FINANCIAL SECTION
ANNUAL REPORT 2011 Year ended March 31, 2011

Contents
Report of Independent Auditors・ ・・・・・・・・・・・ 01
Consolidated Balance Sheets・ ・・・・・・・・・・・・ 02
Consolidated Statement of Income
and Consolidated Statement of Comprehensive Income・・・・・ 04
Consolidated Statements of Changes in Net Assets・ ・・・・・ 05
Consolidated Statements of Cash Flows・・・・・・・・・・ 06
Notes to Consolidated Financial Statements・ ・・・・・・・ 08
Other Information・ ・・・・・・・・・・・・・・・ 34

Consolidated Balance Sheets
Shibaura Mechatronics Corporation and Subsidiaries
March 31,		
2011

March 31,
2010

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

AssetsCurrent assets :Cash and bank deposits (Note 12)
Short-term investments
Notes and accounts receivable, trade
Allowance for doubtful accounts
Inventories (Note 7)
Deferred tax assets (Note 10)
Income receivable
Other current assets
Total current assets¥ 3,353
38
26,940
(61)
6,680
1,071
715
254
38,990¥ 6,11750
21,960
(105)
7,101
932
111
86
36,252$ 40,324
457
323,986(728)
80,341
12,8838,594
3,056
468,913

Property, plant and equipment:
Land
Buildings and structures
Machinery and equipment
Lease assets
Construction in progress
Total
Accumulated depreciation
Property, plant and equipment, net

119
28,822
1,343
1,751
518
32,553(19,143)
13,410164
28,953
1,508
2,392
40
33,057(18,371)
14,686

1,435
346,629
16,15321,0596,227
391,503(230,222)
161,281

Investments and other assets:
Investments in securities (Note 6)
Deferred tax assets (Note 10)
Other assets
Allowance for doubtful accounts
Total investments and other assets

203
181
1,468
(2)
1,850

219
309
1,334
(142)
1,720

2,447
2,174
17,647(20)
22,248¥ 54,250¥ 52,658$ 652,442

Total assets

02

March 31,2011

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION

Consolidated Balance Sheets

March 31,		
2011

March 31,
2010

(Millions of yen)March 31,
2011
(Thousands of
U.S. dollars)(Note 1)

Liabilities and net assets
Current liabilities :Short-term bank loans (Note 8)
Current portion of long-term debt (Note 8)
Notes and accounts payable, trade
Provision for contract losses
Lease obligations
Advances received
Accrued expenses
Accrued income taxes (Note 10)
Provision for directors' bonuses
Asset retirement obligations
Other current liabilities
Total current liabilities¥ 7,705
3,200
11,993
120
381
435
2,627
201
35
11
393
27,101¥ 6,735–
10,916
399
639
818
2,252
132
–
–
550
22,441$ 92,666
38,485144,232
1,440
4,577
5,233
31,589
2,421
420
133
4,731
325,927

Long-term liabilities:
Long-term debt (Note 8)
Provision for retirement benefits (Note 11)
Lease obligations
Long-term accounts payable-other
Provision for directors’ retirement benefits
Reserve for repair and maintenance
Asset retirement obligations
Other long-term liabilities
Total long-term liabilities
Total liabilities

500
5,211
440
22
23
407
32
3,022
9,657
¥ 36,758

3,700
5,067
882
26
33
377
–
3,023
13,108¥ 35,549

6,013
62,674
5,289
262
280
4,893
385
36,352
116,148$ 442,075

6,762
9,995
2,426
(1,719)17,464

6,762
10,738
1,197(1,719)16,97881,317120,209
29,178(20,679)
210,025

30
(2)
28
–
17,492¥ 54,250

50
39
89
42
17,109¥ 52,658

364
(22)
342
–
210,367$ 652,442

Contingent liabilities (Note 13)
Net assets:
Shareholders’ equity:
Common stock:
Authorized :100,000,000 shares
Issued:51,926,194 shares at March 31, 2011 and 2010
Additional paid-in capital
Retained earnings
Less treasury stock, at cost
Total shareholders’ equity
Valuation and translation adjustments:
Valuation difference on available-for-sale securities
Foreign currency translation adjustments
Total valuation and translation adjustments
Minority interest in consolidated subsidiaries
Total net assets
Total liabilities and net assets
The accompanying notes are an integral part of the consolidated financial statements.
Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION

03

Consolidated Statement of Income
and Consolidated Statement of Comprehensive Income
Shibaura Mechatronics Corporation and Subsidiaries
Year ended		March 31,		
2011

Year ended
March 31,
2010

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

Consolidated Statements of Income
Net sales
Cost of sales (Note 9 and 11)
Gross profit¥ 46,246
35,895
10,351¥ 41,096
33,7507,346$ 556,174
431,692
124,482

9,607
744

9,216
(1,870)115,544
8,938

35
(178)
(11)
40
–
(51)
(7)
136
35
(17)
(172)

50
(242)
–
40
266
(66)
(5)
–
–
–
–

416
(2,137)
(132)
478
–
(615)
(79)
1,633
420
(199)
(2,070)

(46)
96
604

–
215
(1,612)

(556)
1,167
7,264

252
(11)
241
363

182
16
198
(1,810)

3,041
(137)
2,904
4,360

¥

(123)
486

(58)
¥ (1,752)$(1,481)
5,841

¥

363

¥

–

$

4,360

¥

(20)
(41)
(61)
302

¥

–
–
–
–

$

(243)
(491)
(734)
3,626

Selling, general and administrative expenses (Note 9,11 and 19)
Operating income (loss)
Other income (expenses):
Interest and dividend income
Interest expense
Foreign exchange loss, net
Amortization of negative goodwill
Subsidy income
Commission fee
Loss on abandonment of noncurrent assets
Reversal of allowance for doubtful accounts
Gain on negative goodwill
Loss on disaster
Business structure improvement expenses
Loss on adjustment for changes of accounting
standard for asset retirement obligations
Other, net
Income (loss) before income taxes and minority interest
Income taxes (Note 10):
Current
DeferredIncome (loss) before minority interest
Minority interest in losses of consolidated subsidiaries
Net income (loss)

Year ended
March 31,2011

Consolidated Statement of Comprehensive Income
Net income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustments
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners of the parent
Comprehensive income attributable to minority interests

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

04

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION

343
(41)

–
–

4,128
(502)

Consolidated Statements of Changes in Net Assets
Shibaura Mechatronics Corporation and Subsidiaries
Shareholders' equity
Number ofshares ofcommonstock

Commonstock

51,926,194¥ 6,762

Additional
paid-in
capitalValuation and translation adjustments
Valuation
Minority
Foreigndifference
interest in
currency
on availabletranslation consolidated
for-saleadjustments subsidiaries
securities

Retainedearnings

Treasurystock¥ 2,950¥ (1,720)(Millions of yen)

Balance as of March 31, 2009
Net loss¥10,739(Millions of yen)

¥

24

¥

15

(Millions of yen)

¥ 100

–		

–		

–		 (1,752)		

–

–		

–		

–

Net change during the year

–		

–		

–		

–		

–

26		

24		

(58)

Net increase in treasury stock

–		

–		

–		

–		

0

–		

–		

–

–		
–		
(1)		
–		
1
51,926,194		 6,762		 10,738		 1,197		 (1,719)

–		

–		

–

50		

39		

42

Net decrease in treasury stock
Balance as of March 31, 2010
Net income

–		

–		

–		

486		

–

–		

–		

–

Net change during the year

–		

–		

–		

–		

–

(20)		

(41)		

(42)

Net decrease in treasury stock

–		

–		

–		

–		

(0)

–		

–		

–

–		

–		

(743)		

743		–

Reversal of other capital surplus
Balance as of March 31, 2011

51,926,194¥ 6,762¥ 9,995¥ 2,426¥ (1,719)

Shareholders' equity
Commonstock

Additional
paid-in
capital

–		
¥

30

¥

Treasurystock¥ 18,870(1,752)(8)
0
0
17,109
486
(103)
(0)

–		

–

–

(2)

