EIZO NANAO CORPORATION

Financial Highlights
Eizo Nanao Corporation and Subsidiaries
Thousands of
U.S. Dollars

Millions of Yen

2008

2009

2010

2010

¥ 89,308¥ 74,522¥ 77,525$ 833,602

Operating income

8,475

4,302

9,026

97,053

Net income

4,433

682

4,928

52,989Total assets

74,54065,62175,369810,419

Total equity

55,48750,68956,485607,366

Years ended March 31:
Net sales

As of March 31:

Per share data
Basic net income

Yen

U.S. Dollars¥ 195.03¥ 30.47¥ 220.79

80.00

70.00

50.00

Cash dividends applicable to the year

$

0.54

Note : U.S. dollar amounts are provided solely for convenience at the rate of ¥93 to US$1, the approximate exchange rate at March 31, 2010.

1

2.37

FlexScan®

RadiForce®

ColorEdge®

DuraVision®

Raptor™

FORIS®

Net Sales

Operating Income

Net Income

Net Sales by Products

Millions of Yen

Millions of Yen

Millions of Yen

Millions of Yen
Monitor for Computer use

9,026

89,308
8,475
74,522

4,928

77,525

Amusement Monitor
Other

5,276
38,442

4,433

7,517

6,472

35,12626,00845,5904,302

42,042
34,882

682

2008

2009

2010

Total Equity

2009

2010

Basic Net Income per
ShareMillions of Yen
56,48555,487

2008

2008

2009

2008

2009

2010

Total Equity per Share
Yen

Yen

2,530.52

2,441.13
50,6892010

2,270.88

220.79195.03

30.47

2008

2009

2010

2008

2009

2010

2008

2009

2010

2

Consolidated Balance Sheets
Eizo Nanao Corporation and Subsidiaries

Thousands of
U.S. Dollars(Note 1)Millions of Yen

2010

2009

2010

¥ 18,760¥ 9,888$ 201,720

2,320

1,998

24,946

Trade notes

300

482

3,226

Trade accounts

15,066

10,264

162,000

31

191

333

(124)

(212)

(1,333)Inventories (Note 5)

11,451

16,316

123,129

Deferred tax assets (Note 9)

2,338

2,257

25,140

701

593

7,537

50,843

41,777546,698

Land

3,084

3,131

33,161

Buildings and structures

11,785

11,794

126,720

Machinery and equipment

3,810

3,872

40,968

Furniture and fixtures

4,219

4,172

45,366

March 31, 2010 and 2009ASSETS
CURRENT ASSETS:
Cash and cash equivalents (Note 13)
Short-term investments (Notes 4 and 13)
Notes and accounts receivables (Note 13):

Other
Allowance for doubtful receivables

Prepaid expenses and other current assets
Total current assets
PROPERTY, PLANT AND EQUIPMENT:

2

Construction in progress
Total

22,89822,971

246,215(13,092)(12,073)(140,774)

9,806

10,898105,441

Investment securities (Notes 4 and 13)

11,8108,783

126,989

Goodwill (Note 6)

1,468

1,727

15,785

366

1,079

3,935

1,076

1,787

11,571

Accumulated depreciation
Net property, plant and equipment
INVESTMENTS AND OTHER ASSETS:

Deferred tax assets (Note 9)
Other assets(430)

Allowance for doubtful receivables
Total investments and other assets
TOTAL

See notes to consolidated financial statements.

3

14,72012,946

158,280¥ 75,369¥ 65,621$ 810,419

Thousands of
U.S. Dollars(Note 1)Millions of Yen

2010

2009

2010

¥ 7,195¥ 7,370$ 77,366

1,151

906

12,376

Income taxes payable

2,239

395

24,075

Accrued expenses

2,894

2,647

31,118

581

535

6,247

14,06011,853

151,182

Liability for retirement benefits (Note 7)

2,374

2,060

25,527

Deferred tax liabilities (Note 9)

1,347

10

14,484

Other long-term liabilities

1,103

1,009

11,860

4,824

3,079

51,871

4,426

4,426

47,591

Capital surplus

4,314

4,314

46,387Retained earnings

46,18542,484

496,613

Unrealized gain on available-for-sale securities

3,862

1,807

41,527

LIABILITIES AND EQUITYCURRENT LIABILITIES:
Accounts payable (Note 13):
Trade accounts
Other

Other current liabilities
Total current liabilities
LONG-TERM LIABILITIES:

Total long-term liabilities
COMMITMENTS AND CONTINGENT LIABILITIES(Notes 12 and 14)
EQUITY (Notes 8 and 15):
Common stock—authorized, 65,000,000 shares;
issued, 22,731,160 shares in 2010 and 2009

Deferred gain on derivatives under hedge accounting
Foreign currency translation adjustments

11

1(1,304)(1,343)(14,021)

(999)

(999)

(10,742)

56,48550,689607,366¥ 75,369¥ 65,621$ 810,419

Treasury stock—at cost, 409,934 shares in 2010 and
409,884 shares in 2009
Total equity
TOTAL

4

Consolidated Statements of Income
Eizo Nanao Corporation and Subsidiaries
Thousands of
U.S. Dollars(Note 1)Millions of Yen

2010

2009

2010

¥ 77,525¥ 74,522$ 833,602

COST OF SALES (Note 10)55,75355,005599,495

Gross profit

21,772

19,517234,107

12,746

15,215137,054

9,026

4,302

97,053

Interest and dividend income

226

273

2,430

Loss on disposal of property, plant and equipment—net

(284)

(31)

(3,054)Years Ended March 31, 2010 and 2009

NET SALESSELLING, GENERAL AND ADMINISTRATIVE EXPENSES (Note 10)
Operating income
OTHER INCOME (EXPENSES):(1,696)

Loss on impairment of goodwill (Note 6)
Loss on impairment of land

(47)

Foreign exchange loss—net

(113)

(313)

(1,215)

Loss on valuation of investment securities

(266)

(815)

(2,860)

70

8

753

Other expenses—net(414)(2,574)(4,451)

INCOME BEFORE INCOME TAXES

8,612

1,728

92,602Current

3,104

1,975

33,376

Deferred

580

(929)

6,237

3,684

1,046

39,613682$ 52,989

Other—net(505)

INCOME TAXES (Note 9):

Total income taxes
NET INCOME¥ 4,928¥

Yen
Years Ended March 31, 2010 and 2009

U.S. Dollars

2010

2009

¥ 220.79¥ 30.47

50.00

70.00

2010

PER SHARE OF COMMON STOCK (Note 2.s):
Basic net income
Cash dividends applicable to the year

See notes to consolidated financial statements.

