Annual
Report2009

Contents
1

An Outline of the Toshiba Machine Group
Corporate Information2

Foreword

4

Financial Highlights (consolidated)

5

Overseas Operations for Fiscal 20096

Overseas Offices
Financial Review

810Consolidated Balance Sheets

11

Consolidated Statements of Changes in Net Assets

12

Consolidated Statements of Cash Flows13

Notes to Consolidated Financial Statements

27

Report of Independent Auditors

28

Directors & Auditors

Consolidated Statements of Income

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 green energy, nanotechnology, optical and electronics, withtotal satisfaction by careful analysis and the recommendation of optimum-type
solutions to their requirements.

Corporate Information (as of March 31, 2009)
Company Name:TOSHIBA MACHINE CO., LTD.

Headquarters:

2068-3, Ooka, Numazu-shi,
Shizuoka-ken 410-8510, Japan

Established:

1938

Capital:¥12,484million (US$137 million)

Shares of Common Stock
Issued and Outstanding:

166,885,530 shares

Number of Shareholders:

14,567

Number of Employees:

1,589 (Consolidated: 3,148)1

Foreword
The Japanese domestic economy of this term has experienced stagnation in personal
consumption, a freeze in capital investment, and a deterioration of company profits, due to thestrong yen rate and the massive world financial crisis brought about by the serious economic
effects of the United States financial crisis. As a result, the management environment of the
Toshiba Machine Group remains in an unprecedented severe situation.

Meanwhile, and for the same reasons, the overseas world economy has also turned sluggish,
deteriorating especially after October beyond our assumption.

In the machinery industry, the unprecedented difficult situation has lasted throughout thisfiscal year. Under such circumstances, the Toshiba Machine Group continued in its concerted
efforts to secure orders, develop new products, and pioneer new domestic and overseas markets.

However, large numbers of our customers’ industries (especially the automobile industry) havedeferred or frozen their capital investment. As a result, in this fiscal year, consolidated orders
received totaled ¥105,330 million (US$1157 million), a 32.3% decrease over the previous term.

Further, consolidated net sales totaled ¥121,890 million (US$1339 million), an 18.1% decreaseover the previous term.

Consequently, consolidated backlog demand totaled ¥62,464 million (US$686 million), a 21.0%
decrease over the end of the previous term.

Though we have adopted emergency policy measures, including fixed expense reductions andbusiness rationalization efforts, consolidated operating income resulted in ¥11,536 million(US$126 million), a 39.2% decrease over the previous term, and net income resulted in ¥5,302
million (US$58 million), a 61.9% decrease over the previous term .

The year-end dividend for this term, ¥6($US0.06) per share, was distributed to ourstockholders for the period ending on March 31, 2009, resulting in a total annual dividend of2¥12(US$0.13) per share.

As for the domestic and overseas outlook, the massive world financial crisis continues todramatically reduce or freeze personal consumption and capital investment and will seriously
affect company profits.

Under such circumstances, we will continue to move forward with the midterm management
plan “TM GrowVary Plan” which started on April 1, 2008, but we have also established a yearly
management plan for fiscal 2009 to cope with these tough management surroundings.

The underlying policy of the yearly management plan provides; “a return to origin principles ofmanufacturing (monozukuri)”, “complete cost reduction”, and “a speed up of research anddevelopment”. We will gather the power of the Toshiba Machine Group in order to build-up leanmanagement, enhance company value, and strengthen management foundation. In addition, 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 and educating
our workforce to forge the future of our company in observance of all rules and regulations, and in
fulfillment of all social responsibilities.

Yukio Iimura
President
July, 20093

FINANCIAL HIGHLIGHTS (consolidated)
Net sales

2009

2008

2007

2006

2005

¥121,890¥148,779¥164,386¥144,356¥123,573¥101,628¥109,801¥98,394¥85,598¥28,180¥34,078¥29,411¥25,742¥18,971¥20,507¥16,551¥12,233¥20,520¥19,750¥16,715¥10,178¥6,610¥8,437¥5,995¥2,940¥13,910¥10,829¥10,482¥7,093¥86.79¥65.80¥63.16¥42.48¥15.00¥12.00¥12.00¥7.00¥157,998¥188,046¥172,477¥145,057¥70,004¥71,029¥60,347¥47,624¥3,098¥4,193¥3,096¥2,004¥2,170¥2,086¥1,891¥1,825¥1,742¥3,557¥2,808¥2,512

3,246

3,435

3,336

3,310

$1,240,863
Cost of sales¥84,760$862,873

Selling, general and¥25,594

administrative expenses$260,551

Operating income¥11,536$117,439

Income before income taxes
and minority interests
Income taxes¥9,866$100,438¥4,563$46,452

Net income¥5,303$53,986

Per common share:
Net income¥34.18$0.35

Cash dividends¥12.00$0.12

Total assets¥132,734$1,351,257

Net assets¥68,712$699,501

Capital expenditure¥5,550(property, plant and equipment)$56,500

Depreciation¥2,561$26,071

R & D Cost

¥1,684$17,143

Number of employees

3,148

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

4

Overseas Operations for Fiscal 2009
Overseas Operation for fiscal 2009For Japanese industry, including themachinery industry, an unprecedented

Net Sales

Millions of yen

Under such economic conditions, theNote 1 : From the fiscal year ending on March
31,2005 [Semicorductor manufacturing
164,385
equipment] is listed separately from
[Other products]
21,710Note 2 : From the fiscal year
ending March 31, 2008, the144,356
consolidated subsidiaries of
25,247
18,221[Semiconductor
Manufacturing
19,084Equipment] are
123,572
31,438excluded from our
916,61
consolidated
28,332companies.
16,286

Toshiba Machine Group made a concerted

24,909difficult situation has lasted throughout thisfiscal year 2009, due to the massive world
financial crisis arising from the United States
financial crisis and the appreciation of theyen.