–

¥ 17,492¥

Valuation and translation adjustments

Retainedearnings

Total

Total

Valuation
Minority
Foreigndifference
interest in
currency
on availabletranslation consolidated
for-saleadjustments subsidiaries
securities(Thousands of U.S. dollars) (Note 1)(Thousands of U.S. dollars) (Note 1)(Thousands of
U.S. dollars)(Note 1)

Balance as of March 31, 2010
Net income
Net change during the year
Net decrease in treasury stock$81,317 $129,144 $ 14,402 $(20,675)		–		–		 5,841		
–
		
–		
–		
–		
–

Reversal of other capital surplus
Balance as of March 31, 2011		–		 (8,935)		 8,935		
–$ 81,317 $120,209 $ 29,178 $(20,679)$ 607 $ 469 $ 503
–		
–		
–
(243)		 (491)		 (503)
–		
–		
–
–		
–		
–
$ 364 $ (22) $–$205,767
5,841(1,237)(4)–$ 210,367

		

–		

–		

–		

(4)

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

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION

05

Consolidated Statements of Cash Flows
Shibaura Mechatronics Corporation and Subsidiaries
Year ended		March 31,		
2011

Year ended
March 31,
2010

(Millions of yen)

Operating activities:
Income (loss) before income taxes and minority interest
Depreciation and amortization
Amortization of negative goodwill
Allowance for doubtful accounts
Increase provision for retirement benefits
Interest and dividend income
Interest expense
Loss on disposal of property, plant and equipment
Gain on sale of land
Foreign exchange gain, net
Increase in advances received
Increase in notes and accounts receivable, trade(Increase) decrease in inventories
Increase in notes and accounts payable, trade
Loss on adjustment for changes of accounting standard
for asset retirement obligations
Increase in accrued consumption taxes
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash (used in) provided by operating activities

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

06

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION

Year ended
March 31,
2011
(Thousands of
U.S. dollars)(Note 1)

604
1,765
(40)
(185)
168
(35)
178
5
8
19
(369)
(4,865)(13)
1,301¥ (1,612)
1,935
(40)
17
206
(50)
242
0
0
(25)
(311)
(3,409)
5,590
964

$

46
9
(1,097)(2,501)
35
(179)
(119)
¥ (2,764)

–
54
1,105
4,666
49
(239)
(37)
¥ 4,439556
109(13,197)(30,085)414(2,148)(1,428)$ (33,247)

¥

7,264
21,232(478)(2,219)
2,020
(416)
2,137
56
93
227
(4,441)(58,512)(160)
15,644

Consolidated Statements of Cash Flows

Year ended		March 31,		
2011

Year ended
March 31,
2010

(Millions of yen)

Investment activities:
Payments for time deposits
Proceeds from time deposits
Purchases of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of software
Other, net
Net cash provided by (used in) financing activities

Financing activities:
Increase in short-term bank loans, net
Repayments of finance lease obligations
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from stock issuance to minority shareholders
Purchases of treasury stock
Proceeds from sale of treasury stock
Net cash (used in) provided by financing activities

Effect of exchange rate changes on cash and cash equivalents
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

¥

(10)
19
(123)
94
(364)
(74)
(458)

¥

Year ended
March 31,
2011
(Thousands of
U.S. dollars)(Note 1)

(14)
5
(105)
99
–
(30)
(45)

$

(118)
232
(1,487)
1,135(4,379)(886)(5,503)

977
(605)
–
–
113
(0)
–
485

1,402
(779)
500
(3,804)–(0)0(2,681)

11,750(7,277)
–
–
1,360
(3)
–
5,830

(27)
(2,764)
6,117¥ 3,353

19
1,732
4,385
¥ 6,117(325)(33,245)
73,569$ 40,324

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

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION

07

Notes to Consolidated Financial Statements
Shibaura Mechatronics Corporation and Subsidiaries
March 31, 2011
1. Basis of Presentation
Shibaura Mechatronics Corporation (the “Company”) and its
consolidated subsidiaries (collectively, the “Companies” or the“Group”) maintain their accounting records and prepare theirfinancial statements in accordance with accounting principles
generally accepted in Japan. The accompanying consolidated
financial statements have been prepared in accordance withaccounting principles generally accepted in Japan, which differ incertain respects from the application and disclosure requirementsof International Financial Reporting Standards, and have been
compiled from the consolidated financial statements preparedby the Company as required by the Financial Instruments andExchange Act of Japan. Certain reclassifications have been
made to present the accompanying consolidated financial
statements in a format that is familiar to readers outside Japan. In
addition, the non-consolidated balance sheets of the Company
as of March 31, 2011 and 2010 and the non-consolidated
statements of its operations for the years then ended areincluded, as other information, in the accompanying consolidated
financial statements.
The accompanying consolidated financial statements are statedin yen, the currency of the country in which the Company isincorporated and operates. The translation of yen amounts into
U.S. dollar amounts has been included solely for the convenienceof readers outside Japan. The translation has been made at therate of ¥ 83.15 = U.S. $ 1.00, the approximate rate of exchange
in effect on March 31, 2011. This translation should not be
construed as a representation that yen could be converted into
U.S. dollars at the above or any other rate.

2. Summary of Significant Items for the Presentationof Consolidated Financial Statements(1) Basis of consolidation
The accompanying consolidated financial statements include
the accounts of Shibaura Mechatronics Corporation andeight subsidiaries over which the Company exerts substantial
control, either through majority ownership of voting stock and/or by other means. All assets and liabilities of the subsidiaries

08

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION

are revalued at fair value on acquisition, if applicable. All
significant intercompany balances and transactions havebeen eliminated in consolidation.
Investment in an unconsolidated subsidiary that is notdeemed material to the consolidated financial statements isstated at cost.
Certain subsidiaries have year end which differs from thatof the Company. As a result, adjustments have been madefor any significant transactions which took place during theperiod between the year end of the subsidiaries and the year
end of the Company.

(2) Foreign currency translation
The revenue and expense accounts of the overseas
consolidated subsidiaries are translated into yen at therates of exchange in effect at the average exchange rateduring the year. The balance sheet accounts, except forthe components of shareholders’ equity, are also translated
into yen at the rate of exchange in effect at the balance
sheet date. The components of shareholders’ equity aretranslated at their historical exchange rates. Differences
arising from translations are presented as “Foreign currencytranslation adjustments,” a component of net assets in theaccompanying consolidated financial statements.
Foreign currency monetary assets and liabilities are translated
into Japanese yen at the exchange rates in effect at eachbalance sheet date and the resulting translation gains orlosses are credited or charged to income.

(3) Cash and cash equivalents
The Company and its subsidiaries consider all highly liquid
investments with a maturity of three months or less from theirpurchase dates to be cash equivalents.

(4) Securities
Marketable securities categorized as other securities arecarried at fair value with unrealized holding gain or loss, net

Notes to Consolidated Financial Statements

of applicable income taxes, accounted for as a separate
component of net assets. Non-marketable securities
classified as other securities are stated at cost. Cost of
securities sold is computed based on the moving averagemethod.

(5) Derivatives
All derivatives are carried at fair value.

(6) Inventories
Finished goods and raw materials— moving average method (in cases where
the profitability has declined, the bookvalue is reduced accordingly)
Semi-finished goods and work in process— individual cost method (in cases where theprofitability has declined, the book value isreduced accordingly)(7) Depreciation and amortization (except for lease asset)
Depreciation of property, plant and equipment is generally
computed by the declining-balance method, based on
the estimated useful lives of the respective assets. The
straight-line method is applied to certain research facilities
acquired during the year ended March 31, 1995, andbuildings acquired after April 1, 1998. Foreign consolidated
subsidiaries compute depreciation primarily using the straightline method. The following summarizes the estimated useful
lives of property, plant and equipment by major category:
Buildings and structures
Machinery and equipment

3 – 60 years
2 – 17 years

Intangible assets, which are included in “other assets” of theaccompanying consolidated balance sheets, are amortizedby the straight-line method. Capitalized software for internal
use is amortized by the straight-line method over a period of
5 years, based on the estimated useful life of the software.

useful life of 5 years by the straight-line method.
(8) Allowance for doubtful accounts
The allowance for doubtful accounts is provided at an
amount sufficient to cover possible losses on the collectionof receivables. The amount of the allowance is determinedbased on their historical experience with write-offs, plus anestimate of specific probable doubtful accounts based on areview of the collectibility of individual receivables.