5

$

2.37
0.54

Consolidated Statements of Changes in Equity
Eizo Nanao Corporation and Subsidiaries
Thousands

Years Ended March 31, 2010 and 2009

BALANCE, APRIL 1, 2008
Net income
Cash dividends, ¥80 per share
Net decrease in unrealized gain
on available-for-sale securities
Net change in foreign currencytranslation adjustments
Purchases of treasury stock
BALANCE, MARCH 31, 2009
Net income
Cash dividends, ¥55 per share
Net increase in unrealized gain
on available-for-sale securities
Net change in deferred gain onderivatives under hedge accounting
Net change in foreign currencytranslation adjustments
Purchases of treasury stock
BALANCE, MARCH 31, 2010

Millions of Yen

Number of
Shares ofCommon Stock Common
Outstanding
Stock

22,730¥ 4,426

CapitalSurplus

Unrealized Deferred Gain on Foreign
Derivatives
Gain onCurrency
Retained Available-for-Sale under Hedge Translation
Accounting Adjustments
Securities
Earnings¥ 4,314 ¥ 43,604
682(1,802)¥ 3,362¥ (217)

TreasuryStock¥ (2) ¥ 55,487
682(1,802)(1,555)(1,555)(1,126)(409)
22,321

4,426

4,314

42,484
4,928(1,227)

1,807(1,343)(1,126)
(997)
(999)

2,055

¥ 4,426¥ 4,314 ¥ 46,185¥ 3,862(997)
50,6894,928(1,227)2,055¥

22,321

Total
Equity

¥

1

1
39

39

1 ¥ (1,304)¥ (999) ¥ 56,485

Thousands of U.S. Dollars (Note 1)

Years Ended March 31, 2010 and 2009

BALANCE, MARCH 31, 2009
Net income
Cash dividends, $0.59 per share
Net increase in unrealized gain
on available-for-sale securities
Net change in deferred gain onderivatives under hedge accounting
Net change in foreign currencytranslation adjustments
Purchases of treasury stock
BALANCE, MARCH 31, 2010

CommonStockCapitalSurplus

Unrealized Deferred Gain on Foreign
Derivatives
Gain onCurrency
Retained Available-for-Sale under Hedge Translation
Accounting Adjustments
Securities
Earnings

Treasury
Stock

Total
Equity$ 47,591 $ 46,387 $456,817 $ 19,430
52,989(13,193)$ (14,440) $ (10,741) $545,044
52,989(13,193)

22,09722,097
$

11

11
419

$ 47,591 $ 46,387 $496,613 $ 41,527 $

419

(1)
(1)
11 $ (14,021) $ (10,742) $607,366

See notes to consolidated financial statements.

6

Consolidated Statements of Cash Flows
Eizo Nanao Corporation and Subsidiaries
Thousands of
U.S. Dollars(Note 1)Millions of Yen
Years Ended March 31, 2010 and 2009

OPERATING ACTIVITIES:
Income before income taxes
Adjustments for:
Income taxes—paidDepreciation and amortization
Amortization of goodwill(Reversal) provision of doubtful receivables
Loss on disposal of property, plant and equipment
Loss on impairment of goodwill (Note 6)
Loss on impairment of land
Loss on valuation of investment securities
Changes in assets and liabilities:(Increase) decrease in notes and accounts receivable
Decrease (increase) in inventories
Increase (decrease) in accounts payable
Increase (decrease) in accrued expenses
Increase in liability for retirement benefits
Other—net
Total adjustments
Net cash provided by operating activities
INVESTING ACTIVITIES:
Purchases of property, plant and equipment
Proceeds from sales of short-term investments and investment securities
Purchases of short-term investments and investment securities
Payment for acquisition of business (Note 11)
Increase in other assets
Net cash used in investing activities
FINANCING ACTIVITIES:Dividends paid

2010

2009

2010

¥ 8,612¥ 1,728$ 92,602(1,262)
1,712
203
(100)
284

(3,832)
2,124
804
148
31

(13,570)
18,4082,183(1,075)
3,054

1,696

47
266

815

505
2,860

(4,483)
4,805
111
387
325
139
2,434
11,046

1,163
(784)
(353)
(487)
100
496
1,921
3,649

(48,204)
51,667
1,193
4,161
3,495
1,495
26,172
118,774(418)
11,073(11,217)
(90)
(299)
(951)

(1,270)6,615(7,938)(715)(512)(3,820)(4,495)
119,065(120,613)(968)(3,215)(10,226)(1,228)(1,801)(13,204)(997)

Purchases of treasury stock

Net cash used in financing activities
FOREIGN CURRENCY TRANSLATION ADJUSTMENT
ON CASH AND CASH EQUIVALENTS
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS—(Forward)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS, END OF YEAR

See notes to consolidated financial statements.

7(1,228)(2,798)(13,204)

5

(251)

43

¥ 8,872
9,888¥ 18,760¥ (3,220)13,108¥ 9,888$ 95,387
106,323$ 201,710

Notes to Consolidated Financial Statements
Eizo Nanao Corporation and Subsidiaries

1. BASIS OF PRESENTING CONSOLIDATEDFINANCIAL STATEMENTS
The accompanying consolidated financial statements have been preparedin accordance with the provisions set forth in the Japanese Financial
Instruments and Exchange Act and its related accounting regulations,and in conformity with accounting principles generally accepted inJapan ("Japanese GAAP"), which are different in certain respects as tothe application and disclosure requirements of International Financial
Reporting Standards.
In preparing these consolidated financial statements, certain
reclassifications and rearrangements have been made to the consolidated
financial statements issued domestically in order to present them in aform which is more familiar to readers outside Japan. In addition, certain
reclassifications have been made in the 2009 consolidated financial
statements to conform to the classifications used in 2010.
The consolidated financial statements are stated in Japanese yen,
the currency of the country in which EIZO NANAO CORPORATION(the "Company") is incorporated and operates. The translations ofJapanese yen amounts into U.S. dollar amounts are included solely forthe convenience of readers outside Japan and have been made at therate of ¥93 to $1, the approximate rate of exchange at March 31, 2010.
Such translations should not be construed as representations that theJapanese yen amounts could be converted into U.S. dollars at that or any
other rate.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa. Consolidation—The consolidated financial statements as of March
31, 2010 include the accounts of the Company and its 13 (13 in 2009)
subsidiaries (together, the "Group").
Under the control concept, those companies in which theCompany, directly or indirectly, is able to exercise control over
operations are fully consolidated.
All significant intercompany balances and transactions have been
eliminated in consolidation. All material unrealized profit included in
assets resulting from transactions within the Group is eliminated.
During the year ended March 31, 2010, Eizo Display Technologies(Suzhou) Co., Ltd. has been included in consolidation as a result of its
establishment. Its registered capital is $900 million, and according
to a payment of half of the registered capital on April 15, 2010, thecapital of Eizo Display Technologies (Suzhou) Co., Ltd. amounted to$450 million on that date.
GETS, Inc., which was one of the subsidiaries of the Company,
completed liquidation proceedings on March 31, 2009.
b. Unification of Accounting Policies Applied to Foreign
Subsidiaries for the Consolidated Financial Statements—In
May 2006, the Accounting Standards Board of Japan (the "ASBJ")
issued ASBJ Practical Issues Task Force ("PITF") No.18, "Practical
Solution on Unification of Accounting Policies Applied to Foreign
Subsidiaries for the Consolidated Financial Statements." PITF No.18
prescribes that (1) the accounting policies and procedures applied
to a parent company and its subsidiaries for similar transactions andevents under similar circumstances should in principle be unified forthe preparation of the consolidated financial statements, (2) financial
statements prepared by foreign subsidiaries in accordance with either
International Financial Reporting Standards or the generally accepted
accounting principles in the United States of America tentatively may
be used for the consolidation process, (3) however, the following
items should be adjusted in the consolidation process so that net
income is accounted for in accordance with Japanese GAAP unlessthey are not material: (a) amortization of goodwill; (b) scheduled
amortization of actuarial gain or loss of pensions that has been
directly recorded in equity; (c) expensing capitalized development
costs of R&D; (d) cancellation of fair value model accounting forproperty, plant and equipment and investment properties andincorporation of cost model accounting; (e) recording the prioryears' effects of changes in accounting policies in the consolidated
statements of income where retrospective adjustments to financial
statements have been incorporated; and (f) exclusion of minority
interests from net income, if contained. PITF No.18 was effective forfiscal years beginning on or after April 1, 2008 with early adoption
permitted.
The Company applied this accounting standard effective April 1,
2007.
c. Business Combination—In October 2003, the Business Accounting
Council (the BAC) issued a Statement of Opinion, "Accounting for
Business Combinations," and in December 2005, the ASBJ issued ASBJ
Statement No.7, "Accounting Standard for Business Divestitures"and ASBJ Guidance No.10, "Guidance for Accounting Standard forBusiness Combinations and Business Divestitures."
The accounting standard for business combinations allows
companies to apply the pooling of interests method of accounting
only when certain specific criteria are met such that the businesscombination is essentially regarded as a uniting-of-interests. For
business combinations that do not meet the uniting-of-interests
criteria, the business combination is considered to be an acquisition
and the purchase method of accounting is required. This standard
also prescribes the accounting for combinations of entities undercommon control and for joint ventures.
d. Cash Equivalents—Cash equivalents are short-term investmentsthat are readily convertible into cash and that are exposed toinsignificant risk of changes in value.
Cash equivalents include time deposits, certificates of deposit andcommercial paper, all of which mature or become due within threemonths of the date of acquisition.
e. Inventories—Inventories are stated at the lower of cost,
determined by the average method for finished products and work inprocess and by the moving-average method for raw materials, or net
selling value.
f. Short-Term Investments and Investment Securities—Shortterm investments and investment securities are classified andaccounted for depending on management's intent. Available-forsale securities, which represent securities not classified as either
trading securities or held-to-maturity debt securities, are reported atfair value, with unrealized gains and losses, net of applicable taxes,
reported as a separate component of equity. The cost of availablefor-sale securities sold is determined based on the moving-averagemethod.
Non-marketable available-for-sale securities are stated at cost
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 to income.
g. Property, Plant and Equipment—Property, plant and equipment
are stated at cost. Depreciation of property, plant and equipment of
the Company and its domestic subsidiaries is computed substantiallyby the declining-balance method at rates based on the estimateduseful lives of the assets, while the straight-line method is applied
to buildings of the Company and its domestic subsidiaries acquired
after April 1, 1998 and all property, plant and equipment of foreignsubsidiaries. The range of useful lives is principally from 15 to 50
years for buildings and structures, from 7 to 10 years for machineryand equipment, and from 2 to 6 years for furniture and fixtures.
h. Goodwill—Goodwill is amortized over 10 years by the straightline method, although immaterial goodwill is charged to income
at acquisition. Amortization of goodwill is ¥203 million ($2,183
thousand) and ¥804 million for the years ended March 31, 2010 and2009, respectively.
i. Long-Lived Assets—The Group reviews its long-lived assets for
impairment whenever events or changes in circumstances indicate thecarrying amount of an asset or asset group may not be recoverable.
An impairment loss would be recognized if the carrying amount ofan asset or asset group exceeds the sum of the undiscounted future
cash flows expected to result from the continued use and eventual
disposition of the asset or asset group. The impairment loss would bemeasured as the amount 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 disposition of theasset or the net selling price at disposition.