23,156

Total
Other
cts
,248 Produ

121,89019

37,470Machine38,226 Tools

85,989

Moldinghinery64,375 Mac

78,728develop new products and exploit new
65,756

markets. However, large numbers of ourcustomers’ industries (especially theautomobile industry) have deferred or frozen

2006

2005

their capital investment. As a result, total
amounted to ¥52,410million (US$575 million),

148,779

88,152

effort to secure orders in the world market,

consolidated overseas sales for this term

ductorSemicon turing
Manufac ten
Equipm

2007

2008

2009

Total Sales & Overseas Sales
Millions of yen

164,385
148,779

contributing approximately 43.0% to total
144,356

consolidated sales. In terms of machine

121,890es
Total Sal

types, injection molding machines, die-casting
123,572

machines and machine tools are our leading
export products, with sales rates highest in
the Asian region.
While we have continue to promote our
midterm management plan “TM GrowVary

70,60274,36067,15552,410Overseas

Sales

59,580Plan”, our group has met with anunprecedented severe business environment.
Therefore, in this fiscal year 2009, we have

2005

2006

2007

2008

2009

developed a yearly management plan toaddress these circumstances, and our groupwill do its best to overcome these depressed

Export Percentages by Major Products
Other
Products

conditions.

Molding
Machinery

12%
Machine
Tools

27%

61%

5

Overseas Offices■ North America ■■ Europe ■■ South East Asia ■TOSHIBA MACHINE CO., AMERICA
Chicago Head Office

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

TOSHIBA MACHINE S.E. ASIA PTE. LTD.
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/

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

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

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

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 MACHINERY CO,. LTD.
Canada Branch
6 Shields Court, Suite 101, Markham,
Ontario, L3R 4S1, CANADA
Tel : [1]-905-479-9111
Fax : [1]-905-479-6098
URL http://www.toshibamachine.on.ca/

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

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

Penang Office
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

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

Ho Chi Minh Office
E-Town Bldg., 8th Floor, Unit 1, 364,
Cong Hoa Street, Tan Binh District,
Ho Chi Minh City, VIETNAM
Tel : [84]-(0)8-3810-8658
Fax : [84]-(0)8-3810-8657

TOSHIBA MACHINE (THAILAND) CO., LTD.
TMT SERVICE & ENGINEERING 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

6

■ 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

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

Suzhou 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

Dalian Office
No. 171-8, Dongbei Avenue,
Exploitation District, Dalian, 116600,
PEOPLE’S REPUBLIC OF CHINA
Tel : [86]-(0)411-8732-7911
Fax : [86]-(0)411-8732-6899

Xiamen 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■ South Asia ■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

TOSHIBA MACHINE (SHANGHAI) CO., LTD.

Chennai Branch

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

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 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

TOSHIBA MACHINE (SHENZHEN)
CO., LTD
Room 606, 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

TOSHIBA MACHINE TAIWAN CO., LTD.
No. 62, Lane 188, Jui-Kuang Road,
Nei-Hu District, Taipei, TAIWAN
Tel : [886]-(0)2-2659-6558
Fax : [886]-(0)2-2659-6381

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

7

Financial Review
CONSOLIDATED BALANCE SHEETSTOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIESMarch 31, 2009 and 2008
Thousands of
U.S. dollars

Millions of yen
ASSETS
Current assets:
Cash and time deposits (Note 14)
Marketable securities (Note 5)
Notes and accounts receivable, trade
Allowance for doubtful receivables
Net receivables
Inventories:
Finished products
Work in process
Raw materials and supplies
Total inventories
Deferred tax assets (Note 13)
Other current assets
Total current assets
Property, plant and equipment, net(Notes 6 and 12)
Intangible assets
Investments and other assets:
Investments in:
Unconsolidated subsidiaries and affiliates
Other securities (Note 5)Long-term loans
Deferred tax assets (Note 13)
Other investments
Total investments and other assets
Total assets

2009

2008

2009

¥15,194
11,50040,990(207)
40,783¥17,083
17,50053,918(378)
53,540$154,678
117,072
417,286(2,107)415,179

4,640
20,976668
26,2842,425
2,457
98,643

5,069
23,892
1,177
30,1383,090
1,530
122,881

47,236
213,540
6,800
267,576
24,68725,012
1,004,204

24,77522,444

252,214

607

620

6,179

2,293
3,642
174
1,775
825
8,709
¥132,734

3,283
5,875
205
2,124
566
12,053¥157,998

23,34337,076
1,771
18,0708,400
88,660$1,351,257

See accompanying notes to financial statements.

8

Millions of yen
LIABILITIES AND NET ASSETS
Current liabilities:
Short-term bank loans (Notes 7 and 12)
Current portion of long-term debt (Note 7)
Notes and accounts payable, trade
Income taxes payable (Note 13)
Accrued expenses
Warranty reserve
Other current liabilities
Total current liabilities
Long-term liabilities:
Long-term debt (Note 7)Long-term accounts payable, otherAccrued employees’ retirement benefits (Note 8)
Accrued directors’ retirement benefits
Other long-term liabilities (Note 7)
Total long-term liabilities
Total liabilities
Contingent liabilities (Note 9)
Net assets:
Shareholders’ equity: (Note 17)
Common stock
Authorized –360,000,000 shares
Issued–166,885,530 shares
Additional paid-in capital
Retained earnings
Treasury stock, at cost (14,843,759 shares in 2009, 9,836,006 shares in 2008)
Total shareholders’ equity
Valuation and translation adjustments:
Unrealized holding gain on securities, net of tax
Deferred gains or losses on hedge
Foreign currency translation adjustments
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

Thousands of
U.S. dollars

2009

2008

2009

¥12,010—
22,253
607
4,610
83
6,564
46,127¥11,500
8,650
37,875
5,824
6,265
86
6,268
76,468$122,264—
226,540
6,179
46,931
845
66,823
469,582

7,500
1,054
9,180
96
65
17,89564,022

—
2,009
9,310
207
—
11,52687,99476,351
10,73093,454977
662
182,174
651,756

12,485
19,601
46,826(10,036)
68,876

12,485
19,60143,879(8,398)67,567

127,100
199,542476,698(102,169)
701,171

1,061
6(1,231)(164)
68,712¥132,734

2,470
23
(56)
2,437
70,004¥157,998

10,801
61(12,532)(1,670)699,501$1,351,257

See accompanying notes to financial statements.

