year ended march 31, 2010 · front-line sales force unchanged from fiscal 2008. though we executed...
TRANSCRIPT
Annual Report2010Year Ended March 31, 2010
CONTENTSCordial Greetings to our stakeholders
Financial HighlightsProfile of Our Businesses
Guide to JUKI'S | 01Management Policies
Outline of Buisiness ResultsResearch and Development Activities
Corporate Governance System
Financial Section | 02Consolidated Balance Sheets
Consolidated Statements of OperationsConsolidated Statements of Changes in Equity
Consolidated Statements of Cash FlowsNotes to Consolidated Financial Statements
Independent Auditors' Report
Corporate Information | 03Corporate Data
Major Group CompaniesJuki Corporate Overview
123
4
5578
10
111314161837
38
394041
1
Cordial Greetings to our stakeholders
First of all, we would like to express our sincere appreciation for your ongoing supports and good wishes.
To precede this report on our business performance for fiscal 2009 (from April 1, 2009 through March 31, 2010), let me
say a few words of greetings.
The world economy in fiscal 2009 took significant steps forward on the road to recovery, thanks largely to domestic
demand in emerging countries and the economic and fiscal policies orchestrated by governments in concert. Our company
also edged closer to a full-fledged recovery at the end of last year, when the demand for industrial sewing machines and
SMT systems rebounded.
JUKI achieved its turnaround in fiscal 2009 through comprehensive reviews and strategy adjustments on all fronts-sales &
marketing, manufacturing, and development. We credit much of this success to our reinforced focus on strong business
reforms and moves to "Secure sales by reducing break-even points and expanding sales share." We also cut spending at
every level and narrowed our investments as aggressively as possible. Our efforts to streamline the JUKI organizational
structure extended through most of the company sections, both in manufacturing and elsewhere, though we maintained the
front-line sales force unchanged from fiscal 2008.
Though we executed the said strong business reforms, the quarters up to the third quarter had significant impact on the
results for the full year. Consolidated net sales for the year stood at 56.97 billion yen. Net income stood at a deficit of 11.102
billion, in spite of the aggressive business reforms undertaken.
JUKI achieved a turnaround in the first half of fiscal 2010, thanks largely to the effects of the various business reforms
executed in fiscal 2009. Net sales stood at 43.363 billion yen, up by 78% from the same period of the previous fiscal year.
We credit this to the effects of new product releases, as well as the robust domestic demand in China and other emerging
countries. Operating income stood at 0.151 billion yen, up by 7.65 billion yen from the same period of the previous fiscal
year, largely due to increases in net sales and reductions in fixed costs. Profit would have been much higher, had it not been
for the stronger yen.
We will make our best efforts to improve business performance in the months to come. In closing, let me again express
our appreciation for your going supports.
Akira Kiyohara
President
JUKI CORPORATION
Akira KiyoharaPresident
Cordial Greetings to our stakeholders
CONTENTSCordial Greetings to our stakeholders
Financial HighlightsProfile of Our Businesses
Guide to JUKI'S | 01Management Policies
Outline of Buisiness ResultsResearch and Development Activities
Corporate Governance System
Financial Section | 02Consolidated Balance Sheets
Consolidated Statements of OperationsConsolidated Statements of Changes in Equity
Consolidated Statements of Cash FlowsNotes to Consolidated Financial Statements
Independent Auditors' Report
Corporate Information | 03Corporate Data
Major Group CompaniesJuki Corporate Overview
123
4
5578
10
111314161837
38
394041
1
Cordial Greetings to our stakeholders
First of all, we would like to express our sincere appreciation for your ongoing supports and good wishes.
To precede this report on our business performance for fiscal 2009 (from April 1, 2009 through March 31, 2010), let me
say a few words of greetings.
The world economy in fiscal 2009 took significant steps forward on the road to recovery, thanks largely to domestic
demand in emerging countries and the economic and fiscal policies orchestrated by governments in concert. Our company
also edged closer to a full-fledged recovery at the end of last year, when the demand for industrial sewing machines and
SMT systems rebounded.
JUKI achieved its turnaround in fiscal 2009 through comprehensive reviews and strategy adjustments on all fronts-sales &
marketing, manufacturing, and development. We credit much of this success to our reinforced focus on strong business
reforms and moves to "Secure sales by reducing break-even points and expanding sales share." We also cut spending at
every level and narrowed our investments as aggressively as possible. Our efforts to streamline the JUKI organizational
structure extended through most of the company sections, both in manufacturing and elsewhere, though we maintained the
front-line sales force unchanged from fiscal 2008.
Though we executed the said strong business reforms, the quarters up to the third quarter had significant impact on the
results for the full year. Consolidated net sales for the year stood at 56.97 billion yen. Net income stood at a deficit of 11.102
billion, in spite of the aggressive business reforms undertaken.
JUKI achieved a turnaround in the first half of fiscal 2010, thanks largely to the effects of the various business reforms
executed in fiscal 2009. Net sales stood at 43.363 billion yen, up by 78% from the same period of the previous fiscal year.
We credit this to the effects of new product releases, as well as the robust domestic demand in China and other emerging
countries. Operating income stood at 0.151 billion yen, up by 7.65 billion yen from the same period of the previous fiscal
year, largely due to increases in net sales and reductions in fixed costs. Profit would have been much higher, had it not been
for the stronger yen.
We will make our best efforts to improve business performance in the months to come. In closing, let me again express
our appreciation for your going supports.
Akira Kiyohara
President
JUKI CORPORATION
Akira KiyoharaPresident
Cordial Greetings to our stakeholders
Artificial joints
Parts for nuclearelectric power generation
DDL-9000B
AMS-210EN
HZL-F600
HZL-28
01 Financial Highlights 01Profile of our businesses
2 3
'09
'08'07
'09
'08'07
'10
(11,234)(86.93)
100.0
80.0
60.0
40.0
20.0
0
12,000
8,000
6,000
4,000
2,000
0
10,000
8,000
6,000
4,000
2,000
100.0
80.0
60.0
40.0
20.0
'10
'09'08'07
Consolidated
Years ended March 31
Net Sales
Income (loss) Before Income Taxes and Minority Interests
Net Income (loss)
As of March 31
Total Assets
Shareholders' Equity
Net Income (loss) per Share
Note : Dollar figures in this annual report refer to U.S. currency. Yen amounts have been translated into U.S. dollars, for convenience only,
at the approximate exchange rate of ￥93=US ＄1 on March 31, 2010. Net income per share is based on the average number of
shares of common stock outstanding during the respective fiscal year.
150,000
125,000
100,000
75,000
50,000
25,000
0
Net Sales
(Millions of Yen)
'10
56,971
77,832
130,351
140,497 6,595
4,127
(9,347)
51.03
31.94
(72.34)
Net Income (loss)
(Millions of Yen)
Net Income (loss) per share
(Yen)
FINANCIAL HIGHLIGHTS JUKI CORPORATION and Consolidated Subsidiaries
￥56,971
(11,661)
(11,234)
101,081
10,686
￥(86.93)
￥77,832
(9,825)
(9,347)
103,655
21,589
￥(72.34)
￥130,351
7,620
4,127
117,636
37,100
￥31.94
￥140,497
11,352
6,595
114,944
33,816
￥51.03
＄612,588
(125,382)
(120,795)
1,086,895
114,904
U.S.dollars
＄(0.93)
Yen
JUKI CORPORATION and Consolidated Subsidiaries, March 31
Yen in millions and dollars in thousands, except for per share amounts
2010 2009 2008 2007 2010
Profile of our businessesIndustrial Sewing Machines Business ～A key business sustaining the sewing industry in the world～
Industrial sewing machines are used not only for apparel products, such as clothing or under
wear, but also for bags, shoes, car seats, and sofas.
To pursue quality and performance, we manufacture most of industrial sewing machines as
models for specific functions, such as straight sewing, zigzag sewing, or button sewing. Speed
and durability are essential, as the machines are used as production equipment in manufacturing
plants.
Nowadays, many of the sewing processes where skill is necessary are computerized. There is
the "Automatic machine" which automatically enables complicated operations in various proces
ses with one-switch button in some of machines.
To pursue greater environment friendliness, we have also been promoting designs for noise
less operation, energy saving, and the elimination of oil pollutants.
SMT Systems Business ～An innovator in PCB mounting industry～
Printed circuit boards (PCBs) on which electronic components are placed are built into all of elec
tronics products such as mobile phones, personal computers, home electrical appliance, and au
tomobiles. SMT systems (pick-and-placers) are equipment used for mounting electronic compo
nents onto printed circuit boards in several tens of microns.