8

j. Retirement and Pension Plans—The Company and certain
subsidiaries have a defined contribution pension plan, noncontributory funded pension plan and unfunded retirement benefit
plans which cover substantially all of their employees.
The Group accounted for the liability for retirement benefits basedon the projected benefit obligations and plan assets at the balance
sheet date.
Effective from April 1, 2009, "Partial Amendments to AccountingStandard for Retirement Benefits (Part 3)" (ASBJ Statement No.19),
has been applied.
In this fiscal year, the application of this policy had no impact
on operating income and income before income taxes, because
unrecognized actuarial loss will be amortized starting next fiscal year.
The amount to be amortized starting next fiscal year withapplication of this standard is ¥104 million ($1,118 thousand).
Retirement benefits to directors and corporate auditors arerecorded at the amount which would be required if all directors andcorporate auditors retired at the balance sheet date. In June 2004,
the retirement benefit system was abolished and the amount required
to be paid at the time of the abolishment will be paid to directors andcorporate auditors upon their retirement.
k. Research and Development Costs—Research and development
costs are charged to income as incurred.
l. Leases—In March 2007, the ASBJ issued ASBJ Statement No.13,"Accounting Standard for Lease Transactions," which revised theprevious accounting standard for lease transactions issued in June
1993. The revised accounting standard for lease transactions iseffective 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 previous accounting standard, finance leases that weredeemed to transfer ownership of the leased property to the lessee
were to be capitalized. However, other finance leases were permitted
to be accounted for as operating lease transactions if certain "asif capitalized" information is disclosed in the notes to the lessee's
financial statements. The revised accounting standard requires that
all finance lease transactions should be capitalized to recognize leaseassets and lease obligations in the balance sheet. In addition, theaccounting standard permits leases which existed at the transition
date and did not transfer ownership of the leased property to thelessee to be accounted for as operating lease transactions.
The Company applied the revised accounting standard effective
April 1, 2008. In addition, the Company accounted for leases which
existed at the transition date and did not transfer ownership of theleased property to the lessee as operating lease transactions.
All other leases are accounted for as operating leases.
m. Bonuses to Directors—Bonuses to directors are accrued at theyear end to which such bonuses are attributable.
n. Software Development Contracts—In December 2007, the ASBJ
issued ASBJ Statement No.15 "Accounting Standard for Construction
Contracts" and ASBJ Guidance No.18 "Guidance on AccountingStandard for Construction Contracts."
Under this new accounting standard, revenue from sales of thecustomized software and costs of development of the customized
software should be recognized by the percentage-of-completion
method if the outcome of a development contract can be estimatedreliably. When total revenue, total costs and the stage of completionof the contract at the balance sheet date can be reliably measured,
the outcome of a development contract can be estimated reliably. If
the outcome of a development contract cannot be reliably estimated,the completed-contract method should be applied. When it isprobable that the total costs will exceed total revenue, an estimatedloss on the contract should be immediately recognized by providing
for a loss on development contracts. This standard is effective forfiscal years beginning on or after April 1, 2009.
The Company applied the new accounting standard effective April
1, 2009.
There was no software development contracts where thepercentage-of-completion method was applied. All softwaredevelopment contracts applied the completed-contract method.
Therefore, there was no effect on income for the year ended March
31, 2010.