9

CONSOLIDATED STATEMENTS OF INCOMETOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIES

Years ended March 31, 2009 and 2008
Thousands of
U.S. dollars

Millions of yen
2009

2008

2009

¥121,890¥148,779$1,240,863

84,760101,628

862,873

37,13047,151

377,990

25,59428,180260,551

11,536

18,971

117,439

Interest and dividend

402

347

4,092

Rent income

178

166

1,812

Equity in earnings of affiliates

—

41

—

Gain on reversal of allowance for doubtful accounts

73

—

743

Gain on sales of property, plant and equipment

4

12

41

Gain on sales of investments inconsolidated subsidiaries and affiliates

—

2,850

—

Gain on sales of investments in securities

—

3,130

—

Net sales
Cost of sales (Note 16)
Gross profit
Selling, general and administrative expenses (Notes 15 and 16)
Operating income
Other income:Gain on change in interest in consolidated subsidiary

—

511

—

Others

298

322

3,034

955

7,379

9,722

Interest

268

334

2,728

Loss on sales of notes receivable

87

134

886

Foreign exchange loss

107

215

1,089

Amortization of transitional obligation for
employees’ retirement benefits (Note 8)

502

571

5,110

Other expenses and losses:

Equity in losses of affiliates

924

—

9,406

Brand fee expense

249

209

2,535

Loss on disposal of property, plant and equipment

50

291

509

Loss on revision of retirement benefit plan

—

3,708

—

Accrued for directors' retirement benefits for prior periods

—

163

—

Loss on devaluation of investment securities

52

—

529

Others

386

205

3,931

2,625

5,830

26,723

9,866

20,520100,438

Income before income taxes and minority interests
Income taxes (Note 13)
Current

2,676

9,571

27,242

Deferred

1,887(2,961)

19,210

4,563

6,610

46,452¥5,303¥13,910$53,986

Net income

Yen
Net income per share of common stock¥34.18

U.S. dollars¥86.79$0.35

See accompanying notes to financial statements.

10

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSTOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIES

Years ended March 31, 2009 and 2008

Millions of yen
CommonStock

Additional
paid in
capitalRetainedearnings

Treasurystock

Unrealized
gain onsecurities,net

Deferred
gains orlosseson hedge

Translation
adjustments

166,885,530 ¥12,485¥19,601¥31,895¥(2,072)¥6,010¥14¥ (0)(3,540)

9

(56)

2,470

23

(56)

(1,409)(17)(1,175)¥1,061¥6¥ (1,231)

Numberof
SharesBalance at March 31, 2007

13,910Net income(6,326)

Purchases of treasury stock(1,926)

Cash dividends
Net changes in items other thanshareholders’ equity
Balance at March 31, 2008

166,885,530

12,485

19,60143,879(8,398)5,303

Net income(1,638)Purchases of treasury stock(2,356)

Cash dividends
Net changes in items other thanshareholders’ equity
Balance at March 31, 2009

166,885,530 ¥12,485¥19,601¥46,826 ¥ (10,036)

Thousands of U.S. dollars

Balance at March 31, 2008

CommonStock

Additional
paid in
capitalRetainedearnings

Treasurystock

Unrealized
gain onsecurities,net

Deferred
gains orlosseson hedge

Translation
adjustments$127,100$199,542$446,697$ (85,493)$25,145$234$ (570)(14,344)(173)(11,962)$10,801$61$ (12,532)

53,986

Net income(16,676)

Purchases of treasury stock(23,985)

Cash dividends
Net changes in items other thanshareholders’ equity
Balance at March 31, 2009

$127,100$199,542$476,698$ (102,169)

See accompanying notes to financial statements

11

CONSOLIDATED STATEMENTS OF CASH FLOWSTOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIES

Years ended March 31, 2009 and 2008
Millions of yen
2009
Operating activities:
Income before income taxes and minority interests¥9,866
Adjustments to reconcile income before income taxes andminority interests to net cash provided by operating activities:
Depreciation
2,561
Allowance for doubtful receivables(208)
Warranty reserve(3)
Employees’ retirement benefit(130)
Director’s retirement benefit(111)
Gain on sales of investment securities—
Gain on sales of investments in consolidated subsidiaries and affiliates—
Interest and dividend income(402)
Interest expense
268
Loss on sales and disposal of property, plant and equipment
46
Equity in losses (earnings) of affiliates
924
Changes in operating assets and liabilities:
Notes and accounts receivable, trade
12,928Inventories
3,854
Notes and accounts payable, trade(15,144)
Advances received(812)
Accrued expenses(1,621)Long-term accounts payable, other(955)
Others(86)
Sub total
10,975Interest and dividend income received
417
Interest paid
(302)
Income taxes paid
(8,824)
Others(87)
Net cash provided by operating activities
2,179
Investing activities:
Acquisition of investment securities(104)
Proceeds from sales of investment securities—
Acquisition of investments in unconsolidated subsidiaries and affiliates—
Proceeds from sales of investments in consolidated subsidiaries and affiliates—
Payments for sales of investments in subsidiaries resulting
in change in scope of consolidation—
Payments for sales of investments in capital of subsidiaries and affiliates(50)
Purchases of property, plant and equipment(4,633)
Proceeds from sales of property, plant and equipment
37
Purchases of intangible assets(181)
Payments of long-term loan receivables(1)
Repayments of long-term loan receivables
32
Others(1)
Net cash (used in) provided by investing activities(4,901)
Financing activities:
Increase (decrease) in short-term bank loans
1,159
Proceeds from long-term debt
7,500
Repayments of long-term debt
(8,650)Purchases of treasury stock(1,638)Cash dividends paid
(2,356)
Others(7)
Net cash used in financing activities(3,992)
Effect of exchange rate changes on cash and cash equivalents(1,175)Net decrease in cash and cash equivalents(7,889)Cash and cash equivalents at the beginning of year
34,583
Cash and cash equivalents at end of year (Note 14)¥26,694

12

Thousands of
U.S. dollars

2008

2009

¥20,520$100,438

2,171
306
8
(264)
207
(3,130)(2,850)
(347)
334
279
(41)

26,071(2,117)(31)(1,323)(1,130)——(4,092)
2,728
468
9,406

1,249
(1,403)(2,162)(1,472)
(100)
2,009
619
15,933347(333)(8,369)
(133)
7,445

131,609
39,234(154,169)(8,266)(16,502)(9,722)(874)
111,728
4,245(3,074)(89,830)(886)
22,183

