Consolidated Five-Year Summary
EXEDY CORPORATION AND CONSOLIDATED SUBSIDIARIES
Years ended March 31
Japanese yen(millions)

U.S. dollars(thousands)

2005

2006

2007

2008

2009

2009

Net sales ··························································· ¥ 136,307¥ 153,059¥ 166,745¥ 187,303¥166,750$1,697,547

6,300

9,354

10,497

11,6585,441

55,390Total assets ······················································· ¥ 123,289¥ 133,440¥ 144,073¥ 158,147¥136,907$1,393,739

For the year:

Net income ························································At year-end:

Current assets ··················································

63,78366,43370,26582,00059,871

609,498

Property, plant and equipment ··························

49,71957,24065,011

68,22070,140714,038

Current liabilities ···············································

27,64730,66732,932

37,207

24,115245,495

Long-term debt ·················································

2,687

2,726

2,727

2,966

2,627

26,743

Shareholders’ equity ·········································

76,032

—

—

—

—

—

Shareholders’ equity / Total assets ···················

61.7%

Net assets ·························································—Net assets / Total assets ···································—%

Retained earnings ············································

60,808—%90,25967.6%
69,050—%99,847—%110,033

64.3%

64.6%

75,04984,934—%103,249
70.9%

Net income ······················································· ¥ 127.61

70.9%

87,588Japanese yen

Per share data:—%
1,051,094

891,662

U.S. dollars¥ 186.02¥ 215.09¥ 239.95¥ 112.00

—

—

—

—

$

1.14
—

Net income – diluted ·········································

127.59

Shareholders’ equity ········································

1,525.24

—

—

—

—

—

Net assets ·························································—

1,714.93

1,907.92

2,102.64

1,999.38

20.35

Notes: 1. Dollar figures are translated, for convenience only, at the rate of ¥98.23 to U.S. $1.00.
2. From fiscal year 2007, net assets were stated under “Accounting standard for presentation of net assets in the balance sheet (Accounting Standards Boardof Japan Statement No.5 issued on December 9, 2005)” and “Implementation guidance for Accounting standard for presentation of net assets in the balance
sheet (Accounting Standards of Japan Guidance No. 8 issued on December 9, 2005)”. This standard applied retroactively to the net assets for fiscal year 2006.

Financial Section
Consolidated Five-Year Summary ······································ 6Consolidated Balance Sheets ············································ 7
Consolidated Statements of Income ··································· 9Consolidated Statements of Changes in Net Assets ········ 10
Consolidated Statements of Cash Flows ·························· 11
Notes to Consolidated Financial Statements ···················· 12
Independent Auditors' Report ··········································· 25
Corporate Data ································································· 26

Annual Report 2009 6

Consolidated Balance Sheets
EXEDY CORPORATION AND CONSOLIDATED SUBSIDIARIESAs of March 31, 2008 and 2009

Japanese yen(millions)
ASSETS2008

U.S. dollars(thousands)

2009

2009

Current Assets:
Cash and cash equivalents [Note 1(p)] ·································¥ 22,422¥ 16,335$ 166,293

Time deposits ········································································

727

68

692

Trade ··············································································

37,66023,369237,901

Non-consolidated subsidiaries and affiliates ··················

183

463

4,714

Notes and accounts receivable (Notes 3 & 4) –Allowance for doubtful accounts ····································

(204)

(104)

(1,059)Inventories (Note 2) ·······························································

15,937

13,665

139,112Deferred tax assets (Note 13) ···············································

2,723

2,017

20,533

Short-term loans ····································································

697

644

6,556

Other current assets ······························································

1,855

3,414

34,756

Total current assets ························································

82,00059,871

609,498

Property, Plant and Equipment (Note 3):
Land ·······················································································

7,698

8,009

81,533

Buildings and structures ························································

36,59039,338400,468

Machinery and vehicles ·························································

100,726

99,2201,010,078

Tools and furniture ·································································

33,68833,960345,719

Construction in progress ························································

6,805

8,956

91,174

185,507

189,483

1,928,972

Less–accumulated depreciation ············································(117,287)(119,343)(1,214,934)

Total property, plant and equipment ·······························

68,22070,140714,038

Investments and Other Assets:
1,477

804

8,185

non-consolidated subsidiaries and affiliates ······················

752

688

7,004

Long-term loans ····································································

151

140

1,425

Deferred tax assets (Note 13) ···············································

3,105

2,744

27,934

Other assets ··········································································

2,442

2,520

25,655

Total investments and other assets ································

7,927

6,896

70,203

Investments in securities (Note 10) ·······································
Investments in and loans to¥158,147¥136,907$1,393,739

Japanese yen(millions)

Current Liabilities:
Short-term borrowings including
current portion of long-term debt (Notes 3 & 18) ·····················
Notes and accounts payable –Trade ····················································································
Construction ·········································································
Non-consolidated subsidiaries and affiliates ························
Accrued expenses ·······································································
Accrued income taxes ·································································
Other current liabilities ·································································
Total current liabilities ···························································

2009

2008

LIABILITIES AND NET ASSETS

¥

5,713

U.S. dollars(thousands)

¥

4,483

2009

$

45,63818,614
1,719
34
6,426
3,878
823
37,207

11,289
2,214
25
5,166
464
474
24,115

114,924
22,539255
52,591
4,724
4,824
245,495

2,966
1,521
5,719
458
243
10,907

2,627
561
5,561
549
245
9,543

26,743
5,711
56,6125,589
2,495
97,1508,284
7,541
84,9348,284
7,541
87,58884,33376,769891,662(36)
100,723(38)
103,375(387)
1,052,377

436
995
1,431

127
(6,368)(6,241)

1,293(64,828)(63,535)

Minority Interests ·············································································

7,879

6,115

62,252

Total net assets ·····································································

110,033

103,249

1,051,094¥158,147¥136,907$1,393,739

Long-term Liabilities:
Long-term debt (Notes 3 & 18) ····················································
Deferred tax liabilities (Note 13) ··················································
Employees’ severance and retirement benefits (Note 12) ···········
Retirement benefits for directors and corporate auditors ············
Other long-term liabilities ·····························································
Total long-term liabilities ·······················································
Contingent Liabilities
Net Assets
Shareholders’ Equity (Note 14):
Common stock
Authorized–168,000 thousand shares in 2008 and 2009
Issued–48,594 thousand shares in 2008 and 2009 ·················
Capital surplus ·············································································
Retained earnings ·······································································
Treasury stock
10 thousand shares in 2008 and 12 thousand shares in 2009 ·····
Total shareholders’ equity ····················································
Valuation and Translation Adjustments:
Net unrealized holding gains on other securities ·························
Foreign currency translation adjustments [Note 1(c)] ··················
Total valuation and translation adjustments ·························

The accompanying notes to the consolidated financial statements are an integral part of these statements.

7 Annual Report 2009

Annual Report 2009 8

Consolidated Statements of Income

Consolidated Statements of Changes in Net Assets

EXEDY CORPORATION AND CONSOLIDATED SUBSIDIARIES
Years ended March 31, 2008 and 2009

EXEDY CORPORATION AND CONSOLIDATED SUBSIDIARIES
Years ended March 31, 2008 and 2009

Japanese yen(millions)

U.S. dollars(thousands)

2009

2008
¥187,303¥166,750$1,697,547

Cost of Sales ····················································································
Gross profit ··················································································

144,216
43,087

134,732
32,018

1,371,598
325,949

Other (Income) Expenses:
Interest and dividend income ·······················································
Interest expense ··········································································
Losses on sale or disposal of property,
plant and equipment ································································
Equity in gains of non-consolidated subsidiaries and affiliates ····
Foreign exchange (gains) losses, net ··········································
Gains on reversal of allowance for doubtful accounts ·················
Gains on reversal of reserve for warranty ····································
Losses on devaluation of investment securities ··························
Impairment losses on property, plant and equipment (Note 6) ······
Other, net ·····················································································

21,801
10,21723,306
19,781

221,938
104,011

(200)
295

(211)
274

(2,036)
3,003

700
1
973
—
—
174
137
(357)
1,723

7,126
10
9,905
—
—
1,771
1,395
(3,634)
17,540

Income before income taxes and minority interests ····················

20,2578,494

86,471

Income Taxes (Note 13)
Current ·························································································
Deferred ·······················································································

6,742
785

2,445
37

24,891
377

Minority Interests in Net Income of Consolidated Subsidiaries ··········

1,072

Net Income ·······················································································¥ 11,658

571
¥

5,441

5,813
$

Japanese yen¥ 239.95—
50.00

The accompanying notes to the consolidated financial statements are an integral part of these statements.

