RYOBI ANNUAL REPORT 2008

For the year ended March 31, 2008

2008

Head Office

762 Mesaki-cho, Fuchu-shi, Hiroshima-ken 726-8628, Japan
Tel. 81-847-41-1111
Tokyo Branch 5-2-8 Toshima, Kita-ku, Tokyo 114-8518, Japan
Tel. 81-3-3927-5541
http://www.ryobi-group.co.jp/

ANNUAL REPORT

Printed in Japan
Copyright©2008 Ryobi Limited. All Rights Reserved.

This annual report was printed by a Ryobi printing press.

表4

表12008 年 07 月 31 日 16 時 00 分 天地 280- 左右 433（背幅 3mm）
08116-1297

リョービ AR 2008

初校 F6000 Comp_S45_SQ_150 澤口

リョービ
レッド

特紺

スミ

Profile

Corporate Information

Since its establishment as a die casting manufacturer in December 1943, Ryobi Limited has

C O R P O R AT E D ATA

accumulated innovative technologies by manufacturing components for automobiles, electronics,

Company NameRYOBI LIMITED

telecommunications and other industries. Ryobi has leveraged these technologies and drawn on

Established
December 16, 1943

its experience to diversify into the manufacture of printing equipment, power tools and builders’

Major Products
Die cast products
Printing equipment(offset printing presses, peripherals, etc.)
Power tools(electric power tools, lawn and garden equipment, etc.)
Builders’ hardware(door closers, hinges, architectural hardware, etc.)

hardware. Ryobi is all around you, making an enjoyable, comfortable daily lifestyle possible.

Head Office
762 Mesaki-cho, Fuchu-shi, Hiroshima-ken 726-8628, Japan
Telephone: 81-847-41-1111
Tokyo Branch
5-2-8 Toshima, Kita-ku, Tokyo 114-8518, Japan
Telephone: 81-3-3927-5541
Toranomon Office
Toranomon Central Building
1-7-1 Nishishinbashi, Minato-ku, Tokyo 105-0003, Japan
Telephone: 81-3-3927-5541

M ana g ement M ember s(As of June 25, 2008)

68.7%
DIE CASTINGSNet Salesby Segment
for Fiscal 2008

As a world-leading die casting manufacturer,
Ryobi supplies various industries with die castproducts, such as automobile components,
including cylinder blocks and transmission
cases.

12.3%
POWER TOOLS AND
BUILDERS’ HARDWARE
Ryobi provides an extensive range ofpower tools and lawn and garden
equipment for both professional anddo-it-yourself needs, as well as suchbuilders’ hardware as our mainstay door
closers, which offer enhanced safety andcomfort for homes and offices.

19.0%

Ryobi offers high-precision, multi-functional offset
printing presses for fast and attractive results, anddevelops total printing systems for all stages of theprinting process, from prepress to press and post-press.

PRINTING EQUIPMENT

Contents
CONSOLIDATED FINANCIAL HIGHLIGHTS 1CORPORATE SOCIAL RESPONSIBILITY 5

A MESSAGE FROM THE MANAGEMENT 2
FINANCIAL SECTION 6

topics 4

CORPORATE INFORMATION 27

Board of Directors
Chairman and Representative Director
Hiroshi Urakami
President and Representative Director
Susumu Yoshikawa
Directors
Takao Tanaka
Takashi Yokoyama
Koji Ishii
Akira Urakami
Kenjiro Suzuki
Outside Director
Satoshi Ohoka
Corporate Auditors
Standing Corporate Auditor
Outside Corporate Auditor
Corporate Auditor
Outside Corporate Auditor

in light of the information available as of the end of the fiscal year under review and may involve various risks and uncertainties. The Ryobi Group cautions that

Shozo Kobayashi
Tairo Katoh
Tsuyoshi Mifune
Izumi Kurosawa

Ryobi Imagix Co. (Japan)
Printing equipment and related product sales
Ryobi Sales Co. (Japan)
Power tools and lawn and garden equipment sales
Ryobi Mirasaka Co. (Japan)
Die casting manufacturing
Ryobi Mitsugi Co. (Japan)
Die casting manufacturing
Tokyo Light Alloy Co., Ltd. (Japan)
Cast aluminum and die casting manufacturing and sales
lkuno Co. (Japan)
Secondary aluminum alloy bullion manufacturing and sales
Ryobi Power Tool Co. (Japan)
Power tools and lawn and garden equipment manufacturing
Ryobi Die Casting (USA), Inc. (U.S.A.)
Die casting manufacturing and sales
RDCM, S. de R.L. de C.V. (Mexico)	Die casting manufacturing
Ryobi Aluminium Casting (UK), Limited (U.K.) Die casting manufacturing and sales
Ryobi Die Casting Dalian Co., Ltd. (P.R.C.)
Die and die casting manufacturing and sales
Ryobi Dalian Machinery Co., Ltd. (P.R.C.)
Power tools, lawn and garden equipment and builders’ hardware manufacturing and sales

S H A R E H O L D E R I N F O R M AT I O N
Number of Shares Issued
171,230,715

Items containing forward-looking statements such as performance forecasts and future policies and strategies are based on the assumptions of management

Corporate Officers

Hiroshi Urakami
Susumu Yoshikawa
Takao Tanaka
Takashi Yokoyama
Koji Ishii
Kenjiro Suzuki
Kuniyuki Ito
Naomichi Honkawa
Kazuaki Danjo
Shoji Osawa
Hideki Domoto
Hiroyuki Kawaguchi
Takashi Suzuki

M a j or C on s ol i dated S u b s i d i ar i e s(As of March 31, 2008)

Forward-Looking Statements

Corporate Officers
Chief Executive Officer
Chief Operating Officer
Executive Corporate Officers

Listing
Common Stock—Tokyo

Transfer Agent
Mitsubishi UFJ Trust and Banking Corporation
1-4-5, Marunouchi, Chiyoda-ku,
Tokyo 100-8212, Japan

its actual actions and performance may differ significantly from these forward-looking statements due to numerous factors outside of the Group’s control suchas, but not limited to, general economic conditions, the business environment, trends in market demand and foreign exchange rates.
Ryobi annual report 2008

表2

2008 年 08 月 05 日 11 時 00 分 天地 280- 左右 433（背幅 3mm）
08116-1297

リョービ AR 2008

再校 F6000 Comp_M45_SQ_175 澤口

27

表3Consolidated financial highlights(For the years ended March 31, 2008, 2007 and 2006)

Thousands of
U.S. dollars(Note 2)Millions of yen

2008

2007

2006

2008

Net sales...........................................................................

¥ 216,181¥ 204,672¥ 171,232$ 2,157,710

Operating income.............................................................

14,235

16,353

13,214142,080

Net income . .....................................................................

8,208

9,877

8,636

81,924

Total assets.......................................................................

¥ 195,972¥ 202,529¥ 177,865$ 1,956,004

Total shareholders’ equity.................................................

76,84574,81566,756

766,993

For the fiscal period:

As of fiscal year-end:

U.S. dollars(Note 2)Yen

Per share data:¥

Net income . .....................................................................

49.07

¥

12.00

Cash dividends..................................................................

58.92

¥

12.00

51.31

$

0.490
0.120

10.00

Notes: 1. Net income per share figures are based on the weighted average number of shares outstanding each year.
2. Yen amounts have been translated into U.S. dollars, solely for the convenience of the reader at ¥100.19=US$1, the exchange rate prevailing on March 31, 2008.

NET SALESOPERATING INCOME

NET INCOME

Millions of yen

Millions of yen

Millions of yen

250,000

20,00015,000216,181

12,812

16,353

204,672

16,000200,000

12,000

14,235

171,232

13,214

156,458 155,251 157,964
12,000150,000

10,347

9,877
8,636

9,000

10,834

6,581

8,452
6,000

8,000

100,000

8,208

4,471
4,000

50,000

0

2003

2004

2005

2006

2007

2008

0

3,000

2003

2004

2005

2006

2007

Ryobi annual report 2008

2008

0

2003

2004

2005

2006

2007

2008

1

A mEssage from the management

Hiroshi Urakami

Susumu Yoshikawa

Chairman and CEO

President and COO

CREATE A SOUND AND DYNAMICCORPORATION THROUGH TECHNOLOGY,
TRUST AND CHALLENGE

Guided by its corporate philosophy, ”Create a sound and dynamic corporation throughtechnology, trust and challenge,” the Ryobi Group aims to become established as an indispensable part of society by creating innovative, top-quality products and services thatmeet the needs of customers and society at large. Aiming to be a company of continuous
growth and development maintained by an optimal mix of die castings and finished products, Ryobi continues to make every effort to reinforce market competitiveness andimprove its earnings power.
From the perspective of corporate social responsibility, the Ryobi Group regards theimplementation of its corporate philosophy as CSR promotion itself. As such, we are striving to thoroughly implement CSR endeavors through activities in such areas asenvironmental protection, social contribution and compliance with statutory regulations.

2

Ryobi annual report 2008

	In fiscal 2008, ended March 31, 2008, capital expenditure increased and the employment situation improved in Japan. Nevertheless, concerns of an economic slowdown
grew, fed by rising crude oil and raw materials prices as well as a fall in housing starts due
to a revision in the building standards law. Notably, the strong yen and weak U.S. dollar
rates have progressed sharply since early calendar 2008 because of disruptions in financial
markets in the wake of the subprime loan problem. Amid growing concerns that the U.S.
economy is moving into a recession, apprehension about the future is rising both at home
and abroad.
	Under these circumstances, the Ryobi Group has implemented various measures that
include advancing aggressive marketing activities, developing new products responsive tocustomer needs, cutting costs and expenses, and increasing operational efficiency.
During fiscal 2008, Ryobi experienced increases in revenues while earnings decreased
from the previous fiscal year. Consolidated net sales grew for the fourth consecutive year,
rising 5.6% to ¥216.2 billion from the previous fiscal year. Domestic sales were up 4.1%
from the previous fiscal year to ¥147.2 billion, and overseas net sales rose 9.1% to ¥69.0
billion. Revenues in all three business segments—Die Castings, Printing Equipment, andPower Tools and Builders’ Hardware—expanded.
Regarding profits and losses, operating income decreased 13.0% to ¥14.2 billion while
net income fell 16.9% to ¥8.2 billion compared with the previous fiscal year. Despite efforts
to increase sales, reduce costs, improve productivity, Ryobi experienced lower earnings
compared with the previous fiscal year due to the heavier burden of price increases in raw
materials and depreciation.
	Looking ahead to fiscal 2009, ending on March 31, 2009, there are various concerns
including the high cost of crude oil and raw materials, a potential U.S. economic recession,and rapid fluctuations in exchange rates. Amid these severe operating conditions, theRyobi Group will continue to improve its product development, production and marketing
capabilities. At the same time, Ryobi aims to boost its market competitiveness and earnings power through redoubled efforts to enhance productivity and reduce costs.
	As we exert ever-greater efforts to become a sound and dynamic corporation, we ask
for your continued support and understanding.

June 2008

Hiroshi Urakami
Chairman and CEO

Susumu Yoshikawa
President and COO

Ryobi annual report 20083

topics

DIE CASTINGS
Aiming to strengthen production capacity and efficiency,
Ryobi is continuing to augment equipment facilities. At theHiroshima East Plant, a machining facility has been expanded
and a casting facility has been established in order toconsolidate production lines, from the casting through themachining stages. In addition, we completed a die fabrication
facility at the Hiroshima East Plant in February 2008, which
reinforces structures for die maintenance and storage, as wellas assembly and delivery of new dies. Regarding developments

Hiroshima East Plant(the die casting facilities are on the right)

overseas, Mexico-based RDCM, S. de R.L. de C.V., establishedin April 2007, will commence commercial production of die
cast products in August 2008.