(100)
3,397
(768)
2,750

(1,059)
—
—
—

(490)
—
(2,992)
44
—
(4)
42
(155)
1,724

—
(509)
(47,165)377(1,843)
(10)
326
(10)
(49,893)(1,207)—(1,100)(6,326)(1,926)—(10,559)(55)(1,445)36,028¥34,583

11,79976,352(88,058)(16,676)(23,985)(71)(40,639)(11,962)(80,311)352,061$271,750

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 consolidated subsidiaries are prepared on the basis of accounting principles generally accepted in Japan, which are different in certain respects as to the application and disclosure
requirements of International Financial ReportingStandards, and are compiled from the consolidated financial statements prepared by the Company
as required by the Financial Instruments andExchange Law of Japan. The preparation of thesefinancial statements requires management tomake estimates and assumptions that affect thereported amounts of assets and liabilities and disclosure of contingent assets and liabilities at thedates of the consolidated financial statements andthe reported amounts of revenues and expenses
during the reporting periods. Actual results could
differ from these estimates.
The consolidated balance sheets, statements ofincome, changes in net assets and cash flows
incorporate certain reclassifications andrearrangements in order to present these statements in forms which are more familiar to readersof these statements outside of Japan. In addition,
the notes to the consolidated financial statements
include information which is not required underaccounting principles generally accepted in Japanbut is presented herein as additional information.

2. Summary of Significant Accounting
Policies(a) Basis of consolidation and accounting for investments in unconsolidated subsidiaries and affiliates
The consolidated financial statements include
the accounts of the Company and its consolidated
subsidiaries (together the “Companies”). Certain
immaterial subsidiaries are not consolidated, but
stated at cost.
All significant intercompany transactions andaccounts and unrealized intercompany profits
among consolidated entities are eliminated in consolidation.
The cost in excess of underlying interest in net
assets of consolidated subsidiaries at the time ofacquisition, which is included in intangible assets of
the accompanying consolidated balance sheets, isdeferred 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 balancesheet 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
statements 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 all income
and expense accounts are translated at the current rates at end of the term. The components ofshareholders’ equity are translated at their historical exchange rates.
(c) Securities
Securities owned by the Companies have beenclassified into two categories, held-to-maturity debt
securities and other securities, in accordance withthe 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 soldis determined by the moving average method.
(d) Inventories
Until the year ended March 31, 2008, inventories are stated at cost, determined by the specificidentification method for finished products andwork in process, and by the moving averagemethod for raw materials and supplies.
Effective from the year ended March 31, 2009,
inventories are stated at the lower of cost, determined by carrying amount on the balance sheet isstated by the devaluation method based on the
decline in profitability, or their net realizable value.
(e) Allowance for doubtful receivables
The allowance for doubtful receivables is stated at the amount determined based on the default

13ratio sustained over a specific period in the pastand the estimated uncollectible amount determined 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 for warranty 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 and depreciation of other property, plant and equipment iscomputed by the declining balance method overthe estimated useful lives of respective assets,principally ranging from 3 – 60 years for buildings
and from 3 – 22 years for machinery, equipment
and vehicle.
(Additional Information)
Effective from the year ended March 31, 2009,
the Company and its domestic consolidated subsidiaries changed the estimated useful lives ofmachinery from 6 – 13 years to 4 – 9 years after
reviewing the availability of these assets in conjunction with the revision of the Corporation Tax
Law of Japan.
The effect of this change on operating income
and income before income taxes and minority interests is immaterial for the year ended March 31, 2009.
( i ) Amortization of intangible assets
Computer software held for internal use isamortized by the straight-line method over the relevant economic useful lives (5 years). The others
including patent rights are computed by thestraight-line method over the estimated useful
lives of respective assets.
( j ) Leased assets
Leased assets under finance lease transactions
that do not transfer ownership to the lessee, aredepreciated under the straight-line method overthe lease term with no residual value.
However, finance lease transactions, commencing on or before March 31, 2008, that do nottransfer ownership to the lessee, are accounted for
as operating lease transactions.

14(k) Derivative financial instruments
All derivatives are stated at fair value. Gains orlosses arising from changes in fair value arecharged or credited to income for the period inwhich they arise, except for derivatives that aredesignated as hedging instruments. Gains or losses
arising from changes in fair value of the derivatives
designated as hedging instruments, net of theapplicable 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 not currently 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 the asset
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 gain or loss
is amortized by the straight-line method over the
average remaining years of service of employees.
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 gain or loss
is amortized by the straight-line method over the
average remaining years of service of employees.
(Additional Information)
Effective July 1, 2007, the Company and certain domestic consolidated subsidiaries amended
their employees’ retirement plans from a combination of lump-sum defined benefit plans andtax–qualified pension plans to a combination of
lump-sum defined benefit plans, defined benefit
plans and defined contribution plans. The
Company and some of its consolidated subsidiaries
applied the accounting treatment specified in theguidance issued by the Accounting Standards
Board of Japan (“ASBJ”).
The effect of this plan amendment decreased
income before income taxes and minority interestsby ¥3,708 million for the year ended March 31,
2008.

(n) Directors’ retirement benefits
Domestic consolidated subsidiaries accrued an
estimated amount calculated in accordance with its
internal rule for retirement benefits for directors.
(Additional Information)
Previously, the Company had accrued an estimated amount calculated in accordance with its internal
rule for retirement benefits for directors. However,At the ordinary general shareholders’ meeting heldon June 26, 2008, an approval was adopted regarding
the severance payment to be made following the abolition of retirement benefit system for directors.
Accordingly, the entire accrued amount of the provision of the payments, ¥123 million ($1,252 thousand), was reversed, and is stated as long-termpayable, other in the accompanying consolidated balance sheet as of March 31, 2009.
The change had no effect on operating income
and income before income taxes and minority
interests for the year ended March 31, 2009.
(o) Amounts per share of common stock
Net income (loss) per share is computed basedon the weighted-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 sharerepresent the actual amount declared as applicable to the respective years.
(p) Cash equivalents
In preparing the consolidated statement ofcash 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 for the year ended March 31, 2008
have been reclassified to conform to the 2009 presentation.

