \59,915million (US$729million), a 6.3% increase over theprevious term.
With respect to profit and loss, consolidated operating profit totaled \7,411million(US$90million), a 83.9% increase over the previous term, income before income taxes andminority interests totaled \9,149million (US$111million), a 144% increase over the previous term,
and consolidated net profit of current term totaled \6,721million (US$ 82million), a 104.9%
increase over the previous term.
The year-end dividend for this term, \5.0(US$0.06) per share, was distributed to ourstockholders for the period ending on March 31, 2012, resulting in a total annual dividend of\9.0(US$0.1) per share.
Key factors affecting the domestic and overseas outlook include; the lengthening of Europe’s
financial crisis, the slow-down in economic growth in developing overseas markets, the yen’s long-2

term appreciation, continuing power shortages, rising oil prices, and more intense competition
among domestic and overseas companies. However, we will make every effort to pioneer newmarkets, introduce new products corresponding to changing market needs, and further reduce
costs through efficiency, to improve profit.
In April 1st 2012 we initiated “TM AC Plan”, with action plans designed around "advancement
strategies" and "expansion strategies" as a basis concept to drive us forward as a genuine global
company. We will gather the power of the Toshiba Machine Group behind this basic policy, tochange and reinforce our business foundation, and drive the expansive business strategy andexpanding business strategy.
We will make every effort to realize complete management of quality and the environment
based on ISO9001 and ISO14001 standards while, as a responsible corporate citizen, training andeducating our workforce to forge the future of our Company in observance of all rules andregulations, and in fulfillment of all social responsibilities.

Yukio Iimura
President	July, 2012

3

FINANCIAL HIGHLIGHTS (consolidated)
Net sales

2012

2011

2010

2009

2008

¥119,519¥95,653¥74,694¥121,890¥148,779¥69,997¥56,470¥84,760¥101,628¥21,628¥20,040¥25,594¥28,180¥4,028¥(1,816)¥11,536¥18,971¥3,749¥(2,032)¥9,866¥20,520¥469¥2,499¥4,563¥6,610¥3,280¥(4,531)¥5,303¥13,910¥2,410———¥21.57¥(29.80)¥34.18¥86.79

¥4.50

¥4.50

¥12.00¥15.00¥131,203¥115,806¥132,734¥157,998¥65,325¥63,372¥68,712¥70,004¥2,044¥625¥5,550¥3,098¥2,322¥2,514¥2,561¥2,170¥1,399¥1,567¥1,684¥1,742

3,140

3,067

3,148

3,246

$1,454,179
Cost of sales¥88,312$1,074,486

Selling, general andadministrative expenses
Operating income (loss)¥23,796$289,524¥7,411$90,169

Income (loss) before income
taxes and minority interests
Income taxes¥9,149$111,315¥2,428$29,541

Net income (loss)¥6,721$81,774

Comprehensive income¥6,840$83,222Per common share:
Net income (loss)¥44.21$0.54

Cash dividends

¥9.00
$0.11

Total assets¥142,297$1,731,318

Net assets¥71,101$865,081

Capital expenditure(property, plant and equipment)
Depreciation¥1,052$12,800¥2,276$27,692

R & D Cost

¥1,582$19,248

Number of employees

3,157

In millions of yen (thousands of U.S. dollars) except for number of
employees and per-share data.

4

Overseas Operations for Fiscal 2012
Fiscal year 2012 was characterized by agradual recovery of the global economy against
a background of firming demand in China,
Southeast Asia, and U.S.A., though influenced
by Europe’s financial crisis and China’s
monetary policy in overseas markets. The
domestic economy was greatly influenced by
the yen’s long-term appreciation, as well as the
beginnings of economic relief in the wake of
the Great East Japan Earthquake. The outlook
for machinery firms in general is one ofrecovery due to demand in China, otherdeveloping countries, and U.S.A.
Under these severe management
circumstances, the Toshiba Machine Groupfocused on midterm management plan, “TMAC Plan (Toshiba Machine Adapt to ChangePlan)”, and made an intensive effort to develop
products, explore new markets, secure orders
in Japan and overseas, and improve ourfinancial structure.
Total consolidated overseas sales for thisterm was ¥66,876 million (US$814million),
which is a 33.5% increase over the previous
term. This growth was led by capital
investment in the automobile, consumer
electronics, and hydraulic equipment
industries in China, Southeast Asia, and U.S.A.
More specifically, injection molding
machines, die-casting machines, machine tools,
and hydraulic equipment were our leading
products, and the most common destination
was the Asian region.
During 2011, we focused on businessstructural reformation designed to best ensure
the success of the TM AC Plan. From April of2012 we began “TM AC Plan iii”. This planestablishes “advancement strategies” and“expansion strategies” as our core businessconcept; reinforcing the business structure of
our sales, technologies, and production, andcreating universal recognition of the Toshiba
Machine brand. We will gather the power of the
Toshiba Machine Group to ensure our
emergence as a genuine global company.

Net Sales
Millions of yen

148,779
23,156

Total
Other
Products
24,952

119,519
121,890

37,47019,24838,22688,152

2008

95,65374,694
12,57928,83922,78923,574

31,33465,726

MachineTools

Moldingry
Machine49,28964,37530,780

2009

2012

2011

2010

Total Sales & Overseas Sales
Millions of yen
164,385

148,779

119,519
121,890es
Total Sal

95,65374,694
66,87674,3602007

67,15552,4102009

2008

35,7632010

Overseas

Sales

50,07720112012

Export Percentages by Major Products
Other
Products

HydraulicEquipment

Molding
Machinery

4%12%

Machine
Tools

19%

65%

5

Overseas Offices■ East Asia ■SHANGHAI TOSHIBA MACHINE CO., LTD.
Head Office4788, Jin Du Road,
Xinzhuang Industry Zone,
Shanghai, 201108,
PEOPLE’S REPUBLIC OF CHINA
Tel : [86]-(0)21-5442-0606
Fax : [86]-(0)21-5866-2450

Dalian Office

Room 1304, Gugeng International
Business Building, 138th Jinma Road,
Dalian Economic & Technological
Development Zone, Dalian, 116600,
PEOPLE’S REPUBLIC OF CHINA
Tel : [86]-(0)411-8732-7911
Fax : [86]-(0)411-8732-6899

Beijing Office

Beijing Fortune Building, Room No. 2014,
5 Dong Sanhuan Bei-Lu, Chaoyang
District, Beijing, 100004,
PEOPLE’S REPUBLIC OF CHINA
Tel : [86]-(0)10-6590-8977~8
Fax : [86]-(0)10-6590-8979

Tianjin Office12-32, Xinshuiyuan, Youyinan Road,
Hexi District, Tianjin, 300221,
PEOPLE’S REPUBLIC OF CHINA
Tel : [86]-(0)22-8836-3056
Fax : [86]-(0)22-2416-0380

Wuhan Office

Room A-1205, Kaiyue Building, No. 62,
Longyang Road, Hanyang District, Wuhan,
430051PEOPLE`S REPUBLIC OF CHINA
Tel : [86]-(0)27-8455-0038
Fax : [86]-(0)27-8451-6389

TOSHIBA MACHINE (SHANGHAI) CO., LTD.
4788, Jin Du Road,
Xinzhuang Industry Zone,
Shanghai, 201108,
PEOPLE’S REPUBLIC OF CHINA
Tel : [86]-(0)21-5442-5455
Fax : [86]-(0)21-5442-5466

TOSHIBA MACHINE (SHENZHEN)
CO., LTD.

Room 608, Building 2, Animation Park,
Yuehai Road, Nanhai Street, Nanshan
District, Shenzhen, 518054,
PEOPLE’S REPUBLIC OF CHINA
Tel : [86]-(0)755-8625-0599
Fax : [86]-(0)755-8625-0522

Guangzhou Office

Room 707, No.93, Linhexi Road, Tianhe
District, Guangzhou, 510610,
PEOPLE’S REPUBLIC OF CHINA
Tel : [86]-(0)20-8755-1180
Fax : [86]-(0)20-8755-1185

Dongguan Office

TOSHIBA MACHINE (THAILAND) CO., LTD.
127/28 Panjathanee Tower, 23rd Floor,
Nonthree Road, Khwaeng Chong
Nonthree, Khet Yannawa, Bangkok,
10120, THAILAND
Tel : [66]-(0)2-681-0158~61
Fax : [66]-(0)2-681-0162

Chonburi Branch

656 Sukumvit Road, Tambol Seansuk,
Ampur Muang, Chonburi 20130,
THAILAND
Tel : [66]-(0)38-341-670
Fax : [66]-(0)38-341-759

TMT SERVICE & ENGINEERING CO., LTD.