P r inting E q u ip m ent
In March 2008, Ryobi announced the development of the
RYOBI 1050 Series B1-Size High-Speed Multi-Color Offset
Presses, aiming to launch this product as a major new entrant
in the large-sized offset printing press business. At drupa 2008,
the largest exhibition of printing equipment in the world held in

Scene from drupa 2008

Germany over May and June 2008, Ryobi presented the 5-color
RYOBI 1050-5 (from the same series). Drawing the attention of
an international array of visitors, the RYOBI 1050 Series has
captured customer attention ahead of its December release.
	Also featured at drupa 2008, the LED-UV Printing System,
which is the first in the world to be developed for offset printingpresses, was displayed as a reference exhibit. Visitors appreci-

B1-Size High-Speed
5-Color Offset Press RYOBI 1050-5

ated the power savings, reduced environmental load, as wellas improvements in productivity expected from changing theUV curing unit light source to LED.

LED-UV Printing System

P o w e r T o o l s and B u i l de r s ’ H a r d w a r e
Ryobi launched the BID-143 and BID-1440 cordless impact
driver for professional use. The BID-143 and BID-1440 feature
reduced hand fatigue thanks to a special gel incorporated into
the handle that absorbs vibrations, shock and heat. Lightweightand compact, both of these products have powerful screw

Cordless impact driver BID-143

tightening and superior drilling capabilities.
	In the builder’s hardware sector, Ryobi launched the SL-2
AQ sliding door closer, which opens and closes smoothly evenin such high-temperature and high-humidity environments asbathrooms. This product features a closing speed adjustment
device that delivers a consistent performance even in hightemperature environments, and special materials and surface
Sliding door closer SL-2 AQ

finishing that have superior corrosion resistance.

4

Ryobi annual report 2008

Corporate Social Responsibility
In line with its corporate philosophy, ”Create a sound and dynamic corporation through technology, trust and challenge,”
Ryobi carries out its CSR activities with the aim of creating sustainable corporate value and a better society. This attitude isfundamental to the general management of the Ryobi Group. Beyond simply pursuing profits through fair competition,
Ryobi aims to be a well-liked, trustworthy company that is perceived to be indispensable to society at large.

ENVIRONMENTAL PROTECTION ACTIVITIESRegarding the management structure, the Board of Di-

Within the Ryobi Group, 17 facilities in 13 companies haverectors is composed of eight directors, including one out-

ISO 14001 certification, the international standard for envi-

side director. Under the corporate officer system, introducedronmental management systems as of June 2008. Eachin June 2000, six of the current 13 corporate officers are di-company and facility is taking action against environmental

rectors. In addition, Ryobi has adopted a corporate auditor

burden by setting environmental targets and objectives, ex-system.

erting efforts to conserve energy and resources, and reduc-	The Board of Directors implements decision-making re-ing waste and greenhouse gasses.

lated to important matters and supervises the execution ofoperations. The Corporate Operating Committee, composed

SOCIAL CONTRIBUTION ACTIVITIES

primarily of corporate officers, reviews the progress of the

In fiscal 2008 the Ryobi Social Contribution Foundation, a

execution of operations. Under the Board of Directors,

nonprofit organization, provided material donations to so-

Ryobi established a committee to decide on matters related

cial welfare councils in 11 locations and monetary donations

to compensation, a committee that focuses on personnel

to assist the activities of eight volunteer groups. In addition,and organization related matters, as well as committees to

Ryobi and its Chinese Group Companies provided a mone-thoroughly promote CSR implementation, compliance andtary donation of 800,000 Yuan (¥12 million) to help victims

risk management. These committees serve to reinforce cor-of the severe earthquake which occurred in Sichuan Prov-

porate governance structures.

ince, China in May 2008, as well as to assist in subsequent	By promoting upgrades internal control systems, Ryobi

reconstruction efforts.

aims to ensure business performance and appropriate
operations in accordance with statutory regulations and theCompany’s Articles of Incorporation.

CORPORATE GOVERNANCE STRUCTURE
In order to foster and develop ourselves in accordance withour corporate philosophy while carrying out CSR, it is impor-

Ryobi continues its efforts to establish a better corporatetant to structure and implement a corporate governancestructure with an eye on social trends, complying with rele-system that is appropriate for Ryobi.

vant rules and regulations.

G en era l Me e t i n g o f S h a r e h o l d e r s

Board of Directors(Eight Directors
one of which is an outside director)

Compensation Committee
Personnel andOrganization Committee

Direction andSupervision

Audit

Board of Corporate Auditors

Independent Auditors(Four Corporate Auditors
two of which are outside auditors)

Accounting Audit

Corporate Operating Committee(13 Corporate Officers)

Ryobi CSR Promotion
Committee
Ryobi Compliance Committee
Ryobi Risk Management
Committee

Legal and Audit Section(for internal auditing)Operational Audit

Each Business Division
and Group Companies

Ryobi annual report 2008

5

financial section
FISCAL PERIOD COMPARATIVE SUMMARY
Ryobi Limited and Consolidated Subsidiaries(For the years ended March 31)

Millions of yen

2008

2007

2006

2005

2004

2003

	Net sales..............................................

¥ 216,181¥ 204,672¥ 171,232¥ 157,964¥ 155,251¥ 156,458

Cost of sales........................................

177,529

164,520

135,088

125,157

123,749

126,536

Gross profit..........................................

38,65240,15236,14432,80731,50229,922For the fiscal period:

Selling, general and administrative
expenses............................................

24,417

23,79922,93021,973

21,155

21,470	Operating income................................

14,235

16,353

13,214

10,834

10,347

8,452

	Income taxes.......................................

5,442

6,353

4,206

3,902

3,608

1,504

	Net income..........................................

8,208

9,877

8,636

6,581

12,812

4,471

	Total assets..........................................

¥ 195,972¥ 202,529¥ 177,865¥ 157,420¥ 160,574¥ 165,487

	Total shareholders’ equity....................

76,84574,81566,75655,29450,04038,366

	Interest-bearing debt ..........................

45,15738,331

39,82344,502

53,63869,731

As of fiscal year-end:

Yen

Per share data:
	Net income..........................................

¥

49.07

¥

58.92

¥

51.31

¥

39.33

¥

76.40

¥

26.26

Shareholders’ equity............................

460.79445.93398.35330.62299.05227.84

Cash dividends....................................

12.00

12.00

10.00

7.50

7.50

—

%

Other data:
	Operating income margin....................

6.6

8.0

7.7

6.9

6.7

5.4

	Net income margin..............................

3.8

4.8

5.0

4.2

8.3

2.9

Return on assets (ROA).......................

4.1

5.2

5.2

4.1

7.9

2.7

Return on equity (ROE)........................

10.8

14.0

14.2

12.5

29.0

12.5

Shareholders’ equity ratio....................

39.2

36.9

37.5

35.1

31.2

23.2

	Asset turnover ratio (times).................

1.08

1.08

1.02

0.99

0.95

0.95

Millions of yen

Capital expenditure..............................

¥ 15,342¥ 20,385¥ 11,232

Depreciation and amortization............

10,058

8,196

6,067

5,439

5,201

5,631

Free cash flow.....................................

(10,816)

4,418

7,196

8,076

15,773

12,027

	Number of employees (persons).........

5,763

5,625

5,464

5,334

5,364

5,669

¥

7,595

¥

5,773

Notes: 1. Net income per share figures are based on the weighted average number of shares outstanding each year.
2. Cash dividends per share are the amounts applicable to the respective years, including dividends to be paid after the end of the year.

6

Ryobi annual report 2008

¥

4,117

MANAGEMENT’S DISCUSSION AND ANALYSISANALYSIS OF FINANCIAL POSITION AND OPERATING RESULTS(1) Summary of Significant Accounting Policies
The consolidated financial statements of the Ryobi Group have been prepared in conformity with accounting principles
generally accepted in Japan. The financial statements of overseas subsidiaries have been prepared in conformity withaccounting principles generally accepted in each country, respectively.
(2) Analysis of Operating Results for the Fiscal Year Ended March 31, 2008
Net Sales
Ryobi’s net sales increased across all business categories, namely the Die Castings, Printing Equipment, and Power Tools
and Builders’ Hardware Businesses.
Ryobi’s Die Castings Business experienced an increase in revenues owing to strong demand from American and domestic automobile manufacturers. In the Printing Equipment Business, revenues increased owing to healthy overseas sales in
Asia, etc. despite a decrease in domestic sales. In the Power Tools and Builders’ Hardware Business, sales of both power
tools and builders’ hardware contributed to a slight increase in revenues.
	As a result, consolidated net sales for the fiscal year under review swelled 5.6% compared to the previous fiscal year, to¥216,181 million.
Operating Income
Despite Ryobi’s efforts to increase net sales, reduce input costs, enhance productivity, and so forth, high raw material costs
and an increase in depreciation translated into a decrease in operating income, bringing the ratio of operating income to net
sales to 6.6% in the fiscal year under review.
	By business segment, earnings fell in the Die Castings Business due to falling prices, high raw material costs, anincrease in depreciation, and so forth. In the Printing Equipment Business earnings were also down, specifically owing to adecrease in domestic sales and high raw material costs. Earnings in the Power Tools and Builders’ Hardware Businessslumped as well, owing to inflated raw material prices, despite showing an increase in sales.
	As a result, operating income decreased 13.0% year on year, to ¥14,235 million.

NET SALESOPERATING INCOME

Millions of yen

Millions of yen

240,000

18,000Millions of yen

15,00016,353

216,181

12,812

204,672

200,000

15,000

14,235

155,251

12,00013,214

171,232
160,000 156,458

NET INCOME

157,964

9,877

12,00010,347
120,000

10,834

9,000

8,636

9,000 8,452

8

6,581
6,000

80,0006,000

40,000

3,000

0

2003

2004

2005

2006

2007

2008

0

4,471
3,000

2003

2004

2005

Ryobi annual report 2008

2006

2007

2008

0

2003

2004

2005

2006

2007

7

2

NET SALESNet Income

OPERATING INCOME

NET INCOME

Although other income contracted overall due to a decrease inMillions of yen
gain on the sale of investment
securities and so forth, other

Millions of yen

18,00015,000expenses fromretirement benefit payments to directors,
16,353 etc.
216,181

12,812

204,672

also decreased.

15,000

14,235

157,964

to ¥8,208 million.

20000012,00013,214
	As
171,232 a result, consolidated net income for the period fell 16.9%,

155,251

2400009,877

12,00010,834

10,347

9,000

8,636

9,000 8,452

Operating Results by Business Segment

1600008,208120000

6,581
6,000

Die Castings

6,000

80000

4,471

Sales in the Die Castings Business rose 7.2% year on year, to¥148,596 million, although3,000
operating income fell 12.8% to ¥7,645

3,000

40000

million. The ratio of operating income to net sales dropped to
2004

2005

0 the previous fiscal year.
5.1%
comparedwith 6.3% in
2006
2007
2008
2003
2004
2005
2006

2007

0

2008

2003

2004

2005

2006

2007

2008

0

Ryobi’s Die Castings Business experienced robust sales to
American and domestic automobile manufacturers in the fiscal
year under review. On the earnings front, despite cost-cutting
measures and a rise in sales, ongoing price drops and inflated
raw material prices, along with an increase in depreciation,
overall operating income decreased.