3. U.S. Dollar Amounts
U.S. dollar amounts are included solely for theconvenience of the readers and have been translated at the rate of ¥98.23=U.S.$1,the approximate
exchange rate prevailing in the Japanese foreignexchange market on March 31, 2009. This translation should not be construed as a representationthat the yen amounts actually represent, havebeen, or could be converted into U.S. dollars.

4. Accounting Changes(a) Practical solution on unification of accounting
policies applied to foreign subsidiaries for consolidated financial statements
Effective from the year ended March 31, 2009,
the Company applied “Practical Solution on
Unification of Accounting Policies Applied toForeign Subsidiaries for Consolidated Statements”(ASBJ, Practical Issues Task Force No. 18, issued
May 17, 2006), and necessary modifications havebeen made for consolidation.
The change had no effect on operating income
and income before income taxes and minority
interests for the year ended March 31, 2009.
(b) Accounting standard for measurement of inventories
Effective from the year ended March 31, 2009,
the Company and its domestic consolidated subsidiaries adopted the new accounting standard“Accounting Standard for Measurement of
Inventories” (ASBJ Statement No.9, issued July 5,2006).
The Company and its domestic consolidated
subsidiaries changed accounting policies to“Inventories are stated at the lower of cost, determined by the specific identification method for finished products and work in process, and by themoving average method for raw materials and supplies, or their net realizable value” from
“Inventories are stated at cost, determined by the
specific identification method for finished products and work in process, and by the moving average method for raw materials and supplies”.
This change in accounting policy for measurement of inventories resulted in the decreases inoperating income and income before income taxes
and minority interests by ¥445 million ($4,530
thousand) for the year ended March 31, 2009.
The effect of this change on segment information is explained in Note 20.
(c) Accounting standard for lease transactions
Effective from the year ended March 31, 2009,
the Company and its domestic consolidated subsidiaries adopted the amended “AccountingStandard for Lease Transactions” (ASBJ
Statement No.13, March 30, 2007; revised fromthe standard originally issued by the Corporate
Accounting Council on June 17, 1993) and“Guidance on Accounting Standard for Lease
Transaction” (ASBJ Guidance No.16, March 30
2007, revised from the standard originally issued
by the Japanese Institute of Certified Public
Accountants on January 18, 1994).
Previously, finance lease transactions that do
not transfer ownership of the leased assets to the15lessee, were accounted for as operating lease transactions. Effective from the year ended March 31, 2009,
such finance lease transactions are recognized as leased assets and leased obligations on the balance sheet.
However, finance lease transactions, which do not transfer ownership of the leased assets to the lessee,
commencing on or before March 31, 2008 continue to be accounted for as operating lease transactions.
This adoption of new standard had no effect on operating income and income before income taxes andminority interests for the year ended March 31, 2009.
(d) Changes in method of depreciation of property, plant and equipment
Effective from the year ended March 31, 2008, upon the amendment to the Corporation Tax Law ofJapan, the Company and its domestic consolidated subsidiaries changed their method of depreciation to
the depreciation method permitted under the Corporation Tax Law of Japan after amendment for property,
plant and equipment acquired on or after April 1, 2007.
This change in the method of depreciation decreased operating income and income before income
taxes and minority interests for the year ended March 31, 2008 by ¥63 million.
The effect of this change on segment information is explained in Note 20.
(Additional Information)
Upon the revision of the Corporation Tax Law of Japan, the Company and its domestic consolidated
subsidiaries depreciate the residual value of the property, plant and equipment acquired on or before
march 31, 2007 over 5 years by the straight-line method as permitted under the revision of Corporation Tax
Law of Japan. The residual value has represented 5% of the acquisition cost of the asset under the previous
Corporation Tax Law of Japan.
This change in depreciation for the residual value decreased operating income and income before
income taxes and minority interests for the year ended March 31, 2008 by ¥284 million.
The effect of this change on segment information is explained in Note 20.
(e) Presentation of financial instruments in the balance sheet
Effective from the year ended March 31, 2008, the Company and its domestic consolidated subsidiaries
adopted the amended “Business Indicator for the Financial Instruments Accounts”.
The Company and its domestic consolidated subsidiaries reclassified negotiable certificates of deposit
from “Cash and time deposits” to “Marketable securities”.
The balances of negotiable certificates of deposit classified in “Marketable securities” at March 31, 2008 andclassified in “Cash and time deposits” at March 31, 2007 were ¥17,500 million and ¥15,500 million, respectively.
( f ) Amended auditing treatment for directors’retirement benefits
Effective from the year ended March 31, 2008, the Company and its domestic consolidated subsidiaries
adopted the amended “Auditing Treatment Relating to Reserve Defined under the Special Tax
Measurement Law, Reserve Defined under the Special Law and Reserve for Director and Corporate Auditor
Retirement Benefits” (Japanese Institute of Certified Public Accountants, Auditing and Assurance practiceCommittee, Report No.42, revised April 13, 2007). Until March 31, 2007, director and corporate auditor
retirement benefits were expensed when paid. From the year ended March 31, 2008, however, those areaccrued at the amount that would be required to be paid in accordance with the internal rule when all
directors and corporate auditors retired at year end.
The effect of the adoption of this new standard on operating income and income before income taxes
and minority interests for the year ended March 31, 2008 were ¥38 million and ¥201 million, respectively.
The effect of the adoption of this new standard on segment information is immaterial for the year ended
March 31, 2008.

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

Equity securities

2009
Acquisition Carrying
cost
value
¥1,711¥3,463¥1,71116¥3,4632008
Unrealized Acquisition Carrying
gains
cost
value
¥1,752¥1,649¥5,682

Unrealized
gains¥4,033¥1,752¥4,033¥1,649¥5,682

Thousands of U.S. dollars
2009
Acquisition Carrying Unrealized
cost
value
gains
Equity securities$17,418$35,254$17,836$17,418$35,254$17,836

Non-marketable securities classified as marketable securities primary consist of negotiable certificate of deposit of ¥11,500 million ($117,072 thousand) and ¥17,500 million as of March 31, 2009 and2008, respectively. Non-marketable equity securities as other securities primary consist of ¥179 million($1,822 thousand) and ¥193 million as of March 31, 2009 and 2008, respectively.