39 M.6 Phaholyothin Road,
Thumbol Klongnueng,
Amphur Klongluang, Pathumthani 12120
THAILAND
Tel : [66]-(0)2-516-2930~31
Fax : [66]-(0)2-516-2928

TOSHIBA MACHINE S.E. ASIA PTE. LTD.
Head Office

112, Jin Di Ming Yuan, No. 168, Jie Fang
Xi Road, Suzhou, 215007,
PEOPLE’S REPUBLIC OF CHINA
Tel : [86]-(0)512-6855-0387
Fax : [86]-(0)512-6855-0562

Suite C, 6th floor, Xingye Building, 89
Lianfeng Road, Changan Town,
Dongguan, PEOPLE'S REPUBLIC OF
CHINA
Tel : [86]-(0)769-8155-8299
Fax : [86]-(0)769-8155-5977

No. 24 Tuas Avenue 4,
Singapore 639374, SINGAPORE
Tel : [65]-68611455
Fax : [65]-68612023

Xiamen Office

TOSHIBA MACHINE HONG KONG LTD.
Suite 1508, 15th Floor, Tower 3, China
Hong Kong City,
33 Canton Road, Tsim Sha Tsui,
Kowloon, HONG KONG
Tel : [852]-2735-1868
Fax : [852]-2735-1872

70-G, Jalan SS21/62,
Damansara Utama, 47400 Petaling Jaya,
Selangor Darul Ehsan, MALAYSIA
Tel : [60]-(0)3-77297544
Fax : [60]-(0)3-77297545

Chongqing Office

TOSHIBA MACHINE TAIWAN CO., LTD.

Penang OfficeSuzhou Office

Room A303, Xinxin Jingdi Building,
No.396, Jia He Road, Huli District,
Xiamen, 361009,
PEOPLE’S REPUBLIC OF CHINA
Tel : [86]-(0)592-5596-381
Fax : [86]-(0)592-5596-382
Room 19-1, Zhongxin Building, No. 1,
Jianxinnan Road, Jiang Bei District,
Chongqing, 400020, PEOPLE'S
REPUBLIC OF CHINA
Tel : [86]-(0)23-6777-5805
Fax : [86]-(0)23-6790-5542

Ningbo Office

Room 713, Building 2, Silver City
National, No 668 jingjia Road jiangdong
District, Ningbo, Zhejiang, 315040,
PEOPLE`S REPUBLIC OF CHINA
Tel : [86]-(0)574-2795-9198
Fax : [86]-(0)574-2795-9199

6■ South East Asia ■No. 62, Lane 188, Jui-Kuang Road,
Nei-Hu District, Taipei­­, 114-91, TAIWAN
Tel : [886]-(0)2-2659-6558
Fax : [886]-(0)2-2659-6381

Kuala Lumpur Branch

No. 61, Jalan Prai Jaya 4,
Bandar Prai Jaya, 13600 Prai, Penang,
MALAYSIA
Tel : [60]-(0)4-3980086
Fax : [60]-(0)4-3989652

Jakarta Office

ANZ Tower, 20th Floor,
J1. Jenderal Sudirman Kav. 33A,
Jakarta, 10220, INDONESIA
Tel : [62]-(0)21-5790-1217~8
Fax : [62]-(0)21-5790-1219

TOSHIBA MACHINE (INDIA) PVT. LTD.
Head Office

6A, 6th Floor, Uppal’s Plaza, M-6, Jasola
District Centre, New Delhi - 110025,
INDIA
Tel : [91]-(0)11-4329-1111
Fax : [91]-(0)11-4329-1127

Chennai Branch

Regus Office Centre, Olympia Tech Park,
Office 212, Level 3, Altius Building No. 1,
Sidco Industrial Estate, Guindy, Chennai 600032, INDIA
Tel : [91]-(0)44-4299-4161
Fax : [91]-(0)44-4299-4300

TOSHIBA MACHINE (VIETNAM) CO., LTD.
Head Office

2nd Floor, VIT Tower, No. 519 Kim Ma
Street, Ngoc Khanh Ward, Ba Dinh
District, Hanoi, VIETNAM
Tel : [84]-(0)4-2220-8700~1
Fax : [84]-(0)4-2220-8702

Ho Chi Minh Office

9th Floor, Unit 9.7B, E-Town Building,
364 Cong Hoa Street, Ward 13, Tan Binh
District, Ho Chi Minh City, VIETNAM
Tel : [84]-(0)8-3810-8658
Fax : [84]-(0)8-3810-8657■ North America ■■ Europe ■TOSHIBA MACHINE CO., AMERICA
Head Office

TOSHIBA MACHINE (EUROPE)G.m.b.H.
Head Office

755 Greenleaf Avenue,
Elk Grove Village, IL 60007, U.S.A.
Tel : [1]-847-593-1616
Fax : [1]-847-593-0897
URL http://www.toshiba-machine.com/

Los Angeles Office1440 South Balboa Avenue,
Ontario, CA 91761, U.S.A.
Tel : [1]-909-923-4009
Fax : [1]-909-923-7258

Oskar-Messter-Strasse 22,85737 Ismaning, GERMANY
Tel : [49]-(0)89-9509499-0
Fax : [49]-(0)89-9509499-25

U.K. Branch

66 Burners Lane, Kiln Farm,
Milton Keynes MK11 3HD
UNITED KINGDOMTel : [44]-(0)1908-562327
Fax : [44]-(0)1908-562348

New Jersey Office1578 Sussex Turnpike, Randolph,
NJ 07869, U.S.A.
Tel : [1]-973-252-9956
Fax : [1]-973-252-9959

Atlanta Office6478 Putnam Ford Drive, Suite#106, Woodstock, GA 30189, U.S.A.
Tel : [1]-678-494-8005
Fax : [1]-678-494-8006

New York Office

10 Corporate Park Drive, Suite C,
Hopewell Junction, NY 12533, U.S.A.
Tel : [1]-845-896-0692
Fax : [1]-845-896-1724

TOSHIBA MACHINE COMPANY CANADA
LTD.
6 Shields Court, Suite 101, Markham,
Ontario, L3R 4S1, CANADA
Tel : [1]-905-479-9111
Fax : [1]-905-479-6098
URL http://www.toshibamachine.ca/

7

Financial Review
CONSOLIDATED BALANCE SHEETTOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIESMarch 31, 2012
Thousands of
U.S. dollars

Millions of yen
ASSETS
Current assets:
Cash and time deposits (Notes 11 and 15)
Marketable securities (Notes 5 and 11)
Notes and accounts receivable, trade (Note 11)
Allowance for doubtful receivables
Net receivables
Inventories:
Finished products
Work in process
Raw materials and supplies
Total inventories
Deferred tax assets (Note 14)
Other current assets
Total current assets
Property, plant and equipment, net (Notes 6, 10 and 13)
Intangible assets
Investments and other assets:
Investments in:
Unconsolidated subsidiaries and affiliates
Other securities (Notes 5 and 11)Long-term loans
Deferred tax assets (Note 14)
Other investments
Total investments and other assets
Total assets

2012

2011

2012

¥20,689
13,50045,730(173)
45,557¥18,513
17,50035,195(171)
35,024$251,722
164,254556,394(2,105)554,289

5,008
21,287
81
26,376
3,158
1,895
111,175

4,785
20,93578
25,7982,535
1,792
101,162

60,932258,997986
320,915
38,42323,055
1,352,658

21,12022,241

256,966

434

468

5,280

4,222
4,201
84
446
615
9,568
¥142,297

2,358
3,886
105
343
640
7,332
¥131,203

51,36951,113
1,022
5,426
7,484
116,414$1,731,318

See accompanying notes to financial statements.