NET SALES BY BUSINESS SEGMENT
DIE CASTINGSPRINTING EQUIPMENT

Millions of yen

POWER TOOLS AND
BUILDERS’ HARDWARE

Millions of yen

Millions of yen

120,000

120,000

90,00090,00090,00060,00060,00060,00030,00030,000 22,741 24,349 27,694

148,596

150,000

138,623

150,000

1500

150,000

1200

120,000

107,762 106,309 105,491

114,320

900

600

0

2003

2004

2005

2006

2007

2008

0

2003

2004

2005

32,307

2006

39,829 40,963

300

30,000 25,046 23,799 24,779 24,605 26,220 26,622

2007

2008

0

2003

2004

2005

2006

2007

2008

OPERATING INCOME BY BUSINESS SEGMENT
DIE CASTINGSPRINTING EQUIPMENT

Millions of yen

POWER TOOLS AND
BUILDERS’ HARDWARE

Millions of yen

10,000Millions of yen

10,00010,000

8,768
8,000

6,000

7,645

7,162
5,670

6,149

5,669

8,000

8,000

5,869

6,000

6,000

4,940
4,285
4,000

4,000

2,000

2,000

4,000

3,051
2,272

0

8

2003

2004

2005

2006

2007

2008

0

2,000

1,289

2003

2004

2005

2006

2007

2008

Ryobi annual report 2008

0

1,581

2003

2,024

2,113

2004

2005

1,767

1,716

1,650

2006

2007

2008

Printing Equipment
Sales in the Printing Equipment Business rose 2.8% year on year, to ¥40,963 million. However, operating income fell 15.8%
to ¥4,940 million, resulting in a ratio of operating income to net sales of 12.1%, down from 14.7% in the previous fiscal year.
Sales increased owing to healthy overseas sales in Asia, etc. despite a decrease in domestic sales. On the earnings front,
profits fell due to a decrease in domestic sales and high raw material costs in spite of steady exports.
Power Tools and Builders’ Hardware
Sales rose 1.5% year on year, to ¥26,622 million, while operating income edged down 3.8%, to ¥1,650 million and resulted
in a decrease in the ratio of operating income to net sales from 6.5% to 6.2%.
	Under pressures from intensifying competition, profits waned, despite growth in sales of both power tools and builders’hardware.
(3) Analysis of Capital Resources and Liquidity
Total Assets, Liabilities and Equity
Total assets as of March 31, 2008, decreased ¥6,557 million compared with the previous fiscal year, to ¥195,972 million.
A major factor contributing to this decrease was, specifically, a decrease in cash and cash equivalents of ¥7,473 million. The
major reason for this increase was in the fixed assets category, property, plant and equipment, of ¥4,135 million.
	Total liabilities fell ¥8,518 million, year on year, to ¥118,253 million, owing to a decrease in notes and accounts payable.
Interest-bearing debt, excluding discounted notes receivable, increased ¥6,826 million compared with the same period ayear earlier, to ¥45,157 million as of the end of the March 31, 2008.
	Equity amounted to ¥77,719 million, reflecting a boost from net income of ¥8,208 million and decrease in line with thepayment of dividends, etc. After the deduction of minority interests from equity, total shareholders’ equity came to ¥76,845
million, bringing the shareholders’ equity ratio to 39.2%.

TOTAL ASSETS &TOTAL SHAREHOLDERS’ EQUITYOPERATING INCOME MARGIN &NET INCOME MARGIN

Millions of yen%%

250,000

10

30

202,529200,000

195,972

8.3

177,865
165,487 160,574

7.7

157,4206.7

6150,000

6.9

4100,000

66,75650,00074,815

6.6
5.0

5.4

50,040

29.0

25

8.0

8

ROE & ROA

4.8

20

15

4.2
3.8

76,84512.5
10

2

38,366

14.0

5.2

5.2

10.8

7.9

2.9

55,294

14.2
12.5

5

4.1

4.1
2.7
0

2003

2004

2005

2006

2007

2008

0

2003

2004

2005

TOTAL ASSETSOPERATING INCOME MARGIN

TOTAL SHAREHOLDERS’ EQUITYNET INCOME MARGIN

2006

Ryobi annual report 2008

2007

2008

0

2003

2004

ROE

ROA

2005

2006

2007

2008

9

Liquidity
The Ryobi Group’s free cash flow (the sum of net cash from operating activities and net cash from investing activities)
decreased ¥15,234 million, from ¥4,418 million in the previous fiscal year to ¥ (10,816) million. This was largely the result ofa ¥14,285 million decrease in net cash provided by operating activities as a reflection of the decrease in notes and accounts
payable.
	In net cash used in financing activities, debt financing and other items increased ¥8,704 million year on year, owing toincreased capital expenditure.
	The Ryobi Group promotes a financial strategy focused on the adequate positioning of its cash flows, while also taking
into consideration overall investment efficiency. As such, Ryobi maintains a fundamental policy of utilizing cash generated
from operating activities as the primary source of its capital expenditure.
Major cash flow indicators and trends are summarized in the following table:
2008

2007

Shareholders’ equity ratio (%)..................................................................................................

39.2

36.9

Shareholders’ equity ratio at fair market value (%)..................................................................

32.1

78.6

Interest-bearing debt—repayment years.................................................................................

5.8

1.7

Interest coverage ratio (times).................................................................................................

6.9

28.5

Notes: Shareholders’ equity ratio: Shareholders’ equity / total assets
Shareholders’ equity ratio at fair market value: Shareholders’ equity at fair market value / total assets
	Interest-bearing debt—repayment years: Interest-bearing debt / net cash from operating activities
	Interest coverage ratio: Net cash from operating activities / interest payment
1. Each of the indicators identified in the preceding table is calculated based on figures from Ryobi’s consolidated financial statements.
2. Fair market value is calculated using the closing market price of Ryobi’s publicly listed shares as of the fiscal year-end multiplied by the number of commonshares issued and outstanding (excluding treasury stock).
3. Interest-bearing debt includes all liabilities, which incur interest in connection with liabilities listed on Ryobi’s consolidated balance sheet.
4. Net cash from operating activities is taken from Ryobi’s consolidated statements of cash flows.
5. Interest payment is the amount of interest paid and is taken from Ryobi’s consolidated statements of cash flows.

CASH FLOWCAPITAL EXPENDITURE &DEPRECIATION AND AMORTIZATIONSHAREHOLDERS’ EQUITY RATIO &INTEREST-BEARING DEBT

Millions of yen

Millions of yen

Millions of yen

25,00025,000120,000

22,120

%

39.2
37.5
35.1

20,00015,00015,15914,187

15,165

20,38520,00031.2
90,00011,66010,000

7,834

5,000

15,342

15,000

4,113

3,377

-10,000(3,132)

2004(17,702)
2005

2006

2007

5,773
5,201

6,067

5,439

20

53,63844,50239,82345,15738,331
10

30,000(18,650)
2008

0

2003

2004

2005

2006

2007

2008

0

2003

2004

2005

CASH FROM OPERATING ACTIVITIESCAPITAL EXPENDITURE

SHAREHOLDERS’ EQUITY RATIOCASH FROM INVESTING ACTIVITIESDEPRECIATION AND AMORTIZATIONINTEREST-BEARING DEBT

CASH FROM FINANCING ACTIVITIES

10

23.2

8,196

7,595
5,631
5,000 4,117(7,969)(10,399)(15,990)2003(3,121)(6,111)(8,024)-15,000-20,000(6,483)69,731

10,05810,000-5,00030

60,000

11,232

0

40

36.9

Ryobi annual report 2008

2006

2007

0
2008

(4) Business Segment Strategy
Die Castings
Ryobi is making concerted efforts to expand orders and sales in the Die Castings Business by further developing highquality, high-value-added products, reinforcing its technology development capabilities and maximizing the application of its
manufacturing systems in Japan, the Americas, Europe and China. Additional efforts to reinforce its global strategic structure were realized in April 2007, with the establishment of a new production site in Mexico. The facility will be in operationin August 2008. Furthermore, Ryobi will unite manufacturing and sales divisions at home and overseas to curtail costs andenhance productivity.
	In the automobile-related sector, Ryobi will strengthen its technical capabilities in response to demands for lighterweight vehicles by making aluminum die-casting power train components and frames. Simultaneously, Ryobi will reinforce
its responsiveness to large-scale orders and production that requires machining.
Ryobi will likewise work to uncover new opportunities and cultivate demand in fields unrelated to the automobile sector,
including the electronics and communications industries and fields with requirements for advanced recyclability.
Printing Equipment
Pursuing high-precision, multicolor rendering and increasingly advanced functionality, Ryobi continues to enhance its development, production and marketing capabilities for new products in order to further consolidate its standing in the global
market. Furthermore, Ryobi strives to expand its product lines to satisfy market needs through the development of environment-friendly products, as well as products that respond to advancements in information technology and digitization.
	Also, in order to expand the production capacity of printing equipment, Ryobi doubled the capacity of a second on-site
factory at its Hiroshima East Plant in April 2006 and further increased productivity by optimizing the production lines of thefirst and second factories.
Moreover, with the combination of technology and know-how accumulated in small- and medium-sized offset printingpresses development, Ryobi has developed a high-speed, multi-color offset printing press (for B1 paper size), which will go
on sale in December 2008. Thus Ryobi will launch full-fledged operations in the large-sized printing press business andenhance its sales.
Power Tools and Builders’ Hardware
In the power tools business, which includes electric power tools, lawn and garden and other equipment, Ryobi offers products that meet a variety of demands from professionals to DIY enthusiasts. Ryobi will enhance its productivity by utilizing
manufacturing systems in Japan and Dalian, China, as well as its product development system based on the concept of”small, lightweight and compact.” In addition, Ryobi aims to enhance its competitiveness through efforts to foster productplanning and marketing capabilities and boosting quality and productivity.
	In the builders’ hardware business, our mainstay door closers are manufactured mainly at the subsidiary in Dalian, China.
By developing distinct products, increasing quality and productivity, promoting cost reduction through productivity enhancement and reinforcing price competitiveness, Ryobi is aiming for higher profitability.

Forward-Looking Statements
Items containing forward-looking statements such as performance forecasts and future policies and strategies are based on the assumptions of management
in light of information available as of the end of the fiscal year under review and may involve various risks and uncertainties. The Ryobi Group cautions that its
actual actions and performance may differ significantly from these forward-looking statements due to numerous factors outside of the Group’s control such as,
but not limited to, general economic conditions, business environment, trends in market demand and foreign exchange rates.

Ryobi annual report 200811

CONSOLIDATED BALANCE SHEETSRYOBI LIMITED AND CONSOLIDATED SUBSIDIARIES(As of March 31, 2008 and 2007)

Thousands of
U.S. dollars(Note 1)Millions of yen

ASSETS

2008

2007

2008

Cash and cash equivalents.......................................................................

¥ 10,139¥ 17,612$ 101,198

	Time deposits (Note 7).............................................................................

2,301

2,301

22,96643,29147,130432,089

Current assets

	Notes and accounts receivable		Trade......................................................................................................
		Unconsolidated subsidiaries and affiliates...........................................

124

129

1,238

		Other.....................................................................................................

2,575

2,608

25,701

		Allowance for doubtful accounts..........................................................

(62)

(54)

(619)

	Inventories (Note 5)..................................................................................

41,85638,398417,766

Deferred tax assets (Note 10)...................................................................