9o. Income Taxes—The provision for income taxes is computed basedon the pretax income included in the consolidated statements ofincome. The asset and liability approach is used to recognize deferred
tax assets and liabilities for the expected future tax consequencesof temporary differences between the carrying amounts and thetax bases of assets and liabilities. Deferred taxes are measured byapplying currently enacted tax laws to the temporary differences.
p. Foreign Currency Transactions—All short-term and long-termmonetary receivables and payables denominated in foreign currencies
are translated into Japanese yen at the exchange rates at the balance
sheet date. The foreign exchange gains and losses from translation
are recognized in the income statement to the extent that they are
not hedged by forward exchange contracts.
q. Foreign Currency Financial Statements—The balance sheet
accounts of the foreign subsidiaries are translated into Japanese yenat the current exchange rate as of the balance sheet date except for
equity, which is translated at the historical rate.
Differences arising from such translation were shown as "Foreign
currency translation adjustments" in a separate component of equity.
Revenue and expense accounts of foreign subsidiaries aretranslated into yen at the average exchange rate.
r. Derivatives and Hedging Activities—The Group uses derivative
financial instruments to manage its exposures to fluctuations inforeign exchange. Foreign exchange forward contracts and currency
option contracts are utilized by the Group to reduce foreign currency
exchange risks. The Group does not enter into derivatives for tradingor speculative purposes.
Derivative financial instruments and foreign currency transactions
are classified and accounted for as follows: (a) all derivatives arerecognized as either assets or liabilities and measured at fair value
with gains or losses on derivative transactions recognized in the
consolidated statements of income or (b) for derivatives used forhedging purposes, if the derivatives qualify for hedge accounting
because of high correlation and effectiveness between the hedging
instruments and the hedged items, the gains or losses are deferred
until maturity of the hedged transactions.
The foreign currency forward contracts and currency option
contracts employed to hedge foreign exchange exposures for export
sales and import purchases are measured at fair value and theunrealized gains/losses are recognized in income.
s. Per Share Information—Basic net income per share is computedby dividing net income available to common shareholders by theweighted-average number of common shares outstanding for theperiod.
Cash dividends per share shown in the consolidated statements
of income are presented on an accrual basis and include interim
dividends paid and year-end dividends to be approved after thebalance sheet date.
Diluted net income per share of common stock is not disclosed
herein because the Company has not issued any securities that arepotentially dilutive for the years ended March 31, 2010 and 2009.
t. New Accounting Pronouncements
Business Combinations—In December 2008, the ASBJ issued
a revised accounting standard for business combinations, ASBJ
Statement No.21, "Accounting Standard for Business Combinations."
Major accounting changes under the revised accounting standard are
as follows:(1) The current accounting standard for business combinations allows
companies to apply the pooling of interests method of accounting
when certain specific criteria are met such that the businesscombination is essentially regarded as a uniting-of-interests. The
revised standard requires companies to account for such businesscombinations by the purchase method and the pooling of interests
method of accounting is no longer allowed.
(2) The current accounting standard accounts for research anddevelopment costs to be charged to income as incurred. Underthe revised standard, in-process research and development(IPR&D) acquired in the business combination is capitalized as anintangible asset.
(3) The current accounting standard accounts for a bargain purchasegain (negative goodwill) to be systematically amortized within20 years. Under the revised standard, the acquirer recognizes abargain purchase gain in profit or loss on the acquisition date after
reassessing whether it has correctly identified all of the assets
acquired and all of the liabilities assumed with a review of suchprocedures used.
This standard is applicable to business combinations undertaken
on or after April 1, 2010 with early adoption permitted for fiscal years
beginning on or after April 1, 2009.
Asset Retirement Obligations—In March 2008, the ASBJ
published a new accounting standard for asset retirement obligations,
ASBJ Statement No.18 "Accounting Standard for Asset Retirement
Obligations" and ASBJ Guidance No.21 "Guidance on AccountingStandard for Asset Retirement Obligations." Under this accounting
standard, an asset retirement obligation is defined as a legal
obligation imposed either by law or contract that results from theacquisition, construction, development and the normal operation ofa tangible fixed asset and is associated with the retirement of suchtangible fixed asset.
The asset retirement obligation is recognized as the sum of the
discounted cash flows required for the future asset retirement andis recorded in the period in which the obligation is incurred if areasonable estimate can be made. If a reasonable estimate of theasset retirement obligation cannot be made in the period the asset
retirement obligation is incurred, the liability should be recognizedwhen a reasonable estimate of asset retirement obligation can be
made. Upon initial recognition of a liability for an asset retirement
obligation, an asset retirement cost is capitalized by increasing
the carrying amount of the related fixed asset by the amount of
the liability. The asset retirement cost is subsequently allocated to
expense through depreciation over the remaining useful life of theasset. Over time, the liability is accreted to its present value eachperiod. Any subsequent revisions to the timing or the amount of
the original estimate of undiscounted cash flows are reflected as anincrease or a decrease in the carrying amount of the liability and thecapitalized amount of the related asset retirement cost. This standard
is effective for fiscal years beginning on or after April 1, 2010 withearly adoption permitted for fiscal years beginning on or before
March 31, 2010.
Accounting Changes and Error Corrections—In December
2009, ASBJ issued ASBJ Statement No.24 "Accounting Standard for
Accounting Changes and Error Corrections" and ASBJ Guidance No.24"Guidance on Accounting Standard for Accounting Changes andError Corrections." Accounting treatments under this standard andguidance are as follows:(1) Changes in accounting policies
When a new accounting policy is applied with a revision of
accounting standards, the new policy is applied retrospectively
unless the revised accounting standards include specifictransitional provisions. When the revised accounting standards
include specific transitional provisions, an entity shall comply withthe specific transitional provisions.
(2) Changes in presentation
When the presentation of financial statements is changed, priorperiod financial statements are reclassified in accordance with thenew presentation.
(3) Changes in accounting estimates
A change in an accounting estimate is accounted for in the
period of the change if the change affects that period only and isaccounted for prospectively if the change affects both the periodof the change and future periods.
(4) Corrections of prior period errors
When an error in prior period financial statements is discovered,those statements are restated.
This accounting standard and the guidance are applicable toaccounting changes and corrections of prior period errors which are
made from the beginning of the fiscal year that begins on or after
April 1, 2011.
Segment Information Disclosures—In March 2008, the ASBJ
revised ASBJ Statement No.17 "Accounting Standard for Segment
Information Disclosures" and issued ASBJ Guidance No.20 "Guidanceon Accounting Standard for Segment Information Disclosures."

Under the standard and guidance, an entity is required to reportfinancial and descriptive information about its reportable segments.
Reportable segments are operating segments or aggregationsof operating segments that meet specified criteria. Operating
segments are components of an entity about which separate
financial information is available and such information is evaluatedregularly by the chief operating decision maker in deciding how toallocate resources and in assessing performance. Generally, segment
information is required to be reported on the same basis as is usedinternally for evaluating operating segment performance and deciding
how to allocate resources to operating segments. This accounting
standard and the guidance are applicable to segment information
disclosures for the fiscal years beginning on or after April 1, 2010.

3. BUSINESS COMBINATION
There were no business combinations for the year ended March 31, 2010.
A business combination for the year ended March 31, 2009 was asfollows:
a. Description of Business Combination(1) Name of Company (Transferor): eg-electronic GmbH
(2) Contents of Acquired Business: Developing, manufacturing andselling of monitors for industrial monitors, air traffic control
monitors, and graphic boards(3) Reason and Purpose of Acquisition: This acquisition opens newvertical markets, Industrial Automation and Automotive markets.
Taking synergy from the Company and EIZO GmbH, this acquisition
strengthens the Group's overall R&D power and the Group's
production capability in Germany and further drives market
penetration of the Air Traffic Control monitor business.
(4) Date of Business Combination: February 28, 2009
(5) Legal Form of Business Combination: Business transfer(6) Name of Company (Transferee): EIZO Technologies GmbH
b. Period for Acquired Business Included in the Consolidated
Financial Statements
From March 1 to March 31, 2009c. Description of Acquisition Costs
Thousands of Euro

Initial payment of purchase priceAccrued amount of purchase priceTotal acquisition costs€ 5,604984€ 6,588d. Goodwill

Name of company (transferee):
Goodwill:

EIZO Technologies GmbH
€3,000 thousand

Nature of goodwill:

Acquired products are expected to generatehigh profitability.