9 Annual Report 2009

Valuation and translation
adjustments

Shareholders' equity

Commonstock

CapitalsurplusRetainedearnings

Net
ForeignTotal
unrealized
currency
shareholders’ holding gains
translation
equityon otheradjustments
securities

Treasurystock

Minority
interests

Balance as of March 31, 2007 ·······························

48,594¥8,284¥7,541¥75,049¥(26)¥ 90,848¥698¥ 1,153¥7,148Net income ······················································

—

—

—

11,658—

11,658———Purchase of treasury stock ·····························

—

—

—

—

(10)

(10)

—

—

—

Cash dividends paid ········································

—

—

—

(1,773)—(1,773)———

Other, net ·························································

—

—

—

—

—

—

(262)

(158)

731

Balance as of March 31, 2008 ·······························

48,594¥8,284¥7,541¥84,934¥(36)¥100,723

¥436

995

¥7,879¥

Increase for unification of accounting policies

286
(108)
240
(216)
(560)
—
98
(279)
(476)

Per Share Data (Note 17):
Net income ··················································································Net income–diluted ······································································Cash dividends ············································································

Number ofissuedshares(thousands)

2009

Net Sales ··························································································

Selling, General and Administrative Expenses (Note 5) ··············
Operating income ········································································

Japanese yen(millions)¥ 112.00—
35.00

55,390applied to foreign subsidiaries ···················

—

—

—

31

—

31

—

—

—

Net income ······················································

—

—

—

5,441

—

5,441

—

—

—

Purchase of treasury stock ·····························

—

—

—

—

(2)

(2)

—

—

—

Cash dividends paid ········································

—

—

—

(2,818)—(2,818)———Other, net ·························································

—

—

—

—

—

—

(309)

(7,363)(1,764)

Balance as of March 31, 2009 ·······························

48,594¥8,284¥7,541¥87,588¥(38)¥103,375¥127¥(6,368)¥6,115

U.S. dollars(thousands)
Valuation and translation
adjustments
Net
ForeignTotal
unrealized
currency
shareholders’ holding gains
translation
equityon otheradjustments
securities

Shareholders' equity

Commonstock

Balance as of March 31, 2008 ·····················································

CapitalsurplusRetainedearnings$84,333$76,769

Treasurystock$864,644$(367) $1,025,379

Minority
interests$4,439$ 10,129$80,210—

Increase for unification of accounting policies
applied to foreign subsidiaries ·········································

—

—

316

—

316

—

—

Net income ············································································——

55,390—55,390———Purchase of treasury stock ···················································

—

—

—

(20)

(20)

—

—

—

Cash dividends paid ······························································——(28,688)—(28,688)———

Other, net ···············································································

—

—

—

—

—

(3,146)(74,957)(17,958)

Balance as of March 31, 2009 ·····················································$84,333$76,769$891,662$(387) $1,052,377$1,293$(64,828)$62,252

U.S. dollars
$

1.14
—
0.35

The accompanying notes to the consolidated financial statements are an integral part of these statements.

Annual Report 2009 10

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

EXEDY CORPORATION AND CONSOLIDATED SUBSIDIARIES
Years ended March 31, 2008 and 2009

EXEDY CORPORATION AND CONSOLIDATED SUBSIDIARIESJapanese yen(millions)

U.S. dollars(thousands)

2008

2009

2009

¥20,257¥ 8,494$ 86,471

10,863
286
98
(155)
(626)
(211)
274
(2,457)(1,405)550
218
27,692231(263)(5,834)
21,826

12,312
680
137
(79)
(157)
(200)
295
11,491(246)(3,696)(1,685)27,346246(310)(7,212)
20,070125,338
6,923
1,395
(804)
(1,598)(2,036)
3,003
116,981(2,504)(37,626)(17,155)
278,3882,504(3,156)(73,420)
204,316

Cash Flows from Investing Activities:
Increase in time deposits ··················································································
Decrease in time deposits ················································································
Payments for purchases of property, plant and equipment ······························
Proceeds from sale of property, plant and equipment ······································
Payments for acquisitions of intangible assets ·················································
Payments for purchases of investment in securities ·········································
Payments for additional portions of consolidated subsidiaries ·························
Payments for acquisitions of consolidated subsidiaries (Note 8) ·····················
Additions to loans receivable ············································································
Collection of loans receivable ···········································································
Other, net ··········································································································Net cash used in investing activities ····························································

(216)
214
(13,619)
171
(206)
(285)
(228)
(1)
(54)
114
2
(14,108)(48)
700(21,418)
241
(519)
(12)
—
—
(45)
53
(21)
(21,069)

(489)
7,126
(218,039)
2,453(5,284)
(122)
—
—
(458)
540
(213)
(214,486)

Cash Flows from Financing Activities:
Increase (decrease) in short-term borrowings, net ··········································
Proceeds from long-term loans payable ···························································
Repayments of long-term loans payable ··························································
Payments for acquisitions of treasury stock ·····················································Cash dividends paid ·························································································Cash dividends paid to minority shareholders ··················································
Other, net ··········································································································Net cash used in financing activities ····························································

1,026
561
(460)
(10)
(1,771)
(349)
71
(932)

(888)
1,926
(1,045)(2)(2,817)(485)
12(3,299)(9,040)19,607(10,638)(20)(28,678)(4,937)
122(33,584)

Cash Flows from Operating Activities:
Income before income taxes and minority interests ·········································
Adjustments for:
Depreciation and amortization ·········································································
Losses on sales or disposal of property, plant and equipment ·························
Impairment losses on property, plant and equipment ·······································
Decrease in allowance for doubtful accounts ···················································
Decrease in employees' severance and retirement benefits ····························
Interest and dividend income ···········································································
Interest expense ·······························································································
Increase in notes and accounts receivables ·····················································
Decrease (increase) in inventories ···································································
Increase in notes and accounts payables ························································
Other, net ··········································································································
Subtotal ········································································································
Interest and dividend income received ·····························································
Interest paid ······································································································
Income taxes paid ····························································································Net cash provided by operating activities ·····················································

Effect of Exchange Rate Changes on Cash and Cash Equivalents ··················Net Increase in Cash and Cash Equivalents ·······················································Cash and Cash Equivalents at Beginning of Year ··············································Cash and Cash Equivalents at End of Year ·························································

(100)
6,686
15,736¥22,422(1,789)(6,087)22,422¥16,335(18,213)(61,967)
228,260$166,293

1. Summary of Significant Accounting and Reporting Policies(a) Basis of presenting the consolidated financial statements
The accompanying consolidated financial statements of EXEDY
Corporation (“the Company”) and its consolidated subsidiaries havebeen prepared in accordance with the provisions set forth in the
Financial Instruments and Exchange Law in Japan and its related
accounting regulations, and in conformity with accounting principles
generally accepted in Japan (“Japanese GAAP”), which are different
in certain respects as to application and disclosure requirements fromInternational Financial Reporting Standards.
The accounts of the Company’s overseas subsidiaries are based on theiraccounting records maintained in conformity with generally accepted
accounting principles prevailing in the respective countries of domicile. The
accompanying consolidated financial statements have been restructured
and translated into English from the consolidated financial statementsof the Company prepared in accordance with Japanese GAAP and filedwith the appropriate Local Finance Bureau of the Ministry of Finance as
required by the Financial Instruments and Exchange Law in Japan. Certain
supplementary information included in the statutory Japanese language
consolidated financial statements, but not required for fair presentation, is
not presented in the accompanying consolidated financial statements.
The translation of the Japanese yen amounts into U.S. dollar amounts
is included solely for the convenience of readers outside Japan, using
the prevailing exchange rate at March 31, 2009, which was ¥98.28 to
U.S. $1.00. The convenience translation should not be construed as
representation that the Japanese yen amounts have been, could havebeen, or could in the future be, converted into U.S. dollars at this or any
other rate of exchange.
(b) Principles of consolidation
The accompanying consolidated financial statements include theaccounts of the Company and significant companies over which theCompany has power of control through majority voting rights or the
existence of certain conditions evidencing control by the Company.
Investments in non-consolidated subsidiaries and affiliates over which
the Company has the ability to exercise significant influence over
operating and financial policies of the investees, are accounted forusing the equity method.
In the elimination of investments in consolidated subsidiaries, the assets
and liabilities of the subsidiaries, including the portion attributable
to minority shareholders, are valued using the fair value at the time
the Company acquired control of the respective subsidiary. Materialintercompany balances, transactions and profits have been eliminatedin consolidation.
(c) Translation of foreign currencies
Monetary assets and liabilities denominated in foreign currency aretranslated into Japanese yen at current rates at each balance sheet
date and the resulting translation gains or losses are charged to income
for the current period.
The balance sheets of consolidated overseas subsidiaries aretranslated into Japanese yen at the year-end rates except forshareholders' equity accounts, which are translated at historical rates.
Income statements of consolidated overseas subsidiaries are translated
at the average rates during the year. Translation adjustments resulting
from translating financial statements whose accounts are denominatedin foreign currencies are not included in the determination of net income
but are reported as “Foreign currency translation adjustments” in acomponent of net assets and minority interests.