(9) Provision for directors' bonuses
To provide for the payment of bonuses to directors andstatutory auditors, an allowance is made based on projectedamount incurred.

(10) Provision for contract losses
Provision for contract losses is provided at an amountconsidered to cover the estimated possible losses involved inorders for which loss occurrence is highly anticipated where
the loss amount can be reasonably estimated at the balance
sheet date.

(11) Provision for retirement benefits
An allowance for employees’ retirement benefits is provided,
based on the projected retirement benefit obligation andthe pension fund assets. Actuarial gain or loss is amortized
effective the year subsequent to the year in which they ariseby the straight-line method over a period of 10 years, whichis shorter than the average remaining years of service of theemployees.

(12) Provision for directors’ retirement benefits
Certain directors, statutory auditors and corporate officersof the Company and certain consolidated subsidiaries
are entitled to lump-sum payments under their respective
unfunded retirement benefit plans. Provision for retirement
allowances for these officers has been made at the estimatedamounts which would be paid if all directors and corporate
officers resigned as of the balance sheet dates.

The Company amortizes negative goodwill over an estimatedAnnual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION

09

Notes to Consolidated Financial Statements(13) Reserve for repair and maintenance
Certain research facilities acquired during the year ended
March 31, 1995 requires periodic repairs and maintenance.
An accrual for these repair and maintenance expenses isrecorded based on the current portion of the total expenses
estimated for such repairs.

(14) Revenues and costs of construction contracts
Revenues and costs of construction contracts are recognizedby the percentage of completion method. The percentage ofcompletion is calculated at the cost incurred as a percentageof the estimated total cost.
The completed-contract method continues to be applied forcontracts for which the percentage of completion cannot be
reliably estimated.

(15) Lease assets
The depreciation of leased assets under finance lease iscalculated using the straight-line method over the lease termwith residual value of zero.

(16) Hedging accounting
Interest rate swaps which meet specific hedge criteria andqualify for special hedge accounting treatment are notremeasured at fair value.
Hedging instruments and hedged items are summarized asfollows:
Hedging instruments
Hedged items...
Interest rate swap agreements
Interest on long-term debt
The Company uses financial instruments to hedge interest
rate fluctuation risk exposed to long-term debt.
For interest rate swaps which meet the criteria for special
hedge accounting, the assessment of hedge effectiveness isomitted.

10

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION(17) Research and development costs
Research and development costs are expensed as incurredand included in cost of sales or selling, general andadministrative expenses.

(18) Income taxes
Deferred tax assets and liabilities are determined based on
the differences between financial reporting and tax-based
reporting of the assets and liabilities, and are measured
using the statutory tax rates which will be in effect when the
differences are expected to be realized.

(19) Adoption of consolidated tax accounting system
The Company and some of its consolidated subsidiaries havereceived an approval from the Commissioner of the National
Tax Agency of Japan to adopt the consolidated taxation
system effective the fiscal year ending March 31, 2012.
From the fiscal year under review, accounting treatment andpresentation have been based on the “Practical Solution
on Tax Effect Accounting under the Consolidated Taxation
System (Part 1)” (ASBJ PITF No. 5), and the “Practical
Solution on Tax Effect Accounting under the Consolidated
Taxation System (Part 2)” (ASBJ PITF No. 7), under theassumption that the Company would adopt the consolidated
taxation system.

Notes to Consolidated Financial Statements

3. Changes in Significant Items for the Preparationof Consolidated Financial Statement(1) Accounting Standard for Asset Retirement Obligations
Effective the fiscal year ended March 31, 2011 the Company
has adopted the “Accounting Standard For Asset Retirement
Obligations” (ASBJ Statement No. 18 of March 31, 2008) andthe “Guidance on Accounting Standard for Asset Retirement
Obligations” (ASBJ Guidance No. 21 of March 31, 2008).
The effect of this change was to decrease operating
income and ordinary income by ¥6 million ($66 thousand),
respectively and net income before taxes by ¥52 million ($622
thousand).

5. Additional Information
Comprehensive Income
Effective the fiscal year ended March 31, 2011 the Company
has adopted the “Accounting Standard for Presentation ofComprehensive Income” (ASBJ Statement No. 25 of June 30,2010). However, the amounts for “Valuation and translation
adjustments and others” and “Total valuation, translation
adjustments and others” are presented as the amounts of“Accumulated other comprehensive income” and “Total
accumulated other comprehensive income” respectively forthe previous fiscal year.

(2) Accounting Standard for Business Combinations
Effective the fiscal year ended March 31, 2011 the Company
has adopted the “Accounting Standard for Business
Combinations” (ASBJ statement No.21, December 26,2008), the “Accounting Standard for Consolidated Financial
Statements” (ASBJ Statement No. 22, December 26, 2008),
and “Accounting Standard for Business Separation andApplication Guideline for Accounting Standard for BusinessSeparation” (ASBJ Guideline No. 10, December 26, 2008)

4. Changes in Presentation
From the fiscal year ended March 31, 2011 the Company
has adopted the “Cabinet Office Ordinance Partially Revising
Regulation on Terminology, Forms and Preparation of
Financial Statements” (Cabinet Office Ordinance No. 5 ofMarch 24, 2009), based on the “Accounting Standard forConsolidated Financial Statements” (ASBJ Statement No. 22
of December 26, 2008), and the account item “Net income
before minority interests” is presented as a result.

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION

11

Notes to Consolidated Financial Statements

6. Investments in Securities
At March 31, 2011 and 2010, marketable securities classified as other (available-for-sale) securities are summarized as follows:				March 31,				
2011			March 31,2010

		AmountAcquisition recorded incosts
the balance Difference
sheet

		
Amount				AmountAcquisition recorded in		 Acquisition recorded in
Difference
costs
the balance			
costs
the balance Difference		sheet				
sheet
					
(Millions of yen)			
(Millions of yen)		

Other securities whose market
value recorded in the balance sheet
exceed their acquisition costs:
					
Equity securities
¥ 101
¥ 142
¥
Debt securities
–		
–		
Other
–		
–		
Total
¥ 101
¥ 142
¥
Other securities whose market value
recorded in the balance sheet do not
exceed their acquisition costs:
					
Equity securities
9		8		
Debt securities
–		
–		
Other
–		
–		
Total
¥
9
¥
8
¥

March 31,2011		(Thousands of U.S. dollars)

		

41
–
–
41

¥ 101
¥ 166 ¥
–		
–		
–		
–		
¥ 101
¥ 166 ¥

(1)
–
–
(1) ¥

–		
–		
–		
–
¥

$1,216 $1,709
$ 493
		
–		
–		
–
		
–		
–		
–
$1,216 $1,709
$ 493

65
–
–
65

–		
–		
–		
– ¥

		
		 113		 104		
		
–		
–		
		
–		
–		
$ 113 $ 104
$

–
–
–
–

(9)
–
–
(9)

At March 31, 2011 and 2010, non-marketable securities carried at cost are summarized as follows:
March 31,		
2011

March 31,
2010

(Millions of yen)

Investments in affiliates:
Affiliate
Other

12

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION

¥

52
1

¥

March 31,
2011
(Thousands of
U.S. dollars)

52
1

$

627
7

Notes to Consolidated Financial Statements

7. Inventories
Inventories at March 31, 2011 and 2010 are summarized as follows:
March 31,		
2011

March 31,
2010

(Millions of yen)Finished products
Raw materials
Work in process
Total¥ 2,138315
4,227¥ 6,680

March 31,
2011
(Thousands of
U.S. dollars)¥ 2,425229
4,447¥ 7,101$ 25,720
3,787
50,834$ 80,341

8. Short-Term Bank Loans and Long-Term Debt
The weighted average interest rate per annum on the short-term bank loans outstanding at March 31, 2011 and 2010 were 1.2% and 1.3%,
respectively.
Long-term debt at March 31, 2011 and 2010 are summarized as follows:
March 31,		
2011

March 31,
2010

(Millions of yen)Unsecured:
Zero coupon Japanese yen convertible notes–(notes with stock acquisition rights)¥
1.68% loans from banks due 2010 to 2012500–
Loans from Pension Welfare Service Public Corporation due 2010 to 2034
Lease obligations
821
Total
1,321
Less current portion
3,200
Long-term debt ,net
¥ 4,521¥

March 31,
2011
(Thousands of
U.S. dollars)

–
3,700
–
1,521
5,221
–
¥ 5,221

$

–

6,013
–

9,866
15,87938,485$ 54,364

Loans from the Pension Welfare Service Public Corporation represent financing for housing loans to the Company’s employees, and thesame amount is stated as a portion of other assets (loans to employees). The Company pays interest on such loans to the lender andcollects the same amount from the employees as the borrowers.