Method and useful
lives of amortization:

The related goodwill is charged to income atacquisition.

e. Assets Received and Liabilities Assumed on the Date ofBusiness Transfer
Thousands of EuroName of company (transferee)
Current assets
Non-current assets:
Goodwill
Other
Total
Current liabilities
Total
Total acquisition costs

EIZO Technologies GmbH€ 3,086
3,000
645€ 6,731€ 143€ 143€ 6,58810

4. SHORT-TERM INVESTMENTS AND INVESTMENT
SECURITIES

5. INVENTORIESInventories at March 31, 2010 and 2009 consisted of the following:

Short-term investments and investment securities as of March 31, 2010
and 2009 consisted of the following:Thousands of
U.S. Dollars

Millions of Yen

Short-term investments:
Debt securities
Others
Total
Investment securities:
Marketable equity securities
Non-marketable equity securities
Others
Total

2010

2009

¥ 1,820500¥ 2,320¥ 1,998¥ 1,998¥ 11,590
16
204¥ 11,810¥ 8,21116556¥ 8,7832010$ 19,570
5,376$ 24,946$ 124,624
172
2,193$ 126,989

The cost and aggregate fair value of the securities classified as availablefor-sale at March 31, 2010 and 2009 were as follows:
Millions of Yen
Cost

Unrealized
Gains

Unrealized
LossesFair
Value¥ 11,590
1,820
704¥ 14,114

March 31, 2010
Securities classified as available-for-sale:
Equity securities
Debt securities
OthersTotal¥ 5,108
1,820
705¥ 7,633¥ 6,978¥ 496¥ 6,9781¥ 497

March 31, 2009
Securities classified as available-for-sale:
Equity securities
Debt securities
OthersTotal¥ 5,177
1,998
409¥ 7,584¥ 4,189¥ 1,155¥ 4,1893¥ 1,158¥ 8,211
1,998
406¥ 10,615

Thousands of U.S. Dollars
Cost

Unrealized
Gains

Unrealized
LossesFair
Value

March 31, 2010
Securities classified as available-for-sale:
Equity securities$ 54,925 $ 75,032$ 5,333 $124,624
Debt securities
19,57019,570
7,580
11
7,569
Others$ 82,075 $ 75,032$ 5,344 $151,763
Total
Available-for-sale securities whose fair value is not readily determinable
as of March 31, 2009 were as follows. Similar information for 2010 isdisclosed in Note 13.

Finished products
Work in process
Raw materials and supplies
Total

March 31, 2009
Available-for-sale:
Equity securities
Others
Total

¥ 16
150
¥ 166

2010
¥ 3,019
2,909
5,523¥ 11,451

2009¥ 3,4032,331
10,582¥ 16,3162010$ 32,462
31,28059,387$ 123,129

6. LONG-LIVED ASSETS
The total loss on impairment of long-lived assets at March 31, 2010
amounted to ¥47 million ($505 thousand), which was a write-down ofland for rent. This land will be sold after the current lease expires, thus
the recoverable amount was measured at its net selling value.
The total loss on impairment of long-lived assets at March 31, 2009amounted to ¥1,696 million. The contents of impairment were goodwillof ¥1,521 million from EIZO GmbH and goodwill of ¥175 million from
Eizo Nanao Technologies Inc.
The recoverable amount of the goodwill of EIZO GmbH was measured
at its value in use and the discount rate used in the computation of thepresent value of future cash flows was 10%.
The recoverable amount of the goodwill of Eizo Nanao Technologies
Inc. was measured at its value in use, but the prospect of the future cash
flow generated from Eizo Nanao Technologies Inc. business is estimatedto be negative. As a result, the whole carrying amount of Eizo Nanao
Technologies Inc. goodwill was written down.

7. RETIREMENT AND PENSION PLANS
The Company and its certain subsidiaries have severance payment plans for
employees, directors and corporate auditors.
Under most circumstances, employees terminating their employment
are entitled to retirement benefits determined based on the rate of pay
at the time of termination, years of service and certain other factors.
Such retirement benefits are made in the form of a lump-sum severance
payment from the Company or from certain subsidiaries and annuity
payments from a trustee. Employees are entitled to larger payments if
the termination is involuntary, by retirement at the mandatory retirementage, by death, or by voluntary retirement at certain specific ages prior tothe mandatory retirement age.
The liability for employees' retirement benefits at March 31, 2010 and2009 consisted of the following:Thousands of
U.S. Dollars

Millions of Yen

Projected benefit obligation
Fair value of plan assets
Unrecognized actuarial gain
Net liability

2010¥ 3,387(1,138)20¥ 2,2692009¥ 2,936(1,119)138¥ 1,9552010$ 36,419(12,237)216$ 24,398

The components of net periodic benefit costs for the years ended March
31, 2010 and 2009 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Carrying AmountMillions of Yen

Thousands of
U.S. Dollars

Millions of Yen

Service cost
Additional retirement cost
Interest cost
Expected return on plan assets
Recognized actuarial loss (gain)
Net periodic benefit costs

2010
¥ 382
153
80
(27)
68
¥ 656

2009
¥ 395
82
(29)
(40)
¥ 408

2010
$ 4,108
1,645
860
(290)
731
$ 7,054

Assumptions used for the years ended March 31, 2010 and 2009 are set
forth as follows:

11

2010
2009
Discount rate
1.0%–5.3%
2.0%–6.3%
Expected rate of return on plan assets
2.0%–3.5%
0.5%–3.5%
5 years
5 years
Recognition period of actuarial gain/loss
The liability for retirement benefits at March 31, 2010 and 2009 fordirectors and corporate auditors is ¥106 million ($1,140 thousand),
respectively.

9. INCOME TAXESThe Company and its domestic subsidiaries are subject to Japanesenational and local income taxes which, in the aggregate, resulted in anormal effective statutory tax rate of approximately 40.4% for the years
ended March 31, 2010 and 2009.
The tax effects of significant temporary differences and tax loss
carryforwards which resulted in deferred tax assets and liabilities at
March 31, 2010 and 2009 are as follows:

8. EQUITY
Japanese companies are subject to the Companies Act of Japan (the"Companies Act"). The significant provisions in the Companies Act that
affect financial and accounting matters are summarized below:
a. Dividends
Under the Companies Act, 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 meetcertain criteria such as: (1) having a Board of Directors, (2) having
independent auditors, (3) having a Board of Corporate Auditors, and(4) the term of service 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-inkind) at any time during the fiscal year if the company has prescribedso in its articles of incorporation. The Company meets all the above
criteria.
The Companies Act permits companies to distribute dividends-inkind (non-cash assets) to shareholders subject to certain limitations
and additional requirements.
Semiannual interim dividends may also be paid once a year upon
resolution by the Board of Directors if the articles of incorporationof the company so stipulate. The Companies Act provides certain
limitations on the amounts available for dividends or the purchase oftreasury stock. The limitation is defined 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 Companies Act requires that an amount equal to 10% of
dividends must be appropriated as a legal reserve (a component ofretained earnings) or as additional paid-in capital (a component of
capital surplus) depending on the equity account charged upon thepayment of such dividends until the total of the aggregate amountof the legal reserve and additional paid-in capital equals 25% ofcommon stock. Under the Companies Act, the total amount ofadditional paid-in capital and legal reserve may be reversed without
limitation. The Companies Act also provides that common stock, legal
reserve, additional paid-in capital, other capital surplus and retained
earnings can be transferred among the accounts under certain
conditions upon resolution of the shareholders.
c. Treasury Stock and Treasury Stock Acquisition Rights
The Companies Act also provides for companies to purchase treasury
stock and dispose of such treasury stock by resolution of the Boardof Directors. The amount of treasury stock purchased cannot exceed
the amount available for distribution to the shareholders which isdetermined by specific formula.
Under the Companies Act, stock acquisition rights are presented asa separate component of equity.
The Companies Act also provides that companies can purchaseboth treasury stock acquisition rights and treasury stock. Suchtreasury stock acquisition rights are presented as a separate
component of equity or deducted directly from stock acquisitionrights.