1,605

2,161

16,020	Prepaid expenses and other.....................................................................

342

289

3,413

		Total current assets...............................................................................

102,171

110,574

1,019,772

21,69921,326

216,579

	Buildings and structures...........................................................................

46,73944,402

466,504

Machinery and equipment........................................................................

105,897

97,896

1,056,961

Property, plant and equipment (Notes 6 and 7)
	Land..........................................................................................................

Construction in progress..........................................................................

2,622

2,227

26,170		Total.......................................................................................................

176,957

165,851

1,766,214

	Accumulated depreciation........................................................................

(99,793)(92,822)(996,037)

		Net property, plant and equipment.......................................................

77,16473,029770,177

10,486

12,897

104,661

Investments and other assets
	Investments in securities (Note 4)............................................................
	Investments in and advances tounconsolidated subsidiaries and affiliates..............................................

163

360

1,627

	Intangible fixed assets..............................................................................

2,254

1,990

22,497

Deferred tax assets (Note 10)...................................................................

1,712

1,472

17,088	Other.........................................................................................................

2,065

2,253

20,611

	Allowance for doubtful accounts.............................................................

(43)

(46)

(429)

		Total investments and other assets......................................................

16,63718,926

166,055

		Total.......................................................................................................

¥195,972¥ 202,529$ 1,956,004

See notes to consolidated financial statements.

12

Ryobi annual report 2008

Thousands of
U.S. dollars(Note 1)Millions of yen

LIABILITIES AND EQUITY

2008

2007

2008

Short-term borrowings (Note 7)................................................................

¥ 21,491¥ 19,751$ 214,502

Current portion of long-term debt (Note 7)..............................................

6,003

4,363

59,91643,23949,634

431,570

Current liabilities

	Notes and accounts payable
		Trade......................................................................................................
		Unconsolidated subsidiaries and affiliates...........................................

354

346

3,533

		Other.....................................................................................................

8,000

11,302

79,849

	Accrued expenses....................................................................................

4,420

4,946

44,116

	Income taxes payable...............................................................................

2,049

5,093

20,451	Other current liabilities (Note 10).............................................................

3,510

3,623

35,034

		Total current liabilities............................................................................

89,066

99,058888,971

	Long-term debt (Note 7)...........................................................................

17,664

14,217

176,305

	Accrued severance indemnities (Note 8).................................................

6,320

6,549

63,080	Other long-term liabilities (Note 10).........................................................

5,203

6,947

51,932

		Total long-term liabilities.......................................................................

29,187

27,713291,317

		Issued: 171,230,715 shares..................................................................

18,472

18,472

184,370

Capital surplus..........................................................................................

23,75023,750237,050

Retained earnings.....................................................................................

39,23534,044

391,606

	Unrealized gain on available-for-sale securities.......................................

3,094

5,144

30,881Long-term liabilities

Commitments and contingent liabilities (Notes 12, 13 and 14)

Equity (Notes 9 and 16)
Common stock
		Authorized: 500,000,000 shares

Deferred loss on derivatives under hedge accounting............................

(40)

(25)

(399)

	Land revaluation reserve (Note 6).............................................................

626

626

6,248

Foreign currency translation adjustments................................................

(6,867)(6,464)(68,540)

	Treasury stock (4,462,347 shares in 2008; 3,457,735 shares in 2007)....

(1,425)(732)(14,223)

			Total.....................................................................................................

76,84574,815766,993

Minority interests......................................................................................

874

943

8,723

			Total equity..........................................................................................

77,71975,758775,716

		Total.......................................................................................................

¥195,972¥ 202,529$ 1,956,004

Ryobi annual report 2008

13

CONSOLIDATED STATEMENTS OF INCOME
RYOBI LIMITED AND CONSOLIDATED SUBSIDIARIES(For the years ended March 31, 2008 and 2007)

Thousands of
U.S. dollars(Note 1)Millions of yen

2008

2007

2008

Net sales......................................................................................................

¥ 216,181¥ 204,672$ 2,157,710

Cost of sales................................................................................................

177,529

164,520

1,771,923

		 Gross profit............................................................................................

38,65240,152385,787

Selling, general and administrative expenses..........................................

24,417

23,799243,707

		 Operating income..................................................................................

14,235

16,353142,080

263

194

2,625

Other income
Interest and dividends..............................................................................
Gain on sales of investments in securities...............................................

0

772

0

Other .......................................................................................................

1,458

1,529

14,552

		 Total other income.................................................................................

1,721

2,495

17,177

Other expenses
Interest......................................................................................................

1,120

815

11,179Loss on disposal of property, plant and equipment.................................

177

347

1,767

Other .......................................................................................................

1,020

1,432

10,180		 Total other expenses.............................................................................

2,317

2,594

23,126

Income before income taxes and minority interests...............................

13,63916,254

136,131

5,317

6,651

53,069

Income taxes (Note 10)
Current......................................................................................................
Deferred....................................................................................................

125

(298)

1,248

		 Total income taxes................................................................................

5,442

6,353

54,317

Minority interests in net income...............................................................

(11)

24

(110)

Net income..................................................................................................

¥

8,208

¥

9,877

$

81,924
U.S. dollars(Note 1)Yen

Per share of common stock (Note 2(p))
Net income...............................................................................................
Cash dividends applicable to the year (Note 16)......................................
See notes to consolidated financial statements.

14

Ryobi annual report 2008

¥

49.07
12.00

¥

58.92
12.00

$

0.490
0.120

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITYRYOBI LIMITED AND CONSOLIDATED SUBSIDIARIES(For the years ended March 31, 2008 and 2007)

Thousands
Issuednumber ofshares ofcommon stock

Millions of yen

Commonstock

CapitalsurplusRetainedearnings

Balance at March 31, 2006........................................... 171,231
Reclassified balance as of March 31, 2006................
—
	Net income.................................................................
—Cash dividends, ¥10.00 per share..............................
—
	Bonuses to directors and corporate auditors.............
—
Disposal of treasury stock (198,660 shares)..............
—
	Purchase of treasury stock (8,243 shares).................
——
	Net change in the year...............................................
Balance at March 31, 2007 .......................................... 171,231
	Net income.................................................................
—Cash dividends, ¥12.00 per share..............................
—
Disposal of treasury stock (1,126 shares)..................
—
	Purchase of treasury stock (1,005,738 shares)..........
——
	Net change in the year...............................................
Balance at March 31, 2008........................................... 171,231¥18,472
—
—
—
—
—
—
—
18,472—————¥18,472¥23,681
—
—
—
—
69
—
—
23,750——0——¥23,750¥25,885—
9,877(1,675)(43)———
34,0448,208(3,017)———¥39,235

Balance at March 31, 2007...........................................
	Net income.................................................................
Cash dividends, ¥12.00 per share..............................
Disposal of treasury stock (1,126 shares)..................
	Purchase of treasury stock (1,005,738 shares)..........
	Net change in the year...............................................
Balance at March 31, 2008...........................................

$ 184,370 $ 237,050 $ 339,794——
81,924——(30,112)
—
0
—
—
—
—
—
—
—
$ 184,370 $ 237,050 $ 391,606

Unrealized
gain onavailable-for-sale securities¥ 6,229——————(1,085)
5,144
—
—
—
—
(2,050)¥ 3,094

Deferredloss onderivatives
under hedge
accounting

¥ —
—
—
—
—
—
—
(25)
(25)
—
—
—
—
(15)
¥(40)

Thousands of U.S. dollars (Note 1)$ 51,342————(20,461)$ 30,881$(250)
—
—
—
—
(149)
$(399)

Millions of yen
Landrevaluation
reserve

Balance at March 31, 2006...........................................
Reclassified balance as of March 31, 2006................
	Net income.................................................................
Cash dividends, ¥10.00 per share..............................
	Bonuses to directors and corporate auditors.............
Disposal of treasury stock (198,660 shares)..............
	Purchase of treasury stock (8,243 shares).................
	Net change in the year...............................................
Balance at March 31, 2007...........................................
	Net income.................................................................
Cash dividends, ¥12.00 per share..............................
Disposal of treasury stock (1,126 shares)..................
	Purchase of treasury stock (1,005,738 shares)..........
	Net change in the year...............................................
Balance at March 31, 2008...........................................

¥626
—
—
—
—
—
—
—
626
—
—
—
—
—
¥626

Foreigncurrencytranslation
adjustments¥ (7,370)
—
—
—
—
—
—
906
(6,464)
—
—
—
—
(403)
¥(6,867)

Treasury
stock

¥

(767)
—
—
—
—
42
(7)
—
(732)
—
—
1
(694)
—
¥(1,425)

Total¥66,756—
9,877(1,675)
(43)
111
(7)
(204)
74,8158,208(3,017)1(694)(2,468)¥76,845

Minority
interests

¥ —
941
—
—
—
—
—
2
943
—
—
—
—
(69)
¥874

Total
equity¥66,756
941
9,877(1,675)
(43)
111
(7)
(202)
75,7588,208(3,017)1(694)(2,537)¥77,719

Thousands of U.S. dollars (Note 1)

Balance at March 31, 2007...........................................
	Net income ................................................................
Cash dividends, ¥12.00 per share..............................
Disposal of treasury stock (1,126 shares)..................
	Purchase of treasury stock (1,005,738 shares)..........
	Net change in the year...............................................
Balance at March 31, 2008...........................................

$6,248 $ (64,517) $ (7,306) $ 746,731———
81,924———(30,112)
—
—
10
10
—
—
(6,927)(6,927)—(4,023)—(24,633)$6,248 $ (68,540) $ (14,223) $ 766,993$9,412 $ 756,143—
81,924—(30,112)—10—(6,927)(689) (25,322)$8,723 $ 775,716

See notes to consolidated financial statements.

Ryobi annual report 2008

15

CONSOLIDATED STATEMENTS OF CASH FLOWSRYOBI LIMITED AND CONSOLIDATED SUBSIDIARIES(For the years ended March 31, 2008 and 2007)

Thousands of
U.S. dollars(Note 1)Millions of yen

2008

2007

2008

¥ 13,639¥ 16,254$136,131

		Income taxes - paid...............................................................................

(8,327)(5,054)(83,112)		 Depreciation and amortization..............................................................

10,058

8,196

100,389

		Loss on sales or disposals of property, plant and equipment..............

158

340

1,577

			 Decrease (increase) in notes and accounts receivable......................

3,706(4,720)36,989

			Increase in inventories........................................................................

(3,574)(6,368)(35,672)

			 Decrease (increase) in notes and accounts payable..........................

(6,836)14,996(68,230)

			 Decrease (increase) in accrued expenses..........................................

(350)

89

(3,493)Operating activities
	Income before income taxes and minority interests...............................
	Adjustments for:		 Changes in assets and liabilities

		Other, net...............................................................................................

(640)(1,613)(6,388)

				Net cash provided by operating activities........................................

7,834

22,12078,191

	Purchase of property, plant and equipment.............................................

(17,488)(18,672)(174,548)

	Proceeds from sale of property, plant and equipment.............................

73

38

729

Investing activities

	Other .......................................................................................................

(1,235)932(12,327)

				Net cash used in investing activities................................................

(18,650)(17,702)(186,146)

		Proceeds from long-term debt..............................................................

9,600

5,218

95,818

		 Repayments of long-term debt.............................................................

(4,404)(6,713)(43,956)

		Increase (decrease) in short-term borrowings, net...............................

1,891

(123)

18,874

		Acquisition of treasury stock................................................................

(694)

(7)

(6,927)

		 Cash dividends paid..............................................................................