8

Millions of yen
LIABILITIES AND NET ASSETS
Current liabilities:
Short-term bank loans (Notes 7, 11 and 13)
Current portion of long-term debt (Notes 7 and 11)
Notes and accounts payable, trade (Note 11)
Income taxes payable (Note 14)
Accrued expenses
Warranty reserve
Other current liabilities (Note 7)
Total current liabilities
Long-term liabilities:
Long-term debt (Notes 7 and 11)Long-term accounts payable, otherAccrued employees’ retirement benefits (Note 8)
Accrued directors’ retirement benefits
Asset retirement obligations
Deferred tax liabilities (Note 14)
Other long-term liabilities (Note 7)
Total long-term liabilities
Total liabilities
Contingent liabilities (Note 9)
Net assets:
Shareholders’ equity: (Note 19)
Common stock
Authorized –360,000,000 shares–
166,885,530 shares
IssuedAdditional paid-in capital
Retained earnings
Treasury stock, at cost (14,852,644 shares in 2012, 14,851,270 shares in 2011)
Total shareholders’ equity
Accumulated other comprehensive income
Unrealized holding gain on securities, net of tax
Deferred gains or losses on hedge, net of tax
Foreign currency translation adjustments
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets

Thousands of
U.S. dollars

2012

2011

2012

¥11,410700
30,676
2,616
5,562
351
5,041
56,356¥10,713700
27,340
711
4,627
208
5,944
50,243$138,825
8,517
373,233
31,82967,672
4,271
61,333
685,680

6,100
42
8,238
50
51
324
35
14,84071,196

6,800
99
8,439
56
50
146
45
15,63565,87874,218511
100,231
608
621
3,942
426
180,557
866,237

12,485
19,60149,408(10,039)
71,455

12,485
19,60143,751(10,039)
65,798151,904
238,484
601,144(122,144)
869,388

1,530(13)(1,871)(354)
71,101¥142,297

1,236
1(1,710)(473)
65,325¥131,203

18,615(158)(22,764)(4,307)865,081$1,731,318

See accompanying notes to financial statements.

9

CONSOLIDATED STATEMENT OF INCOMETOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIES
Year ended March 31, 2012
Thousands of
U.S. dollars

Millions of yen
2012¥119,519
88,312
31,207
23,796
7,411

2011¥95,653
69,99725,656
21,6284,028

2012$1,454,179
1,074,486
379,693289,524
90,169

217
179
160
1,889
6
217
198
2,866

136
179
—
305
—
—
336
956

2,640
2,178
1,947
22,983
73
2,640
2,409
34,870

215
3
—

174
13
119

2,616
37
—

463
224
14
—

466
185
25
32

5,633
2,725
170
—

—
8
201
1,128
9,149

24
5
192
1,235
3,749

—
97
2,446
13,724111,315

Net income before minority interests
Net income

2,916
(488)
2,428
6,721
¥6,721

987
(518)
469
3,280
¥3,28035,479(5,937)29,541
81,774$81,774

Net income per share of common stock2012¥44.21

2011¥21.57

U.S. dollars
2012
$0.52

Net sales
Cost of sales (Note 17)
Gross profit
Selling, general and administrative expenses (Notes 16 and 17)
Operating income
Other income:Interest and dividend
Rent income
Foreign exchange gain

Equity in earnings of affiliates
Gain on sales of property, plant and equipment
Gain on sales of investments in other security
OthersOther expenses and losses:
Interest
Loss on sales of notes receivable
Foreign exchange loss
Amortization of transitional obligation for
employees’ retirement benefits (Note 8)
Brand fee expense
Loss on disposal of property, plant and equipment
Loss on amendment of retirement benefit plan
Loss on application of accounting standard for asset
retirement obligations
Loss on devaluation of investment securities (Note 5)
OthersIncome before income taxes and minority interests
Income taxes (Note 14)
Current
DeferredYen

See accompanying notes to financial statements.

10

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMETOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIES
Year ended March 31, 2012
Millions of yen
Net income before minority interests
Other comprehensive income:Unrealized holding gain on securities, net of tax
Deferred gains or losses on hedge, net of tax
Foreign currency translation adjustments
Total other comprehensive income

Total comprehensive income
Total comprehensive income attributable to parent company’s interest
Total comprehensive income attributable to minority interests

Thousands of
U.S. dollars

2012¥6,721

2011¥3,2802012$81,774

294
(14)
(161)
119
¥6,840

(281)
(2)
(587)
(870)
¥2,4103,577(170)(1,959)1,448$83,222¥6,840—¥2,410—$83,222—

See accompanying notes to financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETSTOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIES
Year ended March 31, 2012
Millions of yen

Balance at March 31, 2010

Number ofsharesCommonstock

Additional
paid in capital

Retainedearnings

166,885,530¥12,485¥19,601¥40,927 ¥(10,038)¥1,517¥3¥(1,123)

(281)
1,236

(2)
1

(587)
(1,710)294¥1,530

(14)
¥(13)

(161)
¥(1,871)(1)(456)
12,485

19,60143,751(10,039)

6,721

Net income(0)

Purchases of treasury stock
Cash dividends
Net changes in items other thanshareholders’ equity
Balance at March 31, 2012
166,885,530

Deferred gains or
Unrealized gain on
Translation
losses on hedge,
securities, net of tax
adjustments
net of tax

3,280

Net income
Purchases of treasury stock
Cash dividends
Net changes in items other thanshareholders’ equity
Balance at March 31, 2011
166,885,530

Treasurystock(1,064)¥12,485¥19,601¥49,408 ¥(10,039)

Thousands of U.S. dollars
Commonstock
Balance at March 31, 2011
Net income

Additional
paid in capital

Retainedearnings

Deferred gains or
Unrealized gain on
Translation
losses on hedge,
securities, net of tax
adjustments
net of tax$151,904 $238,484 $532,315 $(122,144) $15,038$12 $(20,805)

81,774(0)Purchases of treasury stock
Cash dividends
Net changes in items other thanshareholders’ equity
Balance at March 31, 2012

Treasurystock(12,945)
3,577$151,904 $238,484 $601,144 $(122,144) $18,615(170)(1,959)$ (158) $ (22,764)

See accompanying notes to financial statements.

11

CONSOLIDATED STATEMENT OF CASH FLOWSTOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIES
Year ended March 31, 2012
Millions of yen
Operating activities:
Income before income taxes and minority interests
Adjustments to reconcile income before income taxes and minority
interests to net cash provided by operating activities:
Depreciation
Allowance for doubtful receivables
Warranty reserve
Employees’ retirement benefit
Directors’ retirement benefit
Interest and dividend income
Interest expense
Loss on sales and disposal of property, plant and equipment
Gain on sale of investments in other security
Equity in earnings of affiliates
Changes in operating assets and liabilities:
Notes and accounts receivable, trade
Inventories
Notes and accounts payable, trade
Advances received
Accrued expenses
Long-term accounts payable, other
Others
Sub totalInterest and dividend income received
Interest paid
Income taxes paid
OthersNet cash provided by operating activities
Investing activities:
Acquisition of investment in other security
Proceeds from sales of investments in other security

Acquisition of investment in unconsolidated subsidiary
Proceeds from sales of investments in unconsolidated subsidiaries
Payments for contributions in capital of unconsolidated subsidiaries

Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchases of intangible assets
Increase (decrease) in short- term loans receivable
Payments of long-term loans receivable
Repayments for long-term loans receivable
OthersNet cash used in investing activities
Financing activities:
Increase in short-term bank loans
Repayments for long-term loans payable

Purchases of treasury stock
Cash dividends paid
OthersNet cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year (Note 15)

12

Thousands of
U.S. dollars

2012

2011

¥9,149¥3,749$111,315

2,276
(91)
143
(201)
(6)
(217)
215
8
(1,889)

2,322
(244)
135
(559)
(30)
(136)
174
24
—
(305)

27,692(1,107)1,740(2,446)(73)(2,640)2,616
97(2,640)(22,983)(10,536)
(578)
3,336
(1,491)
940
(57)
590
1,374
242
(220)
(1,025)(3)368(6,562)(6,109)10,027
2,830
1,022
53
(887)
5,504
136
(180)
189
(14)
5,635