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION

13

Notes to Consolidated Financial Statements

Aggregate annual maturities of long-term debt at March 31, 2011 are summarized as follows:		 March 31, 2011
2012
2013
2014
2015 and thereafter
Total(Millions of yen)(Thousands of
U.S. dollars)¥ 3,582690
96
153¥ 4,521$ 43,062
8,301
1,155
1,846
$ 54,364

The Company entered into the three-year contracts for commitment lines of credit with seven banks in the aggregated amount of ¥10,000
million ($120,265 thousand) on March 31, 2008 for efficient financial arrangements for operating funds.
At March 31, 2011, the Company had unused commitment lines of credit aggregating ¥8,800 million ($105,833 thousand).

9. Research and Development Expenses
Research and development expenses charged to income for the years ended March 31, 2011 and 2010 are as follows:Year ended		March 31,		
2011

Year ended
March 31,
2010

(Millions of yen)

¥ 2,110

14

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION¥ 2,193

Year ended
March 31,
2011
(Thousands of
U.S. dollars)$ 25,381

Notes to Consolidated Financial Statements

10. Income Taxes
Income taxes applicable to the Company and its domestic subsidiaries comprise corporation, inhabitants’ and enterprise taxes which, in theaggregate, resulted in a statutory tax rate of 40.6% for the years ended March 31, 2011 and 2010. Income taxes of the overseas subsidiaries
are based on the tax rates applicable in their countries of incorporation.
The major components of deferred tax assets and liabilities as of March 31, 2011 and 2010 are summarized as follows:
March 31,		
2011

March 31,
2010

(Millions of yen)

Deferred tax assets:
Employees’ retirement benefits
Accrued employees’ bonuses
Provision for contract losses
Accrual for periodic repairsEnterprise tax payable
Tax loss carried forward
Other
Gross deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Unrecognized holding gain on other securities
Other
Total deferred tax liabilities
Net deferred tax assets

March 31,
2011
(Thousands of
U.S. dollars)¥ 2,113
580
49
187
26
2,940
1,071
6,966
(5,650)1,316¥ 2,053
454
162
182
19
3,956
966
7,792
(6,501)
1,291$ 25,415
6,978
585
2,245
313
35,36012,87983,775(67,950)
15,825

(11)
(53)
(64)
¥ 1,252

(13)
(37)
(50)
¥ 1,241

(130)
(638)
(768)
$ 15,057

The reconciliation between the effective tax rate and the statutory tax rate for the year ended March 31, 2010 was omitted since loss before
income taxes and minority interests was recorded.
The reconciliation between the effective tax rate and the statutory tax rate for the year ended March 31, 2011 was omitted since thedifference between the statutory tax rate and the effective tax rate of less than 5%.

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION

15

Notes to Consolidated Financial Statements

11. Retirement Benefits
The Companies have defined benefit pension plans and lump-sum retirement payment plans which cover substantially all employees who
retire from the Companies. Eligible employees may also receive additional payments under the plans.
The following is a summary of the plans:
March 31,		
2011

March 31,
2010

(Millions of yen)

Projected benefit obligation
Fair value of plan assets
Funded status
Unrecognized actuarial loss
Prepaid pension cost
Allowance for retirement benefits¥ (9,509)
3,223(6,286)
1,395(320)¥ (5,211)

March 31,
2011
(Thousands of
U.S. dollars)¥ (9,661)
3,249(6,412)
1,689(344)¥ (5,067)$(114,363)
38,758(75,605)
16,778(3,847)$ (62,674)

The consolidated subsidiaries have adopted a simplified method, as permitted, to calculate the projected benefit obligation.
Components of net periodic pension cost for the years ended March 31, 2011 and 2010 are summarized as follows:Year ended		March 31,		
2011

Year ended
March 31,
2010

(Millions of yen)

Service cost
Interest cost on projected benefit obligation
Expected return on plan assets
Amortization of actuarial loss
Extra retirement payments
Net periodic pension cost

¥

517
184
(114)
411
127
¥ 1,125¥

Year ended
March 31,
2011
(Thousands of
U.S. dollars)

518
182
(97)
432
–

¥ 1,035$ 6,2122,209(1,367)4,940
1,528$ 13,522

The provision for retirement benefits was determined by the simplified method by the consolidated subsidiaries and has been included inservice cost.
Assumptions used in the actuarial calculation for the years ended March 31, 2011 and 2010 are summarized as follows:
March 31,		
2011

Actuarial cost method
Discount rate
Expected rate of return on plan assets
Amortization period for actuarial loss

16

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATIONMarch 31,2010

Projected unit credit method
2.0 % per annum 2.0 % per annum
3.5 % per annum 3.5 % per annum
10 years (within the employees’
average remaining years of service)Notes to Consolidated Financial Statements

12. Pledged Assets
Assets pledged as collateral for loans payable at foreign subsidiaries as of March 31, 2011 are summarized as follows:		 March 31, 2011
(Millions of yen)		
			Bank deposits
Total

¥
¥

54
54

(Thousands of
U.S. dollars)

$
$

654
654

13. Contingent Liabilities
The Company had the following contingent liability as of March 31, 2011:
		 March 31, 2011
(Millions of yen)		
			

Guarantee for housing loans of employees¥

28(Thousands of
U.S. dollars)$335

14. Derivatives and Hedging Activities
The Company has entered into interest-rate swap contracts tomanage its exposure to interest-rate risk on long-term debt. Asa matter of policy, the Company does not enter into derivativetransactions for trading purposes. The Company does not
anticipate nonperformance by any of the counterparties to theabove transactions, all of whom are domestic financial institutions
with high credit ratings.

does not record certain interest swap arrangements at fairvalue but charges or credits the net cash flows from the swap
arrangements to the interest arising from the respective hedged
borrowing.
At March 31, 2011 and 2010, the fair value information forderivatives was not presented since all derivatives were
accounted for as special hedges.

In accordance with the Company’s policy, derivative transactions
are entered into under the decision-making rules approvedby the Management Strategy Committee of the Company.
The department which has the responsibility to enter intosuch contracts monitors and controls the inherent risk andperformance on a daily basis and reports these to managementof the Company, if and when necessary.
In accordance with the special hedge accounting under the
Accounting Standard for Financial Instruments, the Company

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION

17

Notes to Consolidated Financial Statements

I. Derivative transactions which do not qualify for hedge accounting
Currency-rated transaction
Year ended March 31, 2010
Contract AmountContract AmountOver 1 Year

Fair Value

Gain/Loss(Millions of yen)

Foreign Exchange Forward Contracts
To buy foreign currencies
U.S. Dollars
Total assets

¥

90
90

¥

–
–

¥

3
3

¥

3
3

Notes:
Fair value is principally based on obtaining quotes from financial institutions singing the contract.