The accompanying notes to the consolidated financial statements are an integral part of these statements.

(d) Securities
Securities consist principally of marketable and nonmarketable equity
securities and interest-bearing securities.

Other securities with available fair market value are stated at fair market
value. Net unrealized holding gains and losses on these securities arereported, net of applicable income taxes, as a separate component of
net assets.
Realized gains and losses on the sale of such securities are computed
using the moving average cost method.
Other securities with no available fair market value are stated at moving
average cost, net of the amount considered uncollectible.
If the fair market value of other securities declines significantly, suchsecurities are stated at fair market value and the difference between thefair market value and the carrying amount is recognized as a loss in the
period of decline. If the net asset value of other securities, except forinterest-bearing securities, with no available fair market value declines
significantly, such securities should be written down to the net asset
value by charging to income.
(e) Derivatives
All derivatives are stated at fair value.
(f) Inventories
Inventories possessed for selling except for supplies are mainly statedat the lower of cost (first-in, first-out) or net realizable value at March
31, 2009. Supplies are mainly stated at cost determined by the lastpurchase cost method.
(Changes in accounting policies)
On July 5, 2006, the Accounting Standards Board of Japan issued“Accounting Standard for Measurement of Inventories)” (ASBJ
Statement No.9). Prior to April 1, 2008, inventories of the Company andits domestic subsidiaries were stated at the lower cost (first-in, first-out)or market value. Effective April 1, 2008, the Company and its domestic
subsidiaries adopted the new accounting standards for measurementof inventories and stated the inventories at the lower of cost or net
realizable value at March 31, 2009. The effect on operating income,income before income taxes and minority interests, and net income asa result of applying the new accounting standard has been immaterial.
(g) Property, plant and equipment
The Company and its domestic consolidated subsidiaries compute thedepreciation of property, plant and equipment by using the decliningbalance method, and its overseas consolidated subsidiaries mainly byusing the straight-line method. The depreciation of buildings acquired by
the Company and its domestic consolidated subsidiaries on and after
April 1, 1998 is computed by using the straight-line method.
Estimated useful lives of property, plant and equipment are as follows:
Buildings and structures ··············································· 3–50 years
Machinery and vehicles ················································ 2–15 years
Tools and furniture ························································ 2–20 years
Maintenance and repairs including minor renewals and betterments arecharged to income as incurred.
(Additional information)
Effective from April 1, 2008, the Company and its domestic subsidiaries
changed the estimated useful lives on depreciation of machinery basedon the reassessment of the useful lives in light of the amendment in
the Corporation Tax Code of Japan. The effect of this change was todecrease operating income by ¥416 million ($4,235 thousand) andincome before income taxes and minority interests by ¥416 million($4,235 thousand), respectively.
The effect of these changes on segment information is discussed in therelevant sections of this report.
(h) Software
Software is amortized using the straight-line method over the useful life
(3–5 years) of the software.

11 Annual Report 2009

Annual Report 2009 12

(i) Leases
Finance leases, except for certain immaterial leases, are capitalized anddepreciated over lease terms, as applicable. However, as permitted anddiscussed below, the Company and consolidated domestic subsidiaries
account for finance leases commencing prior to April 1, 2008 which do
not transfer ownership of the leased property to the lessee as operatinglease with disclosure of certain “as if capitalized” information.
(Changes in accounting policies)
On March 31, 2007, the Accounting Standards Board of Japan issued“Accounting standards for lease transactions” (ASBJ Statement No.13)
and “Guidance on Accounting standard for lease transactions” (ASBJ
Guidance No.16). Effective from the year ended March 31, 2009, theCompany and its domestic subsidiaries adopted the new accounting
standards for finance leases commencing after March 31, 2008 andcapitalized assets used under such leases, except for certain immaterialor short-term finance leases, which are accounted for as operatingleases. As permitted, finance leases which commenced prior to April
1, 2008 and have been accounted for as operating leases, continue tobe accounted for as operating leases with disclosure of certain “as if
capitalized” information. The effect on operating income, income before
income taxes and minority interests, and net income as a result ofapplying the new accounting standard has been immaterial.
(j) Income taxes
The Company and its consolidated subsidiaries recognize the tax
effects of temporary differences between the carrying amounts ofassets and liabilities for tax and financial reporting purposes.
The asset and liability approach is used to recognize deferred tax
assets and liabilities for the expected future tax consequences of
temporary differences between the carrying amounts of assets andliabilities for financial reporting purposes and the amounts used forincome tax purposes.
(k) Allowance for doubtful accounts
The Company and its consolidated subsidiaries provide for doubtful
accounts principally at an amount computed based on the historicalbad debt ratio during a certain reference period plus the estimateduncollectible amount based on the analysis of individual accounts.
(l) Employees’ severance and retirement benefits
The Company and its consolidated subsidiaries provide for employees’
severance and retirement benefits at the end of the fiscal year based on
the estimated amounts of projected benefit obligation and the fair valueof the plan assets at that date.
Actuarial differences are fully amortized in the year following the year inwhich the actuarial differences are recognized. Prior service costs arerecognized in expenses in the year in which they are incurred.
(m) Retirement benefits for directors and corporate auditors
The Company and its domestic consolidated subsidiaries have
unfunded retirement allowance plans for directors and corporate
auditors. The amounts required under the plans have been fully
accrued.

(n) Accounting for consumption taxes
Consumption taxes in Japan are imposed at the flat rate of 5% on all
domestic consumption of goods and services (with certain exemptions).

2. Inventories
Inventories as of March 31, 2008 and 2009 were as follows:

The consumption taxes withheld upon sale, and consumption taxes
paid by the Companies on their purchases of goods and services are
not included in the amounts of respective revenue and cost or expense
items in the accompanying consolidated statements of income.
(o) Per share data
The computation of net income per share is based on the weighted
average number of shares outstanding during each year, excluding
the Company’s treasury stock and based on net income attributing toordinary shareholders, excluding bonuses to directors and corporate
auditors, etc. The computation of net income–diluted per share assumes
the full exercise of outstanding warrants and full conversion of convertible
bonds at the beginning of the year (or at the time of issuance, if this isafter the beginning of the year) with an applicable adjustment for related
net-of-tax interest expense. The computation of net assets per shareis based on the number of common stock shares outstanding at yearend, excluding the Company’s treasury stock and based on net assets
attributing to ordinary shareholders excluding minority interests.
Cash dividends per share shown in the statements of income are theamounts applicable to the respective years.
(p) Cash and cash equivalents
Cash and cash equivalents include cash on hand, demand deposits
and short-term investments have maturities of three months or lesswhen purchased, are easily convertible into cash and have few risks offluctuation in value.
(q) Reclassification
Certain comparative figures have been reclassified to conform to thecurrent year’s presentation.
(r) Changes in accounting policies
Practical solution for unification of accounting policies applied
to foreign subsidiaries for consolidated financial statements
From the fiscal year ended March 31, 2009, the Company adopted“Practical Solution for Unification of Accounting Policies Applied toForeign Subsidiaries for Consolidated Financial Statements” (Practical
Issues Task Force No. 18, issued by the Accounting Standards Boardof Japan (ASBJ) on May 17, 2006). In principle, the Company unified
the accounting standards for foreign subsidiaries and makes necessary
adjustments upon consolidation. The effect on operating income,income before income taxes and minority interests, and net income asa result of applying the new accounting standard has been immaterial.

Japanese yen(millions)Finished goods ···········································································································
Work-in process ··········································································································
Raw materials ·············································································································
Supplies ······················································································································

U.S. dollars(thousands)

2008

2009

2009

¥ 6,509
3,257
5,327
844
¥15,937¥ 5,687
2,666
4,287
1,025
¥13,665$ 57,895
27,14043,642
10,435$139,112

3. Assets Pledged as Collateral
The following assets were pledged as collateral for ¥1,689 million of secured short-term loans from banks and ¥113 million of secured longterm loans from government-sponsored agencies as of March 31, 2008, and for ¥129 million ($1,313 thousand) of secured long-term loans
from government-sponsored agencies as of March 31, 2009:
Japanese yen(millions)2008
Notes and accounts receivable and inventories ·····························································
Land ································································································································
Buildings and structures, net ··························································································
Machinery and vehicles, net ···························································································

U.S. dollars(thousands)

2009

2009
¥—
62
37
—
¥99

¥1,142152
220
5¥1,519

$

—
631
377
—
$1,008

As is customary in Japan, short-term and long-term bank loans are made under general agreements which provide that additional security
and guarantees for present and future indebtedness will be given at the request of the bank under certain circumstances, and that any
collateral so furnished will be applicable to all indebtedness to that bank. To date, the Company and its consolidated subsidiaries have notreceived any such requests from their banks.