Thousands of
U.S. Dollars

Millions of Yen

Deferred tax assets:
Inventories
Pension and severance costs
Tax loss carryforwards
Accrued expenses
Other
Less valuation allowance
Total
Deferred tax liabilities:
Unrealized gain on
available-for-sale securities
Other
Total
Net deferred tax assets

2010

2009

2010

¥ 1,085
867
941
884
2,563
(2,342)
3,998¥ 1,200
741
1,178
832
2,759
(2,132)
4,578$ 11,667
9,323
10,1189,505
27,560(25,183)
42,990(2,619)(45)(2,664)(1,225)(57)(1,282)(28,161)(484)(28,645)¥ 1,334¥ 3,296$ 14,345

Deferred assets and liabilities were included in the consolidated balance
sheets as follows:
Thousands of
U.S. Dollars

Millions of Yen

Current assets—Deferred tax assets

2010

2009

2010

¥ 2,338¥ 2,257$ 25,140

366

1,079

3,935

(23)

(30)

(246)

Investments and other assets—
Deferred tax assets
Current liabilities—
Other current liabilities
Long-term liabilities—
Deferred tax liabilities(1,347)(10)(14,484)

Net deferred tax assets¥ 1,334¥ 3,296$ 14,345

Reconciliations between the normal effective statutory tax rates and theactual effective tax rates reflected in the accompanying consolidated
statements of income for the years ended March 31, 2010 and 2009 are
as follows:
Normal effective statutory tax rate
Tax credit for research expenses
Increase in valuation allowance
Other—net
Actual effective tax rate

2010
40.4%
(2.3)
2.3
2.4
42.8%

2009
40.4%
(13.8)
18.7
15.2
60.5%

At March 31, 2010, certain subsidiaries have tax loss carryforwards
aggregating approximately ¥3,033 million ($32,613 thousand) which
are available to be offset against taxable income of such subsidiaries infuture years. These tax loss carryforwards, if not utilized, will expire as
follows:

12

Year Ending March 31

2011
2012
2013
2014
2015 and thereafter
Total

Millions of Yen

Thousands of
U.S. Dollars

Millions of Yen

2010
MachineryandEquipment

¥

5
10
3,018
¥ 3,033$54
108
32,451$ 32,613

Acquisition cost

Total

Total

¥ 10

¥ 10

¥ 21

¥ 21

8

8

16

16

¥ 2

¥ 2

¥ 5

¥ 5

Accumulated depreciation
Net leased property

2009
MachineryandEquipment

Thousands of U.S. Dollars

10. RESEARCH AND DEVELOPMENT COSTS

2010

Research and development costs charged to income were ¥4,727
million ($50,823 thousand) and ¥5,306 million for the years ended
March 31, 2010 and 2009, respectively.

MachineryandEquipment

Acquisition cost

11. CASH FLOW INFORMATION
There were no business transfers for the year ended March 31, 2010,
therefore any increase of assets or liabilities due to business transfer
were not recognized in 2010.
Assets and liabilities which were increased by business transfer andthe payment for business transfer for the year ended March 31, 2009were as follows:

¥ 394
82
383
¥ 859
¥ 19
¥ 19
¥ 840
125
¥ 715

Total

$ 108

Accumulated depreciation

86

86

Net leased property

$ 22

$ 22

Obligations under finance leases:
Millions of Yen

Millions of Yen

Current assets
Non-current assets
Goodwill
Total
Current liabilities
Total
Initial payment of purchase priceAccrued amount of purchase price
Payment for acquisition of business$ 108

Due within one year
Due after one year
Total

2010
¥2
¥2

2009
¥3
2
¥5

13

2010
$ 22
$ 22

The amount of obligations under finance leases includes the imputed
interest expense portion.
Depreciation expense, which is not reflected in the accompanying
consolidated statements of income, computed by the straight line
method, was ¥2 million ($22 thousand) and ¥5 million for the years
ended March 31, 2010 and 2009, respectively.
The minimum rental commitments under noncancelable operatingleases at March 31, 2010 and 2009 were as follows:

12. LEASESThe Group leases certain machinery, equipment and other assets.
Total lease payments under financing lease arrangements that do nottransfer ownership of the leased property to the Company and its
domestic subsidiaries were ¥2 million ($22 thousand) and ¥5 million forthe years ended March 31, 2010 and 2009, respectively.
Pro forma Information of Leased Property Whose Lease
Inception Was before March 31, 2008
ASBJ Statement No.13, "Accounting Standard for Lease
Transactions" requires that all finance lease transactions should
be capitalized to recognize lease assets and lease obligations in
the balance sheet. However, ASBJ Statement No.13 permits leases
without ownership transfer of the leased property to the lessee
whose lease inception was before March 31, 2008 to be accounted
for as operating lease transactions if certain "as if capitalized"
information is disclosed in the notes to the financial statements.
The Company applied the ASBJ Statement No.13 effective April 1,2008 and accounted for such leases as operating lease transactions.
Pro forma information of leased property whose lease inception
was before March 31, 2008 such as acquisition cost, accumulated
depreciation, accumulated impairment loss, obligations underfinance leases, depreciation expense, interest expense and otherinformation of finance leases that do not transfer ownership of theleased property to the lessee on an "as if capitalized" basis was asfollows:

Thousands of
U.S. Dollars

Millions of Yen

Due within one year
Due after one year
Total

2010
¥ 97
155
¥ 252

2009
¥ 100
184
¥ 284

Thousands of
U.S. Dollars

2010$ 1,043
1,667$ 2,710

13. FINANCIAL INSTRUMENTS AND RELATEDDISCLOSURESOn March 10, 2008, the ASBJ revised ASBJ Statement No.10"Accounting Standard for Financial Instruments" and issued ASBJ
Guidance No.19 "Guidance on Accounting Standard for Financial
Instruments and Related Disclosures." This accounting standard and theguidance are applicable to financial instruments and related disclosuresat the end of the fiscal years ending on or after March 31, 2010 withearly adoption permitted from the beginning of the fiscal years ending
before March 31, 2010. The Group applied the revised accounting
standard and the new guidance effective March 31, 2010.
(1) Group Policy for Financial Instruments
The Group uses financial instruments based on its capital
expenditure plan. Cash surpluses, if any, are invested in low risk
financial assets. Derivatives are used, not for speculative purposes,
but to manage exposure to financial risks as described in (2) below.
(2) Nature and Extent of Risks Arising from Financial
Instruments
Receivables such as trade notes and trade accounts are exposed
to customer credit risk. Although receivables in foreign currencies
are exposed to the risk of fluctuation in foreign currency exchange
rates, the position, net of payables in foreign currencies, is hedgedby using forward foreign currency contracts. Marketable andinvestment securities, mainly debt securities and equity instrumentsof customers and suppliers of the Group, are exposed to the risk ofmarket price fluctuations.
All payment terms of payables, such as trade accounts, arewithin one year. Although payables in foreign currencies are
exposed to the risk of fluctuation in foreign currency exchange
rates, those risks are netted against the balance of receivables
denominated in the same foreign currency as noted above.
Derivatives mainly include forward foreign currency contracts
which are used to manage exposure to the risk of changes inforeign currency exchange rates of receivables and payables. Please
see Note 14 for more detail about derivatives.
(3) Risk Management for Financial Instruments
Credit risk management
Credit risk is the risk of economic loss arising from a counterparty's
failure to repay or service debt according to the contractual terms.
The Group manages its credit risk from receivables on the basis ofinternal guidelines, which include monitoring of payment terms
and balances of major customers by each business administration
department to identify the default risk of customers at an earlystage. With respect to debt securities, the Group manages its
exposure to credit risk by limiting its funding to high credit rating
bonds in accordance with its internal guidelines. Please see Note 14
for information about derivatives.
The maximum credit risk exposure of financial assets is limited totheir carrying amounts as of March 31, 2010.
Market risk management (foreign exchange risk andinterest rate risk)
Foreign currency trade receivables and payables are exposed tofluctuations in foreign currency exchange rates. Such foreignexchange risk is hedged occasionally by forward foreign currency
contracts.
Marketable and investment securities are managed bymonitoring the market values and financial position of issuers on aregular basis.
The basic principles of derivative transactions have been
approved by the chief financial officer based on internal guidelines
which prescribe the authority and the limit for each transaction
by the corporate treasury department. Reconciliation of thetransactions and balances with customers is made and thetransaction data is reported to the chief financial officer on amonthly basis.
Liquidity risk management
Liquidity risk comprises the risk that the Group cannot meetits contractual obligations in full on maturity dates. The Groupmanages its liquidity risk by holding adequate volumes of liquid
assets along with adequate financial planning by the corporate
treasury department.
(4) Concentration of Credit Risk
As of March 31, 2010, 43.9% of total receivables are from specificmajor customers of the Group.
(5) Fair Values of Financial Instruments
Fair values of financial instruments are based on quoted prices in
active markets. If quoted prices are not available, other rational
valuation techniques are used instead.