II. Derivative transactions which qualify for hedge accounting
Interest-rated transactions
Year ended March 31, 2011
Type of derivative transaction

Principal Item Hedged

Contract AmountContract AmountOver 1 Year

Fair Value(Millions of yen)Interest rate swap transaction
Pay fixed/Receive variable

Long-term debt

Type of derivative transaction

Principal Item Hedged¥ 1,500

¥

–

¥

–

Year ended March 31, 2010
AmountContract Amount Contract
Over 1 Year

Fair Value(Millions of yen)Interest rate swap transaction
Pay fixed/Receive variable

Long-term debt

¥ 1,500¥ 1,500¥–

Year ended March 31, 2011
Type of derivative transaction

Principal Item Hedged

AmountContract Amount Contract
Over 1 Year

Fair Value(Thousands of U.S. dollars)Interest rate swap transaction
Pay fixed/Receive variable

Long-term debt

$18,040

Notes:
The current price by the exception handling of interest swap is the current price of the long-term debt.

18

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION

$

–

$

–

Notes to Consolidated Financial Statements

15. Financial Instruments① Matters relating to financial instruments(1) Policy of Financial Instruments
The Company and its consolidated subsidiaries procure
capital investment to such like primarily through bank loans
and issuing corporate bonds. Derivatives are used, notfor speculative nor trading purposes, but to manage risk
exposure arising from business operations.
(2) Contents and risk management for financial instruments
Receivables such as trade notes and accounts receivable areexposed to customer’s credit risk. Receivable balance of eachcustomer is constantly checked to reduce risk of costumer’s
default.
Investment securities are mainly bonds or equities ofcustomers of the Company and its consolidated subsidiaries
and exposed to the issuer’s credit risk and market pricefluctuation risk.
Trade payables, which are operating payables, are due forpayment within a year. While foreign currency-denominatedoperating receivables are exposed to exchange rate
fluctuation risk, we evade this risk by, as a general rule,primarily utilizing a forward exchange contract of foreign
currency-denominated operating payables. Short-term bankloans are used to primarily to procure business transaction’s
funds, while long-term debt is used to procure funds required
for long-term stability. Although some items with variableinterest rates are exposed to interest rate fluctuation risk,
we used derivative transactions (interest rate swaps) in partto fix interest payments. Derivatives which are shown in the
below table do not represent the amounts exchanged by theparties and do not measure the Group’s exposure to credit ormarket risk. To control credit risk related to derivatives, basedon an internal guide line, the Company have derivatives withcounterparties which has high credit grade. In addition, theTreasury Division of the Company regularly monitors risk andprofit and loss, and reports them to it’s Executive Committee.
Operating payables and bank loans are exposed to theliquidity risk.
Each of the Companies performs cash management using
monthly cash flow information.
(3) Supplements on Fair value of financial instruments
Fair values of financial instruments are based on quoted
price in active markets. If quoted price is not available, otherrational valuation techniques are used instead. The results ofvaluation may differ among assumptions because the rational
techniques include variable factors. The contract or notionalamounts of derivatives which are shown in the below table
do not represent the amounts exchanged by the parties anddo not measure the Companies’ exposure to credit or market
risk.

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION

19

Notes to Consolidated Financial Statements② Matters concerning the market value of financial instruments, etc.
Amounts on the consolidated balance sheets as of March 31, 2011, fair value and variance are as follows.
March 31, 2011
Carrying Value

Fair Value

Difference(Millions of yen)

(1) Cash and bank deposits(2) Notes and accounts receivable, trade(3) Investment securities
Other securities(4) Notes and accounts payable, trade(5) Short-term bank loans(6) Current portion of long-term debt
(7) Long-term debt
(8) Other long-term liabilities

¥

3,391
26,940
151

¥

3,391
26,940
151

¥

–
–
–
(3)
(1,010)(11,993)(7,705)(3,200)(497)(2,012)(11,993)(7,705)(3,200)(500)(3,022)–––

March 31, 2010
Carrying Value

Fair Value

Difference(Millions of yen)

(1) Cash and bank deposits(2) Notes and accounts receivable, trade(3) Investment securities
Other securities(4) Notes and accounts payable, trade(5) Short-term bank loans(6) Long-term debt
(7) Other long-term liabilities(8) Derivatives

¥

6,168
21,960
167

¥

6,168
21,960
167

¥

–
–
(13)
(1,055)–(10,916)(6,735)(3,687)(1,968)3(10,916)(6,735)(3,700)(3,023)
3–––

March 31, 2011
Carrying Value

Fair Value

Difference(Thousands of U.S. dollars)(1) Cash and bank deposits(2) Notes and accounts receivable, trade(3) Investment securities
Other securities(4) Notes and accounts payable, trade(5) Short-term bank loans(6) Current portion of long-term debt
(7) Long-term debt
(8) Other long-term liabilities(*) If the total represents a liability, it is indicated in parentheses.

20

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION$

40,781
323,986
1,820(144,232)(92,666)(38,485)(6,013)(36,352)$

40,781
323,986
1,820(144,232)(92,666)(38,485)(5,981)(24,192)

$

–
–
–
–
–
–
(32)
(12,160)

Notes to Consolidated Financial Statements

Notes:a) Method of measurement of fair value of financial instruments
and matters concerning securities and derivative transactions
		 (1) Cash and bank deposits, (2) Notes and accounts
receivable, trade
As these items are settled in a short period of time andthe fair value is almost equal to the book value, theirbook value is presented.
		(3) Investment securities and other securities
The fair value of stocks represents the price on the stock
exchange, while that of bonds represents the priceon the exchange or that presented by the counterpart
financial institution		(4) Notes and accounts payable, trade, (5) Short-term bankloans
As these items are settled in a short period of time andthe fair value is almost equal to the book value, theirbook value is presented.

		(6) Long-term debt
As for fair value of long-term debt, the expectedprincipal and interest receivable amounts are discounted
at the interest rates applicable to similar new loans to
the present value. As long-term debt are subject to theapplication of special hedge accounting with designatedinterest rate swaps, the expected principal and interest
receivable amounts, combined with the designatedinterest rate swaps, are discounted at the interest rates
applicable to similar new loans to the present value.
		(7) Other long-term liabilities
Other long-term liabilities consist of lease deposits. The
fair value of other long-term liabilities is discounted at
the risk-free interest rates of future cash flows to thepresent value.

		(8) Derivatives transaction
Also please see Note 11 for the detail of derivatives
transaction.

b) As non-marketable equity securities of ¥52 million ($627
thousand) do not have a market price and the future cash
flow cannot be estimated, we consider it extremely difficult to
identify their fair value. Hence, the items are not included in “(3)Investment securities and other securities.”c) Financial assets due subsequent to the balance sheet dateCash and bank deposits of ¥3,371 million ($40,540 thousand),
Notes and accounts receivable, trade of ¥26,939 million($323,985 thousand) are due within one year subsequent
to March 31, 2011 and Cash and bank deposits of ¥6,145
million, Notes and accounts receivable, trade of ¥21,960
million are due within one year subsequent to March 31, 2010.

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION

21

Notes to Consolidated Financial Statements

16. Investment and Rental Property
The Company owns an office building (including land) for rent for third parties in Yokohama city, part of which is used by the Company.
Information on Consolidated Balance Sheets
Carrying AmountMarch 31,2010

Decrease

March 31,2011

At March 31,2011
Fair Value(Millions of yen)

Rental property

¥

7,376

¥

346

¥

7,030

¥

7,649

Carrying AmountMarch 31,2009

Decrease

March 31,2010

At March 31,2010
Fair Value(Millions of yen)

Rental property

¥

7,923

¥

547

¥

7,376

¥

8,022

Carrying Amount
Decrease

March 31,2010

March 31,2011

At March 31,2011
Fair Value(Thousands of U.S. dollars)

Rental property
Notes:a) The carrying amount on the consolidated balance sheets
is determined at the amount of acquisition costs lessaccumulated depreciation and impairment loss.

$

88,706

$

4,163

$

84,543$91,985b) Decrease represents depreciation during the year.
c) Fair value at March 31, 2011, is determined based on the realestate appraisal standard prepared by the Company.