(3,016)(1,676)(30,103)

		Other.....................................................................................................

(0)

180

(0)

				Net cash provided by (used in) financing activities..........................

3,377(3,121)

33,706and cash equivalents..............................................................................

(34)

218

(339)

Net decrease (increase) in cash and cash equivalents............................

(7,473)

1,515(74,588)

Cash and cash equivalents at beginning of year.....................................

17,612

16,097

175,786

Cash and cash equivalents at end of year................................................

¥ 10,139¥ 17,612$101,198¥¥$ 11,338

Financing activities

Foreign currency translation adjustments on cash

Additional cash flow information
		Interest paid..........................................................................................
See notes to consolidated financial statements.

16

Ryobi annual report 2008

1,136

775

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
RYOBI LIMITED AND CONSOLIDATED SUBSIDIARIESFor the years ended March 31, 2008 and 2007

1. Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements havebeen prepared in accordance with the provisions set forth in
the Japanese Financial Instruments and Exchange Law(formerly, the Japanese Securities and Exchange Law) and
its related accounting regulations, and in conformity withaccounting principles generally accepted in Japan, which
are different in certain respects as to application and disclosure requirements of International Financial ReportingStandards.
	In preparing these consolidated financial statements, certain reclassifications and rearrangements have been madeto the consolidated financial statements issued domesticallyin order to present them in a form which is more familiar toreaders outside Japan. In addition, certain reclassifications
have been made in the 2007 consolidated financial statements to conform to the classifications used in 2008.
	The notes to the consolidated financial statements include
information which is not required under accounting principles generally accepted in Japan but is presented herein as
additional information.
	The consolidated financial statements are stated inJapanese yen, the currency of the country in which Ryobi
Limited (“the Company”) is incorporated and operates. The
translations of Japanese yen amounts into U.S. dollar
amounts are included solely for the convenience of readers
outside Japan and have been made at the rate of ¥100.19 to$1, the approximate rate of exchange at March 31, 2008.
Such translations should not be construed as representations that the Japanese yen amounts could be converted
into U.S. dollars at that or any other rate.
2. Summary of Significant Accounting Policies(a) Consolidation
The consolidated financial statements include the accountsof the Company and its significant subsidiaries (“the Ryobi
Group”). Under the control or influence concept, those companies in which the Company, directly or indirectly, is able toexercise control over operations are fully consolidated, andthose companies over which the Ryobi Group has the ability
to exercise significant influence are accounted for by theequity method.
(i) Consolidated subsidiaries
The major consolidated subsidiaries are listed below:
Tokyo Light Alloy Co., Ltd. (Japan)
Ryobi Holdings (USA), Inc.
Ryobi Die Casting (USA), Inc.
(ii) Affiliates
The major affiliate accounted for by the equity method is
Ryobi Land Development Ltd. (Japan).
	The number of consolidated subsidiaries and affiliates
accounted for by the equity method as of March 31, 2008
and 2007 was as follows:
2008

2007

Consolidated subsidiaries..........................

17

15

Affiliates.....................................................

2

3

	The number of unconsolidated subsidiaries and affiliates
not accounted for by the equity method as of March 31,
2008 and 2007 was as follows:
2008

2007

Unconsolidated subsidiaries......................

3

3

Affiliates.....................................................

00	The investments in such unconsolidated subsidiaries arestated at cost. If the equity method of accounting had been
applied to the investments in these companies, the effect on
the accompanying consolidated financial statements would
not be material.
	All significant inter-company transactions, account balances and unrealized profits among the companies havebeen eliminated.
	The excess of the cost of an acquisition over the fair valueof the net assets of the acquired subsidiary at the date ofacquisition is being amortized over a period of 5 years
except for such excess recorded in a US subsidiary which istreated in accordance with FAS142.
(b) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, deposits
with banks and financial institutions which are unrestricted
as to withdrawal or use, and which have original maturitiesof three months or less.
(c) Inventories
Inventories are valued at cost for the Company and domestic
subsidiaries and the lower of cost or market for foreign subsidiaries. Cost is determined by methods according to theclassification of inventories as follows:(i) Finished products and work in process
The Company and domestic subsidiaries mainly adopt
the average method. However, die is determined by the
specific identification method.
Foreign subsidiaries mainly adopt the first-in first-out
method.
(ii) Raw materials, supplies and purchased goods
Die castings........Average method
Others.................Last purchase invoice price method
Foreign subsidiaries mainly adopt the first-in first-out
method.
(d) Marketable and investment securities
Marketable and investment securities are classified and accounted for, depending on management’s intent, as follows:i) trading securities, which are held for the purpose of earning capital gains in the near term are reported at fair value,
and the related unrealized gains and losses are included inincome, ii) held-to-maturity debt securities, which are expected to be held to maturity with the positive intent and ability
to hold to maturity are reported at amortized cost, andiii) available-for-sale securities, which are not classified aseither of the aforementioned securities, are reported at fairvalue, with unrealized gains and losses, net of applicabletaxes, reported in a separate component of equity.
	Non-marketable available-for-sale securities are stated atcost determined by the moving-average method.
For other than temporary declines in fair value, investment
securities are reduced to net realizable value by a charge toincome.

Ryobi annual report 200817

(e) Property, plant and equipment
Property, plant and equipment are stated at cost. Depreciationof property, plant and equipment of the Company and its
consolidated domestic subsidiaries is primarily computedby the declining-balance method at rates based on the estimated useful lives of the assets, while the straight-line
method is principally applied to the property, plant andequipment of consolidated foreign subsidiaries. The range
of useful lives is from 3 to 50 years for buildings and structures, and from 2 to 20 years for machinery and equipment.
	Property, plant and equipment had been depreciated up to
95% of acquisition cost with 5% of residual value carried
until previous fiscal years. However, such 5% portion ofproperty, plant and equipment is systematically amortizedover 5 years starting in the following year in which the carrying value of property, plant and equipment reaches 5% of
the acquisition cost in accordance with the revised corporate tax law.
	The effect of this treatment was to decrease operating
income by ¥430 million ($4,292 thousand) and to decrease
income before income taxes for the year ended March 31,
2008 by ¥461 million ($4,601 thousand).
(f) Long-lived assets
The Ryobi Group reviews its long-lived assets for impairment
whenever events or changes in circumstance indicate thecarrying amount of an asset or asset group may not be recoverable. An impairment loss would be recognized if the carrying
amount of an asset or asset group exceeds the sum of theundiscounted future cash flows expected to result from thecontinued use and eventual disposition of the asset or asset
group. The impairment loss would be measured as theamount by which the carrying amount of the asset exceeds
its recoverable amount, which is the higher of the discounted
cash flows from the continued use and eventual dispositionof the asset or the net selling price at disposition.
	No impairment losses were recognized for the years
ended March 31, 2008 and 2007.
(g) Accrued severance indemnities and pension plan
The Company and domestic consolidated subsidiaries havea contributory or a non-contributory funded pension planand unfunded pension plans, which cover substantially all of
their employees. Certain foreign consolidated subsidiaries
have defined benefit pension plans.
	Effective April 1, 2000, the Ryobi Group adopted a new
accounting standard for employees’ retirement benefits andaccounted for the liability for retirement benefits based on
the projected benefit obligations and plan assets at the balance sheet date. The amount of the transitional obligation of¥9,092 million ($90,748 thousand), determined as of the
beginning of this fiscal year, is amortized over ten years.
Unrecognized prior service cost is amortized at the beginning of this fiscal year by using straight-line method over
employees’ remaining service period or shorter period (primarily 14 years). Unrecognized net actuarial loss is amortizedfrom the next fiscal year by using the straight-line method
over the employees’ remaining service period or less (primarily 14 years). The Company changed its period ofamortization of unrecognized prior service cost and unrecognized net actuarial loss from primarily 15 years to 14 years infiscal 2007 as the employees’ remaining service period was
shortened. The effect of this change was immaterial.

18(h) Presentation of equity
On December 9, 2005, the Accounting Standards Board ofJapan (”the ASBJ”) published a new accounting standard forpresentation of equity. Under this accounting standard, certain items which were previously presented as liabilities are
now presented as components of equity. Such items include
stock acquisition rights, minority interests, and any deferredgain or loss on derivatives accounted for under hedge
accounting. This standard was effective for fiscal years ending on or after May 1, 2006. The consolidated balance sheet
as of March 31, 2007 is presented in line with this new
accounting standard.
(i) Leases
All leases are accounted for as operating leases. Under
Japanese accounting standards for leases, finance leases
that deem to transfer ownership of the leased property to
the lessee are to be capitalized, while other finance leases
are permitted to be accounted for as operating lease transactions if certain “as if capitalized” information is disclosed
in the notes to the lessee’s financial statements.
(j) Bonuses to directors and corporate auditors
Bonuses to directors and corporate auditors are accrued at
the year end to which such bonuses are attributable.
(k) Income taxes
The Ryobi Group adopted an accounting method for interperiod allocation of income taxes based on the asset andliability method.
Deferred income taxes are recorded to reflect the impact
of temporary differences between assets and liabilities recognized for financial reporting purposes and such amounts
recognized for tax purposes. These deferred taxes are measured by applying currently enacted tax laws to the temporary
differences.
(l) Appropriation of retained earnings
Appropriations of retained earnings at each year end arereflected in the financial statements for the following year
upon shareholder’s approval.
(m) Translation of foreign currency accounts
All current and non-current receivables and payables denominated in foreign currencies are translated into Japanese yenat the exchange rates at the balance sheet date. The foreignexchange gains and losses from translations are recognizedin the income statement to the extent that they are nothedged by forward exchange contracts.
(n) Translation of foreign currency financial statements(accounts of foreign subsidiaries)
The balance sheet accounts of the consolidated overseas
subsidiaries are translated into yen at the current exchange
rates as of the balance sheet date except for equity, which istranslated at the historical exchange rate. Differences arisingfrom such translation are shown as “Foreign currency translation adjustments” in a separate component of equity.
Revenue and expense accounts of the consolidated overseas subsidiaries are translated into yen at the averageexchange rate.
(o) Derivative and hedging activities
The Ryobi Group uses derivative financial instruments tomanage its exposure to fluctuations in foreign exchange andinterest rates. Foreign exchange forward contracts and interest rate swaps are utilized by the Ryobi Group to reduce
foreign currency exchange and interest rate risks. The Ryobi

Ryobi annual report 2008

Group does not enter into derivatives for trading or speculative purposes.
Derivative financial instruments and foreign currency transactions are classified and accounted for as follows: a) all
derivatives be recognized as either assets or liabilities andmeasured at fair value, and gains or losses on derivativetranslations are recognized in the income statement and b)
for derivatives, except those which qualify for hedge accounting, are used for hedging purposes, if derivatives qualify forhedge accounting because of high correlation and effectiveness between the hedging instruments and the hedged
items, gains or losses on derivatives are deferred until ofmaturity of the hedged transaction.
	The interest rate swaps which qualify for hedge accounting and meet specific matching criteria are not remeasured
at market value but the differential paid or received under
the swap agreements are recognized and included in interest expense or income.
(p) Per share information
Basic net income per share is computed by dividing net
income available to common shareholders, by the weightedaverage number of common shares outstanding for theperiod, retroactively for stock splits.
Diluted net income per share is not calculated because no
dilutive instruments were issued and outstanding for theyears ended March 31, 2008 and 2007.
Cash dividends per share presented in the accompanying
consolidated statements of income are dividends applicableto the respective years including dividends to be paid after
the end of the year.
(q) New accounting pronouncements
a. Measurement of Inventories
Under generally accepted accounting principles in Japan(“Japanese GAAP”), inventories are currently measured
either by the cost method, or at the lower of cost or market.
On July 5, 2006, the ASBJ issued ASBJ Statement No. 9,“Accounting Standard for Measurement of Inventories,”
which is effective for fiscal years beginning on or after April
1, 2008 with early adoption permitted. This standard requiresthat inventories held for sale in the ordinary course of business be measured at the lower of cost or net selling value,
which is defined as the selling price less additional estimated manufacturing costs and estimated direct selling
expenses. The replacement cost may be used in place of the
net selling value, if appropriate. The standard also requiresthat inventories held for trading purposes be measured at
the market price.
b. Lease Accounting
On March 30, 2007, the ASBJ issued ASBJ Statement
No.13, “Accounting Standard for Lease Transactions,” whichrevised the existing accounting standard for lease transactions issued on June 17, 1993. The revised accounting
standard for lease transactions is effective for fiscal years
beginning on or after April 1, 2008 with early adoption permitted for fiscal years beginning on or after April 1, 2007.
	Under the existing accounting standard, finance leases
that deem to transfer ownership of the leased property to
the lessee are to be capitalized, however, other financeleases are permitted to be accounted for as operating leasetransactions if certain “as if capitalized” information is disclosed in the note to the lessee’s financial statements.