(128,191)(7,032)40,589(18,141)
11,437(694)
7,178
16,717
2,944(2,677)(12,471)
(35)
4,478

(100)
293

—
—
(31)
612
—
(1,326)
4
(106)
0
(6)
33
(21)
(841)

(1,217)
3,565

(217)

(28)
—

(24)

(1,122)
41
(64)
(0)
—
21
36
(947)
698

(700)

(0)
(1,064)(28)(1,094)(151)(1,824)36,013¥34,189

206
—
(1)
(456)
(57)
(308)
(466)
4,020
31,993¥36,013

2012

(341)
—

(292)

(13,651)
499
(779)
(0)
—
256
438
(11,522)8,493(8,517)(0)(12,945)(342)(13,311)(1,837)(22,192)
438,168$415,976

See accompanying notes to financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSTOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIES

1. Basis of Presenting Consolidated
Financial Statements
The accompanying consolidated financial
statements of TOSHIBA MACHINE CO., LTD. (the“Company”) and its consolidated subsidiaries areprepared on the basis of accounting principles
generally accepted in Japan, which are different
in certain respects as to the application anddisclosure requirements of International Financial
Reporting Standards, and are compiled fromthe consolidated financial statements preparedby the Company as required by the Financial
Instruments and Exchange Law of Japan. The
preparation of these financial statements requires
management to make estimates and assumptions
that affect the reported amounts of assets andliabilities and disclosure of contingent assets andliabilities at the dates of the consolidated financial
statements and the reported amounts of revenues
and expenses during the reporting periods. Actual
results could differ from these estimates.
The consolidated balance sheet, andconsolidated statements of income, changes
in net assets, cash flows and comprehensive
income incorporate certain reclassifications
and rearrangements in order to present thesestatements in forms which are more familiar toreaders of these statements outside of Japan. In
addition, the notes to the consolidated financial
statements include information which is not
required under accounting principles generally
accepted in Japan but is presented herein as
additional information.

2. Summary of Significant Accounting
Policies(a) Basis of consolidation and accounting forinvestments in unconsolidated subsidiaries andaffiliates
The consolidated financial statements include
the accounts of the Company and its consolidated
subsidiaries (together the “Companies”). Certain
immaterial subsidiaries are not consolidated, inwhich the investments are stated at cost.
All significant intercompany transactions andaccounts and unrealized intercompany profits
among consolidated entities are eliminated inconsolidation.
The cost in excess of underlying interest in net
assets of consolidated subsidiaries at the time ofacquisition, which is included in intangible assetsof the accompanying consolidated balance sheet,is deferred and amortized within the five-year
period.
Investments in affiliates (15 to 50 percentowned companies) in which the ability to exercise
significant influence exist, except immaterial
investments, are accounted for using the equity
method.
Immaterial investments in affiliates are statedat cost.
(b) Translation of foreign currencies
Monetary assets and liabilities denominated inforeign currencies are translated into Japanese
yen at the exchange rate prevailing at the balance
sheet dates except for those perfectly hedged byforward contracts, which are translated using thecontracted rate.
The foreign exchange gains and losses fromtranslation are recognized in the consolidated
statement of income to the extent that they are
not hedged by foreign exchange derivatives.
All assets and liabilities of foreign consolidated
subsidiaries are translated at the current rates
at the respective balance sheet dates and allincome and expense accounts are translated
at the current rates at end of the term. The
components of shareholders’ equity are translated
at their historical exchange rates. Differencesin transaction are directly charged to foreign
currency translation adjustments in new assets.
(c) Securities
Securities owned by the Companies have beenclassified into two categories, held-to-maturity
debt securities or other securities, in accordancewith the accounting standard for financial
instruments.
Held-to-maturity debt securities are carried atamortized cost. Marketable securities classified asother securities are carried at fair value with any
changes in unrealized gain or loss, net of income
taxes, directly included in net assets.
Non-marketable securities classified as othersecurities are carried at cost. Cost of securities
sold is determined by the moving average method.
(d) Inventories
Finished products and work in process arestated at the lower of cost, determined by theindividual identification method, or their net
realizable value. Raw materials and supplies arestated at the lower of cost, determined by themoving average method, or their net realizablevalue.

13(e) Allowance for doubtful receivables
The allowance for doubtful receivables isstated at the amount determined based on thedefault ratio sustained over a specific period in
the past and the estimated uncollectible amountdetermined based on the analysis of certain
individual accounts, including probable bad debts
and claims in bankruptcy.
This amount is considered sufficient to coverpossible losses on collection.
(f) Warranty reserve
Warranty reserve has been provided forwarranty costs to be incurred during the warranty
period based on the historical experience.
(g) Employees bonuses
The bonuses to the employees are paid twice ayear and accrued based on the estimated amounts
incurred and to be paid in the subsequent period.
(h) Depreciation of property, plant and equipment(excluding leased assets)
Depreciation of buildings is principally
computed by the straight-line method anddepreciation of other property, plant andequipment is computed by the declining balancemethod over the estimated useful lives ofrespective assets, principally ranging from 3 - 60
years for buildings and structures, and from 3 - 22years for machinery, equipment and vehicles.
(i) Amortization of intangible assets
Computer software held for internal use isamortized by the straight-line method over the
relevant economic useful life (5 years). The otherintangible assets, including patent rights, areamortized by the straight-line method over theestimated useful lives of respective assets.
(j) Leased assets
Leased assets under finance lease transactions
that do not transfer ownership to the lessee aredepreciated by the straight-line method over thelease term with no residual value.
H o w e v e r, f i n a n c e l e a s e t r a n s a c t i o n s ,commencing on or before March 31, 2008, that
do not transfer ownership to the lessee, areaccounted for as operating lease transactions.
(k) Derivative financial instruments
All derivatives are stated at fair value. Gainsor losses arising from changes in fair value arecharged or credited to income for the period
in which they arise, except for derivatives thatare designated as hedging instruments. Gainsor losses arising from changes in fair value ofthe derivatives designated as cash flow hedging

14

instruments, net of the applicable income taxes,
are reported as a component of net assets.
(l) Income taxes
The Companies accrue current income taxes
based on taxable income.
The Companies include many temporary
difference items for financial reporting purpose
which, in the case of expenses, are not currently
deductible and in the case of income, are notcurrently taxable.
Income tax effects on such temporary
differences between tax and financial reporting
purposes are reflected as deferred income taxes
in the consolidated financial statements using theasset and liability method.
(m) Employees’ retirement benefits
Accrued employees’ retirement benefits areprovided based on the projected retirement
benefit obligation and the fair value of plan assets
at year-end.
The unrecognized transitional obligation is
being amortized over 15 years. Actuarial gainor loss is amortized by the straight-line method
over the average remaining years of service of
employees.
(n) Directors’ retirement benefits
Domestic consolidated subsidiaries accrued
an estimated amount calculated in accordancewith its internal rule for retirement benefits for
directors.
(o) Amounts per share of common stock
Net income per share is computed based on theweighted-average number of shares of common
stock outstanding during a year.
Diluted net income per share is not presented
since the Company has never issued any securities
with a dilutive effect, such as bonds with warrants
and convertible bonds. Cash dividends per
share represent the actual amount declared as
applicable to the respective years.
(p) Cash equivalents
In preparing the consolidated statementof cash flows, cash on hand, readily available
deposits and short-term highly liquid investmentswith maturities of not exceeding three months at
the time of purchase are considered to be cash
and cash equivalents.
(q) Reclassifications
Certain accounts in the consolidated financial
statements as of and for the year ended March 31,
2011 have been reclassified to conform to the year
ended March 31, 2012 presentation.

3. U.S. Dollar Amounts
U.S. dollar amounts are included solely for the convenience of the readers and have been translated
at the rate of ¥82.19=U.S.$1, the approximate exchange rate prevailing in the Japanese foreign exchange
market on March 31, 2012. This translation should not be construed as a representation that the yenamounts actually represent, have been, or could be converted into U.S. dollars.