JUKI pick-and-placers feature both the high reliability we have developed over the years based
on the modular concept we have been consistently promoting and the versatility of our machines
based on component-recognition technologies unique to our company.
In May 2008, we expanded our product portfolio by entering the market for high-speed ma
chines with the FX-3, a high-speed modular mounter (pick-and-placer).
Household Sewing Machines Business ～A fun-to-sew offered to customers at home and abroad～
The household sewing machines remain the cornerstone in the development of JUKI CORPORA
TION, and the top-level machines have been offered to customers at home and abroad.
JUKI household sewing machines, which have been adopting industry sewing machine tech
nology, have been enjoying high approval ratings of the professionals who use them "vocationally
and professionally" through their high quality and functions.
The "Exceed" series machines, middle-ranking computer-controlled machines in which our nu
merous original functions are included to achieve high-level sewing quality and performance
were announced in March 2009, and have been received very well as user-friendly sewing ma
chines.
Precision Casting Business ～Monodzukuri (the art of product making) following the times～
JUKI AIZU CORPORATION manufactures a wide range of products utilizing two manufacturing
characteristics: Lost-wax process and MIM (Metal Injection Molding).
A consistent system from the manufacturing dies and molds to the finished products has been
arranged. Besides Japan, they have an affiliated factory in Vietnam, and their strength lies in im
plementing Monodzukuri (the art of product making) by utilizing the characteristics of low cost
products and super precision components and parts.
As the lost-wax processing method can realize a monoblock casting of complicated forms,
three-dimensional products such as motorboat propellers, etc. that are difficult to realize by ma
chining processes can be manufactured.
DDL-9000B
AMS-210EN
FX-3FX-3
JX-100LEDJX-100LED
HZL-F600
HZL-28
Artificial joints
Parts for nuclearelectric power generation
Artificial joints
Parts for nuclearelectric power generation
DDL-9000B
AMS-210EN
HZL-F600
HZL-28
01 Financial Highlights 01Profile of our businesses
2 3
'09
'08'07
'09
'08'07
'10
(11,234)(86.93)
100.0
80.0
60.0
40.0
20.0
0
12,000
8,000
6,000
4,000
2,000
0
10,000
8,000
6,000
4,000
2,000
100.0
80.0
60.0
40.0
20.0
'10
'09'08'07
Consolidated
Years ended March 31
Net Sales
Income (loss) Before Income Taxes and Minority Interests
Net Income (loss)
As of March 31
Total Assets
Shareholders' Equity
Net Income (loss) per Share
Note : Dollar figures in this annual report refer to U.S. currency. Yen amounts have been translated into U.S. dollars, for convenience only,
at the approximate exchange rate of ￥93=US ＄1 on March 31, 2010. Net income per share is based on the average number of
shares of common stock outstanding during the respective fiscal year.
150,000
125,000
100,000
75,000
50,000
25,000
0
Net Sales
(Millions of Yen)
'10
56,971
77,832
130,351
140,497 6,595
4,127
(9,347)
51.03
31.94
(72.34)
Net Income (loss)
(Millions of Yen)
Net Income (loss) per share
(Yen)
FINANCIAL HIGHLIGHTS JUKI CORPORATION and Consolidated Subsidiaries
￥56,971
(11,661)
(11,234)
101,081
10,686
￥(86.93)
￥77,832
(9,825)
(9,347)
103,655
21,589
￥(72.34)
￥130,351
7,620
4,127
117,636
37,100
￥31.94
￥140,497
11,352
6,595
114,944
33,816
￥51.03
＄612,588
(125,382)
(120,795)
1,086,895
114,904
U.S.dollars
＄(0.93)
Yen
JUKI CORPORATION and Consolidated Subsidiaries, March 31
Yen in millions and dollars in thousands, except for per share amounts
2010 2009 2008 2007 2010
Profile of our businessesIndustrial Sewing Machines Business ～A key business sustaining the sewing industry in the world～
Industrial sewing machines are used not only for apparel products, such as clothing or under
wear, but also for bags, shoes, car seats, and sofas.
To pursue quality and performance, we manufacture most of industrial sewing machines as
models for specific functions, such as straight sewing, zigzag sewing, or button sewing. Speed
and durability are essential, as the machines are used as production equipment in manufacturing
plants.
Nowadays, many of the sewing processes where skill is necessary are computerized. There is
the "Automatic machine" which automatically enables complicated operations in various proces
ses with one-switch button in some of machines.
To pursue greater environment friendliness, we have also been promoting designs for noise
less operation, energy saving, and the elimination of oil pollutants.
SMT Systems Business ～An innovator in PCB mounting industry～
Printed circuit boards (PCBs) on which electronic components are placed are built into all of elec
tronics products such as mobile phones, personal computers, home electrical appliance, and au
tomobiles. SMT systems (pick-and-placers) are equipment used for mounting electronic compo
nents onto printed circuit boards in several tens of microns.
JUKI pick-and-placers feature both the high reliability we have developed over the years based
on the modular concept we have been consistently promoting and the versatility of our machines
based on component-recognition technologies unique to our company.
In May 2008, we expanded our product portfolio by entering the market for high-speed ma
chines with the FX-3, a high-speed modular mounter (pick-and-placer).
Household Sewing Machines Business ～A fun-to-sew offered to customers at home and abroad～
The household sewing machines remain the cornerstone in the development of JUKI CORPORA
TION, and the top-level machines have been offered to customers at home and abroad.
JUKI household sewing machines, which have been adopting industry sewing machine tech
nology, have been enjoying high approval ratings of the professionals who use them "vocationally
and professionally" through their high quality and functions.
The "Exceed" series machines, middle-ranking computer-controlled machines in which our nu
merous original functions are included to achieve high-level sewing quality and performance
were announced in March 2009, and have been received very well as user-friendly sewing ma
chines.
Precision Casting Business ～Monodzukuri (the art of product making) following the times～
JUKI AIZU CORPORATION manufactures a wide range of products utilizing two manufacturing
characteristics: Lost-wax process and MIM (Metal Injection Molding).
A consistent system from the manufacturing dies and molds to the finished products has been
arranged. Besides Japan, they have an affiliated factory in Vietnam, and their strength lies in im
plementing Monodzukuri (the art of product making) by utilizing the characteristics of low cost
products and super precision components and parts.
As the lost-wax processing method can realize a monoblock casting of complicated forms,
three-dimensional products such as motorboat propellers, etc. that are difficult to realize by ma
chining processes can be manufactured.
DDL-9000B
AMS-210EN
FX-3FX-3
JX-100LEDJX-100LED
HZL-F600
HZL-28
Artificial joints
Parts for nuclearelectric power generation
Guide to JUKI's
7
(1) Fundamental Corporate Management Policy
Our group has been striving to fulfill the trust and
expectation of all of our stakeholders-customers,
shareholders, business partners, employees and
society-by offering superior products and services and
promoting our basic management policy of "Total Quality
Management," with a focus on improved CS (Customer
Satisfaction).
Our basic aim in the execution of business is to
contribute to society by creating new values based on
the concept built in our "Mind & Technology”
(emotionally accessible technology) slogan, while
expanding our businesses worldwide.
(2) Management Strategies for the Medium to Long
Term and Issues to Address
We have formulated a new three-year Mid-Term
Management Plan commencing in fiscal 2008 and have
been pursuing business in a manner described below.
1. Promotion of management of quality
We will implement thorough compliance and reinforce
internal control, and at the same time, further promote
quality improvement of merchandises and services, as
well as address environmental issues even more
proactively. We will thereby endeavor to enhance the
trust of our stakeholders in, and improve the quality of,
the management of the company.
2. Enhancement of corporate value
We will strive to enhance our corporate value, and aim
to become a company that is needed by all of our
stakeholders-customers, shareholders, business
partners, employees and society.
3. Increased focus on profit and cash flows
In order to flexibly respond to changing market trends,
we will drastically review our business with a view to
making strategy shifts, and seek to increase market
share. Given the severe economic conditions, we will
focus on investment efficiency and re-construct an
organizational human resources system compatible with
our business scale, as well as reinforce our
management foundations in order to ensure profit and
cash flows.
4. Reinforcement of "Monodzukuri (the art of product
making)" (development, manufacturing, quality)
In addition to enhancing our technological development
capabilities which supports our growth, we will improve
our manufacturing technologies and cost
competitiveness. Through these efforts, we will reinforce
our capabilities of quality manufacturing.