	The revised accounting standard requires that all financelease transactions shall be capitalized recognizing leaseassets and lease obligations in the balance sheet.
c. Unification of Accounting Policies Applied to Foreign
Subsidiaries for the Consolidated Financial Statements
Under Japanese GAAP, a company currently can use thefinancial statements of its foreign subsidiaries which havebeen prepared in accordance with generally accepted
accounting principles in their respective jurisdictions for its
consolidation process unless they are clearly unreasonable.
On May 17, 2006, the ASBJ issued ASBJ Practical Issues
Task Force (PITF) No.18, “Practical Solution on Unification of
Accounting Policies Applied to Foreign Subsidiaries for theConsolidated Financial Statements.” The new standard prescribes: 1) the accounting policies and procedures applied
to a parent company and its subsidiaries for similar transactions and events under similar circumstances should in
principle be unified for the preparation of the consolidated
financial statements, 2) financial statements prepared byforeign subsidiaries in accordance with either International
Financial Reporting Standards or the generally accepted
accounting principles in the United States tentatively may be
used for the consolidation process, 3) however, the following items should be adjusted in the consolidation process sothat net income is accounted for in accordance with Japanese
GAAP unless they are not material;(1) Amortization of goodwill(2) Actuarial gains and losses of defined benefit plans recognized outside profit or loss
(3) Capitalization of intangible assets arising from development phases(4) Fair value measurement of investment properties, andthe revaluation model for property, plant and equipment, andintangible assets(5) Retrospective application when accounting policies arechanged(6) Accounting for net income attributable to a minority
interest
The new task force is effective for fiscal years beginning on
or after April 1, 2008 with early adoption permitted.
3. Accounting Change
a. Change in Depreciation Method for Buildings
Effective April 1, 2007, the Company adopted the straightline method of depreciation for Buildings, which, previously,
had been depreciated by the declining-balance method. Thischange was made to provide a more accurate allocation of
the cost of Buildings.
	The effects of this change were to increase operating
income by ¥228 million ($2,276 thousand) and to increase
income before income taxes by ¥234 million ($2,336 thousand) for the year ended March 31, 2008.
b. Change in Depreciation Method in Accordance with the
Revised Corporate Tax Law
Property, plant and equipment acquired and die on and after
April 1, 2007 are depreciated by the declining-balance method in accordance with the revised corporate tax law, which iseffective for fiscal years beginning on and after April 1, 2007.
	The effect of this treatment was to decrease operating
income by ¥823 million ($8,214 thousand) and to decrease
income before income taxes for the year ended March 31,

Ryobi annual report 2008

19

2008 by ¥825 million ($8,234 thousand).
4. Marketable Securities and Investments in Securities
Information regarding each category of the securities classified as trading, held-to-maturity and available-for-sale atMarch 31, 2008 and 2007 was as follows:
Millions of yen

2008

Available-for-sale:
Corporate shares.....
	Bonds.......................
Total............................

Cost

Unrealized
gain

Unrealized
loss

Fair value¥3,979100¥4,079¥5,296—¥5,296¥(146)(1)¥(147)¥9,12999¥9,228Millions of yen

2007

Available-for-sale:
Corporate shares.....
	Bonds.......................
Total............................

Cost

Unrealized
gain

Unrealized
loss

Fair value¥2,929100¥3,029¥8,629—¥8,629

¥(11)
(1)
¥(12)

¥11,54799¥11,646

Thousands of U.S. dollars

2008
Cost

Available-for-sale:
Corporate shares..... $39,715
998
	Bonds.......................
Total............................ $40,713

Unrealized
gain

Unrealized
loss

Fair value$52,859—$52,859$(1,457)(10)$(1,467)$91,117988$92,105

	Available-for-sale securities whose fair value was not readily
determinable as of March 31, 2008 and 2007 were as follows:
Thousands of
U.S. dollars

Millions of yen

Available-for-sale:
Corporate shares...................

2008

2007

2008

¥1,258¥1,251$12,556

	The book value of available-for-sale securities by contractual maturity for securities classified as available-for-sale atMarch 31, 2008 and 2007 were as follows:
Thousands of
U.S. dollars

Millions of yen

Due in one year or less............
Due after one year
through five years..................
Due after five years
through ten years...................
Total..........................................

20

2008

2007

2008

¥ —

¥ —

$ —

100

100

5. Inventories
Inventories at March 31, 2008 and 2007 consisted of thefollowing:
Millions of yen

2008

2007

2008

Finished products
and purchased goods............

¥19,992¥15,658$199,540

Work in process.......................
Raw materials and supplies.....
Total..........................................

14,312
7,552¥41,856

13,9098,831¥38,398

142,849
75,377$417,766

6. Land Revaluation
Under the “Law of Land Revaluation” a subsidiary elected a
one-time revaluation of its own-use land to a value based onreal estate appraisal information as of March 31, 2002.
	The resulting land revaluation excess represents unrealized appreciation of land and is stated, net of income taxes,
as a component of equity. There is no effect on the consolidated statements of income. Continuous readjustment is
not permitted unless the land value subsequently declines
significantly such that the amount of the decline in value
should be removed from the land revaluation excess accountand related deferred tax liabilities.
	The details of the one-time revaluation as of March 31,
2002 were as follows:

—

—

—

¥100

$998

Millions of yen

Thousands of
U.S. dollars

¥ 275
1,981

$ 2,745
19,772¥ 626$ 6,248

Land before revaluation....................
Land after revaluation.......................
Land revaluation reserve, net ofincome taxes of ¥675 million($6,737 thousand) and attribution ofminority interest of ¥405 million($4,042 thousand)...........................

	As of March 31, 2008, the carrying amount of the land
after the above one-time revaluation exceeded the market
value by ¥705 million ($7,037 thousand).
7. Short-term Borrowings and Long-term Debt
The annual weighted average interest rates applicable toshort-term borrowings were 2.5% and 2.2%, at March 31,
2008 and 2007, respectively.
	Long-term debt at March 31, 2008 and 2007 consisted of
the following:
Millions of yen

998

¥100

Thousands of
U.S. dollars

2008

Thousands of
U.S. dollars

2007

2008

Loans principally frombanks and insurancecompanies with interest
rates ranging from
1.38% to 6.31%:
Secured.................................... ¥ 1,241
22,426
Unsecured................................
23,667
Total..........................................
(6,003)
Less: Current portion...............

¥ 1,237
17,343
18,580(4,363)$ 12,386
223,835
236,221(59,916)Long-term debt
less current portion................ ¥17,664¥14,217$176,305

Ryobi annual report 2008

	The aggregate annual maturities of long-term debt at
March 31, 2008 were as follows:
Years ending March 31

Millions of yen

Thousands of
U.S. dollars¥ 6,003
6,180
5,032
3,581
2,075
796
¥ 23,667

2009...................................................
2010...................................................
2011...................................................
2012...................................................
2013...................................................
2014 and thereafter...........................
Total...................................................

$ 59,916
61,68350,22535,742
20,711
7,944$236,221	The assets of the Ryobi Group pledged as collateral for
short-term borrowings and long-term debt with banks andother financial institutions at March 31, 2008 and 2007 wereas follows:
Millions of yen

2008

Net book value of property:
	Buildings and structures........ ¥ 4,714
Machinery and equipment....
4,546
	Land.......................................
2,881
4
	Time deposit..........................
Total.......................................... ¥12,145

Thousands of
U.S. dollars

2007

2008

¥ 4,682
5,149
2,884
4
¥12,719$ 47,051
45,37428,75540$121,220

8. Accrued Severance Indemnities and Pension Plan
The Company and certain of its consolidated subsidiaries
have severance payment plans for employees. Under mostcircumstances, employees terminating their employment
are entitled to retirement benefits determined based on therate of pay at the time of termination, years of service andcertain other factors. Such retirement benefits are made in
the form of a lump-sum severance payment from theCompany or from certain consolidated subsidiaries andannuity payments from a trustee. Employees are entitled tolarger payments if the termination is involuntary, by retirement at the mandatory retirement age, by death, or byvoluntary retirement at certain specific ages prior to the
mandatory retirement age.
	The liabilities for employees’ retirement benefits at March
31, 2008 and 2007 consisted of the following:
Millions of yen

2008

2007

Thousands of
U.S. dollars

2008

Projected benefit obligation..... ¥ 32,792 ¥ 32,415 $ 327,298
Fair value of plan assets...........
(21,791)(23,840) (217,497)
Unrecognized priorservice cost............................

2,198

2,432

21,938Unrecognized actuarial loss.....

(5,638)(2,596)(56,273)

Unrecognized transitional
obligation................................

(1,241)(1,862)(12,386)

Prepaid pension cost...............
Net liabilities............................. ¥

0
6,320

0
0
6,549 $ 63,080¥

	The components of net periodic retirement benefit costs forthe years ended March 31, 2008 and 2007 were as follows:
Thousands of
U.S. dollars

Millions of yen

2008

2007

2008

Service cost..............................
Interest cost.............................

¥1,250752¥1,074718$12,476
7,506

Expected return on plan
assets......................................

(822)

(804)

(8,204)

Amortization of priorservice cost............................

(234)

(232)

(2,336)

Recognized actuarial loss........

393

294

3,923

Amortization of transitional
obligation................................

621

621

6,198

Net periodic retirement
benefit costs..........................

¥1,960¥1,671$19,563

	Assumptions used for the years ended March 31, 2008
and 2007 are set forth as follows:
2008

Discount rate..................................... 2.0%~2.5%

2007

2.0%~2.5%

Expected rate of return onplan assets......................................

3.5%

3.5%

Amortization of prior service cost.....

Primarily
14 years

Primarily
14 years

Primarily
14 years
10 years

Primarily
14 years
10 years

Recognition period of actuarial
gain / loss........................................
Amortization of transitional obligation....