4. Contingent Liabilities
Contingent liabilities as of March 31, 2008 and 2009 were as follows:
Japanese yen(millions)

2008
Trade notes receivable discounted ·················································································

U.S. dollars(thousands)

2009

2009
¥6

¥16

$61

5. Research and Development Expenses
Research and development expenses are charged to income as incurred. Research and development expenses charged to income for theyears ended March 31, 2008 and 2009 were as follows:
Japanese yen(millions)

2008
Research and development expenses ···········································································

13 Annual Report 2009

¥4,546

U.S. dollars(thousands)

2009¥4,947

2009$50,361Annual Report 200914

(b) Dividends

6. Impairment of Fixed Assets(1) Dividends
March 31, 2008

Accounting for impairment of fixed assets shall be applied only when the investment may not be recoverable in the business.
In the year ended March 31, 2008, the Company and its consolidated subsidiaries evaluated the profitability in each business category,
which is Manual automotive drivetrain operations, Automatic automotive drivetrain operations, Industrial drivetrain operations and Other(Plants and other facilities), and the result indicates each business can recover the investment through the future. However, the Company
and its consolidated subsidiaries have some assets which do not belong to any business category and the carrying amount of some of thoseassets are not recoverable. Therefore the Company and its consolidated subsidiaries recognized impairment losses on those assets where
the recoverable value was less than the net book value. The recoverable value of land was based on valuation of property and equipment
taxes. Impairment losses were recognized for the excess of the net book value over the recoverable value.
Impairment losses on fixed assets for the year ended March 31, 2008 were as follows:

Asset Type

Location

Usage

Asset which does not belong
to any business category

Land
Land

Hyogo Pref.
Osaka Pref.

Idle
Idle

Type of shares

Ordinary general meeting of theshareholders on June 26, 2007

Common stock¥

947

Board of Directors’ meeting on
October 30, 2007

Common stock¥

826

Dividends per share(Japanese yen)

Cut-off date

Effective date

¥19.5

March 31, 2007

June 27, 2007

¥17.0

September 30, 2007

November 28, 2007

March 31, 2009

March 31, 2008
Asset Group

Cash dividends paid
Japanese yen (millions)

Resolution

Japanese yen(millions)················································································

¥70
28
¥98

In the year ended March 31, 2009, the Company and its consolidated subsidiaries evaluated the profitability in each business category,
which is Manual automotive drivetrain operations, Automatic automotive drivetrain operations, Industrial drivetrain operations and Other(Plants and other facilities), and the result indicates each business can recover the investment through the future. However, the Company
and its consolidated subsidiaries has some assets which belong to Automatic automotive drivetrain category and there is no prospect foruse. Therefore the Company and its consolidated subsidiaries recognized impairment losses on those assets where the recoverable value
was less than the net book value. The recoverable value of assets was based on net selling price. Impairment losses were recognized for theexcess of the net book value over the recoverable value.

Cash dividends paid
Japanese yen (millions)
U.S. dollars (thousands)

Resolution

Type of shares

Ordinary general meeting of theshareholders on June 26, 2008

Common stock¥ 1,603$16,319

Board of Directors’ meeting on
October 30, 2008

Common stock¥ 1,215$12,369

Dividends per share(Japanese yen)
(U.S. dollars)

Cut-off date

Effective date

¥33.0
$0.34

March 31, 2008

June 27, 2008

¥25.0
$0.25

September 30, 2008

November 28, 2008

(2) Dividends, of which cut-off date was in the year ended March 31, 2009, and effective date of which will be in the year ending March 31, 2010
Resolution

Type of shares

Cash dividends paid
Japanese yen (millions)
U.S. dollars (thousands)

Sourceofdividends

Ordinary general meeting of theshareholders on June 24, 2009

Common stock¥ 486$4,948Retainedearnings

Dividends per share
Cut-off date
(Japanese yen)
(U.S. dollars)

¥10.0
$0.10

March 31, 2009

Effective dateJune 25, 2009

Impairment losses on fixed assets for the year ended March 31, 2009 were as follows:
March 31, 2009
Asset Group

Asset Type

Usage

AT
AT

Machinery
Tools and furniture

Idle
Idle

Japanese yen(millions)················································································

U.S. dollars(thousands)

¥114
23

$1,161234¥137$1,395

8. Cash Flows(a) Acquisition of newly consolidated subsidiaries
In the year ended March 31, 2008, the Company acquired the outstanding shares of Kinugawa Cast Iron Co., Ltd. The assets and liabilities
of Kinugawa Cast Iron Co., Ltd. acquired by the Company and the reconciliation between the acquisition cost and net cash used for theacquisition were as follows:
Japanese yen(millions)

7. Changes in Net Assets(a) Shares issued / Treasury stock

March 31, 2008
Shares issued:
Common stock (thousands) ·····················································
Treasury stock:
Common stock (thousands) ······················································

Number of shares
as of March 31,
2007

Increase

Decrease

Number of shares
as of March 31,
2008

48,594
48,594————

48,594
48,594

8
8

2
2

—
—

10
10

Current assets ·····························································································
Non-current assets ······················································································
Consolidation difference ··············································································
Current liabilities ···························································································
Non-current liabilities ···················································································
Acquisition cost ····························································································Cash and cash equivalents of newly consolidated subsidiary ·····················Net acquisition cost ·····················································································

¥216
210
93
(215)
(280)
24
(23)
¥ 1

(Note) The increase of treasury stock–common stock 2 thousand is due to purchase of the stocks less than standard unit 2 thousand.

March 31, 2009
Shares issued:
Common stock (thousands) ·····················································
Treasury stock:
Common stock (thousands) ······················································

Number of shares
as of March 31,
2008

Increase

Decrease

Number of shares
as of March 31,
2009

48,594
48,594————

48,594
48,594

10
10

2
2

—
—

12
12

(Note) The increase of treasury stock–common stock 2 thousand is due to purchase of the stocks less than standard unit 2 thousand.

15 Annual Report 2009

Annual Report 200916

9. Leases

10. Securities(a) Finance leases
As discussed in Note 1 (i), finance leases commenced prior to April 1, 2008 which do not transfer ownership of leased assets to lessees areaccounted for as operating leases.

Other securities with book values (fair values) exceeding acquisition costs as of March 31, 2008 and 2009 were as follows:

Information relating to finance leases, except those leases for which the ownership of the leased assets is considered to be transferred to
the lessee, is described below.
Pro forma information regarding leased property such as acquisition cost, accumulated depreciation, accumulated losses on impairment andfuture minimum lease payments under finance leases that do not transfer the ownership of the leased property to the lessee for the years
ended March 31, 2008 and 2009, was as follows:

Japanese yen (millions)
Acquisition
cost

March 31, 2008

Equity securities ·············································································································
Interest-bearing securities ······························································································
Others ·····························································································································

Book
value

¥356
—
—
¥356

Difference¥1,184——¥1,184

¥828
—
—
¥828

Japanese yen (millions)
March 31, 2008

Acquisition
cost

Accumulated
depreciation

Accumulated
losses on
impairment

Japanese yen (millions)
Balance
March 31, 2009

Machinery and vehicles ················
Tools and furniture ························
Other ·············································

¥334
131
—
¥465

¥216
29
—
¥245

¥

¥

—
—
—
—

¥118
102
—
¥220

Equity securities ·············································
Interest-bearing securities ······························
Others ·····························································

Japanese yen (millions)
March 31, 2009
Machinery and vehicles ················
Tools and furniture ························

Acquisition
cost

Accumulated
depreciation

¥266
142
¥408

¥197
56
¥253

Accumulated
losses on
impairment
¥
¥

—
—
—

U.S. dollars (thousands)
BalanceAcquisition
cost

Accumulated
depreciation

¥ 69
86
¥155

$2,708
1,446$4,154$2,006570$2,576

$

—
—
—

Book
value

Difference

Acquisition
cost

¥249
—
—
¥249

¥542
—
—
¥542

¥293
—
—
¥293

$2,535——$2,535Book
value

Difference$5,518——$5,518$2,983——$2,983

Other securities with book values (fair values) not exceeding acquisition costs as of March 31, 2008 and 2009 were as follows:

Accumulated
losses on
impairment$

U.S. dollars (thousands)

Acquisition
cost

Balance$ 702
876$1,578Japanese yen (millions)
Acquisition
cost

March 31, 2008

Equity securities ·············································································································
Interest-bearing securities ······························································································
Others ·····························································································································

Book
value

¥326
—
—
¥326

Difference

¥227
—
—
¥227

¥(99)
—
—
¥(99)

The scheduled maturities of future lease payments, on such lease contracts for the years ended March 31, 2008 and 2009 were as follows:
Japanese yen(millions)

2008

U.S. dollars(thousands)

2009

2009

Due within one year ··········································································································
Due over one year ············································································································

¥ 63
157
¥220

¥ 46
109
¥155

$ 468
1,110
$1,578

Lease payments for the year ····························································································

¥ 79

¥ 62

$ 631

Japanese yen (millions)
March 31, 2009

Equity securities ·············································
Interest-bearing securities ······························
Others ·····························································

U.S. dollars (thousands)

Acquisition
cost

Book
value

Difference

Acquisition
cost

¥271
—
—
¥271

¥195
—
—
¥195

¥(76)
—
—
¥(76)

$2,759——$2,759Book
value$1,985——$1,985Difference$(774)——$(774)

The amounts of acquisition costs and future minimum lease payments under finance leases included the interest expense portions.
Depreciation expenses, which are not reflected in the accompanying consolidated statements of income, calculated by the straight-line
method, would have been ¥79 million and ¥62 million ($ 631 thousand) for the years ended March 31, 2008 and 2009, respectively.