5. Promotion of management that cultivates and
optimized human resources
We will seek to cultivate and optimize human resources
on a Group-wide basis.
MANAGEMENT POLICIES
CORPORATE GOVERNANCE SYSTEM
01 Guide to JUKI's 01Guide to JUKI's
6
01 Guide to JUKI's
RESEARCH AND DEVELOPMENT ACTIVITIES
01Guide to JUKI's
8 9
OUTLINE OF BUSINESS RESULTS
1. Business results
Consolidated net sales stood at 56,970 million yen, down
by 26.8% from the preceding fiscal year. Consolidated
operating income was posted as a loss of 11,187 million
yen (versus a negative 4,975 million yen in the preceding
fiscal year). Consolidated ordinary income was posted as a
loss of 11,102 million yen (versus a negative 5,259 million
yen in the preceding fiscal year). Consolidated net income
was posted as a loss of 11,233 million yen (versus a
negative 9,347 million yen in the preceding fiscal year).
(1) Business results by segment
㈰ Industrial Sewing Machines Business
Sales have shown an increasing trend after the fourth
quarter of the preceding fiscal year where the sales had
hit bottom, but its resilience was weak. As a result,
consolidated net sales of the Industrial Sewing
Machines Business as a whole stood at 36,092 million
yen, down by 19.0% from the preceding fiscal year).
Consolidated operating income was posted as a
negative 5,281 million yen (versus a negative 258
million yen in the preceding fiscal year).
㈪ SMT Systems Business
Sales have been on the steady increase due to the
effect of putting a high-speed pick-and-placer on the
market after the first quarter of the current fiscal year
where the sales had hit bottom, but its resilience was
weak. As a result, consolidated net sales of the SMT
Systems Business as a whole stood at 12,040 million
yen, down by 39.7% from the preceding fiscal year.
Consolidated operating income was posted as a
negative 3,570 million yen (versus a negative 1,793
million in the preceding fiscal year).
㈫ Household Sewing Machines Business
Due to the effect of putting new products on the market,
consolidated net sales of the Household Sewing
Machines Business as a whole stood at 2,424 million
yen, up by 2.9% from the preceding fiscal year.
Consolidated operating income was posted as a
negative 319 million yen (versus a negative 1,536
million yen in the preceding fiscal year).
㈬ Electronic Equipment and Computer Peripherals
Business
Due to a withdrawal from precision equipment (arcade-
related equipment) business in the second quarter of
the current fiscal year, consolidated net sales of the
Electronic Equipment and Computer Peripherals
Business as a whole stood as 2,381 million yen, down
by 55.4% from the preceding fiscal year. Consolidated
operating income was posted as a positive 25 million
yen, down by 93.9% from the preceding fiscal year.
㈭ Precision Casting Business
Due to a decline in demand in the related industries,
consolidated net sales as a whole of the Precision
Casting Business stood at 2,745 million yen, down by
26.9% from the preceding fiscal year. Consolidated
operating income was posted as a negative 133 million
yen (versus a positive 98 million yen in the preceding
fiscal year).
(2) Geographical Segments
㈰ Japan
Consolidated net sales stood at 15,450 million yen,
down by 39.9% from the preceding fiscal year.
Consolidated operating income was posted as a
negative 9,892 million yen (versus a negative 4,687
million yen in the preceding fiscal year).
㈪ Americas
Consolidated net sales stood at 5,057 million yen, down
by 38.2% from the preceding fiscal year. Consolidated
operating income was posted as a negative 196 million
yen (versus a positive 55 million yen in the preceding
fiscal year).
㈫ Asia
Consolidated net sales stood at 31,335 million yen,
down by 9.9% from the preceding fiscal year.
Consolidated operating income was posted as a
negative 751 million yen (versus a positive 970 million
yen in the preceding fiscal year).
㈬ Europe
Consolidated net sales stood at 5,122 million yen, down
by 44.2% from the preceding fiscal year. Consolidated
operating income was posted as a negative 227 million
yen (versus a positive 195 million yen in the preceding
fiscal year).
2. Cash Flows
Cash and cash equivalents on a consolidated basis in
the current fiscal year are hereinafter called "Funds."
The Funds decreased to 8,291 million yen at the end of
the current fiscal year, down by 633 million yen from the
end of the preceding fiscal year.
(Cash flow from operating activities)
Funds from operating activities in the current fiscal year
stood at a positive 1,224 million yen (versus a negative
of 10,841 million yen in the preceding fiscal year),
mainly due to a decrease in inventories, an increase in
notes and accounts payable-trade, and the allocation of
loss before income taxes and minority interests.
(Cash flow from investing activities)
Funds from investing activities in the current fiscal year
stood at a negative 10,440 million yen (versus a
negative 3,867 million yen in the preceding fiscal year),
mainly due to the acquisition of tangible fixed assets.
(Cash flow from financing activities)
Funds from financing activities from financing activities
in the current fiscal year stood at a positive 8,524 million
yen (versus a positive 14,622 million yen in the
preceding fiscal year), mainly due to an increase in
interest-bearing debt.
The research and development functions in our group are shared by the design department and research department. The former develops products for the business segments and the latter develops element technologies necessary for product development. Expenditure for R&D (Research and Development) activities for the entire group stood at 5,354 million yen in the current fiscal year (6.1% of the sales amount: net sales was calculated as an average for the past three years), down by 2,056 million yen from the preceding fiscal year (a 27.8% decrease). Meanwhile, the total number of industrial property rights (patent rights and design rights registered in Japan and overseas), an index of our R&D performance, was 1,279 as of the end of the current fiscal year, up by 32 from the preceding fiscal year.
1. R&D activities common to the entire group
(1) Environment-friendly_R&D activities
Sixteen products have been certified under the "Juki
Eco Label Certification System" started in March 2009.
We continue to work on environmental issues at a
higher level.
(2) R&D activities at the head office
Based on our mid-to-long term technological strategies,
we have been focusing on the research and
development of element technologies necessary for our
future activities. We have also been collaborating with
manufacturing departments and overseas offices to
upgrade the design infrastructure throughout the group
and reinforce our systems to support R&D activities.
2. R&D activities by segment
(1) Industrial Sewing Machines Business
The industrial sewing machines segment released
seven new products, including the DDL-9000B (a Direct-
drive, High-speed, 1-needle, Lockstitch Machine), the
MF-7700D and MF-7800D (Semi-dry-head, Flat-bed
(7700D) and Cylinder-bed (7800D), Top and Bottom
Coverstitch Machines), and the MF-3620 (a 4-needle,
Feed-off-the-arm, Flatseamer, Top and Bottom
Coverstitch Machine). In addition to being high in quality
and functionality, new entries are designed to run with
minimal impacts on the environment. We have also
been promoting an expanded range of products to meet
domestic demand in emerging countries through
product development focused on lower cost and higher
productivity.
(2) SMT Systems Business
The SMT systems segment released two major new
products. The first was a machine designed to handle
extra-large PWB from the FX-3 series of high-speed
pick-and-placers, electric tape feeders, and peripheral
devices. The second was the Placement Monitor, the
industry's first machine designed to monitor the status of
pickup and placement of electronics components in real
time (with a small camera mounted on the head of the
pick-and-placer). We also launched a machine with
straight conveyor specifications from the JX-100 series
for the BRICs markets and the JX-100LED, a compact
high-speed machine designed to handle LED
components on the JX-100 platform.
(3) Household Sewing Machines Business
The household sewing machines segment launched five
new products: three middle-ranking computer-controlled
sewing machines from the multi-featured Exceed series
(the HZL-F600, HZL-F400, and HZL-F300) that has a
comprehensive range of features and two Easy-Drop-in
Bobbin type sewing machines (the HZL-28 and HZL-
27Z) that are targeting the budget price zone in
domestic and international markets. Our Exceed series
and HZL-28 both received the good design awards (G
mark) in fiscal 2009. Our Household Sewing Machines
segment was also highly appraised for its product
performance and designs.
(4) Precision Casting Business
Recent advances in casting analysis technology have
enabled the precision casting segment to research the
establishment of a foundry technology appropriate for
our group's manufacturing methods in collaboration with
universities. As a result, we can expect cost reductions
and shortened lead times from prototyping to the
completion of commercial products.
01
JUKI booth at CISMA 2009 China held at Shanghai (Octobre 2009)
5
01Guide to JUKI's
(1) Corporate governance system
The Board of Directors supervises the progress of
business execution point by point and makes decisions
for important managerial matters, including items
stipulated by law. In addition, an outside director was
elected in the ordinary general meeting of shareholders
held on June 25, 2009. Together, the company and its
directors are working to strengthen the structure for
supervising management. We also have introduced an
Operating Officer system to streamline the execution of
business and clarify responsibilities. There are seven
directors and twelve operating officers in our company.