9. Equity
On and after May 1, 2006, Japanese companies are subject
to a new corporate law of Japan (the “Corporate Law”),
which reformed and replaced the Commercial Code ofJapan (the “Code”) with various revisions that are, for themost part, applicable to events or transactions which occur
on or after May 1, 2006 and for the fiscal years ending on orafter May 1, 2006. The significant changes in the Corporate
Law that affect financial and accounting matters are summarized below;(a) Dividends	Under the Corporate Law, companies can pay dividends at
any time during the fiscal year in addition to the year-end
dividend upon resolution at the shareholders meeting. For
companies that meet certain criteria such as; (1) having theBoard of Directors, (2) having independent auditors, (3) having the Board of Corporate Auditors, and (4) the term ofservice of the directors is prescribed as one year rather than
two years of normal term by its articles of incorporation, theBoard of Directors may declare dividends (except for dividends in kind) at any time during the fiscal year if thecompany has prescribed so in its articles of incorporation.
However, the Company cannot do so because it does notmeet all the above criteria.
	The Corporate Law permits companies to distribute dividends-in-kind (non-cash assets) to shareholders subject to acertain limitation and additional requirements.
Semiannual interim dividends may also be paid once a
year upon resolution by the Board of Directors if the articles
of incorporation of the company so stipulate. The Corporate
Law provides certain limitations on the amounts available for

Ryobi annual report 200821

dividends or the purchase of treasury stock. The limitation isdefined as the amount available for distribution to the shareholders, but the amount of net assets after dividends must
be maintained at no less than ¥3 million.
(b) Increases/decreases and transfer of common stock,reserve and surplus
	The Corporate Law requires that an amount equal to 10%
of dividends must be appropriated as a legal reserve (a component of retained earnings) or as additional paid-in capital(a component of capital surplus) depending on the equity
account charged upon the payment of such dividends until
the total of aggregate amount of legal reserve and additional
paid-in capital equals 25% of the common stock. Under the
Corporate Law, the total amount of additional paid-in capitaland legal reserve may be reversed without limitation. The
Corporate Law also provides that common stock, legal
reserve, additional paid-in capital, other capital surplus andretained earnings can be transferred among the accounts
under certain conditions upon resolution of the shareholders.
(c) Treasury stock and treasury stock acquisition rights
	The Corporate Law also provides for companies to purchase treasury stock and dispose of such treasury stock byresolution of the Board of Directors. The amount of treasury
stock purchased cannot exceed the amount available for
distribution to the shareholders which is determined by specific formula.
	Under the Corporate Law, stock acquisition rights, whichwere previously presented as a liability, are now presented
as a separate component of equity.
	The Corporate Law also provides that companies can purchase both treasury stock acquisition rights and treasury
stock. Such treasury stock acquisition rights are presented
as a separate component of equity or deducted directly fromstock acquisition rights.
10. Income Taxes
The Company and its domestic subsidiaries are subject toJapanese national and local income taxes which, in theaggregate, resulted in normal effective statutory tax rates of
39.5% for the years ended March 31, 2008 and 2007.
	The tax effects of significant temporary differences andtax loss carryforwards which resulted in deferred tax assets
and liabilities at March 31, 2008 and 2007 were as follows:
Millions of yen

2008

2007

Thousands of
U.S. dollars

2008

Deferred tax assets:
Accrued severance cost.......... ¥ 2,453 ¥ 2,530 $ 24,483
16,158
16,696161,274
Tax loss carryforwards.............
3,571
3,746
35,642Other........................................
(16,585)(17,196) (165,535)
Valuation allowance.................
Deferred tax assets.................. ¥ 5,597 ¥ 5,776 $ 55,864
Deferred tax liabilities:

22

Unrealized gain on available-for-sale securities.................. ¥(2,036) ¥ (3,408) $ (20,321)

Other........................................
Deferred tax liabilities.............. ¥Net deferred tax assets............ ¥(2,075)(2,122)(20,711)(4,111) ¥ (5,530) $ (41,032)
1,486 ¥
246 $ 14,832

	The reconciliation between the normal effective statutory
tax rate for the years ended March 31, 2008 and 2007 andthe actual effective tax rates reflected in the accompanying
consolidated statements of income is as follows:
Normal effective statutory tax rate.......
Valuation allowance...............................
Other, net................................................
Actual effective tax rate.........................

2008

2007

39.5%
(4.2)
4.6
39.9%

39.5%
(0.3)
(0.1)
39.1%

11. Research and Development Costs
Research and development costs were ¥2,334 million($23,296 thousand) and ¥1,883 million for the years ended
March 31, 2008 and 2007, respectively.
12. Leases
Lease expenses on finance lease contracts without ownership transfer amounted to ¥531 million ($5,300 thousand)and ¥698 million, for the years ended March 31, 2008 and2007, respectively.
	Pro forma information of leased property such as acquisition cost, accumulated depreciation, depreciation expense,
interest expense, future minimum lease payments of financeleases that do not transfer ownership of the leased property
to the lessee on an “as if capitalized” basis for the years
ended March 31, 2008 and 2007 was as follows:
Millions of yen

2008

Machinery and equipment...........
Other assets.................................
Total..............................................

Acquisition
cost

Accumulated
depreciation

Net leased
property¥4,49888¥4,586¥2,88158¥2,939¥1,61730¥1,647

Millions of yen

2007

Machinery and equipment...........
Other assets.................................
Total..............................................

Acquisition
cost

Accumulated
depreciation

Net leased
property¥4,54298¥4,640¥2,43574¥2,509¥2,10724¥2,131Thousands of U.S. dollars

2008
Acquisition
cost

Accumulated
depreciation

Net leased
property

Machinery and equipment........... $44,895
878
Other assets.................................
Total.............................................. $45,773$28,755579$29,334$16,140299$16,439

Depreciation expense and interest expense, which are notreflected in the accompanying statements of income, computed by the straight-line method and the interest method
were ¥531 million ($5,300 thousand) and ¥698 million for theyears ended March 31, 2008 and 2007, respectively.

Ryobi annual report 2008

Future minimum lease payments:
Millions of yen

Current.....................................
Non-current..............................
Total..........................................

Thousands of
U.S. dollars

2008

2007

2008

¥ 492
1,155
¥1,647¥ 525
1,606¥2,131$ 4,911
11,528$ 16,439

Future minimum lease payments of the Ryobi Group as ofMarch 31, 2008 and 2007 under noncancelable operatingleases are as follows:
Millions of yen

Current.....................................
Non-current..............................
Total..........................................

Thousands of
U.S. dollars

2008

2007

2008

¥211
85
¥296

¥114
75
¥189

$2,106848$2,954

13. Contingent Liabilities
The Ryobi Group had the following contingent liabilities at
March 31, 2008 and 2007.
Millions of yen

Trade notes discounted...........
Guarantees and similar items
	Bank loans.............................
	Leases....................................
	Others....................................
Total..........................................

Thousands of
U.S. dollars

2008

2007

2008

¥ 489

¥ 606

$ 4,881

131
1,718
5
¥2,343151
2,037—¥2,794

1,308
17,14750$ 23,386

14. Derivatives
The Ryobi Group enters into foreign exchange forward contracts and interest rate swaps to hedge risk and reduce
exposure to fluctuations in market values of foreign exchange
rates and interest rates associated with certain assets andliabilities.
	All derivative transactions are related to qualified hedges
of interest and foreign currency exposures incorporated withits business. Market risk of these derivatives is basically offset by opposite movements in the value of hedged assets.
The Ryobi Group does not hold or issue derivatives for
speculative or trading purposes.
Market risk is the exposure created by potential fluctuations in market conditions, including interest or foreignexchange rates. The Ryobi Group does not anticipate any
losses arising from credit risk because the counterparties tothese derivatives are limited to major international financial
institutions.
	The execution of derivatives is controlled by the Finance
Department of the Company, and by the Finance Division of
consolidated subsidiaries. Derivative transactions have been
made in accordance with internal policies which regulate theauthorization and credit limit amounts.
	The Ryobi Group had the following derivatives contracts
outstanding as of March 31, 2008 and 2007.
Millions of yen

2008
Contract
amountFair value

Unrealized
gain (loss)

¥100

¥(0)

¥(0)

Interest swap:
Fixed rate payment,
floating rate receipt..................

Millions of yen

2007
Contract
amountFair value

Unrealized
gain (loss)

Interest swap:
Fixed rate payment,
floating rate receipt..................

¥100

¥(0)

¥(0)

Thousands of U.S. dollars

2008
Contract
amountFair value

Unrealized
gain (loss)

$998

$(0)

$(0)

Interest swap:
Fixed rate payment,
floating rate receipt..................

Note: Derivatives which qualify for hedge accounting were excluded from the market value information in 2008 and 2007.

Ryobi annual report 200823

15. Segment Information
The segment information classified by industry and geographical market area is presented below with respect to the years
ended March 31, 2008 and 2007.
(1) Industry segment information
The Ryobi Group operates in three industry segments according to the product groups which are:—Die castings (“Die castings”)—Printing equipment (“Printing equipment”)—Electric power tools, lawn and garden equipment and builders’ hardware (“Power tools and builders’ hardware”)
Millions of yen

2008
Die castings

Net sales:
	Unaffiliated customer....................................................
	Intersegment.................................................................
Total..................................................................................
Operating costs and expenses........................................
Operating income............................................................
Total assets......................................................................
Depreciation and amortization.........................................
Capital expenditure..........................................................

¥148,596
207
148,803
141,158¥ 7,645¥120,048
8,389¥ 12,054

Printing equipment¥ 40,963—
40,96336,023¥ 4,940¥ 31,778
904¥ 2,502

Power tools andbuilders’ hardware¥ 26,622
2
26,624
24,974¥ 1,650¥ 25,094765¥
786

Eliminations /corporate

¥

—
(209)
(209)
(209)
¥
(0)
¥ 19,052—¥—

Consolidated¥216,181—
216,181
201,946¥ 14,235¥195,972
10,058¥ 15,342

Millions of yen

2007
Die castings

Net sales:
	Unaffiliated customer....................................................
	Intersegment.................................................................
Total..................................................................................
Operating costs and expenses........................................
Operating income............................................................
Total assets......................................................................
Depreciation and amortization.........................................
Capital expenditure..........................................................

¥138,623
266
138,889
130,121¥ 8,768¥118,535
6,779¥ 17,836

Printing equipment¥ 39,829—
39,82933,960¥ 5,869¥ 31,066
693¥ 1,816

Power tools andbuilders’ hardware¥ 26,2202
26,222
24,506¥ 1,716¥ 25,763
724¥
733

Eliminations /corporate

¥

—
(268)
(268)
(268)
¥
0
¥ 27,165—¥—

Consolidated¥204,672—
204,672
188,319¥ 16,353¥202,529
8,196¥ 20,385

Thousands of U.S. dollars

2008

Net sales:
	Unaffiliated customer....................................................
	Intersegment.................................................................
Total..................................................................................
Operating costs and expenses........................................
Operating income............................................................
Total assets......................................................................
Depreciation and amortization.........................................
Capital expenditure..........................................................