4. Accounting Changes(a) Accounting standard for accounting changes and error corrections
Effective from the year ended March 31, 2012, the Companies adopted the new accounting standard“Accounting Standard for Accounting Changes and Error Corrections” (ASBJ Statement No.24,
issued December 4, 2009) and “Guidance on Accounting Standard for Accounting Changes and Error
Corrections” (ASBJ Guidance No.24, issued December 4, 2009).

5. Securities
Information regarding marketable securities classified as other securities included in investment
securities were as follows:

Equity securities

Equity securities

Acquisition
cost¥1,716¥1,7162012
Carrying
value¥4,031¥4,031Millions of yen
Unrealized Acquisition
gains
cost
¥1,700¥2,315¥1,700¥2,3152011
Carrying
value¥3,716¥3,716

Unrealized
gains¥2,016¥2,016

Thousands of U.S. dollars
2012
Acquisition Carrying Unrealized
cost
value
gains
$20,878$49,045$28,167$20,878$49,045$28,167

Losses on devaluation of investment securities for the years ended March 31, 2012 and 2011 were ¥8
million ($97 thousand) and ¥5 million, respectively.
Negotiable certificates are classified as non-marketable securities of deposit of ¥13,500 million($164,254 thousand) and ¥17,500 million as of March 31, 2012 and 2011, respectively. Non-marketable
equity securities as other securities primary consist of ¥170 million ($2,068 thousand) and ¥170 million
as of March 31, 2012 and 2011, respectively.

15

6. Property, Plant and Equipment
Property, plant and equipment at March 31, 2012 and 2011 consisted of the following:

Land
Buildings and structures
Machinery and equipment
VehiclesTools, furniture and fixtures
Lease assets
Construction in progress
Less accumulated depreciation

Millions of yen
2011
2012
¥6,224¥6,20334,17934,24830,53929,832
462
388
6,779
6,895
118
140
469
188
78,77077,894(56,529)(56,774)¥22,241¥21,120

Thousands of
U.S. dollars
2012$75,471416,693362,964
4,721
83,891
1,704
2,287
947,731(690,765)$256,966

Depreciation expense for the years ended March 31, 2012 and 2011 were ¥2,276 million ($27,692
thousand) and ¥2,322 million, respectively.

7. Short-term Bank Loans and Long-term Debt
The annual interest rates applicable to the short-term bank loans outstanding on March 31, 2012 and2011 ranged principally from 0.61% to 5.94% and 0.84% to 4.75%, respectively. Long-term debt on March
31, 2012 and 2011 consisted of the following:
Millions of yen
2011
2012
Loans, principally from Japanese banks and insurancecompanies maturing 2012 – 2013, interest 0.94 % - 1.95 %Less current portion¥6,8006,800
700¥6,100¥7,5007,500—¥6,800Thousands of
U.S. dollars
2012$82.735
82,735
8,517$74,218

The aggregate annual maturities of long-term debt at March 31, 2012 were as follows:Year ending March 31
2013
2014
2015
2016
2017 and later
Total

Millions of yen
¥700
6,100
—
—
—
¥6,800Thousands of
U.S. dollars$8,517
74,218———$82,735

The aggregate annual maturities of finance lease obligations at March 31, 2012 were as follows:Year ending March 31
2013
2014
2015
2016
2017 and later
Total

16

Millions of yen
¥30
19
8
6
2
¥65

Thousands of
U.S. dollars
$365
231
98
73
24
$791

8. Employees’ Retirement Benefits
The severance indemnity regulations of the Company and certain subsidiaries provides for benefit
payments based on the employees’ current basic rate of pay and length of service.
The Company and certain subsidiaries have a non-contributory funded pension plan for employees. The
Company and certain subsidiaries pay the full cost of the benefits to a trust bank which act as the trustees.
The liability for employees’ retirement benefits at March 31, 2012 and 2011 consisted of the following:

Projected benefit obligation
Fair value of plan assets
Unfounded status
Unrecognized transitional obligation
Unrecognized actuarial loss
Accrued retirement benefits obligation

Thousands of
U.S. dollars
2012$167,320(42,001)
125,319(16,900)(8,188)$100,231

Millions of yen
2011
2012
¥13,794¥13,752(3,315)(3,452)
10,47910,300(1,852)(1,389)(188)(673)¥8,439¥8,238The components of net periodic benefit costs for the years ended March 31, 2012 and 2011 were as follows:

Service cost
Interest cost
Expected return on plan assets
Amortization of transitional obligation
Recognized actuarial loss
Total

Thousands of
U.S. dollars
2012$8,918
2,689
(730)
5,633
852
$17,362

Millions of yen
2011
2012
¥748
¥733
227
221
(47)
(60)
466
463
191
70
¥1,585¥1,427

Certain consolidated subsidiaries have adopted the conventional method in calculating their projected
benefit obligation.
Assumptions used in the accounting for the projected benefit obligation were as follows:
Discount rate
Expected rate of return on plan assets
Amortization period of transitional obligation
Amortization period of actuarial loss/gain

2012
2.0%
2.0%
15 years
10 years

2011
2.0%
2.0%
15 years
10 years

9. Contingent Liabilities
On March 31, 2012, contingent liabilities for loans guaranteed by the Company, principally on behalf of
non-consolidated subsidiaries and affiliated companies, amounted to ¥547 million ($6,655 thousand).

10. Leases
The Companies adopted the amended “Accounting standard for lease transactions”. However, financeleases of the Companies other than those where ownership of the leased assets is transferred to the lessee,
commencing on or before March 31, 2008 continue to be accounted for as operating leases. The following
pro forma amounts represent the acquisition costs, accumulated depreciation and net book value of theleased assets accounted for as operating leases at March 31, 2012 and 2011, which would have beenreflected in the consolidated balance sheet if these arrangements had been accounted for as finance leases:17

Acquisition Costs
Machinery, equipment and vehicles
Tools, furniture and fixtures
Less-Accumulated depreciation
Net book value

Millions of yen
2011
2012
¥394
¥273
569
399
(823)
(631)
¥140
¥41

Thousands of
U.S. dollars
2012$3,322
4,855(7,678)$499

Future lease payments (including the interest portion thereon) subsequent to March 31, 2012 and 2011
for finance leases accounted for as operating leases were as follows:

Due within one year
Due after one year
Total

Millions of yen
2011
2012
¥81
¥38
59
3
¥140
¥41

Thousands of
U.S. dollars
2012
$462
37
$499

Periodic lease expenses, as a lessee, charged to income for the years ended March 31, 2012 and 2011were ¥97 million ($1,180 thousand) and ¥166 million, respectively. The pro forma amounts of depreciation
for the years ended March 31, 2012 and 2011 would be calculated at ¥97 million ($1,180 thousand) and¥166 million by using the straight-line method over the lease term with no salvage value.

11. Financial Instruments
Overview(a) Policy for financial instruments
The Companies invest in short-term deposits for fund management, where temporally cash surplus
is invested in low-risk financial instruments. The Companies raise a fund by bank borrowings. The
Companies use derivatives only to reduce risk, and don’t use derivatives for speculative trading purposes.
(b) Contents of financial instruments, related risk and risk management system
Operating receivables such as notes and accounts receivable, trade are exposed to customer credit risk.
The Companies try to reduce this risk by the Companies’ sales management rules. Investments, consistingof marketable securities of corporations, are exposed to stock price fluctuation risk in market. To address
this risk, the Companies monitor their stock price in every quarter. Operating payables such as notes andaccounts payable, trade are almost due within six months. Debts are mainly used in normal operations
and capital investments. The maturity date of the debts is up to 2 years from the balance sheet date at the
maximum.
Derivative transactions consist of foreign exchange forward contracts used for the purpose of hedging
foreign exchange risk associated with certain assets and liabilities denominated in foreign currency, andare managed under the internal management policies, to the extent deemed necessary. Note 12. Derivative
Financial Instruments explains hedge accounting, hedging instruments and methods, hedging policy,
hedge items and assessment of hedge effectiveness.
The Finance Department of the Companies prepares and updates its cash flow plan to manage liquidity
risk. A part of bank borrowings are subject to terms of financial covenants. If the Companies violate theterms of financial covenants, the terms of borrowings may be possibly revised.
The terms of financial covenants incident to syndicated loan (¥6,300 million ($76,652 thousand) at
March 31, 2012) contract are as follows:① March 31 and September 30 every year, the Company must keep the amount of net assets in the
consolidated balance sheet over ¥50,949 million ($619,893 thousand).
② In the consolidated statement of income for the fiscal year ending March 31, the Company must notrecord operating loss for the two consecutive years.
(c) Supplemental information on the fair value of financial instruments
Fair value of financial instruments are calculated based on market prices, or by using reasonableestimates when market prices are not available. These estimates include variable factors, and are subject