The directors have been doubling as operating officers,
except the outside director.
The company has set up a Management Strategy
Council under the Board of Directors. In addition to the
directors, other operating officers and department heads
in charge of respective functions attend the
Management Strategy Council to discuss the basic
policies and management strategies from various
perspectives for the execution of more appropriate
decision-making and business operation. Meanwhile,
out of the matters discussed in the Management
Strategy Council, more important matters are
deliberated and determined by the Board of Directors.
The company has established a Risk Management
Committee and Crisis-Management Task Force as key
components of its risk management system.
(2) Internal audit and auditors audit
The company has established an Internal Auditing
Department made up of ten people for the organization
of its internal audits, mainly business operation audits
for individual departments within our company and
subsidiary companies. The auditor's audit is conducted
in cooperation with the Internal Auditing Department and
the Accounting Auditors according to the audit policy
and the work-allotment plan decided in the Board of
Auditors. The company has also established an Auditors
Office as an organization to assist the auditors.
(3) Outside director and outside auditors
One outside director and three outside auditors are
appointed in our company. The outside director was
elected in the ordinary general meeting of shareholders
held on June 25, 2009.
The outside director and outside auditors provide
advice, exercise supervision, and conduct audits to
enhance the transparency of company management
and the disciplines from a standpoint independent from
management outside the company.
Neither the outside director nor the outside auditors
have personal relationships, capital ties, or business
relationships and other interests with or in our company.
AuditorsBoard of Auditors
Auditors Office
Election/Dismissal Election/Dismissal Election/dismissal
General Meeting of Shareholders
AccountingAuditors
DirectorsBoard of directors
Report
Report
Report
Audit
DismissalElection/Dismissal/Supervision
President
Management StrategyCouncil
Chief OfficersCCO
Internal AuditingDepartment
Internal audit
LegalDepartment
Activities for spreadingcompliance educationand its management
Presentation/Report of importantagenda
Presentation
Risk Management Committee
Instruction/ Supervision
Instruction/ Supervision Presentation/ Report
(When a serious crisis has occurred)
Crisis-ManagementTask Force
CrisisCountermeasure
Headquarters
Divisions, companies, staff organizations, subsidiaries, and affiliated companies
Guide to JUKI's
7
(1) Fundamental Corporate Management Policy
Our group has been striving to fulfill the trust and
expectation of all of our stakeholders-customers,
shareholders, business partners, employees and
society-by offering superior products and services and
promoting our basic management policy of "Total Quality
Management," with a focus on improved CS (Customer
Satisfaction).
Our basic aim in the execution of business is to
contribute to society by creating new values based on
the concept built in our "Mind & Technology”
(emotionally accessible technology) slogan, while
expanding our businesses worldwide.
(2) Management Strategies for the Medium to Long
Term and Issues to Address
We have formulated a new three-year Mid-Term
Management Plan commencing in fiscal 2008 and have
been pursuing business in a manner described below.
1. Promotion of management of quality
We will implement thorough compliance and reinforce
internal control, and at the same time, further promote
quality improvement of merchandises and services, as
well as address environmental issues even more
proactively. We will thereby endeavor to enhance the
trust of our stakeholders in, and improve the quality of,
the management of the company.
2. Enhancement of corporate value
We will strive to enhance our corporate value, and aim
to become a company that is needed by all of our
stakeholders-customers, shareholders, business
partners, employees and society.
3. Increased focus on profit and cash flows
In order to flexibly respond to changing market trends,
we will drastically review our business with a view to
making strategy shifts, and seek to increase market
share. Given the severe economic conditions, we will
focus on investment efficiency and re-construct an
organizational human resources system compatible with
our business scale, as well as reinforce our
management foundations in order to ensure profit and
cash flows.
4. Reinforcement of "Monodzukuri (the art of product
making)" (development, manufacturing, quality)
In addition to enhancing our technological development
capabilities which supports our growth, we will improve
our manufacturing technologies and cost
competitiveness. Through these efforts, we will reinforce
our capabilities of quality manufacturing.
5. Promotion of management that cultivates and
optimized human resources
We will seek to cultivate and optimize human resources
on a Group-wide basis.
MANAGEMENT POLICIES
CORPORATE GOVERNANCE SYSTEM
01 Guide to JUKI's 01Guide to JUKI's
6
01 Guide to JUKI's
RESEARCH AND DEVELOPMENT ACTIVITIES
01Guide to JUKI's
8 9
OUTLINE OF BUSINESS RESULTS
1. Business results
Consolidated net sales stood at 56,970 million yen, down
by 26.8% from the preceding fiscal year. Consolidated
operating income was posted as a loss of 11,187 million
yen (versus a negative 4,975 million yen in the preceding
fiscal year). Consolidated ordinary income was posted as a
loss of 11,102 million yen (versus a negative 5,259 million
yen in the preceding fiscal year). Consolidated net income
was posted as a loss of 11,233 million yen (versus a
negative 9,347 million yen in the preceding fiscal year).
(1) Business results by segment
① Industrial Sewing Machines Business
Sales have shown an increasing trend after the fourth
quarter of the preceding fiscal year where the sales had
hit bottom, but its resilience was weak. As a result,
consolidated net sales of the Industrial Sewing
Machines Business as a whole stood at 36,092 million
yen, down by 19.0% from the preceding fiscal year).
Consolidated operating income was posted as a
negative 5,281 million yen (versus a negative 258
million yen in the preceding fiscal year).
② SMT Systems Business
Sales have been on the steady increase due to the
effect of putting a high-speed pick-and-placer on the
market after the first quarter of the current fiscal year
where the sales had hit bottom, but its resilience was
weak. As a result, consolidated net sales of the SMT
Systems Business as a whole stood at 12,040 million
yen, down by 39.7% from the preceding fiscal year.
Consolidated operating income was posted as a
negative 3,570 million yen (versus a negative 1,793
million in the preceding fiscal year).
③ Household Sewing Machines Business
Due to the effect of putting new products on the market,
consolidated net sales of the Household Sewing
Machines Business as a whole stood at 2,424 million
yen, up by 2.9% from the preceding fiscal year.
Consolidated operating income was posted as a
negative 319 million yen (versus a negative 1,536
million yen in the preceding fiscal year).
④ Electronic Equipment and Computer Peripherals
Business
Due to a withdrawal from precision equipment (arcade-
related equipment) business in the second quarter of
the current fiscal year, consolidated net sales of the
Electronic Equipment and Computer Peripherals
Business as a whole stood as 2,381 million yen, down
by 55.4% from the preceding fiscal year. Consolidated
operating income was posted as a positive 25 million
yen, down by 93.9% from the preceding fiscal year.
⑤ Precision Casting Business
Due to a decline in demand in the related industries,
consolidated net sales as a whole of the Precision
Casting Business stood at 2,745 million yen, down by
26.9% from the preceding fiscal year. Consolidated
operating income was posted as a negative 133 million
yen (versus a positive 98 million yen in the preceding
fiscal year).
(2) Geographical Segments
① Japan
Consolidated net sales stood at 15,450 million yen,
down by 39.9% from the preceding fiscal year.
Consolidated operating income was posted as a
negative 9,892 million yen (versus a negative 4,687
million yen in the preceding fiscal year).
② Americas
Consolidated net sales stood at 5,057 million yen, down
by 38.2% from the preceding fiscal year. Consolidated
operating income was posted as a negative 196 million
yen (versus a positive 55 million yen in the preceding
fiscal year).
③ Asia
Consolidated net sales stood at 31,335 million yen,
down by 9.9% from the preceding fiscal year.
Consolidated operating income was posted as a
negative 751 million yen (versus a positive 970 million
yen in the preceding fiscal year).
④ Europe
Consolidated net sales stood at 5,122 million yen, down
by 44.2% from the preceding fiscal year. Consolidated
operating income was posted as a negative 227 million
yen (versus a positive 195 million yen in the preceding
fiscal year).
2. Cash Flows
Cash and cash equivalents on a consolidated basis in
the current fiscal year are hereinafter called "Funds."
The Funds decreased to 8,291 million yen at the end of
the current fiscal year, down by 633 million yen from the
end of the preceding fiscal year.