The book value of securities with no available fair values as of March 31, 2008 and 2009 were as follows:
Japanese yen(millions)

The Company had no leased assets on which impairment should have been recognized for the years ended March 31, 2008 and 2009.

2008(b) Operating leases
The scheduled maturities of future lease payments under non-cancelable operating leases as of March 31, 2008 and 2009, were as follows:
Japanese yen(millions)2008
Due within one year ··········································································································
Due over one year ············································································································

17 Annual Report 2009

¥ 3
10
¥13

Other securities with no fair value
Non-listed equity securities ································································································¥66

U.S. dollars(thousands)

2009

2009
¥67

$682

U.S. dollars(thousands)

2009
¥ 3
7
¥10

2009
$ 31
71
$102

Annual Report 2009 18

Assumptions used in the calculation of the above information were as follows:

11. Derivatives
The only derivative transactions the Company and its consolidated subsidiaries engages in are forward currency exchange contracts andcurrency swaps for the purpose of hedging against exchange rate risks. The Company and its consolidated subsidiaries do not engage
in derivative transactions for trading or speculative purposes. Hedging accounting through derivative transactions was not applied as thenecessary conditions were not met. Forward currency exchange contracts and currency swaps bear risk due to changes in the exchange
rate. However, as the company trades only with banking facilities, there is very little credit risk. The Company and its consolidated
subsidiaries have established a control system which includes policies and procedures regarding derivative transactions. All derivativetransactions were processed under control and with the necessary approval.

Method of attributing the projected benefits to periods of service ····································
Discount rate ····················································································································
Expected rate of return on plan assets ·············································································
Amortization of prior service costs ···················································································
Amortization of actuarial differences ················································································

2008

2009

Straight-line basis
2.0%
2.0%
1 year
1 yearStraight-line basis
2.0%
2.0%
1 year
1 year

The following table provides information on derivative instruments as of March 31, 2008 and 2009.
Japanese yen (millions)
March 31, 2008

Contract
amountCurrency swaps:
Payment Rupiah
Receipt U.S. dollars ·······································
¥

34
—

Fair
value

(3)
—

¥

13. Income Taxes

Gain (loss)¥

Significant components of the Company and consolidated subsidiaries' deferred tax assets and liabilities as of March 31, 2008 and 2009 were as follows:
Japanese yen(millions)

(3)
(3)

2008

Japanese yen (millions)
March 31, 2009

Forward exchange contracts:
To sell U.S. dollars ·········································To sell Euro ····················································To sell Japanese Yen ·····································
To buy Japanese Yen ·····································
To buy U.S. dollars ·········································
Currency swaps:
Payment Rupiah
Receipt U.S. dollars ·······································

U.S. dollars (thousands)

Gain (loss)

Contract
amount

Fair
value

¥848
10
125
117
1

¥(24)
(1)
(25)
3
0

$8,388
92
1,018
1,222
10

$8,633
102
1,273
1,191
10

$(245)
(10)
(255)
31
0

3
¥ —

3
¥(44)

$

31
—

31
$(448)

Contract
amount

Fair
value

¥824
9
100
120
1

21
¥ —

214
—

$

Gain (loss)

12. Employees’ Severance and Retirement Benefits
The Company and its domestic consolidated subsidiaries have adopted defined benefit retirement plans: cash balance plans and lump-sum
payment plans, as well as defined contribution pension plans.
The liability for employees’ severance and retirement benefits included in the liabilities section of the consolidated balance sheets as ofMarch 31, 2008 and 2009 consisted of the following:
Japanese yen(millions)

Projected benefit obligation ······························································································
Fair value of plan assets ··································································································
Unrecognized actuarial differences ··················································································
Liability for employees’ severance and retirement benefits ·······································

U.S. dollars(thousands)

2008

2009

2009

¥11,742(5,494)
6,248¥11,781(5,080)6,701$119,933(51,716)
68,217(529)¥ 5,719(1,140)¥ 5,561(11,605)$ 56,612

Included in the consolidated statements of income for the years ended March 31, 2008 and 2009 were employees’ severance and retirement
benefit expenses comprised of the following:
Japanese yen(millions)

2008
Service costs ····················································································································
Interest costs ····················································································································
Expected return on plan assets ························································································
Amortization of actuarial differences ················································································
Employees’ severance and retirement benefit expenses ··········································
Others ·······························································································································

¥461
236
(111)
(37)
549
166
¥715

U.S. dollars(thousands)

2009
¥ 496
234
(110)
527
1,147
183
¥1,330U.S. dollars(thousands)

2009

2009

Deferred tax assets:
Employees’ severance and retirement benefits ·························································Net operating losses carried forward ········································································
Accrued bonuses to employees ················································································
Impairment losses on property, plant and equipment ···············································
Losses on devaluation of inventories ········································································
Unrealized gains (inventories) ··················································································
Unrealized gains (fixed assets) ·················································································
Accrued warranty costs ····························································································
Retirement benefits for directors and corporate auditors ··········································
Depreciation···············································································································
Losses on disposal of machinery ··············································································
Other ························································································································
Total deferred tax assets ·······························································································
Valuation allowance ··································································································¥2,309
2,084
949
475
305
385
196
191
185
—
—
1,422
8,501
(1,101)¥2,245
1,723
726
488
441
374
225
240
222
112
93
839
7,728
(1,622)$22,855
17,540
7,391
4,968
4,489
3,807
2,291
2,443
2,260
1,140
947
8,541
78,672(16,512)Deferred tax assets ········································································································

7,400

6,106

62,160

Deferred tax liabilities:
Property, plant and equipment ··················································································
Retained earnings of overseas subsidiaries ·····························································
Reserve for advanced depreciation ··········································································Net unrealized holding gains on other securities ······················································
Other ························································································································
Total deferred tax liabilities ···························································································
Valuation allowance ··································································································(822)(1,515)
(334)
(292)
(130)
(3,093)
—

(833)
(469)
(330)
(92)
(182)
(1,906)—(8,480)(4,775)(3,359)(937)(1,853)(19,404)—

Deferred tax liabilities ····································································································(3,093)(1,906)(19,404)

Net deferred tax assets ··································································································¥4,307¥4,200$42,756

The Company and its consolidated subsidiaries are subject to a number of taxes based on income, which, in the aggregate, indicate astatutory tax rate in Japan of approximately 40.4% for the years ended March 31, 2008 and 2009.
The following table summarizes the significant differences between the statutory tax rate and the Company’s effective tax rate for financial
statement purposes for the years ended March 31, 2008 and 2009:

2008
Statutory tax rate ············································································································
Adjustments for:Non-deductible expenses ·························································································Per capita inhabitants tax ··························································································Tax credit for research and development expenses ··················································
Different tax rates applied to overseas subsidiaries ··················································
Increase (decrease) of retained earnings of overseas subsidiaries ·························
Dividend ····················································································································
Increase in valuation allowance ················································································
Other ························································································································
Effective tax rate ·············································································································

2009

40.4%

40.4%

0.4
0.1
(1.6)
(4.0)
2.5
—
—
(0.6)
37.2%

1.0
0.3
(3.0)
(6.6)
(12.3)
4.4
6.3
(1.3)
29.2%

2009
$ 5,049
2,382(1,120)5,365
11,676
1,863$13,539(Note) “Others” represents the payments to defined contribution pension plans.