18

to fluctuation due to the change in underlying assumptions. The contract amounts of derivatives are
discussed in Note 12. Derivative financial instruments below are not an indicator of the market risk
associated with derivative transactions.
Fair value of financial instructions
Carrying value of financial instruments on the consolidated balance sheets as of March 31, 2012 and2011, and their fair value were as follows:(Financial instruments whose fair value was extremely difficult to determine were not included.)Millions of yen

2011
2012
Carrying value Fair value Difference Carrying value Fair value Difference
Cash and time deposits—¥20,689 ¥20,689— ¥18,513 ¥18,513
Notes and accounts receivable, trade35,191¥(4)
45,73045,724¥(6) 35,195
Marketable securities and investment securities
23,177
24,683
1,506
21,35629,994
8,638¥76,885¥78,387¥1,502¥87,775¥96,407¥8,632
Total assets
Short-term bank loans—¥12,110 ¥12,110— ¥11,413 ¥11,413
Notes and accounts payable, trade27,34027,340—30,67630,676—Long-term debt
6,800
6,799
¥(1)
6,100
6,100
¥(0)
¥(1)
¥48,886 ¥48,886¥(0) ¥45,553 ¥45,552
Total liabilities
Derivatives
¥2
¥2
—
¥(20)
¥(20)
—
Thousands of U.S. dollars
2012
Carrying value Fair value Difference
Cash and time deposits$251,722 $251,722—
Notes and accounts receivable, trade556,394 556,321$(73)
Marketable securities and investment securities 259,233 364,934 105,098$1,067,952 $1,172,977 $105,025
Total assets
Short-term bank loans$147,342 $147,342—
Notes and accounts payable, trade373,233 373,233—
Long-term debt
74,21874,218$(0)$594,793$594,793$(0)
Total liabilities
Derivatives$(243)$(243)—*Derivatives are presented as net amounts receivable or payable with net amounts payable in parentheses.
(a) Method for calculating fair value of financial instruments, short-term investments and derivativetransactions① Cash and deposits
The carrying value approximate fair value because these are due within short-term.
② Notes and accounts receivable, trade
The amount of notes and accounts receivable, trade is classified based on certain terms anddiscounted using a rate which reflects safety interest and credit risk
③ Marketable securities and investment securities
For negotiable certificate of deposit, the carrying value approximate fair value because it is due
within short-term.
Investment securities are based on quoted market prices.
④ Short-term bank loans; ⑤ Notes and accounts payable, trade
The carrying value approximate fair value because these are due within short-term.
⑥ Long-term debt
The fair value of long-term debt is determined based on the present value of principles and interest,

19

discounted by the interest rate that would be applied if similar new borrowings were entered into.
⑦ Derivatives
Please refer to Note 12. Derivative Financial Instruments.
(b) Financial instruments whose fair value was extremely difficult to determine at March 31, 2012 and 2011were as follows:

Investment securities for which the market prices are not available

Millions of yen
2011
2012
¥567
¥567

Thousands of
U.S. dollars
2012$6,899Market prices don’t exist for these items, or the cost of estimating cash flow is considered prohibitive.
These items are not included in ③ Marketable securities and investment securities in the above, because
their fair value are not readily determinable.
(c) The aggregate annual maturities of financial assets at March 31, 2012 and 2011 were as follows:
Millions of yen
2011
2012
Due within Due after one Due after five Due after Due within Due after one Due after five Due after
one year year through years through ten years one year year through years through ten years
five years
ten years
five years
ten years———¥20,680——— ¥18,498¥135——
45,210¥520—— 35,060

Cash and deposits
Notes and accounts receivable, tradeMarketable securities and investment securities:
Negotiable certificate of deposit 13,500¥79,390
Total

—
¥520

—
—

— 17,500— ¥71,058

—
¥135

—
—

—
—

Thousands of U.S. dollars
2012
Due within Due after one Due after five Due after
one year year through years through ten years
five years
ten years$251,612———
550,067 $6,327——

Cash and deposits
Notes and accounts receivable, tradeMarketable securities and investment securities:
Negotiable certificate of deposit 164,254$965,933
Total—$6,327————(d) Annual maturities of long-term debt
Please refer to Note 7. Short-term Bank Loans and Long-term Debt

12. Derivative Financial Instruments
The Company has entered into derivative transactions (foreign exchange contract, interest rate swap
and currency option transaction) in order to manage certain risks arising from adverse fluctuations inforeign currency exchange rate and in interest rate. The Company doesn’t hold or issue derivative financial
instruments for the purpose of speculative trading. Derivative transactions are entered into by the Finance
Department under the rules approved by the Board of Directors. Derivative transactions are inspectedvalidity of the operation by the Corporate Auditing Office.
Derivatives designated as hedging instruments at March 31, 2012 and 2011 were as follows:

20

Millions of yen

Hedged item

Accounting in principle
Foreign exchange forward contracts:
To sell foreign currencies:
U.S. dollars
Euro
British poundTo buy foreign currencies:
U.S. dollars
Appropriated accounting for foreign currency
Foreign exchange forward contracts:
To sell foreign currencies:
U.S. dollars
Euro
Canadian dollars
British poundTo buy foreign currencies:
U.S. dollars
Total

2011
Contract Fair value
amountdue after
one yearaccounts receivable

¥375
1
—

—
—
—

¥(20)
0
—

—
¥180
10

—
—
—

—
¥2
(0)

accounts payable

—

—

—

10

—

0

accounts receivable

4,968
47
123
—

—
—
—
—

—
—
—
—

1,773
408
—
11

—
—
—
—

—
—
—
—

400
¥5,914——781—— ¥3,173————

accounts payable

Hedged item

Accounting in principle
Foreign exchange forward contracts:
To sell foreign currencies:
U.S. dollars
Euro
British poundTo buy foreign currencies:
U.S. dollars
Appropriated accounting for foreign currency
Foreign exchange forward contracts:
To sell foreign currencies:
U.S. dollars
Euro
Canadian dollars
British poundTo buy foreign currencies:
U.S. dollars
Total

2012
Contract Contract Fair value Contract
amount amountamountdue after
one yearThousands of U.S. dollars
2012
Contract Contract Fair value
amount amountdue after
one year$4,563
accounts receivable
12
—

—
—
—

$(243)
0
—

—

—

—

60,445572
accounts receivable
1,497
—

—
—
—
—

—
—
—
—

4,867
$71,956————

accounts payableaccounts payable2113. Pledged Assets
The following assets were pledged as collateral at March 31, 2012 and 2011 to secure short-term bankloans amounting to ¥2 million ($24 thousand). (See Note 7):Land
Machinery and equipment, net
Buildings and structures, net
Total