(Cash flow from operating activities)
Funds from operating activities in the current fiscal year
stood at a positive 1,224 million yen (versus a negative
of 10,841 million yen in the preceding fiscal year),
mainly due to a decrease in inventories, an increase in
notes and accounts payable-trade, and the allocation of
loss before income taxes and minority interests.
(Cash flow from investing activities)
Funds from investing activities in the current fiscal year
stood at a negative 10,440 million yen (versus a
negative 3,867 million yen in the preceding fiscal year),
mainly due to the acquisition of tangible fixed assets.
(Cash flow from financing activities)
Funds from financing activities from financing activities
in the current fiscal year stood at a positive 8,524 million
yen (versus a positive 14,622 million yen in the
preceding fiscal year), mainly due to an increase in
interest-bearing debt.
The research and development functions in our group are
shared by the design department and research department.
The former develops products for the business segments
and the latter develops element technologies necessary for
product development. Expenditure for R&D (Research and
Development) activities for the entire group stood at 5,354
million yen in the current fiscal year (6.1% of the sales
amount: net sales was calculated as an average for the past
three years), down by 2,056 million yen from the preceding
fiscal year (a 27.8% decrease). Meanwhile, the total
number of industrial property rights (patent rights and
design rights registered in Japan and overseas), an index of
our R&D performance, was 1,279 as of the end of the
current fiscal year, up by 32 from the preceding fiscal year.
1. R&D activities common to the entire group
(1) Environment-friendly_R&D activities
Sixteen products have been certified under the "Juki
Eco Label Certification System" started in March 2009.
We continue to work on environmental issues at a
higher level.
(2) R&D activities at the head office
Based on our mid-to-long term technological strategies,
we have been focusing on the research and
development of element technologies necessary for our
future activities. We have also been collaborating with
manufacturing departments and overseas offices to
upgrade the design infrastructure throughout the group
and reinforce our systems to support R&D activities.
2. R&D activities by segment
(1) Industrial Sewing Machines Business
The industrial sewing machines segment released
seven new products, including the DDL-9000B (a Direct-
drive, High-speed, 1-needle, Lockstitch Machine), the
MF-7700D and MF-7800D (Semi-dry-head, Flat-bed
(7700D) and Cylinder-bed (7800D), Top and Bottom
Coverstitch Machines), and the MF-3620 (a 4-needle,
Feed-off-the-arm, Flatseamer, Top and Bottom
Coverstitch Machine). In addition to being high in quality
and functionality, new entries are designed to run with
minimal impacts on the environment. We have also
been promoting an expanded range of products to meet
domestic demand in emerging countries through
product development focused on lower cost and higher
productivity.
(2) SMT Systems Business
The SMT systems segment released two major new
products. The first was a machine designed to handle
extra-large PWB from the FX-3 series of high-speed
pick-and-placers, electric tape feeders, and peripheral
devices. The second was the Placement Monitor, the
industry's first machine designed to monitor the status of
pickup and placement of electronics components in real
time (with a small camera mounted on the head of the
pick-and-placer). We also launched a machine with
straight conveyor specifications from the JX-100 series
for the BRICs markets and the JX-100LED, a compact
high-speed machine designed to handle LED
components on the JX-100 platform.
(3) Household Sewing Machines Business
The household sewing machines segment launched five
new products: three middle-ranking computer-controlled
sewing machines from the multi-featured Exceed series
(the HZL-F600, HZL-F400, and HZL-F300) that has a
comprehensive range of features and two Easy-Drop-in
Bobbin type sewing machines (the HZL-28 and HZL-
27Z) that are targeting the budget price zone in
domestic and international markets. Our Exceed series
and HZL-28 both received the good design awards (G
mark) in fiscal 2009. Our Household Sewing Machines
segment was also highly appraised for its product
performance and designs.
(4) Precision Casting Business
Recent advances in casting analysis technology have
enabled the precision casting segment to research the
establishment of a foundry technology appropriate for
our group's manufacturing methods in collaboration with
universities. As a result, we can expect cost reductions
and shortened lead times from prototyping to the
completion of commercial products.
01
JUKI booth at CISMA 2009 China held at Shanghai (Octobre 2009)
5
01Guide to JUKI's
(1) Corporate governance system
The Board of Directors supervises the progress of
business execution point by point and makes decisions
for important managerial matters, including items
stipulated by law. In addition, an outside director was
elected in the ordinary general meeting of shareholders
held on June 25, 2009. Together, the company and its
directors are working to strengthen the structure for
supervising management. We also have introduced an
Operating Officer system to streamline the execution of
business and clarify responsibilities. There are seven
directors and twelve operating officers in our company.
The directors have been doubling as operating officers,
except the outside director.
The company has set up a Management Strategy
Council under the Board of Directors. In addition to the
directors, other operating officers and department heads
in charge of respective functions attend the
Management Strategy Council to discuss the basic
policies and management strategies from various
perspectives for the execution of more appropriate
decision-making and business operation. Meanwhile,
out of the matters discussed in the Management
Strategy Council, more important matters are
deliberated and determined by the Board of Directors.
The company has established a Risk Management
Committee and Crisis-Management Task Force as key
components of its risk management system.
(2) Internal audit and auditors audit
The company has established an Internal Auditing
Department made up of ten people for the organization
of its internal audits, mainly business operation audits
for individual departments within our company and
subsidiary companies. The auditor's audit is conducted
in cooperation with the Internal Auditing Department and
the Accounting Auditors according to the audit policy
and the work-allotment plan decided in the Board of
Auditors. The company has also established an Auditors
Office as an organization to assist the auditors.
(3) Outside director and outside auditors
One outside director and three outside auditors are
appointed in our company. The outside director was
elected in the ordinary general meeting of shareholders
held on June 25, 2009.
The outside director and outside auditors provide
advice, exercise supervision, and conduct audits to
enhance the transparency of company management
and the disciplines from a standpoint independent from
management outside the company.
Neither the outside director nor the outside auditors
have personal relationships, capital ties, or business
relationships and other interests with or in our company.
AuditorsBoard of Auditors
Auditors Office
Election/Dismissal Election/Dismissal Election/dismissal
General Meeting of Shareholders
AccountingAuditors
DirectorsBoard of directors
Report
Report
Report
Audit
DismissalElection/Dismissal/Supervision
President
Management StrategyCouncil
Chief OfficersCCO
Internal AuditingDepartment
Internal audit
LegalDepartment
Activities for spreadingcompliance educationand its management
Presentation/Report of importantagenda
Presentation
Risk Management Committee
Instruction/ Supervision
Instruction/ Supervision Presentation/ Report
(When a serious crisis has occurred)
Crisis-ManagementTask Force
CrisisCountermeasure
Headquarters
Divisions, companies, staff organizations, subsidiaries, and affiliated companies
Guide to JUKI's
7
(1) Fundamental Corporate Management Policy
Our group has been striving to fulfill the trust and
expectation of all of our stakeholders-customers,
shareholders, business partners, employees and
society-by offering superior products and services and
promoting our basic management policy of "Total Quality
Management," with a focus on improved CS (Customer
Satisfaction).
Our basic aim in the execution of business is to
contribute to society by creating new values based on
the concept built in our "Mind & Technology”
(emotionally accessible technology) slogan, while
expanding our businesses worldwide.
(2) Management Strategies for the Medium to Long
Term and Issues to Address
We have formulated a new three-year Mid-Term
Management Plan commencing in fiscal 2008 and have
been pursuing business in a manner described below.
1. Promotion of management of quality
We will implement thorough compliance and reinforce
internal control, and at the same time, further promote
quality improvement of merchandises and services, as
well as address environmental issues even more
proactively. We will thereby endeavor to enhance the
trust of our stakeholders in, and improve the quality of,
the management of the company.
2. Enhancement of corporate value
We will strive to enhance our corporate value, and aim
to become a company that is needed by all of our
stakeholders-customers, shareholders, business
partners, employees and society.
3. Increased focus on profit and cash flows
In order to flexibly respond to changing market trends,
we will drastically review our business with a view to
making strategy shifts, and seek to increase market
share. Given the severe economic conditions, we will
focus on investment efficiency and re-construct an
organizational human resources system compatible with
our business scale, as well as reinforce our
management foundations in order to ensure profit and
cash flows.
4. Reinforcement of "Monodzukuri (the art of product
making)" (development, manufacturing, quality)
In addition to enhancing our technological development
capabilities which supports our growth, we will improve
our manufacturing technologies and cost
competitiveness. Through these efforts, we will reinforce
our capabilities of quality manufacturing.
5. Promotion of management that cultivates and
optimized human resources
We will seek to cultivate and optimize human resources
on a Group-wide basis.