6. Property, Plant and Equipment
Property, plant and equipment at March 31, 2009 and 2008 consisted of the following:Thousands of
U.S. dollars

Millions of yen
2009

2008

2009

Land

¥6,053¥6,060$61,621

Buildings and structures

34,02031,361

346,330

Machinery and equipment

30,35728,968309,040

498

534

5,070

7,162

7,143

72,911

Lease assets

79

—

803

Construction in progress

317

605

3,227

78,48674,671

799,002(53,711)(52,227)(546,788)¥24,775¥22,444$252,214

VehiclesTools, furniture and fixtures

Less accumulated depreciation

Depreciation expense for the years ended March 31, 2009 and 2008 were ¥2,561 million ($26,071
thousand) and ¥2,170 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, 2009
and 2008 ranged principally from 1.19% to 4.54% and 1.28% to 6.38%, respectively. Long-term debt on
March 31, 2009 and 2008 consisted of the following:Thousands of
U.S. dollars

Millions of yen

Loans, principally from Japanese banks andinsurance companies maturing 2010 – 2013,
interest 1.42 % – 1.95 %Less current portion

2009

2008

2009

¥7,500¥8,650$76,351

7,500

8,650

76,351

—

8,650

—

¥7,500—$76,351

17

The aggregate annual maturities of long-term debt at March 31, 2009 were as follows:Year ending March 31

Thousands of
U.S. dollars

Millions of yen

2010

—

—

2011

—

—

2012

¥700

$7,126

2013

700

7,126

6,100

62,099¥7,500$76,351

2014 and later

The aggregate annual maturities of finance lease obligations at March 31, 2009 were as follows:Year ending March 31

Thousands of
U.S. dollars

Millions of yen

2010

¥11

$112

2011

17

173

2012

17

173

2013

17

173

2014 and later

14

143

¥76

$774

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 thetrustees.
The liability for employees’retirement benefits at March 31, 2009 and 2008 consisted of the following:Thousands of
U.S. dollars

Millions of yen
2009

2008

2009

¥14,641¥14,688$149,048

Fair value of plan assets(1,562)(1,167)(15,901)

Unfounded status

13,07913,521

133,147

Unrecognized transitional obligation(2,842)(3,345)(28,932)

Unrecognized actuarial loss

(1,057)(866)(10,761)

Accrued retirement benefits obligation¥9,180¥9,310$93,454

Projected benefit obligation

18

The components of net periodic benefit costs for the years ended March 31, 2009 and 2008 were as follows:
Thousands of
U.S. dollars

Millions of yen
2009

2008

2009

Service cost

¥797

¥850

$8,114

Interest cost

235

270

2,392

Expected return on plan assets

(27)

(18)

(275)

Amortization of transitional obligation

502

571

5,111

Recognized actuarial loss

197

202

2,005

Others

174

118

1,771

¥1,878¥1,993$19,118

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:
2009

2008

Discount rate

2.0%

2.0%

Expected rate of return on plan assets

2.0%

2.5%

Amortization period of transitional obligation

15 years

15 years

Amortization period of actuarial loss/gain

10 years

10 years

9. Contingent Liabilities
On March 31, 2009, contingent liabilities for loans guaranteed by the Company, principally on behalfof non-consolidated subsidiaries and affiliated companies, amounted to ¥861 million ($8,765 thousand).

10. Leases
As described Note 4(c), the Company and its domestic consolidated subsidiaries adopted theamended “Accounting standard for lease transactions”. However, finance leases of the Companies otherthan 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 the leased assets at March
31, 2009 and 2008, which would have been reflected in the consolidated balance sheets if thesearrangements had been accounted for as finance leases:

Millions of yen

Thousands of
U.S. dollars

2009

2008

2009

Machinery, equipment and vehicles¥996¥1,174$10,139

Tools, furniture and fixtures

895

1,437

9,111

Less-Accumulated depreciation(1,264)(1,607)(12,867)

Net book value¥627¥1,004$6,383Acquisition Costs

Future lease payments (including the interest portion thereon) subsequent to March 31, 2009 forfinance leases accounted for as operating leases were as follows:

19

Millions of yen

Thousands of
U.S. dollars

2009

2009

Due within one year¥287

$2,922

Due after one year

340

3,461

¥627

$6,383

Periodic lease charges, as a lessee, charged to income for the years ended March 31, 2009 and 2008
were ¥ 455 million ($4,632 thousand) and ¥ 577 million, respectively. The pro forma amounts of depreciation for the years ended March 31, 2009 and 2008 would be calculated at ¥455 million ($4,632 thousand) and ¥577 million by using the straight-line method over the lease term with no salvage value.

11. 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 in foreign 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 enteredinto by the Finance Department under the rules approved by the Board of Directors. Derivative transactions are inspected validity of the operation by the Corporate Auditing Office.

12. Pledged Assets
The following assets were pledged as collateral at March 31, 2009 to secure short-term bank loans
amounting to ¥2 million ($20 thousand). (See Note 7):
Millions of yen

Thousands of
U.S. dollars

Land

¥581

$5,915

Machinery and equipment, net

272

2,769

2,496

25,410¥3,349$34,093

Buildings, net

13. Income Taxes
Income taxes in Japan applicable to the Companies generally comprise Corporation Tax, EnterpriseTax and Prefectural and Municipal Inhabitants Taxes. The statutory tax rates for the years ended March
31, 2009 and 2008 were approximately 39.7% and 39.8%, respectively.
The reconciliation between the statutory rate and effective tax rate of income taxes for the years
ended March 31, 2009 and 2008 were as follows:
2009

2008

39.7 %

39.8 %

Per-capita portion of Inhabitant Tax

0.4

0.2

Permanently non-taxable revenue

2.1

0.8

Permanently non-deductible expenses

0.5

0.5

Unrealized intercompany profit on fixed assets

0.2

(0.0)

Change in valuation allowance

4.7

(8.0)

Difference in tax rates of consolidated subsidiaries

(1.9)

(1.4)

Other

0.6

0.3

Effective tax rate

46.3 %

32.2 %

Statutory tax rate

20

The significant components of deferred tax assets and liabilities at March 31, 2009 and 2008 were as follows:
Thousands ofMillions of yen
U.S. dollars
2009