Millions of yen
2011
2012
¥581
¥581
95
13
2,190
2,040
¥2,866¥2,634

Thousands of
U.S. dollars
2012$7,069158
24,821$32,048

14. Income Taxes
Income taxes in Japan applicable to the Company and its domestic consolidated subsidiaries generallycomprise Corporation Tax, Enterprise Tax and Prefectural and Municipal Inhabitants Taxes. The statutory
tax rates for the years ended March 31, 2012 and 2011 were approximately 39.7%.
Following the promulgations on December 2, 2011, of the “Act for Partial Revision of the Income Tax
Act, etc. for the Purpose of Creating Taxation System Responding to Changes in Economic and Social
Structures” (Act No.114 of 2011) and the “Act on Special Measure for Securing Financial Resources
Necessary to implement Measures for Reconstruction Following the Great East Japan Earthquake” (ActNo.117 of 2011), effective from fiscal year beginning on and after April 1, 2012, Corporation Tax rates will
be reduced and the Special Reconstruction Corporation Tax will be imposed. In accordance with this tax
reform, the effective statutory tax rate, used to measure deferred tax assets and deferred tax liabilities,
will be reduced from 39.7% to 37.2% for temporary differences expected to be realized between fiscal
year beginning on April 1, 2012 and fiscal year beginning on April 1, 2014, to 34.8% for the temporary
differences expected to be realized after fiscal year beginning on April 1, 2015.
This change of tax rate decreased net deferred tax assets (after netting deferred tax liabilities),
deferred gains or losses on hedge by ¥117 million ($1,424 thousand), ¥1 million ($12 thousand), ¥227
million ($2,762 thousand), respectively, and income taxes-deferred holding gain on securities by ¥111
million ($1,351 thousand).
The reconciliation between the statutory rate and effective tax rate of income taxes for the year ended
March 31, 2012 and 2011 were as follows:
Statutory tax rate
Per-capita portion of Inhabitant Tax
Permanently non-taxable revenue
Permanently non-deductible expenses
Effects of elimination
Utilization of tax loss carry forwards
Change in valuation allowance
Difference in tax rates of consolidated subsidiaries
Effect of amount of deferred tax assets by tax rate change
Other
Effective tax rate

22

2012
39.7%
0.4
(0.4)
0.6
(3.3)
(9.7)
(6.9)
(0.9)
7.5
(0.5)
26.5%

2011
39.7%
0.9
(0.3)
1.6
(8.4)
(19.7)
4.6
(2.0)
—
(3.9)
12.5%

The significant components of deferred tax assets and liabilities at March 31, 2012 and 2011 were as
follows:
Millions of yen
2011
2012

Thousands of
U.S. dollars
2012

Deferred tax assets:
Accrued employees’ bonuses
Allowance for doubtful receivables
Devaluation of inventories
Devaluation of securities
Accrued employees’ retirement benefits
Amount not shifted to defined contribution pension plan
Unrealized intercompany profit on inventories
Enterprise tax payable
Other
Total deferred tax assets
Valuation allowance
Net deferred tax assets

¥972
21
655
455
2,942
21
359
37
2,043
¥7,505(3,098)¥4,407

¥923
89
636
516
3,375
33
112
30
1,771
¥7,485(3,728)¥3,757$11,826
256
7,969
5,536
35,795
256
4,368
450
24,857$91,313(37,693)$53,620

Deferred tax liabilities:
Deferral of gain on sale of fixed assets
Unrealized gain on securities
Gain on deferred hedging
Asset retirement obligations
Foreign consolidated subsidiaries’ retained earning
Total deferred tax liabilities
Net deferred tax assets

(144)
(785)
—
(7)
(191)
¥(1,127)¥3,280

(170)
(779)
(1)
(9)
(66)
¥(1,025)¥2,732(1,752)(9,551)—(85)(2,325)$(13,713)$39,907

15. Cash and Cash Equivalents
Reconciliation between cash and time deposits in the consolidated balance sheets and cash and cash
equivalents in the consolidated statements of cash flows at March 31, 2012 and 2011 were presented asfollows:

Cash and time deposits
Marketable securities
Cash and cash equivalents

Millions of yen
2011
2012
¥18,513¥20,689
17,50013,500¥36,013¥34,189

Thousands of
U.S. dollars
2012$251,722
164,254$415,9762316. Selling, General and Administrative Expenses
Major components of selling, general and administrative expenses for the years ended March 31, 2012
and 2011 were as follows:
Millions of yen

Sales commission
Delivering expenses
Reserve for warranty
Personnel-expenses
Retirement benefit expense
Depreciation
Rent expenses
Traveling expenses
Research and development expenses
Outside order expenses
OthersTotal

2012¥2,109
3,181
306
9,814
545
590
689
1,110
1,052
400
4,000
¥23,7962011¥1,475
2,431
255
8,949
613
667
755
1,025
847
386
4,225
¥21,628

Thousands of
U.S. dollars
2012$25,660
38,703
3,723
119,406
6,631
7,178
8,383
13,50512,8004,867
48,668$289,524

17. Research and Development Costs
Research and development costs charged to income were ¥1,582 million ($19,248 thousand) and ¥1,399
million for the years ended March 31, 2012 and 2011, respectively.

18. Other comprehensive income
The components of other comprehensive income for the years ended March 31, 2012 were as follows:
Millions of yen
2012

Unrealized holding gain on securities:
Current period changes in unrealized gain (loss)
Reclassification adjustment
Total unrealized holding gain on securities before tax effects
Tax effects
Unrealized holding gain on securities, net of tax effects
Deferred gains or losses on hedge:
Current period changes in unrealized gain (loss)
Total deferred gains or losses on hedge, before tax effects
Tax effects
Deferred gains or losses on hedge, net of tax effects
Foreign currency translation adjustments:
Current period changes
Total other comprehensive income

24

Thousands of
U.S. dollars
2012

¥509
(209)
300
(6)
294

$6,193(2,543)
3,650
(73)
3,577

(22)
(22)
8
(14)

(268)
(268)
98
(170)

(161)
¥119

(1,959)$1,448

19. Shareholders’ Equity
The Corporation Law of Japan (the “Law”), which went into effect on May 1, 2006, provides that an
amount equal to 10% of the amount to be distributed as distribution of additional paid in capital (otherthan the capital reserve) and retained earning (other than the legal reserve) be transferred to the capitalreserve and legal reserve, respectively, until the sum of the capital reserve and legal reserve equals 25% of
the common stock account. Such distributions can be made at any time by resolution of the shareholders,or by the Board of Directors if certain conditions are met, but neither the capital reserve nor the legal
reserve is available for distributions.

20. Related Party Transactions
During the years ended March 31, 2012 and 2011, the Companies had operational transactions with
Toshiba Corporation, a 22.1% shareholder of the Company, Toshiba Machine (Thailand) Co., Ltd., a 100%
unconsolidated subsidiary, and NuFlare Technology, Inc., a 21.3% affiliate of the Company.
A summary of the significant transactions with Toshiba Corporation for the years ended March 31, 2012
and 2011 were as follows:
Millions of yen
2011
2012
For the years ended March 31:
Payment of brand fee
Note: Brand fee rate was contracted beforehand.

¥224

¥185

Thousands of
U.S. dollars
2012$2,725

A summary of the significant transactions with Toshiba Machine (Thailand) Co., Ltd. for the years
ended March 31, 2012 was as follows:

For the year ended March 31, 2012:
Notes and accounts receivable, trade
Note: Trading price was market price.

Millions of yen
2012

Thousands of
U.S. dollars
2012¥1,761$21,426

A summary of the significant transactions with NuFlare Technology, Inc. for the years ended March 31,
2012 and 2011 were as follows:
Millions of yen
2011
2012
For the years ended March 31:
Rent income for land, buildings and structures
Note: Rent price was market price.