MANAGEMENT POLICIES
CORPORATE GOVERNANCE SYSTEM
01 Guide to JUKI's 01Guide to JUKI's
6
01 Guide to JUKI's
RESEARCH AND DEVELOPMENT ACTIVITIES
01Guide to JUKI's
8 9
OUTLINE OF BUSINESS RESULTS
1. Business results
Consolidated net sales stood at 56,970 million yen, down
by 26.8% from the preceding fiscal year. Consolidated
operating income was posted as a loss of 11,187 million
yen (versus a negative 4,975 million yen in the preceding
fiscal year). Consolidated ordinary income was posted as a
loss of 11,102 million yen (versus a negative 5,259 million
yen in the preceding fiscal year). Consolidated net income
was posted as a loss of 11,233 million yen (versus a
negative 9,347 million yen in the preceding fiscal year).
(1) Business results by segment
① Industrial Sewing Machines Business
Sales have shown an increasing trend after the fourth
quarter of the preceding fiscal year where the sales had
hit bottom, but its resilience was weak. As a result,
consolidated net sales of the Industrial Sewing
Machines Business as a whole stood at 36,092 million
yen, down by 19.0% from the preceding fiscal year).
Consolidated operating income was posted as a
negative 5,281 million yen (versus a negative 258
million yen in the preceding fiscal year).
② SMT Systems Business
Sales have been on the steady increase due to the
effect of putting a high-speed pick-and-placer on the
market after the first quarter of the current fiscal year
where the sales had hit bottom, but its resilience was
weak. As a result, consolidated net sales of the SMT
Systems Business as a whole stood at 12,040 million
yen, down by 39.7% from the preceding fiscal year.
Consolidated operating income was posted as a
negative 3,570 million yen (versus a negative 1,793
million in the preceding fiscal year).
③ Household Sewing Machines Business
Due to the effect of putting new products on the market,
consolidated net sales of the Household Sewing
Machines Business as a whole stood at 2,424 million
yen, up by 2.9% from the preceding fiscal year.
Consolidated operating income was posted as a
negative 319 million yen (versus a negative 1,536
million yen in the preceding fiscal year).
④ Electronic Equipment and Computer Peripherals
Business
Due to a withdrawal from precision equipment (arcade-
related equipment) business in the second quarter of
the current fiscal year, consolidated net sales of the
Electronic Equipment and Computer Peripherals
Business as a whole stood as 2,381 million yen, down
by 55.4% from the preceding fiscal year. Consolidated
operating income was posted as a positive 25 million
yen, down by 93.9% from the preceding fiscal year.
⑤ Precision Casting Business
Due to a decline in demand in the related industries,
consolidated net sales as a whole of the Precision
Casting Business stood at 2,745 million yen, down by
26.9% from the preceding fiscal year. Consolidated
operating income was posted as a negative 133 million
yen (versus a positive 98 million yen in the preceding
fiscal year).
(2) Geographical Segments
① Japan
Consolidated net sales stood at 15,450 million yen,
down by 39.9% from the preceding fiscal year.
Consolidated operating income was posted as a
negative 9,892 million yen (versus a negative 4,687
million yen in the preceding fiscal year).
② Americas
Consolidated net sales stood at 5,057 million yen, down
by 38.2% from the preceding fiscal year. Consolidated
operating income was posted as a negative 196 million
yen (versus a positive 55 million yen in the preceding
fiscal year).
③ Asia
Consolidated net sales stood at 31,335 million yen,
down by 9.9% from the preceding fiscal year.
Consolidated operating income was posted as a
negative 751 million yen (versus a positive 970 million
yen in the preceding fiscal year).
④ Europe
Consolidated net sales stood at 5,122 million yen, down
by 44.2% from the preceding fiscal year. Consolidated
operating income was posted as a negative 227 million
yen (versus a positive 195 million yen in the preceding
fiscal year).
2. Cash Flows
Cash and cash equivalents on a consolidated basis in
the current fiscal year are hereinafter called "Funds."
The Funds decreased to 8,291 million yen at the end of
the current fiscal year, down by 633 million yen from the
end of the preceding fiscal year.
(Cash flow from operating activities)
Funds from operating activities in the current fiscal year
stood at a positive 1,224 million yen (versus a negative
of 10,841 million yen in the preceding fiscal year),
mainly due to a decrease in inventories, an increase in
notes and accounts payable-trade, and the allocation of
loss before income taxes and minority interests.
(Cash flow from investing activities)
Funds from investing activities in the current fiscal year
stood at a negative 10,440 million yen (versus a
negative 3,867 million yen in the preceding fiscal year),
mainly due to the acquisition of tangible fixed assets.
(Cash flow from financing activities)
Funds from financing activities from financing activities
in the current fiscal year stood at a positive 8,524 million
yen (versus a positive 14,622 million yen in the
preceding fiscal year), mainly due to an increase in
interest-bearing debt.
The research and development functions in our group are
shared by the design department and research department.
The former develops products for the business segments
and the latter develops element technologies necessary for
product development. Expenditure for R&D (Research and
Development) activities for the entire group stood at 5,354
million yen in the current fiscal year (6.1% of the sales
amount: net sales was calculated as an average for the past
three years), down by 2,056 million yen from the preceding
fiscal year (a 27.8% decrease). Meanwhile, the total
number of industrial property rights (patent rights and
design rights registered in Japan and overseas), an index of
our R&D performance, was 1,279 as of the end of the
current fiscal year, up by 32 from the preceding fiscal year.
1. R&D activities common to the entire group
(1) Environment-friendly_R&D activities
Sixteen products have been certified under the "Juki
Eco Label Certification System" started in March 2009.
We continue to work on environmental issues at a
higher level.
(2) R&D activities at the head office
Based on our mid-to-long term technological strategies,
we have been focusing on the research and
development of element technologies necessary for our
future activities. We have also been collaborating with
manufacturing departments and overseas offices to
upgrade the design infrastructure throughout the group
and reinforce our systems to support R&D activities.
2. R&D activities by segment
(1) Industrial Sewing Machines Business
The industrial sewing machines segment released
seven new products, including the DDL-9000B (a Direct-
drive, High-speed, 1-needle, Lockstitch Machine), the
MF-7700D and MF-7800D (Semi-dry-head, Flat-bed
(7700D) and Cylinder-bed (7800D), Top and Bottom
Coverstitch Machines), and the MF-3620 (a 4-needle,
Feed-off-the-arm, Flatseamer, Top and Bottom
Coverstitch Machine). In addition to being high in quality
and functionality, new entries are designed to run with
minimal impacts on the environment. We have also
been promoting an expanded range of products to meet
domestic demand in emerging countries through
product development focused on lower cost and higher
productivity.
(2) SMT Systems Business
The SMT systems segment released two major new
products. The first was a machine designed to handle
extra-large PWB from the FX-3 series of high-speed
pick-and-placers, electric tape feeders, and peripheral
devices. The second was the Placement Monitor, the
industry's first machine designed to monitor the status of
pickup and placement of electronics components in real
time (with a small camera mounted on the head of the
pick-and-placer). We also launched a machine with
straight conveyor specifications from the JX-100 series
for the BRICs markets and the JX-100LED, a compact
high-speed machine designed to handle LED
components on the JX-100 platform.
(3) Household Sewing Machines Business
The household sewing machines segment launched five
new products: three middle-ranking computer-controlled
sewing machines from the multi-featured Exceed series
(the HZL-F600, HZL-F400, and HZL-F300) that has a
comprehensive range of features and two Easy-Drop-in
Bobbin type sewing machines (the HZL-28 and HZL-
27Z) that are targeting the budget price zone in
domestic and international markets. Our Exceed series
and HZL-28 both received the good design awards (G
mark) in fiscal 2009. Our Household Sewing Machines
segment was also highly appraised for its product
performance and designs.
(4) Precision Casting Business
Recent advances in casting analysis technology have
enabled the precision casting segment to research the
establishment of a foundry technology appropriate for
our group's manufacturing methods in collaboration with
universities. As a result, we can expect cost reductions
and shortened lead times from prototyping to the
completion of commercial products.
01
JUKI booth at CISMA 2009 China held at Shanghai (Octobre 2009)
5
01Guide to JUKI's
(1) Corporate governance system
The Board of Directors supervises the progress of
business execution point by point and makes decisions
for important managerial matters, including items
stipulated by law. In addition, an outside director was
elected in the ordinary general meeting of shareholders
held on June 25, 2009. Together, the company and its
directors are working to strengthen the structure for
supervising management. We also have introduced an
Operating Officer system to streamline the execution of
business and clarify responsibilities. There are seven
directors and twelve operating officers in our company.