(a) Fair values of financial instruments
Millions of Yen
Carrying
AmountMarch 31, 2010
Cash and cash equivalents
Notes and accounts receivables
Allowance for doubtful receivables
Short-term investments andinvestment securities
Total
Accounts payable
Total

Fair Value¥ 18,760
15,397(124)
15,273¥ 18,760

14,113¥ 48,146¥ 8,346¥ 8,346

14,113¥ 48,146¥ 8,346¥ 8,346

Unrealized
Gain/Loss

15,273Thousands of U.S. Dollars
Carrying
AmountMarch 31, 2010
Cash and cash equivalents
Notes and accounts receivables
Allowance for doubtful receivables
Short-term investments andinvestment securities
Total
Accounts payable
Total

Fair Value$ 201,720
165,559(1,333)
164,226$ 201,720

151,753$ 517,699$ 89,742$ 89,742

151,753$ 517,699$ 89,742$ 89,742

Unrealized
Gain/Loss

164,226

Cash and Cash Equivalents
The carrying values of cash and cash equivalents approximate
fair value because of their short maturities.
Short-Term Investments and Investment Securities
The fair values of short-term investments and investment
securities are measured at the quoted market price of thestock exchange for equity instruments and at the quoted priceobtained from financial institutions for certain debt instruments.
Information on the fair value for the short-term investments andinvestment securities by classification is included in Note 4.
Notes and Accounts Receivables and Accounts Payable
The fair values of receivables and payables are measured at
the amount to be received or paid at maturity discounted at
the Group's assumed corporate discount rate, except for shortterm receivables and payables when the recognition of discountwould be immaterial, less any impairment.
Derivatives
The information of the fair value for derivatives is included in
Note 14.
(b) Financial instruments whose fair value cannot be
reliably determined
Carrying AmountMarch 31, 2010
Investments in equity instruments that do nothave a quoted market price in an active market

Millions of Yen

Thousands of
U.S. Dollars

¥ 16

$ 172

14

(6) Maturity Analysis for Financial Assets and Securities with
Contractual Maturities

Derivative Transactions to Which Hedge Accounting Is Applied at
March 31, 2010

Millions of Yen
Due in1 Yearor Less

March 31, 2010
Cash and cash equivalents
Receivables
Investment securities:
Corporate bonds
Commercial paper
Other
Total

Due after
1 Yearthrough
5 Years

Millions of Yen

Due after
5 Years
through
10 Years

Due after
10 YearsForeign currency

¥ 43
¥ 43

¥ 18
¥ 18

forward contracts—

Forecast

Buying U.S.$

transactions

March 31, 2010
Cash and cash equivalents
Receivables
Investment securities:
Corporate bonds
Commercial paper
Other
Total

Due after
5 Years
through
10 Years

Contract
AmountDue after
1 YearContract
AmountFair
Value

Foreign currency
Due after
10 Years$ 201,677
165,559
3,441
16,1295,559$ 392,365¥2

March 31, 2010

Thousands of U.S. Dollars
Due after
1 Yearthrough
5 Years¥ 40
Thousands of U.S. Dollars

¥ 69
¥ 69
Hedged Item

Due in1 Yearor Less

Fair
Value

March 31, 2010

¥ 18,756
15,397
320
1,500
517
¥ 36,490

Hedged Item

Contract
AmountDue after
1 YearContract
Amountforward contracts—

Forecast

Buying U.S.$

transactions

$ 430

$ 22

The following is the fair value information for foreign currency forward
contracts to which hedge accounting is not applied at March 31, 2009.
Foreign currency forward contracts which qualify for hedge accounting
are excluded from the information below.
Millions of Yen

$ 462
$ 462

$ 194
$ 194

$ 742
$ 742

Contract
AmountFair
Value

Unrealized
Loss

March 31, 2009

Please see Note 12 for obligations under finance leases.

14. DERIVATIVESThe Group enters into derivative contracts, including foreign
currency forward contracts and currency options contracts, to hedge
foreign exchange risk associated with certain assets and liabilities
denominated in foreign currencies.
All derivative transactions are entered into to hedge foreign
currency exposures incorporated within its business. Accordingly,
market risk in these derivatives is basically offset by opposite
movements in the value of hedged assets or liabilities.
Because the counterparties to these derivatives are limited to majorinternational financial institutions, the Group does not anticipate any
losses arising from credit risk.
Derivative transactions entered into by the Group have been madein accordance with internal policies which regulate the authorizationand credit limit amount.
As noted in Note 13, the Group applied ASBJ Statement No.10"Accounting Standard for Financial Instruments" and ASBJ Guidance
No.19 "Guidance on Accounting Standard for Financial Instruments
and Related Disclosures." The accounting standard and the guidance
are applicable to financial instruments and related disclosures at theend of the fiscal years ending on or after March 31, 2010; therefore, therequired information is disclosed only for 2010.
Derivative Transactions to Which Hedge Accounting Is Not
Applied at March 31, 2010
None

15

Foreign currency
forward contracts—
Buying Japanese ¥

¥ 61

¥ (2)

¥ (2)

The fair value of derivative transactions is measured at the quoted priceobtained from financial institutions.
The contract or notional amounts of derivatives which are shown in
the above table do not represent the amounts exchanged by the partiesand do not measure the Group's exposure to credit or market risk.

15. SUBSEQUENT EVENT
The following appropriation of retained earnings at March 31, 2010
was approved at the Board of Directors meeting held on May 24, 2010:

Year-end cash dividends, ¥25 ($0.3) per share

Millions of Yen

Thousands of
U.S. Dollars¥ 558$ 6,000

16. SEGMENT INFORMATION
Information about industry segments, geographical segments and sales
to foreign customers of the Group for the years ended March 31, 2010
and 2009 is as follows:(1) Industry Segments
The Group is primarily engaged in the manufacture, development
and sale of visual display systems and related products. Under
Japanese accounting regulations, the Group is not required todisclose industry segment information because its main industry
segment represented more than 90% of its operations.