Information on Consolidated Statements of Operations
Year ended March 31, 2011
Rental income

Rental costs

Difference(Millions of yen)

Rental property

¥

1,797

¥

983

¥

814

Year ended March 31, 2010
Rental income

Rental costs

Difference(Millions of yen)

Rental property

¥

1,820

¥

1,273

¥

547

Year ended March 31, 2011
Rental income

Rental costs

Difference(Thousands of U.S. dollars)

Rental property

22

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION$

21,610$11,819$9,791

Notes to Consolidated Financial Statements

Notes:
Because the rental property includes an office space internally used by the Company, rental income related to the internally-used office space
is not included in the above. Costs incidental to this real-estate (Depreciation, Repair cost, Insurance cost, Taxes and public charges) are
included in rental costs.

17. Segment Information
The business segment information of the Companies for the years ended March 31, 2010 was summarized as follows:① Business segments
Year ended March 31, 2010
Fine
mechatronics

Electronic&
vacuumsystems

Vending
machines&
systems

Real estateleasing

Total

Eliminations
orunallocatedamounts

Consolidated(Millions of yen)

I. Sales and operating (loss) income
Sales to external customers¥ 34,044 ¥ 3,414 ¥Intersegment sales or transfers
118
10
Total sales
3,532
34,054
Operating expenses
5,031
34,357
Operating (loss) income¥(303) ¥ (1,499) ¥II. Total assets, depreciation and capital expenditures
Total assets¥ 31,248 ¥ 6,114 ¥Depreciation and amortization
256
1,029
Capital expenditures
140
685

Notes:a) Basis of segmentation
Business segments are divided into product categories by thesame criteria as applied for internal control purposes.
b) Major products in each business segment(1) Fine mechatronics
Flat Panel Display("FPD") manufacturing equipment(wet cleaning equipment, stripping equipment, etchingequipment, developing equipment, PI inkjet coater, cell
assembly equipment, outer lead bonders), semiconductor
manufacturing equipment (wet cleaning equipment, etchingequipment, ashing equipment, die bonders, inner leadbonders, flip chip bonders, wafer inspection equipment),
railroad maintenance equipment, non-destructive inspections,

1,818 ¥ 1,820 ¥ 41,096 ¥128––
41,224
1,820
1,818
42,7651,273
2,104
547 ¥ (1,541) ¥(286) ¥

– ¥ 41,096–(128)
41,096(128)
42,966201(329) ¥ (1,870)

1,923 ¥ 7,660 ¥ 46,945 ¥ 5,713 ¥ 52,658
1,935
–
1,935
578
72
847
–
847
7
15

and other items.
(2) Electronic & vacuum systems
Laser equipment, microwave equipment, media device
manufacturing equipment (sputtering equipment, vacuum
bonding equipment), industrial vacuum evaporationequipment, rechargeable battery manufacturing equipment,
precision parts manufacturing equipment, other automationequipment, vacuum pumps, and other items.
(3) Vending machines & systems
Vending machines, ticket vending machines, and others.

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION

23

Notes to Consolidated Financial Statements(4) Real estate leasing
Real estate leasing and management, and otherbusinesses.
c) Included in eliminations or unallocated amounts of operating
expenses are unallocable amounts of ¥330 million for the year
ended March 31, 2010, respectively which relates to researchand development expenses incurred over the entire group aspart of the Company’s research and development activities.
d) Included in the eliminations or unallocated amounts of total
assets were unallocable amounts totaling ¥ 5,713 million forthe years ended March 31, 2010, respectively, which primarily
consisted of surplus funds (cash and bank deposits), investment
funds (investment securities) of the Company and deferred tax
assets.

e) Effective April 1, 2009, the Company and its subsidiaries haveadopted the “Accounting Standard for Construction Contract”(ASBJ Statement No.15 issued on December 27, 2007) and“Guidance on Accounting Standard for Construction Contract”(ASBJ Guidance No.18 on December 27, 2007).
As a result, Net sales for the year ended March 31, 2010,
increased by ¥5,286 million in Fine mechatronics segment,¥369 million in Electronic & vacuum systems segment, andOperating loss for the year ended March 31, 2010, decreasedby ¥830 million in Fine mechatronics segment and increasedby ¥3 million in Electronic & vacuum systems segment.

② Geographical segments
Year ended March 31, 2010
Japan

Northeastern
Asia

Total

Eliminations
orunallocatedamounts

Consolidated(Millions of yen)

I. Sales and operating (loss) income
Sales to external customers
Intersegment sales or transfers
Total sales
Operating expenses
Operating (loss) income
II. Total assets
Total assets

Notes:a) Countries and regions are classified in each geographicalsegment by geographical proximity.
b) The main countries and regions in each segment.
Northeastern Asia – Taiwan, Korea, China

24

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION

716¥40,380 ¥
962
306
1,678
40,686
1,403
42,501275¥ (1,815) ¥¥46,310¥635– ¥41,096¥41,096 ¥–(1,268)
1,268
41,096(1,268)42,36442,966(938)
43,904¥ (1,540) ¥ (330) ¥ (1,870)¥46,945¥ 5,713¥52,658c) Included in eliminations or unallocated amounts of operating
expenses are unallowable amounts of ¥330 million for the year
ended March 31, 2010, respectively which relates to researchand development expenses incurred over the entire group aspart of the Company’s research and development activities.

Notes to Consolidated Financial Statementsd) Included in the eliminations or unallocated amounts of total
assets were unallowable amounts totaling ¥5,713 million
for the years ended March 31, 2010, respectively, whichprimarily consisted of surplus funds (cash and bank deposits),
investment funds (investment securities) and deferred tax
assets of the Company.

e) Effective April 1, 2009, the Company and its subsidiaries haveadopted the “Accounting Standard for Construction Contract”(ASBJ Statement No.15 issued on December 27, 2007) and“Guidance on Accounting Standard for Construction Contract”(ASBJ Guidance No.18 on December 27, 2007).
As a result, Net sales for the year ended March 31, 2010,
increased by ¥5,655 million and Operating loss for the year ended
March 31, 2010, decreased by ¥828 million in Japan.

③ Overseas sales
Year ended March 31, 2010
Northeastern Asia

Other

Total

(Millions of yen)

I. Overseas sales
II. Consolidated net sales
III. % of consolidated net sales
Notes:a) Overseas sales are sales recorded by the Company and its
consolidated subsidiaries in countries or regions other thanJapan.
b) The division of overseas sales into countries or regions isdetermined as follows:(1) Overseas sales by country or region:¥ 13,902
33.8%

¥

1,748
4.3%

¥ 15,650
41,09638.1%

Geographical areas are defined based on geographicalproximity.
(2) Major countries or regions included in each geographicalarea:		 Northeastern Asia – Taiwan, Korea, China
		 Other– Hungary, Poland④ Segment Information
Fiscal year ended March 31, 2011 (April 1, 2010 – March 31, 2011)(1) Overview of reporting segments
The Company’s reporting segments are determined as theGroup's units for which separate financial information is also
obtainable, and the Board of Directors regularly monitor inorder to decide allocation of business resources and evaluatebusiness performance.
The Company adopts the division system in its Group
organization based on the product or service lines.

Each division draws up a domestic and overseas
comprehensive strategy about its responsible products orservices to deal with and develop operation.
The Company has four reporting segments: Finemechatronics, Mechatronics systems, Vending machines &systems, and Real estate leasing.
The product or service lines belonging to each reporting
segment are as follows.

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION

25

Notes to Consolidated Financial Statements

Fine mechatronics :FPD manufacturing equipment (wet cleaning equipment,
developing equipment, etching equipment, stripping
equipment, PI inkjet coater, cell assembly equipment),
Semiconductor manufacturing equipment (wafer inspection
equipment, etching equipment, ashing equipment, wetcleaning equipment), Railroad maintenance equipment, andother items.
Mechatronics systems:
FPD manufacturing equipment (outer lead bonders),
Semiconductor manufacturing equipment (die bonders,flip chip bonders, inner lead bonders), Media device
manufacturing equipment (sputtering equipment, vacuum
bonding equipment), Industrial vacuum evaporationequipment, Laser equipment, Microwave equipment,
Rechargeable battery manufacturing equipment, Precisionparts manufacturing equipment, Other automationequipment, Vacuum pumps, and other items.