Die castings

Printing equipment

Power tools andbuilders’ hardware$1,483,142
2,066
1,485,208
1,408,903$ 76,305$1,198,204
83,731$ 120,311$ 408,853—
408,853359,547$ 49,306$ 317,177
9,023$ 24,973$ 265,715
20
265,735
249,266$ 16,469$ 250,464
7,635$ 7,845

Eliminations /corporate$—(2,086)(2,086)(2,086)$(0)$ 190,159—$—

Consolidated$2,157,710—
2,157,710
2,015,630$ 142,080$1,956,004
100,389$ 153,129

	The amounts of corporate assets as of March 31, 2008 and 2007 included in the “Eliminations or corporate assets” were¥19,062 million ($190,259 thousand) and ¥27,183 million, respectively, which mainly consisted of cash, securities and longterm investment assets (investments in securities).
	The effect of the change in depreciation method for Buildings described in Note 3. was to increase operating income of Die
castings, Printing equipment and Power tools and builders’ hardware for the year ended March 31, 2008, by ¥133 million($1,327 thousand), ¥74 million ($739 thousand) and ¥21 million ($210 thousand), respectively, from such segments in the prioryear.
	The effect of the change in depreciation method in accordance with the revised corporate tax law described in Note 3. wasto decrease operating income of Die castings, Printing equipment and Power tools and builders’ hardware for the year ended
March 31, 2008, by ¥745 million ($7,436 thousand), ¥41 million ($409 thousand) and ¥37 million ($369 thousand), respectively, from such segments in the prior year.
	The effect of depreciation of residual value in accordance with the revised corporate tax law described in Note 2.(e) was todecrease operating income of Die castings, Printing equipment and Power tools and builders’ hardware for the year ended

24

Ryobi annual report 2008

March 31, 2008, by ¥354 million ($3,533 thousand), ¥32 million ($319 thousand) and ¥44 million ($439 thousand), respectively, from such segments in the prior year.
(2) Geographical segment information
Millions of yen

2008
Japan

Net sales:
	Unaffiliated customer....................................................
	Intersegment.................................................................
Total..................................................................................
Operating costs and expenses........................................
Operating income............................................................
Total assets......................................................................

¥ 182,724
4,954
187,678
173,913¥ 13,765¥ 143,405

The Americas¥ 25,151
265
25,416
24,734¥682¥ 19,973

Other
overseas

Eliminations /corporate¥ 8,306
7,284
15,59015,803¥ (213)¥ 17,109

Consolidated¥—(12,503)(12,503)(12,504)¥1¥ 15,485¥ 216,181—
216,181
201,946¥ 14,235¥ 195,972

Millions of yen

2007
Japan

Net sales:
	Unaffiliated customer....................................................
	Intersegment.................................................................
Total..................................................................................
Operating costs and expenses........................................
Operating income............................................................
Total assets......................................................................

¥ 173,830
3,748
177,578
163,330¥ 14,248¥ 142,856

The Americas¥ 23,147
800
23,94722,651¥ 1,296¥ 18,909

Other
overseas

Eliminations /corporate¥ 7,695
6,242
13,937
13,245¥692¥ 16,457

Consolidated¥—(10,790)(10,790)(10,907)¥117¥ 24,307¥ 204,672—
204,672
188,319¥ 16,353¥ 202,529

Thousands of U.S. dollars

2008

Net sales:
	Unaffiliated customer....................................................
	Intersegment.................................................................
Total..................................................................................
Operating costs and expenses........................................
Operating income............................................................
Total assets......................................................................

Japan

The Americas

Other
overseas

Eliminations /corporate$ 1,823,775
49,446
1,873,221
1,735,832$ 137,389$ 1,431,331$ 251,033
2,645
253,678
246,871$ 6,807$ 199,351$ 82,902
72,702
155,604
157,730$ (2,126)$ 170,766$

	The amounts of corporate assets as of March 31, 2008
and 2007 included in the “Eliminations or corporate assets”
were ¥19,062 million ($190,259 thousand) and ¥27,183 million, respectively, which mainly consisted of cash, securities
and long-term investment assets (investments in securities).
	The effect of the change in depreciation method for Buildings
described in Note 3. was to increase operating income ofJapan for the year ended March 31, 2008, by ¥228 million($2,276 thousand) from such segments in the prior year.
	The effect of the change in depreciation method in accordance with the revised corporate tax law described in Note
3 was to decrease operating income of Japan for the year
ended March 31, 2008, by ¥823 million ($8,214 thousand)from such segments in the prior year.
	The effect of depreciation of residual value in accordancewith the revised corporate tax law described in Note 2.(e)was to decrease operating income of Japan for the year
ended March 31, 2008, by ¥430 million ($4,292 thousand)from such segments in the prior year.
(3) Export sales and sales by overseas subsidiaries
Export sales of the companies (i.e., export amounts made by
the Company and its domestic subsidiaries) plus the sales
by overseas consolidated subsidiaries for the years ended
March 31, 2008 and 2007 are presented below:

Consolidated—(124,793)(124,793)(124,803)$
10$ 154,556$ 2,157,710—
2,157,710
2,015,630$ 142,080$ 1,956,004
Thousands of
U.S. dollars

Millions of yen

2008

2007

2008

¥35,238
22,192
11,540¥68,970¥29,079
21,955
12,180¥63,214$351,712
221,499
115,181$688,392

16.3%
10.3
5.3
31.9%

14.2%
10.7
6.0
30.9%

Export sales and sales byoverseas subsidiaries:
		The Americas......................
		Europe.................................
		Other...................................
Total..........................................
Percentage of such sales
against consolidated net sales:
		The Americas......................
		Europe.................................
		Other...................................
Total..........................................

16. Subsequent Event
On June 25, 2008, the shareholders of the Company authorized the following appropriation of retained earnings for theyear ended March 31, 2008.

Cash dividends..................................

Ryobi annual report 2008

Millions of yen

Thousands of
U.S. dollars¥1,001$ 9,99125

26

Ryobi annual report 2008

Profile

Corporate Information

Since its establishment as a die casting manufacturer in December 1943, Ryobi Limited has

C O R P O R AT E D ATA

accumulated innovative technologies by manufacturing components for automobiles, electronics,

Company NameRYOBI LIMITED

telecommunications and other industries. Ryobi has leveraged these technologies and drawn on

Established
December 16, 1943

its experience to diversify into the manufacture of printing equipment, power tools and builders’

Major Products
Die cast products
Printing equipment(offset printing presses, peripherals, etc.)
Power tools(electric power tools, lawn and garden equipment, etc.)
Builders’ hardware(door closers, hinges, architectural hardware, etc.)

hardware. Ryobi is all around you, making an enjoyable, comfortable daily lifestyle possible.

Head Office
762 Mesaki-cho, Fuchu-shi, Hiroshima-ken 726-8628, Japan
Telephone: 81-847-41-1111
Tokyo Branch
5-2-8 Toshima, Kita-ku, Tokyo 114-8518, Japan
Telephone: 81-3-3927-5541
Toranomon Office
Toranomon Central Building
1-7-1 Nishishinbashi, Minato-ku, Tokyo 105-0003, Japan
Telephone: 81-3-3927-5541

M ana g ement M ember s(As of June 25, 2008)

68.7%
DIE CASTINGSNet Salesby Segment
for Fiscal 2008

As a world-leading die casting manufacturer,
Ryobi supplies various industries with die castproducts, such as automobile components,
including cylinder blocks and transmission
cases.

12.3%
POWER TOOLS AND
BUILDERS’ HARDWARE
Ryobi provides an extensive range ofpower tools and lawn and garden
equipment for both professional anddo-it-yourself needs, as well as suchbuilders’ hardware as our mainstay door
closers, which offer enhanced safety andcomfort for homes and offices.

19.0%

Ryobi offers high-precision, multi-functional offset
printing presses for fast and attractive results, anddevelops total printing systems for all stages of theprinting process, from prepress to press and post-press.

PRINTING EQUIPMENT

Contents
CONSOLIDATED FINANCIAL HIGHLIGHTS 1CORPORATE SOCIAL RESPONSIBILITY 5

A MESSAGE FROM THE MANAGEMENT 2
FINANCIAL SECTION 6

topics 4

CORPORATE INFORMATION 27

Board of Directors
Chairman and Representative Director
Hiroshi Urakami
President and Representative Director
Susumu Yoshikawa
Directors
Takao Tanaka
Takashi Yokoyama
Koji Ishii
Akira Urakami
Kenjiro Suzuki
Outside Director
Satoshi Ohoka
Corporate Auditors
Standing Corporate Auditor
Outside Corporate Auditor
Corporate Auditor
Outside Corporate Auditor

in light of the information available as of the end of the fiscal year under review and may involve various risks and uncertainties. The Ryobi Group cautions that

Shozo Kobayashi
Tairo Katoh
Tsuyoshi Mifune
Izumi Kurosawa

Ryobi Imagix Co. (Japan)
Printing equipment and related product sales
Ryobi Sales Co. (Japan)
Power tools and lawn and garden equipment sales
Ryobi Mirasaka Co. (Japan)
Die casting manufacturing
Ryobi Mitsugi Co. (Japan)
Die casting manufacturing
Tokyo Light Alloy Co., Ltd. (Japan)
Cast aluminum and die casting manufacturing and sales
lkuno Co. (Japan)
Secondary aluminum alloy bullion manufacturing and sales
Ryobi Power Tool Co. (Japan)
Power tools and lawn and garden equipment manufacturing
Ryobi Die Casting (USA), Inc. (U.S.A.)
Die casting manufacturing and sales
RDCM, S. de R.L. de C.V. (Mexico)	Die casting manufacturing
Ryobi Aluminium Casting (UK), Limited (U.K.) Die casting manufacturing and sales
Ryobi Die Casting Dalian Co., Ltd. (P.R.C.)
Die and die casting manufacturing and sales
Ryobi Dalian Machinery Co., Ltd. (P.R.C.)
Power tools, lawn and garden equipment and builders’ hardware manufacturing and sales

S H A R E H O L D E R I N F O R M AT I O N
Number of Shares Issued
171,230,715

Items containing forward-looking statements such as performance forecasts and future policies and strategies are based on the assumptions of management

Corporate Officers

Hiroshi Urakami
Susumu Yoshikawa
Takao Tanaka
Takashi Yokoyama
Koji Ishii
Kenjiro Suzuki
Kuniyuki Ito
Naomichi Honkawa
Kazuaki Danjo
Shoji Osawa
Hideki Domoto
Hiroyuki Kawaguchi
Takashi Suzuki

M a j or C on s ol i dated S u b s i d i ar i e s(As of March 31, 2008)

Forward-Looking Statements

Corporate Officers
Chief Executive Officer
Chief Operating Officer
Executive Corporate Officers

Listing
Common Stock—Tokyo

Transfer Agent
Mitsubishi UFJ Trust and Banking Corporation
1-4-5, Marunouchi, Chiyoda-ku,
Tokyo 100-8212, Japan

its actual actions and performance may differ significantly from these forward-looking statements due to numerous factors outside of the Group’s control suchas, but not limited to, general economic conditions, the business environment, trends in market demand and foreign exchange rates.
Ryobi annual report 2008

表2

2008 年 08 月 05 日 11 時 00 分 天地 280- 左右 433（背幅 3mm）
08116-1297

リョービ AR 2008

再校 F6000 Comp_M45_SQ_175 澤口

27

表3

RYOBI ANNUAL REPORT 2008

For the year ended March 31, 2008

2008

Head Office

762 Mesaki-cho, Fuchu-shi, Hiroshima-ken 726-8628, Japan
Tel. 81-847-41-1111
Tokyo Branch 5-2-8 Toshima, Kita-ku, Tokyo 114-8518, Japan
Tel. 81-3-3927-5541
http://www.ryobi-group.co.jp/

ANNUAL REPORT

Printed in Japan
Copyright©2008 Ryobi Limited. All Rights Reserved.

This annual report was printed by a Ryobi printing press.

表4

表12008 年 07 月 31 日 16 時 00 分 天地 280- 左右 433（背幅 3mm）
08116-1297

リョービ AR 2008

初校 F6000 Comp_S45_SQ_150 澤口

リョービ
レッド

特紺

スミ