19 Annual Report 2009

Annual Report 2009 20

Geographic area segment information for the years ended March 31, 2008 and 2009 was as follows:

14. Shareholders’ Equity
As described in Note 1, net assets comprises three subsections, which are shareholders’ equity, valuation and translation adjustments andminority interests.
The Japanese Corporate Law (“the Law”) became effective on May 1, 2006, replacing the Japanese Commercial Code (“the Code”).
Under the Law, in cases where a dividend distribution of surplus is made, the smaller of an amount equal to 10% of the dividend or theexcess, if any, of 25% of common stock over the total of additional paid-in-capital and legal earnings reserve must be set aside as additional
paid-in-capital or legal earnings reserve. Legal earnings reserve is included in retained earnings in the accompanying consolidated balance
sheets.
Under the Code, companies were required to set aside an amount equal to at least 10% of the aggregate amount of cash dividends andother cash appropriations as legal earnings reserve until the total of legal earnings reserve and additional paid-in capital equaled 25% ofcommon stock.
Under the Code, legal earnings reserve and additional paid-in capital could be used to eliminate or reduce a deficit by a resolution of
the shareholders’ meeting or could be capitalized by a resolution of the Board of Directors. Under the Law, both of these appropriations
generally require a resolution of the shareholders’ meeting.
Additional paid-in capital and legal earnings reserve may not be distributed as dividends. Under the Code, however, on condition that the
total amount of legal earnings reserve and additional paid-in capital remained equal to or exceeded 25% of common stock, they wereavailable for distribution by resolution of the shareholders’ meeting. Under the Law, all additional paid-in-capital and all legal earnings
reserve may be transferred to other capital surplus and retained earnings, respectively, which are potentially available for dividends.
The maximum amount that the Company can distribute as dividends is calculated based on the non-consolidated financial statements of theCompany in accordance with Japanese laws and regulations.

15. Segment Information
The Company and its consolidated subsidiaries operate in three business segments, Manual automotive drivetrain operations, Automatic
automotive drivetrain operations and Other. The Manual automotive drivetrain segment manufactures and sells clutch discs, clutch covers,
flywheels and other manual transmissions. The Automatic automotive drivetrain segment is engaged in the manufacture and sale of torqueconverters and wet friction clutch plates. The Other segment consists of industrial machine drivetrain operations, that is, the manufacture andsale of powershift transmissions, and other operations including the sale and manufacture of clutches for motorcycle, plants and other facilities.
Business segment information for the years ended 31, 2008 and 2009 was as follows:
Japanese yen(millions)

2009

2009

Manual automotive drivetrain operations ····································
Automatic automotive drivetrain operations ································
Other operations ·········································································
Eliminations (inter-segment net sales) ········································¥ 58,026
110,513
24,489(5,725)¥187,303¥ 54,632
93,67825,730(7,290)¥166,750$ 556,164953,660
261,937(74,214)$1,697,547

Operating Costs and Expenses: Manual automotive drivetrain operations ····································
Automatic automotive drivetrain operations ································
Other operations ·········································································
Non-allocated operating expenses and eliminations ···················¥ 48,591
100,690
23,166(4,925)¥167,522¥ 47,370
90,50425,041(6,382)¥156,533$ 482,236
921,348
254,922(64,970)$1,593,536

Operating Income:Manual automotive drivetrain operations ····································
Automatic automotive drivetrain operations ································
Other operations ·········································································
Non-allocated operating expenses and eliminations ···················

¥

9,435
9,823
1,323
(800)
¥ 19,781

¥

7,262
3,173
690
(908)
¥ 10,217$

Assets:Manual automotive drivetrain operations ····································
Automatic automotive drivetrain operations ································
Other operations ·········································································
Corporate and eliminations ·························································¥ 44,495
80,837
17,36915,446¥158,147¥ 37,585
71,076
16,355
11,891¥136,907$ 382,622
723,567
166,497
121,053$1,393,739

Depreciation and Amortization:

Manual automotive drivetrain operations ····································
Automatic automotive drivetrain operations ································
Other operations ·········································································
Corporate and eliminations ·························································

¥

3,021
7,131
814
(103)
¥ 10,863

¥

2,964
8,191
1,275
(118)
¥ 12,312$

30,174
83,386
12,979(1,201)$ 125,338

Capital Expenditures:

Manual automotive drivetrain operations ····································
Automatic automotive drivetrain operations ································
Other operations ·········································································
Corporate and eliminations ·························································

¥

¥

$

3,084
9,460
1,756
(57)
¥ 14,243

5,700
13,531
3,276(83)¥ 22,424

U.S. dollars(thousands)

2008

2009

2009

Japan ··························································································
America ·······················································································
Asia-Oceania ··············································································
Other ···························································································
Eliminations (inter-segment net sales) ········································¥140,449
34,654
31,987
2,907(22,694)¥187,303¥121,492
31,07133,897
2,659(22,369)¥166,750$1,236,812
316,309
345,078
27,069(227,721)$1,697,547

Operating Costs and Expenses: Japan ··························································································
America ·······················································································
Asia-Oceania ··············································································
Other ···························································································
Non-allocated operating expenses and eliminations ···················¥126,795
33,49727,317
2,481(22,568)¥167,522¥116,895
30,36429,503
2,222(22,451)¥156,533$1,190,013
309,111300,346
22,621(228,555)$1,593,536

Operating Income:Japan ··························································································
America ·······················································································
Asia-Oceania ··············································································
Other ···························································································
Non-allocated operating expenses and eliminations ···················¥ 13,654
1,157
4,670
426
(126)
¥ 19,781

¥

4,597
708
4,395
436
81
¥ 10,217$

Assets:Japan ··························································································
America ·······················································································
Asia-Oceania ··············································································
Other ···························································································
Corporate and eliminations ·························································¥ 87,433
25,66931,5172,022
11,506¥158,147¥ 79,509
19,20730,7091,695
5,787¥136,907$ 809,417
195,531
312,623
17,25558,913$1,393,739

Sales:

46,7987,208
44,742
4,438
825$ 104,011(Notes) 1. The Company’s operations are classified into geographical areas as follows: Japan, America, Asia-Oceania (Thailand, Malaysia, China, Indonesia,
Vietnam, Australia, United Arab Emirates and New Zealand) and Other (Europe).
2. Effective from the year ended March 31, 2008, the Company and its domestic consolidated subsidiaries changed accounting method for depreciationof property, plant and equipment based on an amendment in the Corporation Tax Law. As compared with the previous method, operating costs andexpenses increased by ¥375 million in Japan segment and operating income for each segment decreased by the same amount.
Furthermore, those assets acquired before April 1, 2007 were allowed, after depreciating to 95% of their acquisition costs, to be depreciated to ¥1 in
five years using the straight line method. As compared with the previous method, operating costs and expenses increased by ¥405 million in Japan
segment and operating income for each segment decreased by the same amount.
3. Effective from the year ended March 31, 2009, the Company and its domestic consolidated subsidiaries changed estimated useful lives on
depreciation of machinery based on an amendment in the Corporation Tax Law. As compared with the previous method, operating costs and expenses
increased by ¥416 million($4,235 thousand) in Japan segment and operating income for each segment decreased by the same amount.

U.S. dollars(thousands)

2008
Sales:

Japanese yen(millions)

Net sales outside Japan for the years ended March 31, 2008 and 2009 were as follows:
Japanese yen(millions)

America ·······················································································
Asia-Oceania ··············································································
Other ···························································································

U.S. dollars(thousands)

2008

2009

2009

¥34,678
32,032
9,004¥75,714¥31,165
33,247
7,308¥71,720$317,266
338,461
74,396$730,123

73,92932,302
7,024(9,244)$ 104,011

58,027
137,748
33,351(845)$ 228,281(Notes) 1. Effective from the year ended March 31, 2008, the Company and its domestic consolidated subsidiaries changed accounting method for depreciation ofproperty, plant and equipment based on an amendment in the Corporation Tax Law. As compared with the previous method, operating costs and expenses
increased by ¥88 million in the Manual automotive drivetrain operations, ¥238 million in the Automatic automotive drivetrain operations and ¥49 million in the
Other operations, and operating income for each segment decreased by the same amount.
Furthermore, those assets acquired before April 1, 2007 were allowed, after depreciating to 95% of their acquisition costs, to be depreciated to ¥1 in
five years using the straight line method. As compared with the previous method, operating costs and expenses increased by ¥154 million in the Manualautomotive drivetrain operations, ¥172 million in the Automatic automotive drivetrain operations and ¥79 million in the Other operations, and operating
income for each segment decreased by the same amount.
2. Effective from the year ended March 31, 2009, the Company and its domestic consolidated subsidiaries changed estimated useful lives on depreciation ofmachinery based on an amendment in the Corporation Tax Law. As compared with the previous method, operating costs and expenses increased by ¥79
million ($804 thousand) in the Manual automotive drivetrain operations, ¥308 million ($ 3,136 thousand) in the Automatic automotive drivetrain operationsand ¥29 million ($295 thousand) in the Other operations, and operating income for each segment decreased by the same amount.