Vending machines & systems :Vending machines, ticket vending machines, and others.
Real estate leasing :Real estate leasing and management, and otherbusinesses.
(2) Methods of calculating amounts for net sales, income or loss,
assets and other items by reporting segment
The accounting policies applied by each reporting businesssegment are those outlined in “Significant items for the
preparation of consolidated financial statements”.
Reporting segment is an ordinary income basis.
Internal sales between segments are mainly based on price tobe applied for third-party transactions.
(3) Information on sales, income or loss, assets and other items
by reporting segment

Fiscal year ended March 31, 2011 and 2010 is summarized as follows:Year ended March 31, 2011
Fine
mechatronics

Mechatronics
systems

Vending
machines &systems

Real estateleasing

Total(Millions of yen)

Sales
Sales to external customers
Intersegment sales or transfers
		
Total sales
Segment income (loss)
Segment assets
Other
Depreciation
Depreciation of goodwill
Amortization of negative goodwill
Interest income
Interest expense
Increase in tangible and intangible fixed assets

26

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION¥ 22,514 ¥ 20,145 ¥193
17
20,33822,531
211
609
20,92921,862
906
12
40
6
6
530

420
–
–
0
9
567

1,790 ¥
–
1,790
(245)
1,532
78
–
–
0
3
23

1,797 ¥ 46,246
210–
46,456
1,797
1,389
814
51,708
7,385
361
–
–
–
–
34

1,765
12
40
6
18
1,154

Notes to Consolidated Financial Statements

Year ended March 31, 2010
Fine
mechatronics

Mechatronics
systems

Vending
machines &systems

Real estateleasing

Total(Millions of yen)

Sales
Sales to external customers
Intersegment sales or transfers
		
Total sales
Segment income (loss)
Segment assets
Other
Depreciation
Depreciation of goodwill
Amortization of negative goodwill
Interest income
Interest expense
Increase in tangible and intangible fixed assets¥ 24,313 ¥ 13,145 ¥148
8
13,29324,321(1,521)(41)
15,78222,000
865
12
40
5
24
594

445
–
–
0
19
193

1,818 ¥
–
1,818
(197)
1,928

1,820 ¥ 41,096
156–
41,252
1,820(1,212)547
47,404
7,694
557
–
–
–
–
9

68
–
–
0
8
4

1,935
12
40
5
51
800

Year ended March 31, 2011
Fine
mechatronics

Mechatronics
systems

Vending
machines &systems

Real estateleasing

Total(Thousands of U.S. dollars)

Sales
Sales to external customers
Intersegment sales or transfers
		
Total sales
Segment income (loss)
Segment assets
Other
Depreciation
Depreciation of goodwill
Amortization of negative goodwill
Interest income
Interest expense
Increase in tangible and intangible fixed assets$270,757 $242,277 $ 21,530 $ 21,610 $556,174
2,523
–
–
2,315
208
21,610 558,697
21,530270,965 244,592
16,697
9,791(2,950)2,533
7,323
88,813 621,861
18,426
262,926 251,696
10,895
145
478
75
77
6,373

5,059
–
–
0
103
6,813

935
–
–
0
35
282

4,343
–
–
–
–
409

21,232
145
478
75
215
13,877

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION

27

Notes to Consolidated Financial Statements(4) Main contents of the balance with a report segment net total and the amount of consolidated financial statements adding up and thebalance concerned (adjustment amounts)a) Segment income

Year ended		March 31,		
2011

Year ended
March 31,
2010

(Millions of yen)

Reporting segments
Unallocated amounts
Other
Consolidated¥ 1,389
(499)
(86)
¥
804

¥ (1,211)
(330)
(71)
¥ (1,612)

Year ended
March 31,
2011
(Thousands of
U.S. dollars)$ 16,697(5,998)(1,030)$ 9,669

Notes:
Included in the "unallocated amounts" above are unallowable operating expenses which primarily relate to research and development
expenses incurred over the entire group as part of the Company’s research and development activities.

b) Segment assets

Year ended		March 31,		
2011

Year ended
March 31,
2010

(Millions of yen)

Reporting segments
Unallocated amounts
Consolidated¥ 51,708
2,542¥ 54,250¥ 47,404
5,254¥ 52,658

Year ended
March 31,
2011
(Thousands of
U.S. dollars)$621,861
30,581$652,442

Notes:
Included in the “unallocated amounts” above are unallowable assets which primarily consist of surplus funds (cash and bank deposits) andinvestment funds (investment securities) owned by the Company and deferred tax assets.

28

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION

Notes to Consolidated Financial Statementsc) OtherYear ended March 31, 2011
Reportingsegments

Adjustment
amountConsolidated(Millions of yen)

Depreciation
Depreciation of goodwill
Amortization of negative goodwill
Interest income
Interest expense
Increase in tangible and intangible fixed assets¥ 1,765 ¥
12
40
6
18
1,154

Reportingsegments

Adjustment
amountConsolidated(Thousands of U.S. dollars)– ¥ 1,765
12
–
40
–
7
1
178
160
1,154
–

– $ 21,232$ 21,232 $
145
–
145
478
–
478
93
18
75
2,137
1,922
215
13,877–
13,877

Year ended March 31, 2010
Reportingsegments

Adjustment
amountConsolidated(Millions of yen)

Depreciation
Depreciation of goodwill
Amortization of negative goodwill
Interest income
Interest expense
Increase in tangible and intangible fixed assets¥ 1,935 ¥
12
40
5
51
800

– ¥ 1,935
12
–
40
–
6
1
242
191
800
–

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION

29

Notes to Consolidated Financial Statements⑤ Related information
Fiscal year ended March 31, 2011 (April 1, 2010 – March 31, 2011)(1) Information every product and service
The description is omitted because disclose a similar mention in segment information.
(2) Information by geographical areaa) SalesYear ended March 31, 2011
Japan

Northeastern Asia

Other

Total

(Millions of yen)¥

22,468¥21,800

Japan

Northeastern Asia

¥

1,978

¥

46,246

Year ended March 31, 2011
Other

Total

(Thousands of U.S. dollars)$ 262,175$ 270,215$

23,784$ 556,174

Notes:
Sales are based on the location of customers, and are classified by country or region.

b) Tangible fixed assets
Year ended March 31, 2011
Japan

Northeastern Asia

Total

(Millions of yen)¥

13,075¥335¥

13,410Year ended March 31, 2011
Japan

Northeastern Asia

Total

(Thousands of U.S. dollars)$ 157,243

$

4,038

$ 161,281c) Information on main customer
There are no material sales to any single unaffiliated customer.

30

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION

Notes to Consolidated Financial Statements⑥ Impairment losses on fixed assets by reporting segment
No applicable items⑦ Depreciation of goodwill and remaining amounts by reporting segment
Fiscal year ended March 31, 2011 (April 1, 2010 – March 31, 2011)
Year ended March 31, 2011
Fine
mechatronics

Mechatronics
systems

Vending
machines &systems

Real estateleasing

Total(Millions of yen)

Balance as of March 31, 2011

¥

50

¥

–

¥

–

¥

–

¥

50

Year ended March 31, 2011
Fine
mechatronics

Mechatronics
systems

Vending
machines &systems

Real estateleasing

Total(Thousands of U.S. dollars)

Balance as of March 31, 2011

$

601

$

–

$

–

$

–

$

601

⑧ Gain on negative goodwill by reporting segment
Fiscal year ended March 31, 2011 (April 1, 2010 – March 31, 2011)
Gain on negative goodwill by reporting segment at March 31, 2011 were not significant.
(Additional information)
Fiscal year ended March 31, 2011 (April 1, 2010 – March 31, 2011)
From the fiscal year ended March 31, 2011 the Company has adopted the “Accounting Standard for Disclosures about Segments ofan Enterprise and Related information” (ASBJ Statement No. 17 of March 27, 2009) and the “Guidance on Accounting Standard forDisclosures about Segments of an Enterprise and Related Information” (ASBJ Guidance No. 20 of March 21, 2008).