2008

2009

¥1,067¥1,362$10,862

Allowance for doubtful receivables

143

54

1,456

Devaluation of inventories

163

106

1,659

Devaluation of securities

510

199

5,192

3,619

3,673

36,842

Amount not shifted to defined contribution pension plan

697

1,142

7,096

Unrealized intercompany profit on inventories

532

613

5,416

Enterprise tax payable

77

497

784

Other

1,262

1,218

12,847

Total deferred tax assets¥8,070¥8,864$82,154

Valuation allowance(2,869)(1,876)(29,207)

Net deferred tax assets¥5,201¥6,988$52,947

Deferral of gain on sale of fixed assets

(187)

(196)

(1,904)

Unrealized gain on securities(746)(1,563)(7,594)Gain on deferred hedging

(4)

(15)

(41)

Foreign consolidated subsidiaries’ retained earning

(64)

—

(651)

Deferred tax liabilities¥(1,001)¥(1,774)$(10,190)

Net deferred tax assets (liabilities)¥4,200¥5,214$42,757

Deferred tax assets:
Accrued employees’ bonuses

Accrued employees’ retirement benefits

Deferred tax liabilities:

14. Cash and Cash Equivalents.
Reconciliation between cash and time deposits in the consolidated balance sheets and cash and cash
equivalents in the statements of cash flows at March 31, 2009 and 2008 were presented as follows:
Thousands ofMillions of yen
U.S. dollars
2009

2008

2009

Cash and time deposits¥15,194¥17,083$154,678

Marketable securities

11,50017,500117,072

Cash and cash equivalents¥26,694¥34,583$271,750

21

15. Selling, General and Administrative Expenses
Major components of selling, general and administrative expenses at March 31, 2009 and 2008
were as follows:
Thousands of
U.S. dollars

Millions of yen
2009

2008

2009

Sales commission¥1,804¥2,352$18,365

Delivering expense

3,250

4,030

33,086

Reserve for warranty

83

8

845

11,136

11,145

113,367

Retirement allowance

639

691

6,505

Depreciation

683

632

6,953

Rent expense

877

918

8,928

Traveling expense

1,377

1,438

14,018

Research and development expense

1,046

1,251

10,648Outside order expense

1,094

1,030

11,137

Others

3,605

4,685

36,699Personal expense

16. Research and Development Costs
Research and development costs charged to income were ¥1,684 million ($17,143 thousand) and¥1,743 million for the years ended March 31, 2009 and 2008, respectively.

17. Shareholders’ Equity.
The Corporation Law of Japan (the “Law”), which superseded most of the provisions of theCommercial Code of Japan, went into effect on May 1, 2006. The Law provides that an amount equal to
10% of the amount to be distributed as distribution of additional paid in capital (other than the capitalreserve) and retained earning (other than the legal reserve) be transferred to the capital reserve andlegal 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 reserveis available for distributions.

18. Related Party Transactions
During the years ended March 31, 2009 and 2008, the Company and its consolidated subsidiaries had
operational transactions with Toshiba Corporation, a 22.1% and 21.4% shareholder of the Company and
NuFlare Technology, Inc., a 25.6% affiliate of the Company.

22

A summary of the significant transactions with Toshiba Corporation for the years ended, March 31, 2009
and 2008 were as follows:
Thousands of
U.S. dollars

Millions of yen
2009

2008

2009

—

¥2,750

—

¥249

209

$2,535¥249¥2,959$2,535For the year:
Sales of investment in affiliates
Payment of brand fee

Note : Sales price was market price.
Brand fee rate was contracted beforehand.
A summary of the significant transactions with NuFlare Technology, Inc. for the years ended, March 31,
2009 and 2008 were as follows:
Thousands of
U.S. dollars

Millions of yen
2009

2008

2009

¥119

¥113

$1,211¥119¥113$1,211For the year:
Rent income for land, buildings and structures

Note : Rent price was market price.

19. Net Income and Net Assets per Share
Net income and net assets per share for the years ended march 31, 2009 and 2008 were as follows:
Yen

U.S. dollars

2009

2008

2009

Net income per share¥34.18¥86.79$0.35

Net assets per share

451.93445.744.60

The information regarding diluted net income per share is omitted because of no diluted effect.
Basic information for calculation of net income per share was as follows:
Thousands of sharesweighted-average number of shares of common stock

2009

2008

155,123

160,285
Thousands of
U.S. dollars

Millions of yen

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

2009

2008

2009

¥5,303¥13,910$53,986———¥5,303¥13,910$53,98623

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

Number of shares at year-end

2009

2008

152,042

157,050
Thousands of
U.S. dollars

Millions of yen

Net assets

2009

2008

2009

¥68,712¥70,004$699,501———¥68,712¥70,004$699,501

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

20. Segment Information(A) Business Segment Information
The Companies’ business is classified into the following three segments based on the similarities of typeand nature of business:
Molding Machinery: Injection molding machines, Die casting machines, Plastic extrusion
Machine Tools: Large size machine tools, Portal type machine tools, Machining centers, Horizontal boring machines, High-precision machines
Other Products: Hydraulic equipment, Electronic controls
The tables bellow present sales, operating expenses and operating income information by business segment.
Millions of yen

Year ended March 31, 2009
Molding
Machinery

Machine
Tools

Other
Products

Eliminations
and/or corporate

Consolidated

Sales¥64,375¥38,791¥22,497¥(3,773)¥121,890

Operating expenses

60,21832,717

21,957(4,538)110,354

Operating income

4,157

6,074

540

765

11,536

Identifiable assets

60,63032,19331,594

8,317

132,734

946

386

1,229

—

2,561

1,387

2,538

1,625

—

5,550

Depreciation
Capital expenditure

Millions of yen

Year ended March 31, 2008

24

Molding
Machinery

Machine
Tools

Other
Products

Eliminations
and/or corporate

Consolidated

Sales¥88,205¥37,765¥27,646¥(4,837)¥148,779

Operating expenses

77,77831,502

25,400(4,872)

129,808

Operating income

10,427

6,263

2,246

35

18,971

Identifiable assets

74,35930,90540,973

11,761

157,998

Depreciation

1,278

327

565

—

2,170

Capital expenditure

1,605

281

1,212

—

3,098

Thousands of U.S.dollars

Year ended March 31, 2009
Molding
Machinery

Machine
Tools

Other
Products

Eliminations
and/or corporate

Consolidated

Sales$655,350$394,900$229,024$(38,411)$1,240,863

Operating expenses

613,031333,065

223,526(46,198)