21 Annual Report 2009

Annual Report 2009 22

16. Related Party Transactions

17. Per Share Data

The Company adopted a new accounting standard entitled “Accounting Standard for Related Party Disclosures” (ASBJ, Statement No. 11)
and “Guidance on Accounting Standard for Related Party Disclosures” (ASBJ, Guidance No. 13) effective from the year beginning on April
1, 2008. The adoption of this standard made changes to the scope of disclosure for related party transactions, that is indicating transactions
for each subject.

Per share data for the years ended March 31, 2008 and 2009 were as follows:

For the years ended March 31, 2008 and 2009, the Company and its consolidated subsidiaries had operational transactions with Aisin AW
Co., Ltd and Aisin Holdings of America, Inc., which are subsidiaries of Aisin Seiki Co., Ltd. which holds 33.4% of the Company's voting rights.

Japanese yen

2009

2008
Net income ·······················································································································Net income – diluted ········································································································Net assets ·························································································································

U.S. dollars

2009¥ 112.00—
1,999.38¥ 239.95—
2,102.64$ 1.14—20.35

Diluted net income per share is not disclosed because potentially dilutive securities have not been issued.

A summary of the significant transactions between the Company and its consolidated subsidiaries and such companies for the years ended
March 31, 2008 and 2009 were as follows:
The information on which per share data was calculated for the years ended March 31, 2008 and 2009 was as follows:
March 31, 2008
Categories

Name

Other related
Aisin AW
company’sCo., Ltd.
subsidiary

Address

Anjo City
Aichi Pref.

CapitalJapanese yen(millions)¥ 26,480

Votingrights(%)

Operation

Manufacturing
automotiveparts

RelationshipDirectors

1—

BusinessrelationshipSale ofproducts

Trade

AmountJapanese yen(millions)

Sale ofproducts¥ 9,035

Accounts

Japanese yen(millions)

Balance
Japanese yen(millions)

Accounts
receivable¥ 1,916

Advanced
received¥

6

U.S. dollars(thousands)

2008

2009

2009

Net income per share of common stock
Net income ················································································································
Amounts not attributed to ordinary shareholders ······················································Net income attributed to ordinary shareholders ························································¥11,658—¥11,658¥ 5,441—¥ 5,441$55,390—$55,390

The weighted average number of shares (thousands) ··············································

48,58548,583

March 31, 2009

Subjects

The
Company

Categories

Other relatedcompany’s
subsidiary

Name

Aisin AW
Co., Ltd.

Address

Anjo City
Aichi Pref.

CapitalJapanese yen(millions)
U.S. dollars(thousands)¥ 26,480$269,571

RelationshipOperation

Votingrights(%)

Manufacturing
automotive
parts

—

BusinessrelationshipSale ofproducts

Trade

AmountJapanese yen(millions)
U.S. dollars(thousands)

Sale ofproducts
Concurrently
serving as
directors¥ 3,973$40,446

Accounts

Balance
Japanese yen(millions)
U.S. dollars(thousands)

Accounts
receivable¥503$ 5,121

Advanced
received¥$

18. Short-term Borrowings and Long-term Debt
Short-term borrowings and long-term debt as of March 31, 2008 and 2009 were as follows:
Japanese yen(millions)

1
10

2008
Other related
Dynax
company’s
Corporation
subsidiary

Exedy
Other related
Americacompany’s
Corporation subsidiary

Aisin AW
Co., Ltd.

Aisin
HoldingsofAmerica,Inc.

Anjo City
Aichi Pref.

Indiana
U.S.A.

¥ 26,480$269,571$282,290

Manufacturing
automotiveparts

Administrationof overall
North
Americanoperations—

40%(directly
held)Sale ofproducts

Debt

Sale ofproducts

Interest
expense¥ 2,374$24,168

¥
$

86
875

Accounts
receivable

Long-term
debt(Transaction terms and policy determination thereof)
With regard to sale of products and debt, prices and other transaction terms are determined by negotiation in consideration of market situations.
(Note) Consumption taxes are included in the balance, but not in the trade amounts.

¥
216$ 2,199

Short-term borrowings ········································
Current portion of long-term debt ·······················
Current portion of lease obligation ·····················
Long-term debt ···················································
Lease obligations ················································
Other interest bearing debt ·································¥5,194
519
—
2,966
—
107
¥8,786

U.S. dollars(thousands)

2009¥3,681
802
5
2,627
15
79
¥7,209$37,473
8,165
51
26,743
153
804$73,389

3.9%
4.5
—
3.6
—
0.9

Year
due

2010–20192010–2013¥ 1,529$15,566

Annual maturities of long-term debt and lease obligations as of March 31, 2009 were as follows:
Long-term debt
Years ending March 31
2011 ···································································································································································
2012 ···································································································································································
2013 ···································································································································································
2014 and thereafter ···········································································································································

Lease obligation
Years ending March 31
2011 ···································································································································································
2012 ···································································································································································
2013 ···································································································································································
2014 and thereafter ···········································································································································

23 Annual Report 20092009

Weighted
averageinterest rates

Japanese yen(millions)
¥ 865
72
1,578
112
¥2,627

Japanese yen(millions)
¥ 5
5
5
0
¥15

U.S. dollars(thousands)$ 8,806
733
16,064
1,140$26,743

U.S. dollars(thousands)
$ 51
51
51
0
$153

Annual Report 2009 24

Independent Auditors’ Report

Corporate Data

EXEDY CORPORATION AND CONSOLIDATED SUBSIDIARIESBOARD OF DIRECTORSAND CORPORATE
AUDITORS

To the Shareholders and Board of Directors of
EXEDY Corporation:
We have audited the accompanying consolidated balance sheets of EXEDY Corporation andconsolidated subsidiaries as of March 31, 2009 and 2008 and the related consolidated statements ofincome, changes in net assets and cash flows for the year then ended, expressed in Japanese yen.
These consolidated financial statements are the responsibility of the Company’s management. Our
responsibility is to independently express an opinion on these consolidated financial statements basedon 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 consolidated financial statements referred to above present fairly, in all material
respects, the consolidated financial position of EXEDY Corporation and its consolidated subsidiaries asof March 31, 2009 and 2008, and the consolidated results of their operations and their cash flows for theyears then ended, in conformity with accounting principles generally accepted in Japan.
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year
ended March 31, 2009 are presented solely for convenience. Our audit also included the translation of
yen amounts into U.S. dollar amounts and, in our opinion, such translation has been made on the basis
described in Note 1 to the consolidated financial statements.

Osaka, Japan
June 24, 2009

As of June 30, 2009
President and Chief Executive Officer:
Haruo Shimizu
Director: Etsuji Terada
Hisayasu Masaoka
Masayuki Matsuda
Yoshitsugu Sakamoto
Katsumi Shintou
Hidehito Hisakawa
Mikio Natsume
Auditors: Naoaki Sawada
Kanshirou Toyoda
Koji Okada
Takenori Yamasaki

OUTLINE OF COMPANY

As of June 30, 2009

As of March 31, 2009

Senior Executive Managing Officer:
Etsuji Terada
Executive Managing Officer: Hisayasu Masaoka
Masayuki Matsuda
Yoshitsugu Sakamoto
Katsumi Shintou
Hidehito Hisakawa
Senior Executive Officer:
Hideki Miura
Shougo Okamura
Koji Akita
Hiromu Yamasaki
Toshiharu Yamamoto
Akira Hirai
Executive Officer:
Yoshio Katayama
Masahito Baba
Tadashi Nakahara
Mitsugu Yamaguchi
Tetsuya Yoshinaga

Name:
EXEDY Corporation
Established:
July 1, 1950
Paid-in Capital:¥8,284 million
Number of Employees:
2,330
Number of Authorized Shares:
168,000 thousand shares
Number of Issued Shares:
48,594 thousand shares
Number of Shareholders:
7,250
Average Number of Shares
Held by One Shareholder:
6,703 shares
Listed on First Sections,Tokyo/Osaka Stock Exchange

DOMESTIC JAPANESE NETWORKHead Office:1-1-1 Kidamotomiya, Neyagawa-shi, Osaka, 572-8570
Tel: 81-72-824-6933 Fax: 81-72-821-7913

Tokyo Sales Office:
DBS Tokyo, 2-17-2 Iwamoto-cho, Chiyoda-ku, Tokyo, 101-0032
Tel: 81-3-3862-2771 Fax: 81-3-3864-1547

Saitama Sales Office:Oomiyanakacho AK Bldg., 6th Floor, 1-104 Naka-cho,
Oomiya-ku, Saitama-shi, Saitama, 330-0845
Tel: 81-48-650-4441/4442 Fax: 81-48-650-4443

Shizuoka Sales Office:RICOH Solutions Higashi Shizuoka Bldg., 2nd Floor, 6-20
Aratajima-cho, Fuji-shi, Shizuoka, 417-0043
Tel: 81-545-54-0861 Fax: 81-545-54-0862