¥120

¥125

Thousands of
U.S. dollars
2012$1,46025

21. Net Income and Net Assets per Share
Net income and net assets per share for the years ended March 31, 2012 and 2011 were as follows:

Net income per share
Net assets per share2012¥44.21467.67Yen

2011¥21.57429.67

U.S. dollars
2012
$0.54
5.69

Basic information for calculation of net income per share was as follows:

Weighted-average number of shares of common stockThousands of shares
2011
2012
152,035
152,034

Net income
Net income not applicable to shareholders of common stock
Net income applicable to shareholders of common stock

Millions of yen
2011
2012
¥3,280¥6,721——¥3,280¥6,721Thousands of
U.S. dollars
2012$81,774—$81,774

Basic information for calculation of net assets per share was as follows:

Number of shares at year-end

Thousands of shares
2011
2012
152,034
152,033

Net assets
Minority interests in consolidated subsidiaries
Net assets applicable to shareholders of common stock

Millions of yen
2011
2012
¥65,325¥71,101——¥65,325¥71,101

Thousands of
U.S. dollars
2012$865,081—$865,081

22. Segment Information
Effective from the year ended March 31, 2011, the Companies adopted the new accounting standard“Revised Accounting Standard for Disclosures about Segments of an Enterprise and Related information”(ASBJ Statement No.17, revised March 27, 2009) and “Guidance on the Accounting Standard forDisclosures about Segments of an Enterprise and Related information” (ASBJ Guidance No.20, issued
March 21, 2008). Under the standard and the guidance, disclosures about segments of an enterprise andrelated information are required to report based on management approach.
(A) General information about reportable segments
The reportable segments of the Companies are the business units for which the Company is able toobtain respective financial information separately in order for Executive Officer to conduct periodic
investigation to determine distribution of management resources and evaluate their business results.
The Companies’ business is classified into certain segments based on the type of products and services.
The Companies’ segments are categorized into the following three reportable segments, “Molding
Machinery”, “Machine Tools” and “Hydraulic Equipment” based on the similarities of economical nature,contents and manufacturing method:
Molding Machinery: Injection molding machines, Die casting machines, Plastic extrusion
Machine Tools: Large size machine tools, Portal type machine tools, Machining centers, Horizontal

26

boring machines, High-precision machines
Hydraulic Equipment: Hydraulic motors, Control valves, Piston pumps(B) Basis of measurement for reportable segment profit or loss, segment assets and other material items
The accounting treatment method for the reportable business segment is generally the same as
described in “2. Summary of Significant Accounting Policies”. Reportable segment income is calculated on
the basis of operating income. The prices of intersegment transactions and transfers are calculated basedon the market prices.
(C) Reportable segment information
Reportable segment information of the Companies for the years ended March 31, 2012 and 2011 wereas follows:
Millions of yen

Year ended March 31, 2012

Reportable segments
Other Products
Molding Machine Hydraulic
Sub total
Machinery
Tools Equipment
Net Sales:
External customers
Inter-segment
Total
Segment income
Segment assets
OthersDepreciation
Capital expenditure

Year ended March 31, 2011

Net Sales:
External customers
Inter-segment
Total
Segment income
Segment assets
OthersDepreciation
Capital expenditure

Total

Adjustments Consolidated— ¥119,519¥65,727 ¥28,839 ¥13,854 ¥108,420 ¥11,099 ¥119,519
—
—
130
233
363
2,570
2,933 ¥ (2,933)
13,669 122,452(2,933) 119,519
65,72728,96914,087 108,783¥4,396¥1,451¥1,040¥6,887¥189¥7,076¥335¥7,411¥66,963 ¥33,941¥7,806 ¥108,710 ¥19,415 ¥128,125 ¥14,172 ¥142,297¥1,018
213

¥585
183

¥388
559

¥1,991
955

¥285
97

Millions of yen
Reportable segments
Other Products
Molding Machine Hydraulic
Sub total
Machinery
Tools Equipment¥49,289 ¥23,575
1
43
49,29023,618¥1,338¥1,037¥54,862 ¥29,154¥1,205
893

¥535
409

¥2,276
1,052

Total

—
—

¥2,276
1,052

Adjustments Consolidated¥11,316 ¥84,180 ¥11,473 ¥95,653— ¥95,653
66
110
2,066
2,176 ¥ (2,176)—
11,382
84,29013,53997,829(2,176) 95,653¥945¥3,320¥456¥3,776¥252¥4,028¥7,538 ¥91,554 ¥24,441 ¥115,995 ¥15,208 ¥131,203
¥221
527

¥1,961
1,829

¥360
215

¥2,321
2,044——¥2,321
2,044

27

Year ended March 31, 2012

Net Sales:
External customers
Inter-segment
Total
Segment income
Segment assets
OthersDepreciation
Capital expenditure

Thousands of U.S. dollars
Reportable segments
Other Products Total
Molding Machine Hydraulic
Sub total
Machinery
Tools Equipment$799,696 $350,882 $168,561
—
1,582
2,834
799,696 352,464 171,395$53,486 $17,654 $12,653$814,734 $412,958 $94,975$1,319,139 $135,040
4,416
31,2701,323,555 166,310$83,793$2,300$1,322,667 $236,221$1,454,179
35,686
1,489,865$86,093$1,558,888$12,385
2,591$24,224
11,619$27,692
12,800$7,1182,227$4,721
6,801$3,4681,181

Adjustments Consolidated— $1,454,179$ (35,686)—(35,686) 1,454,179$4,076$90,169$172,430 $1,731,318——$27,692
12,800Note: ”Other products” is a business segment that is not included in reportable segments. It included
business activities of electronic controls, etc.
(D) Difference between total reportable segments and consolidated financial statements
The main differences between total reportable segments and consolidated financial statements for theyears ended March 31, 2012 and 2011 were as follows:

Sales
Total reportable segments
Other products
Eliminations
Net sales on consolidated financial statements

IncomeTotal reportable segments
Other products
Eliminations
Operating income on consolidated financial statements

AssetsTotal reportable segments
Other productsCompany-wide assets
Eliminations
Net assets on consolidated financial statements

Millions of yen
2011
2012
¥84,290¥108,783
13,53913,669(2,176)(2,933)¥95,653¥119,519

Thousands of
U.S. dollars
2012$1,323,555
166,310(35,686)$1,454,179

Millions of yen
2011
2012
¥3,320¥6,887
456
189
252
335
¥4,028¥7,411Thousands of
U.S. dollars
2012$83,793
2,300
4,076$90,169

Millions of yen
2011
2012
¥91,554¥108,710
24,441
19,415
22,131
20,278(6,923)(6,106)¥131,203¥142,297

Thousands of
U.S. dollars
2012$1,322,667
236,221
246,721(74,291)$1,731,318

Note: Company-wide assets are mainly cash and cash equivalents, securities and investment securities
that don’t belong to the reportable segments(E) Related segment information① Information about products and services
Information about products and services is not disclosed, because reportable segment information isbased on products and services.

28

② Information about geographical areas
Sales information about geographical areas for the years ended March 31, 2012 and 2011 were follows:Japan¥52,642Millions of yen
2012
North America
Asia¥10,918¥52,695

Other¥3,264

Total¥119,519

Japan¥45,576

Millions of yen
2011
North America
Asia¥7,536¥39,774

Other¥2,767

Total¥95,653Japan$640,492

Thousands of U.S. dollars
2012North America
Asia
Other
$132,839$641,136$39,712

Total$1,454,179

Note: Sales figures are classified based on the customer locations.
Property, plant and equipment information about geographical areas for the years ended March 31,
2012 and 2011 were follows:Japan¥20,098

Millions of yen
2012
North America
Asia
¥177
¥845

Total
¥21,120

Japan¥21,181Millions of yen
2011
North America
Asia
¥199
¥861

Total
¥22,241Japan$244,531

Thousands of U.S. dollars
2012North America
Asia$2,154$10,281

Total$256,966③ Information about major customers
Information about major customers is not disclosed, because net sales to any customer did notexceed 10% of the consolidated net sales for the years ended March 31, 2012 and 2011.
(F) Information about impairment loss on long-lived assets for each reportable segment
There was no applicable matter for the years ended March 31, 2012 and 2011.
(G) Information about amortization of goodwill and unamortized balance for each reportable segment
There was no applicable matter for the years ended March 31, 2012 and 2011.
(H) Information about gain on negative goodwill for each reportable segment
There was no applicable matter for the years ended March 31, 2012 and 2011.

29

23. Subsequent Event
Cash Dividends
The following appropriations of retained earnings, which have not been reflected in the accompanying
consolidated financial statements for the year ended March 31, 2012, were approved at the meeting of theBoard of Directors held on April 27, 2012:
Cash dividends (¥4.50 = $0.05 per share) ¥684 million ($8,322 thousand)30

Report of Independent Auditors

31

Directors & Auditors

Directors President

Yukio Iimura
Senior Managing Director
Akinori Ide
Managing Directors
Hiroshi Hanai
Yoshihiro Kishimoto
Directors
Satoshi Hironaka
Masayuki Yagi
Shigetomo Sakamoto
Makoto Tsuji
Kazuo Takamura
Auditors		Masahiro Suzuki

Teruyuki Makino
Takanao Suzuki
Kazuo Tanigawa

32Tokyo Head Office

SM12095-350-SS