1,123,424

Operating income

42,31961,835

5,498

7,787

117,439

Identifiable assets

617,225

327,731

321,633

84,668

1,351,257

Depreciation

9,630

3,930

12,511—

26,071

Capital expenditure

14,12025,837

16,543—56,500As described Note 4(b), the Company and its domestic subsidiaries adopted “Accounting Standard for
Measurement of Inventories” effective from the year ended March 31, 2009. As a result, operating expenses increased by ¥183 million ($1,863 thousand) in the Molding Machinery segment, ¥195 million ($1,985
thousand) in the Machine Tools segment, and ¥67 million ($682 thousand) in the Other Products segment.
Operating income decreased by the same amounts accordingly.
As described Note 4(d) and Note 4(d) (Additional Information), the Company and its domestic subsidiaries changed their method of depreciation based on an amendment to the Corporation Tax Law ofJapan for property, plant and equipment effective from the year ended March 31, 2008. As a result, operating expenses increased by ¥53 million in the Molding Machinery segment, ¥41 million in the Machine Tools
segment, and ¥253 million in the Other Products segment. Operating income decreased by the sameamounts accordingly.
(B) Geographic Segment Information
Geographic Segment Information of the Companies for the years ended March 31, 2009 and 2008 wereas follows:

North America¥9,664
9,106
558
5,705

Millions of yen
Asia
Total
¥13,193¥137,580
12,671
126,336522
11,244
8,506
124,042

Eliminations Consolidated¥(15,690)¥121,890(15,982)
110,354
292
11,536
8,692
132,734

North America¥10,406
9,904
502
7,125

Millions of yen
Asia
Total
¥14,795¥168,585
13,587
149,294
1,208
19,291
9,304
147,696

Eliminations Consolidated¥(19,806)¥148,779(19,486)
129,808(320)
18,971
10,302
157,998

Year ended March 31, 2009
Net sales
Operating expenses
Operating income
Identifiable assets

Japan¥114,723
104,559
10,164
109,831

Year ended March 31, 2008
Net sales
Operating expenses
Operating income
Identifiable assets
Year ended March 31, 2009
Net sales
Operating expenses
Operating income
Identifiable assets

Japan¥143,384
125,803
17,581
131,267

Thousands of U.S.dollars
Japan
North America
Asia
Total
Eliminations Consolidated$1,167,902$98,381$134,307 $1,400,590 $(159,727) $1,240,863
1,064,430
92,701
128,993
1,286,124(162,700)
1,123,424
103,472
5,680
5,314
114,466
2,973
117,439
1,118,100
58,07886,593
1,262,771
88,486
1,351,257

As described Note 4(b), the Company and its domestic subsidiaries adopted “Accounting Standard for
Measurement of Inventories” effective from the year ended March 31, 2009. As a result, operating expenses increased by ¥445 million ($4,530 thousand) in the Japan segment, and operating income decreased by
the same amount accordingly.

25

As described Note 4(d) and Note 4(d) (Additional Information), the Company and its domestic subsidiaries changed their method of depreciation based on an amendment to the Corporation Tax Law ofJapan for property, plant and equipment effective from the year ended March 31, 2008. As a result, operating expenses increased by ¥347 million in the Japan segment. Operating income decreased by the sameamounts accordingly.
(C) Sales to foreign customers
Sales to foreign customers for the years ended March 31, 2009 and 2008 were as follows:Year ended March 31, 2009
North America
Sales to foreign customers
Net sales
Ratio of Sales to foreign Customers (%)¥36,239¥3,199¥52,410———

121,890

10.6

29.8

2.6

43.0

North America

Net sales
Ratio of Sales to foreign Customers (%)

Ratio of Sales to foreign Customers (%)

Total¥43,889¥6,845¥67,156———

148,779

11.0

29.5

4.6

45.1

North America

Net sales

Millions of yen
Asia
Other

¥16,422

Year ended March 31, 2009
Sales to foreign customers

Total¥12,972

Year ended March 31, 2008
Sales to foreign customers

Millions of yen
Asia
Other

Thousands of U.S.dollars
Asia
Other

Total

$132,057$368,920$32,567$533,544———

1,240,863

10.6

29.8

2.6

43.0

21. Subsequent Event
Cash Dividends
The following appropriations of retained earnings, which have not been reflected in the accompanying financial statements for the year ended March 31, 2009, were approved at the meeting of the Boardof Directors held on April 30, 2009:
Cash dividends (¥6.00 = $0.06 per share) ¥912 million ($9,284 thousand)26

Report of Independent Auditors
The Board of Directors
TOSHIBA MACHINE Co.,Ltd.
We have audited the accompanying consolidated balance sheets of TOSHIBA MACHINE Co.,Ltd. andconsolidated subsidiaries as of March 31, 2009 and 2008, and the related consolidated statements ofoperations, changes in net assets, and cash flows for the years then ended, all expressed 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 auditing standards generally accepted in Japan. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether thefinancial 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 reasonablebasis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, theconsolidated financial position of TOSHIBA MACHINE Co.,Ltd. and consolidated subsidiaries at March 31,
2009 and 2008, and the consolidated results of their operations and their cash flows for the years thenended in conformity with accounting principles generally accepted in Japan.
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to theyear ended March 31, 2009 are presented solely for convenience. Our audit also included the translationof yen amounts into U.S. dollar amounts and, in our opinion, such translation has been made on the basis
described in Note 3.

June 26, 200927

Directors & Auditors

Directors President

Yukio Iimura
Senior Managing Director
Yoshi AtobeManaging Directors
Fumihisa Yano
Akinori Ide
Directors
Takateru Yoshimura
Yoshihiro Kishimoto
Takanao Suzuki
Satoshi Hironaka
Masayuki Yagi
Shigetomo Sakamoto
Auditors

Michio Matsumoto
Masahiro Suzuki
Teruyuki Makino
Michiharu Watanabe

282-2, Uchisaiwaicho 2 Chome, Chiyoda-ku, Tokyo 100-8503, Japan
TEL : 81-(0)3-3509-0200
FAX : 81-(0)3-3509-0333

SM09101-500-SS