The directors have been doubling as operating officers,
except the outside director.
The company has set up a Management Strategy
Council under the Board of Directors. In addition to the
directors, other operating officers and department heads
in charge of respective functions attend the
Management Strategy Council to discuss the basic
policies and management strategies from various
perspectives for the execution of more appropriate
decision-making and business operation. Meanwhile,
out of the matters discussed in the Management
Strategy Council, more important matters are
deliberated and determined by the Board of Directors.
The company has established a Risk Management
Committee and Crisis-Management Task Force as key
components of its risk management system.
(2) Internal audit and auditors audit
The company has established an Internal Auditing
Department made up of ten people for the organization
of its internal audits, mainly business operation audits
for individual departments within our company and
subsidiary companies. The auditor's audit is conducted
in cooperation with the Internal Auditing Department and
the Accounting Auditors according to the audit policy
and the work-allotment plan decided in the Board of
Auditors. The company has also established an Auditors
Office as an organization to assist the auditors.
(3) Outside director and outside auditors
One outside director and three outside auditors are
appointed in our company. The outside director was
elected in the ordinary general meeting of shareholders
held on June 25, 2009.
The outside director and outside auditors provide
advice, exercise supervision, and conduct audits to
enhance the transparency of company management
and the disciplines from a standpoint independent from
management outside the company.
Neither the outside director nor the outside auditors
have personal relationships, capital ties, or business
relationships and other interests with or in our company.
AuditorsBoard of Auditors
Auditors Office
Election/Dismissal Election/Dismissal Election/dismissal
General Meeting of Shareholders
AccountingAuditors
DirectorsBoard of directors
Report
Report
Report
Audit
DismissalElection/Dismissal/Supervision
President
Management StrategyCouncil
Chief OfficersCCO
Internal AuditingDepartment
Internal audit
LegalDepartment
Activities for spreadingcompliance educationand its management
Presentation/Report of importantagenda
Presentation
Risk Management Committee
Instruction/ Supervision
Instruction/ Supervision Presentation/ Report
(When a serious crisis has occurred)
Crisis-ManagementTask Force
CrisisCountermeasure
Headquarters
Divisions, companies, staff organizations, subsidiaries, and affiliated companies
Guide to JUKI's
7
(1) Fundamental Corporate Management Policy
Our group has been striving to fulfill the trust and
expectation of all of our stakeholders-customers,
shareholders, business partners, employees and
society-by offering superior products and services and
promoting our basic management policy of "Total Quality
Management," with a focus on improved CS (Customer
Satisfaction).
Our basic aim in the execution of business is to
contribute to society by creating new values based on
the concept built in our "Mind & Technology”
(emotionally accessible technology) slogan, while
expanding our businesses worldwide.
(2) Management Strategies for the Medium to Long
Term and Issues to Address
We have formulated a new three-year Mid-Term
Management Plan commencing in fiscal 2008 and have
been pursuing business in a manner described below.
1. Promotion of management of quality
We will implement thorough compliance and reinforce
internal control, and at the same time, further promote
quality improvement of merchandises and services, as
well as address environmental issues even more
proactively. We will thereby endeavor to enhance the
trust of our stakeholders in, and improve the quality of,
the management of the company.
2. Enhancement of corporate value
We will strive to enhance our corporate value, and aim
to become a company that is needed by all of our
stakeholders-customers, shareholders, business
partners, employees and society.
3. Increased focus on profit and cash flows
In order to flexibly respond to changing market trends,
we will drastically review our business with a view to
making strategy shifts, and seek to increase market
share. Given the severe economic conditions, we will
focus on investment efficiency and re-construct an
organizational human resources system compatible with
our business scale, as well as reinforce our
management foundations in order to ensure profit and
cash flows.
4. Reinforcement of "Monodzukuri (the art of product
making)" (development, manufacturing, quality)
In addition to enhancing our technological development
capabilities which supports our growth, we will improve
our manufacturing technologies and cost
competitiveness. Through these efforts, we will reinforce
our capabilities of quality manufacturing.
5. Promotion of management that cultivates and
optimized human resources
We will seek to cultivate and optimize human resources
on a Group-wide basis.
MANAGEMENT POLICIES
CORPORATE GOVERNANCE SYSTEM
01 Guide to JUKI's 01Guide to JUKI's
6
01 Guide to JUKI's
RESEARCH AND DEVELOPMENT ACTIVITIES
01Guide to JUKI's
8 9
OUTLINE OF BUSINESS RESULTS
1. Business results
Consolidated net sales stood at 56,970 million yen, down
by 26.8% from the preceding fiscal year. Consolidated
operating income was posted as a loss of 11,187 million
yen (versus a negative 4,975 million yen in the preceding
fiscal year). Consolidated ordinary income was posted as a
loss of 11,102 million yen (versus a negative 5,259 million
yen in the preceding fiscal year). Consolidated net income
was posted as a loss of 11,233 million yen (versus a
negative 9,347 million yen in the preceding fiscal year).
(1) Business results by segment
㈰ Industrial Sewing Machines Business
Sales have shown an increasing trend after the fourth
quarter of the preceding fiscal year where the sales had
hit bottom, but its resilience was weak. As a result,
consolidated net sales of the Industrial Sewing
Machines Business as a whole stood at 36,092 million
yen, down by 19.0% from the preceding fiscal year).
Consolidated operating income was posted as a
negative 5,281 million yen (versus a negative 258
million yen in the preceding fiscal year).
㈪ SMT Systems Business
Sales have been on the steady increase due to the
effect of putting a high-speed pick-and-placer on the
market after the first quarter of the current fiscal year
where the sales had hit bottom, but its resilience was
weak. As a result, consolidated net sales of the SMT
Systems Business as a whole stood at 12,040 million
yen, down by 39.7% from the preceding fiscal year.
Consolidated operating income was posted as a
negative 3,570 million yen (versus a negative 1,793
million in the preceding fiscal year).
㈫ Household Sewing Machines Business
Due to the effect of putting new products on the market,
consolidated net sales of the Household Sewing
Machines Business as a whole stood at 2,424 million
yen, up by 2.9% from the preceding fiscal year.
Consolidated operating income was posted as a
negative 319 million yen (versus a negative 1,536
million yen in the preceding fiscal year).
㈬ Electronic Equipment and Computer Peripherals
Business
Due to a withdrawal from precision equipment (arcade-
related equipment) business in the second quarter of
the current fiscal year, consolidated net sales of the
Electronic Equipment and Computer Peripherals
Business as a whole stood as 2,381 million yen, down
by 55.4% from the preceding fiscal year. Consolidated
operating income was posted as a positive 25 million
yen, down by 93.9% from the preceding fiscal year.
㈭ Precision Casting Business
Due to a decline in demand in the related industries,
consolidated net sales as a whole of the Precision
Casting Business stood at 2,745 million yen, down by
26.9% from the preceding fiscal year. Consolidated
operating income was posted as a negative 133 million
yen (versus a positive 98 million yen in the preceding
fiscal year).
(2) Geographical Segments
㈰ Japan
Consolidated net sales stood at 15,450 million yen,
down by 39.9% from the preceding fiscal year.
Consolidated operating income was posted as a
negative 9,892 million yen (versus a negative 4,687
million yen in the preceding fiscal year).
㈪ Americas
Consolidated net sales stood at 5,057 million yen, down
by 38.2% from the preceding fiscal year. Consolidated
operating income was posted as a negative 196 million
yen (versus a positive 55 million yen in the preceding
fiscal year).
㈫ Asia
Consolidated net sales stood at 31,335 million yen,
down by 9.9% from the preceding fiscal year.
Consolidated operating income was posted as a
negative 751 million yen (versus a positive 970 million
yen in the preceding fiscal year).
㈬ Europe
Consolidated net sales stood at 5,122 million yen, down
by 44.2% from the preceding fiscal year. Consolidated
operating income was posted as a negative 227 million
yen (versus a positive 195 million yen in the preceding
fiscal year).
2. Cash Flows
Cash and cash equivalents on a consolidated basis in
the current fiscal year are hereinafter called "Funds."
The Funds decreased to 8,291 million yen at the end of
the current fiscal year, down by 633 million yen from the
end of the preceding fiscal year.
(Cash flow from operating activities)
Funds from operating activities in the current fiscal year
stood at a positive 1,224 million yen (versus a negative
of 10,841 million yen in the preceding fiscal year),
mainly due to a decrease in inventories, an increase in
notes and accounts payable-trade, and the allocation of
loss before income taxes and minority interests.