(2) Geographical Segments
The geographical segments of the Group for the years ended March
31, 2010 and 2009 are summarized as follows:
Millions of Yen
2010
Japan

Sales to customers
Interarea transfer
Total sales
Operating expenses
Operating income (loss)
Total assets¥ 66,584
4,134
70,71858,365¥ 12,353¥ 41,742

EuropeNorth
America

Eliminations/
Corporate¥ 8,145
779
8,924
9,938
¥ (1,014)¥ 6,414¥ 2,796
33
2,829
2,781
¥48
¥ 1,057¥ (4,946)(4,946)(2,585)¥ (2,361)¥ 26,156

77,52568,499¥ 9,026¥ 75,369

EuropeNorth
America

Eliminations/
Corporate

Consolidated¥ 8,874
1,061
9,935
11,118¥ (1,183)¥ 7,379¥ 3,250
20
3,270
3,259
¥
11
¥ 931

¥ (5,400)(5,400)(2,721)¥ (2,679)¥ 15,720

74,52270,220¥ 4,302¥ 65,621

North
America

Eliminations/
Corporate

Consolidated$ 30,064
355
30,41929,904$ 515$ 11,366$ (53,183)(53,183)(27,796)$ (25,387)$ 281,246

Consolidated¥ 77,525

Millions of Yen
2009
Japan

Sales to customers
Interarea transfer
Total sales
Operating expenses
Operating income (loss)
Total assets¥ 62,398
4,319
66,71758,564¥ 8,153¥ 41,591¥ 74,522

Thousands of U.S. Dollars
2010
Japan

Sales to customers
Interarea transfer
Total sales
Operating expenses
Operating income (loss)
Total assets$ 715,957
44,452760,409627,581$ 132,828$ 448,839

Europe$ 87,581
8,376
95,957
106,860$ (10,903)$ 68,968$ 833,602
833,602736,549$ 97,053$ 810,419(3) Sales to Foreign Customers
Sales to foreign customers for the years ended March 31, 2010 and2009 consisted of the following:Thousands of
U.S. Dollars

Millions of Yen

Europe

2010

2009

2010

¥ 18,000¥ 21,083$ 193,548

North America

2,811

3,200

30,226

Other

1,928

1,815

20,731¥ 22,739¥ 26,098$ 244,505

Total

16

Independent Auditors’ Report
Eizo Nanao Corporation

17

Corporate Data
(As of March 31, 2010)

Board of Directors andStatutory Auditors(As of October 1, 2010)

Company Name
Eizo Nanao Corporation

Board of Directors

EstablishedMarch 1968

President and CEO
Yoshitaka Jitsumori

Capital¥4,425,745,500

Executive Vice President and CFO
Tsutomu Tanabe

Address
153 Shimokashiwano, Hakusan,
Ishikawa, 924-8566, Japan
Phone: +81-76-275-4121
Fax: +81-76-275-4125

Directors
Kazuya Maeda
Masaki Ono
Yuichi Murai
Kazuhide Shimura
Yuichi Terada

Employees on a Consolidated Basis
1,462
Business Activities
Development, design, manufacturing
and sale of display monitors andperipherals, amusement products, andimaging system software.

Statutory Auditors
Standing Corporate Auditor
Eiichi Ueno
Corporate Auditors
Shuji Taniho
Masakatsu Atarashi
Masafumi Kubo

Managing Officers
Executive Managing Officers
Kazuya Maeda
Masaki Ono
Managing Officers
Yuichi Murai
Kazuhide Shimura
Eiji Tsurumi
Muneharu Yamamoto
Toshimine Hiraki
Shuichi Arima
Hidenori Kojima
Kiichiro Akitsune

18

Shareholders‘ Information(As of March 31, 2010)

Total Number of Shares Authorized
65,000,000
Number of Shares Issued
22,731,160
Shares Listed On
The first section of the Tokyo Stock Exchange
Number of Shareholders
12,598Major Shareholders
The Master Trust Bank of Japan, Ltd.
(Investment Trust Account)
Yasutaka Murata
Tsuneo Murata
Naoki Murata
Tetsu Takashima
Hiroshi Murata
Japan Trustee Service Bank, Ltd.
(Investment Trust Account)
Japan Trustee Service Bank, Ltd.
(Investment Trust Account 9)
The Hokkoku Bank, Ltd.
The Hokuriku Bank, Ltd.

Distribution of Shares
by Type of Shareholders

Number of Shares Held(Thousands)

Percentage of
Voting Rights (%)

1,550

6.95

1,135
1,135
1,135
1,083
902

5.09
5.09
5.09
4.86
4.04

739

3.31

686

3.08

575
547

2.58
2.45

Distribution of Sharesby Number of Shares

Financial Institutions
5,870,800 shares

Securities Firms
252,825 shares

under 100
1,423 shares
100 or more
1,517,859 shares
500 or more
630,485 shares

1,000,000 or more
6,040,160 shares
500,000 or more
3,451,440 shares

1,000 or more
1,743,800 shares
Other Firms
1,655,310 shares
Foreign Companies
3,735,885 shares
Individuals and others
10,806,406 shares

19

Treasury Stock409,934 shares

5,000 or more
452,642 shares
10,000 or more
1,763,184 shares

100,000 or more
5,185,902 shares
50,000 or more
1,944,265 shares

Group Network(As of October 1, 2010)

EIZO EUROPE AB
EIZO GmbHEIZO NANAO AGEIZO TECHNOLOGIESGmbHEIZO NANAO CORPORATIONEIZO NANAOTECHNOLOGIES INC.
TECH SOURCE, INC.

EIZO Display Technologies(Suzhou) Co., Ltd.

Eizo Nanao Corporation Headquarters
Overseas Group Companies
Overseas Distribution

Overseas Network
EIZO GmbH
Siemensallee 84, 76187 Karlsruhe, Germany
Phone: +49-721-20321-0 Fax: +49-721-20321-471
EIZO Technologies GmbH
Bürgermeister-Seidl-Str. 8, 82515 Wolfratshausen, Germany
Phone: +49-8171-3492-11 Fax: +49-8171-3492-16
Tech Source, Inc.
442 Northlake Blvd Altamonte Springs, FL 32701, U.S.A.
Phone: +1-407-262-7100 Fax: +1-407-339-2554
Eizo Nanao Corporation

EIZO Display Technologies (Suzhou) Co., Ltd.
5B Zhongxin Science & Technology Industrial Zone 8 Zhanye
Road, Suzhou Industrial Park Suzhou 215122 PRC, China
Phone: +86-512-6252-0100 Fax:+86-512-6252-1508

Domestic Network
Domestic Support Network

EIZO NANAO TECHNOLOGIES INC.
5710 Warland Drive Cypress, CA 90630, U.S.A.
Phone: +1-562-431-5011 Fax: +1-562-431-4811
Eizo Europe AB
Lövängsvägen 14 194 61 Upplands Väsby, Sweden
Phone: +46-8-594 105 00 Fax: +46-8-590 91 575
EIZO NANAO AG
Moosacherstrasse 6, Au, CH-8804 Wädenswil, Switzerland
Phone: +41-0-44-782 24 40 Fax: +41-0-44-782 24 50
Domestic Network
EIZO NANAO MS CORPORATION
37-9 Re, Jike, Hakui, Ishikawa 925-8566, Japan
Phone: +81 767 22-7121 Fax: +81 767 22-6601
IREM SOFTWARE ENGINEERING INC.
655 Fukudome, Hakusan, Ishikawa 924-8533, Japan
Phone: +81 76 277-3800 Fax: +81 76 277-3622

EIZO SUPPORT NETWORK CORPORATION
153 Shimokashiwano, Hakusan, Ishikawa 924-8566, Japan
Phone: +81 76 274-2424 Fax: +81 76 274-2416
NANAO AGENCY CORPORATION
153 Shimokashiwano, Hakusan, Ishikawa 924-8566, Japan
Phone: +81 76 274-0035 Fax: +81 76 274-0041
EIZO ENGINEERING CORPORATION
153 Shimokashiwano, Hakusan, Ishikawa 924-8566, Japan
Phone: +81 76 274-2448 Fax: +81 76 274-0041
20

EIZO NANAO CORPORATION
153 Shimokashiwano‚ Hakusan, Ishikawa 924-8566, Japan
Tel: +81-76-275-4121, Fax: +81-76-275-4125
http://www.eizo.com/