Hamamatsu Sales Office:CITY21Bldg., 6th Floor, 320-4 Sunayama-cho, Naka-ku,
Hamamatsu-shi, Shizuoka, 430-0926
Tel: 81-53-413-6011 Fax: 81-53-413-6012

Chubu Sales Office:Tosho Bldg., 2nd Floor, 1-16-5 Mikawaanjo-cho, Anjo-shi, Aichi, 446-0056
Tel: 81-566-71-2750 Fax: 81-566-72-7015

Hiroshima Sales Office:
DBS Hiroshima, 6-6 Sakaemachi, Kaita-cho, Aki-gun,
Hiroshima, 736-0043
Tel: 81-82-821-0021 Fax: 81-82-823-6620

Ueno Division:
2418 Ota-cho, Iga-shi, Mie, 518-0825
Tel: 81-595-23-8101 Fax: 81-595-24-5521

Kawagoe Plant:
1-103-25 Yoshinodai, Kawagoe-shi, Saitama, 350-0833
Tel: 81-49-225-0601 Fax: 81-49-225-0600

DYNAX Corporation:
1053-1 Kamiosazu, Chitose-shi, Hokkaido, 066-8585
Tel: 81-123-24-3247 Fax: 81-123-49-2050

DK Pronac Co., Ltd.:
6-11 Taguchi Kenkyu Danchi, Higashi Hiroshima-shi,
Hiroshima, 739-0038
Tel: 81-82-425-3434/5 Fax: 81-82-425-3436

Exenet Logistics Co., Ltd.:
1-1-33 Kidamotomiya, Neyagawa-shi, Osaka, 572-0822
Tel: 81-72-825-0473 Fax: 81-72-820-2521

DK Building Service Co., Ltd.:
1-1-33 Kidamotomiya, Neyagawa-shi, Osaka, 572-0822
Tel: 81-72-824-7633 Fax: 81-72-822-1016

Nippon Retarder System Co., Ltd.:
1-1-33 Kidamotomiya, Neyagawa-shi, Osaka, 572-0822
Tel: 81-72-820-0911 Fax: 81-72-824-1035

Pronet Co., Ltd.:
15 Kizuogawa, Kizugawa-shi, Kyoto, 619-0214
Tel: 81-774-73-0631 Fax: 81-774-73-2147

EXEDY Precision Co., Ltd.:
104-1 Joden, Mimasaka-shi, Okayama, 701-2625
Tel: 81-868-74-3501 Fax: 81-868-74-3503

EXEDY Casting Co., Ltd.:112 Haishi, Fukuchiyama-shi, Kyoto, 620-0955
Tel: 81-773-22-1156 Fax: 81-773-23-8477

OVERSEAS NETWORKEXEDY Holdings of America Corporation (EHA)
8601 Haggerty Road South, Belleville, Michigan
48111, U.S.A.
Tel: 1-734-397-3333 Fax: 1-734-397-9567

DYNAX Industry (Shanghai) Co., Ltd. (DXS)
No.350 Rongxiang Road, Songjiang Export
Processing Zone, Shanghai 201613, CHINA
Tel: 86-21-57748388 Fax: 86-21-57748389

EXEDY Globalparts Corporation (EGP)
8601 Haggerty Road, South Belleville, MI 48111,
U.S.A.
Tel: 1-734-397-3333 Fax: 1-734-397-7300

EXEDY Corporation Asean Regional Office (EAR)
700/316 Moo 6, Bagna-Trad Road, Tumbon Don HuaRoh, Amphur Muang, Chonburi 20000, THAILAND
Tel: 66-38-214-423 Fax: 66-38-214-422

EXEDY America Corporation (EAC)
2121 Holston Bend Drive, Mascot, TN 37806, U.S.A.
Tel: 1-865-932-3700 Fax: 1-865-932-2230

EXEDY (Thailand) Co., Ltd. (EXT)
700/316 Moo 6, Bangna-Trad Road, Tumbon Don HuaRoh, Amphur Muang, Chonburi 20000, THAILAND
Tel: 66-38-214-423 Fax: 66-38-214-422

DYNAX America Corporation (DXA)
568 East Park Drive, Roanoke, VA 24019, U.S.A.
Tel: 1-540-966-6010 Fax: 1-540-966-6011
EXEDY-DYNAX America Corporation (EDA)
8601 Haggerty Road, South Belleville, MI 48111,
U.S.A.
Tel: 1-734-397-6556 Fax: 1-734-397-6566
EXEDY Chongqing Co., Ltd. (EXC)
D44, D45, D47, D49 North Economy & Technology
Development Park, Chong Qing, 401142, CHINA
Tel: 86-23-62924439 Fax: 86-23-62900348
EXEDY (Shanghai) Co., Ltd. (ESC)
1399 Chengqiao Road, Fengxian District, Shanghai
201400, CHINA
Tel: 86-21-67109075 Fax: 86-21-57434257
EXEDY Guangzhou Co., Ltd. (EGC)
No.406, E-Aria, Longfu Car Accessories Centre,
Hengfu Road, Guangzhou, CHINA
Tel: 86-20-83489371 Fax: 86-20-83489370
Shanghai DYNAX Co., Ltd. (DXC)
No.2 plant 1399 Chengqiao Road, Fengxian District,
Shanghai 201400, CHINA
Tel: 86-21-57437465 Fax: 86-21-57437458

25 Annual Report 2009EXECUTIVE OFFICERS

EXEDY Friction Material Co., Ltd. (EFM)
700/359 Moo 6, Bangna-Trad Road, Tumbon Don HuaRoh, Amphur Muang, Chonburi 20000, THAILAND
Tel: 66-38-743-923 Fax: 66-38-743-927
EXEDY (Malaysia) Sdn. Bhd. (EXM)
PT 16748, Jalan Permata 1/5, Arab-Malaysian
Industrial Park 71800 Nilai, Negeri Sembilan,
MALAYSIA
Tel: 60-6-7992988 Fax: 60-6-7996388
P.T. EXEDY Indonesia (EXI)
Jalan Pegangsaan Dua Km2 No.64, Kelapa Gading,
Jakarta, Utara 14250, INDONESIA
Tel: 62-21-4603353 Fax: 62-21-4603355
P.T. EXEDY Motorcycle Indonesia (EMI)JL. Pulobuaran Raya Kav. III FF 8-9, Jakarta, Timur
13920, INDONESIA
Tel: 62-21-4602581 Fax: 62-21-4602580
EXEDY Vietnam Co., Ltd. (EXV)Khai Quang Industrial Zone, Vinh Yen City, Vinh Phuc
Province, Socialist Republic of VIETNAM
Tel: 84-211-3721252 Fax: 84-211-3721253

Ceekay Daikin Ltd. (CDL)<Aurangabad Plant>
Plot No.L-4, M.I.D.C. Industrial Area, Chikalthana,
Aurangabad, 431 210, M.H. INDIA
Tel: 91-240-2484014 Fax: 91-240-2484403<Greater Noida Plant>
Plot No.9, Udyog Kendra Industrial Area, Greater
Noida, 201 304, U.P. INDIA
Tel: 91-120-2350280~286 Fax: 91-120-2350237
EXEDY Middle East FZCO (EME)
P.O.BOX 18199, Warehouse No. ZE5 & ZE6 Jebel Ali
Free Zone, Jebel Ali Dubai, U.A.E.
Tel: 971-4-883-2244 Fax: 971-4-883-2500<Amman Representative Office>Room No.103, 1st Floor, Al Housanie Bldg. #6 Salem
Moh'd Al-Ekdhah Street Sweifieh, Wadi Al-Saier,Amman, JORDAN
Tel: 962-658-13215 Fax: 962-658-13015<Nairobi Representative Office>International House, 1st Floor, Room No.12, Mama
Ngina Street, P.O. Box 41931-00100, Nairobi, KENYA
Tel: 254-20-221-1214 Fax: 254-20-221-5700
EXEDY Australia Pty. Ltd. (EAP)
21 Fiveways Boulevard, Keysborough, Victoria 3173,
AUSTRALIA
Tel: 61-3-9701-5556 Fax: 61-3-9701-5684
EXEDY New Zealand Ltd. (ENZ)
151 Wairau Road Glenfield Auckland, NEW ZEALAND
Tel: 64-9-444-0901 Fax: 64-9-444-0903
EXEDY Clutch Europe Ltd. (ECE)
Unit 2, Rokeby Court, Manor Park, Runcorn, Cheshire
WA7 1RW, U.K.
Tel: 44-1928-571850 Fax: 44-1928-571852
EXEDY DYNAX Europe Ltd. (EDE)
2800 Tatabanya, Szarkalab UT6, HUNGARY
Tel: 36-34-311-117 Fax: 36-34-311-122

Annual Report 2009 26