18. Non-cash Transactions
Lease assets and lease obligations recorded relating to lease transactions were ¥35 million ($421 thousand) and ¥35 million ($421 thousand),
respectively for the year ended March 31, 2011 and ¥182 and ¥182, respectively for the year ended March 31, 2010.

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION

31

Notes to Consolidated Financial Statements

19. Selling, General and Administrative Expenses
For the years ended March 31, 2011 and 2010, major selling, general and administrative expenses are summarized as follows:
March 31,		
2011

March 31,
2010

(Millions of yen)

Packing and delivery expenses
Sales commission
Advertising expenses
Employees' salaries and allowances
Provision of allowance for doubtful accounts
Provision for retirement benefits
Provision for directors' retirement benefits
Depreciation
Rent expenses
Development and research expenses

¥

161
279
17
5,324
8
484
6
847
196
2,110

¥

March 31,
2011
(Thousands of
U.S. dollars)

100
38
10
4,910
26
500
15
713
259
2,191

$ 1,9353,352
208
64,032
100
5,818
78
10,1892,362
25,374

20. Related Party Transactions
Toshiba Corporation held 39.1 % of the Company’s voting rights as of March 31, 2011.
The Company sold semiconductor manufacturing equipment to Toshiba Corporation and received rent revenue from Toshiba Corporation.
The aggregate amounts of these transactions were ¥4,086 million ($49,145 thousand) and ¥4,023 million for the years ended March 31,
2011 and 2010, respectively.
The Company purchased material from Toshiba Corporation totaling ¥330 million ($3,963 thousand) and ¥381 million for the year ended
March 31, 2011 and 2010, respectively.
Amounts due from and to Toshiba Corporation at March 31, 2011 and 2010 were as follows:
March 31,		
2011

March 31,
2010

(Millions of yen)Due from Toshiba Corporation
Due to Toshiba Corporation

32

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION¥ 1,0813,230¥ 1,056
3,245

March 31,
2011
(Thousands of
U.S. dollars)$ 13,006
38,845

Notes to Consolidated Financial Statements

21. Per Share Information
Basic net income per share is computed based on the net income available for distribution to shareholders of common stock and theweighted-average number of shares of common stock outstanding during each year. Diluted net income per share is computed based on
the net income available for distribution to the shareholders and the weighted-average number of shares of common stock outstanding
during each year, assuming full dilution of common stock equivalents. A net asset per share is computed based on the weighted-average
number of shares of common stock outstanding at each balance sheet date.

Year ended		March 31,		
2011

Year ended
March 31,
2010

(yen)

Net income (loss):– Basic
Net assets¥

9.83
353.98Year ended
March 31,2011
(U.S. dollars)¥ (35.47)
345.39

$

0.12
4.26

Notes:The information regarding diluted net income per share in 2011 and 2010 is omitted because of no stock with dilutive effect.

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION

33

Other Information

Non-Consolidated Balance Sheets
March 31,		
2011

AssetsCurrent assets:
Cash and bank deposits
Notes and accounts receivable, trade:
Notes
Accounts
Allowance for doubtful accounts
Inventories
Deferred tax assets
Short-term loans receivable from subsidiaries and affiliates
Other current assets
Total current assets

Property, plant and equipment:
Land
Buildings and structures
Machinery and equipment
Lease assets
Construction in progress
Total
Accumulated depreciation
Property, plant and equipment, net

Investments and other assets:
Investments in securities
Investments in subsidiaries and affiliates
Deferred tax assets
Intangible assets
Other assets
Allowance for doubtful accounts
Total investments and other assets

Total assets

34

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATIONMarch 31,
2010

(Millions of yen)March 31,
2011
(Thousands of
U.S. dollars)¥ 1,479¥ 4,278$ 17,791

1,794
22,308
(512)
5,146
897
1,300
1,480
33,892328
18,719
(79)
5,290
675
1,070
272
30,553

21,579268,282(6,154)
61,883
10,792
15,634
17,799407,606

68
27,579
943
1,151
518
30,259(17,923)
12,33668
27,557
1,122
1,803
40
30,590(17,228)
13,362827
331,680
11,337
13,8356,227
363,906(215,549)
148,357

136
683
131
688
620
(0)
2,258

150
787
196
391
906
(571)
1,859

1,640
8,211
1,579
8,273
7,452
(3)
27,152¥ 48,486¥ 45,774$ 583,115

Non-Consolidated Balance Sheets

March 31,		
2011

Liabilities and net assets
Current liabilities:
Short-term bank loans
Current portion of long-term debt
Notes and accounts payable:
Notes
Accounts
Advances received
Lease obligations
Provision for directors' bonuses
Provision for contract losses
Accrued expenses
Accrued income taxes
Other current liabilities
Total current liabilities
Long-term liabilities:
Long-term debt
Lease obligations
Long-term accounts payable-other
Provision for retirement benefits
Reserve for repair and maintenance
Other long-term liabilities
Asset retirement obligations
Total long-term liabilities
Total liabilities
Net assets:
Shareholders’ equity:
Common stock:
Authorized :100,000,000 shares
Issued:51,926,194 shares at March 31, 2011 and 2010
Additional paid-in capital
Retained earnings
Less treasury stock, at cost
Total shareholders’ equity
Valuation and translation adjustments:
Net unrealized holding gain on other securities
Total net assets
Total liabilities and net assets

March 31,
2010

(Millions of yen)March 31,
2011
(Thousands of
U.S. dollars)

–
6,100

$ 87,793
38,485

2,209
7,889
334
290
35
120
2,332
47
137
23,893

2,024
6,345
768
520
–
374
1,981
42
228
18,382

26,564
94,882
4,022
3,491
420
1,440
28,046565
1,644
287,352

500
206
22
4,729
407
3,023
20
8,907
32,800

3,700
594
26
4,588
377
3,022
–
12,30730,689

6,013
2,480
262
56,8804,893
36,352
237
107,117394,469

6,762
9,995
622
(1,719)15,660

6,762
10,738(743)(1,719)15,03881,317120,208
7,489(20,679)
188,335

26
15,686¥ 48,486

47
15,085¥ 45,774

311
188,646$ 583,115¥ 7,300
3,200¥

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION

35

Other Information

Non-Consolidated Statements of Income
Year ended		March 31,		
2011

Year ended
March 31,
2010

(Millions of yen)

Year ended
March 31,
2011
(Thousands of
U.S. dollars)¥ 36,696
29,444
7,252¥ 33,161
28,0475,114$ 441,322
354,10787,215

Selling, general and administrative expenses
Operating loss

7,369
(117)

7,015
(1,901)

88,618(1,403)

Other income (expenses):
Interest and dividend income
Interest expense
Business advisory fee
Subsidy income
Commission fee
Loss on valuation of subsidiaries’ stock
Provision of allowance for doubtful accounts for subsidiaries and affiliates
Loss on disaster
Loss on adjustment for changes of accounting standard for asset retirement obligations
Other, net
income (Loss) before income taxes

485
(160)
290
–
(51)
(252)
(30)
(17)
(8)
353
493

109
(191)
267
174
(66)
(97)
(322)
–
–
252
(1,775)

5,829(1,922)
3,490
–
(615)
(3,031)
(356)
(199)
(97)
4,250
5,946

28
(156)
(128)
621

25
(207)
(182)
¥ (1,593)

333(1,878)(1,545)
7,491

Net sales
Cost of sales
Gross profit

Income taxes:
Current
Deferred
Net income (loss)

¥

$

(Yen)

Per share of common stock:
Net income (loss)
Cash dividends applicable to the year

36

Annual Report 2011 Financial Section
SHIBAURA MECHATRONICS CORPORATION

¥

12.60
2.00

(U.S. dollars)¥(32.26)
0.00

$

0.15
0.02

5-1, Kasama 2-chome, Sakae-ku, Yokohama,
Kanagawa Pref. 247-8610, Japan
TEL：+81-45-897-2421
FAX：+81-45-897-2470
http://www.shibaura.co.jp/

SEA0313A 00 1009
11011