(Cash flow from investing activities)
Funds from investing activities in the current fiscal year
stood at a negative 10,440 million yen (versus a
negative 3,867 million yen in the preceding fiscal year),
mainly due to the acquisition of tangible fixed assets.
(Cash flow from financing activities)
Funds from financing activities from financing activities
in the current fiscal year stood at a positive 8,524 million
yen (versus a positive 14,622 million yen in the
preceding fiscal year), mainly due to an increase in
interest-bearing debt.
The research and development functions in our group are shared by the design department and research department. The former develops products for the business segments and the latter develops element technologies necessary for product development. Expenditure for R&D (Research and Development) activities for the entire group stood at 5,354 million yen in the current fiscal year (6.1% of the sales amount: net sales was calculated as an average for the past three years), down by 2,056 million yen from the preceding fiscal year (a 27.8% decrease). Meanwhile, the total number of industrial property rights (patent rights and design rights registered in Japan and overseas), an index of our R&D performance, was 1,279 as of the end of the current fiscal year, up by 32 from the preceding fiscal year.
1. R&D activities common to the entire group
(1) Environment-friendly_R&D activities
Sixteen products have been certified under the "Juki
Eco Label Certification System" started in March 2009.
We continue to work on environmental issues at a
higher level.
(2) R&D activities at the head office
Based on our mid-to-long term technological strategies,
we have been focusing on the research and
development of element technologies necessary for our
future activities. We have also been collaborating with
manufacturing departments and overseas offices to
upgrade the design infrastructure throughout the group
and reinforce our systems to support R&D activities.
2. R&D activities by segment
(1) Industrial Sewing Machines Business
The industrial sewing machines segment released
seven new products, including the DDL-9000B (a Direct-
drive, High-speed, 1-needle, Lockstitch Machine), the
MF-7700D and MF-7800D (Semi-dry-head, Flat-bed
(7700D) and Cylinder-bed (7800D), Top and Bottom
Coverstitch Machines), and the MF-3620 (a 4-needle,
Feed-off-the-arm, Flatseamer, Top and Bottom
Coverstitch Machine). In addition to being high in quality
and functionality, new entries are designed to run with
minimal impacts on the environment. We have also
been promoting an expanded range of products to meet
domestic demand in emerging countries through
product development focused on lower cost and higher
productivity.
(2) SMT Systems Business
The SMT systems segment released two major new
products. The first was a machine designed to handle
extra-large PWB from the FX-3 series of high-speed
pick-and-placers, electric tape feeders, and peripheral
devices. The second was the Placement Monitor, the
industry's first machine designed to monitor the status of
pickup and placement of electronics components in real
time (with a small camera mounted on the head of the
pick-and-placer). We also launched a machine with
straight conveyor specifications from the JX-100 series
for the BRICs markets and the JX-100LED, a compact
high-speed machine designed to handle LED
components on the JX-100 platform.
(3) Household Sewing Machines Business
The household sewing machines segment launched five
new products: three middle-ranking computer-controlled
sewing machines from the multi-featured Exceed series
(the HZL-F600, HZL-F400, and HZL-F300) that has a
comprehensive range of features and two Easy-Drop-in
Bobbin type sewing machines (the HZL-28 and HZL-
27Z) that are targeting the budget price zone in
domestic and international markets. Our Exceed series
and HZL-28 both received the good design awards (G
mark) in fiscal 2009. Our Household Sewing Machines
segment was also highly appraised for its product
performance and designs.
(4) Precision Casting Business
Recent advances in casting analysis technology have
enabled the precision casting segment to research the
establishment of a foundry technology appropriate for
our group's manufacturing methods in collaboration with
universities. As a result, we can expect cost reductions
and shortened lead times from prototyping to the
completion of commercial products.
01
JUKI booth at CISMA 2009 China held at Shanghai (Octobre 2009)
5
01Guide to JUKI's
(1) Corporate governance system
The Board of Directors supervises the progress of
business execution point by point and makes decisions
for important managerial matters, including items
stipulated by law. In addition, an outside director was
elected in the ordinary general meeting of shareholders
held on June 25, 2009. Together, the company and its
directors are working to strengthen the structure for
supervising management. We also have introduced an
Operating Officer system to streamline the execution of
business and clarify responsibilities. There are seven
directors and twelve operating officers in our company.
The directors have been doubling as operating officers,
except the outside director.
The company has set up a Management Strategy
Council under the Board of Directors. In addition to the
directors, other operating officers and department heads
in charge of respective functions attend the
Management Strategy Council to discuss the basic
policies and management strategies from various
perspectives for the execution of more appropriate
decision-making and business operation. Meanwhile,
out of the matters discussed in the Management
Strategy Council, more important matters are
deliberated and determined by the Board of Directors.
The company has established a Risk Management
Committee and Crisis-Management Task Force as key
components of its risk management system.
(2) Internal audit and auditors audit
The company has established an Internal Auditing
Department made up of ten people for the organization
of its internal audits, mainly business operation audits
for individual departments within our company and
subsidiary companies. The auditor's audit is conducted
in cooperation with the Internal Auditing Department and
the Accounting Auditors according to the audit policy
and the work-allotment plan decided in the Board of
Auditors. The company has also established an Auditors
Office as an organization to assist the auditors.
(3) Outside director and outside auditors
One outside director and three outside auditors are
appointed in our company. The outside director was
elected in the ordinary general meeting of shareholders
held on June 25, 2009.
The outside director and outside auditors provide
advice, exercise supervision, and conduct audits to
enhance the transparency of company management
and the disciplines from a standpoint independent from
management outside the company.
Neither the outside director nor the outside auditors
have personal relationships, capital ties, or business
relationships and other interests with or in our company.
AuditorsBoard of Auditors
Auditors Office
Election/Dismissal Election/Dismissal Election/dismissal
General Meeting of Shareholders
AccountingAuditors
DirectorsBoard of directors
Report
Report
Report
Audit
DismissalElection/Dismissal/Supervision
President
Management StrategyCouncil
Chief OfficersCCO
Internal AuditingDepartment
Internal audit
LegalDepartment
Activities for spreadingcompliance educationand its management
Presentation/Report of importantagenda
Presentation
Risk Management Committee
Instruction/ Supervision
Instruction/ Supervision Presentation/ Report
(When a serious crisis has occurred)
Crisis-ManagementTask Force
CrisisCountermeasure
Headquarters
Divisions, companies, staff organizations, subsidiaries, and affiliated companies
Guide to JUKI's
7
(1) Fundamental Corporate Management Policy
Our group has been striving to fulfill the trust and
expectation of all of our stakeholders-customers,
shareholders, business partners, employees and
society-by offering superior products and services and
promoting our basic management policy of "Total Quality
Management," with a focus on improved CS (Customer
Satisfaction).
Our basic aim in the execution of business is to
contribute to society by creating new values based on
the concept built in our "Mind & Technology”
(emotionally accessible technology) slogan, while
expanding our businesses worldwide.
(2) Management Strategies for the Medium to Long
Term and Issues to Address
We have formulated a new three-year Mid-Term
Management Plan commencing in fiscal 2008 and have
been pursuing business in a manner described below.
1. Promotion of management of quality
We will implement thorough compliance and reinforce
internal control, and at the same time, further promote
quality improvement of merchandises and services, as
well as address environmental issues even more
proactively. We will thereby endeavor to enhance the
trust of our stakeholders in, and improve the quality of,
the management of the company.
2. Enhancement of corporate value
We will strive to enhance our corporate value, and aim
to become a company that is needed by all of our
stakeholders-customers, shareholders, business
partners, employees and society.
3. Increased focus on profit and cash flows
In order to flexibly respond to changing market trends,
we will drastically review our business with a view to
making strategy shifts, and seek to increase market
share. Given the severe economic conditions, we will
focus on investment efficiency and re-construct an
organizational human resources system compatible with
our business scale, as well as reinforce our
management foundations in order to ensure profit and
cash flows.
4. Reinforcement of "Monodzukuri (the art of product
making)" (development, manufacturing, quality)
In addition to enhancing our technological development
capabilities which supports our growth, we will improve
our manufacturing technologies and cost
competitiveness. Through these efforts, we will reinforce
our capabilities of quality manufacturing.
5. Promotion of management that cultivates and
optimized human resources
We will seek to cultivate and optimize human resources
on a Group-wide basis.
MANAGEMENT POLICIES
CORPORATE GOVERNANCE SYSTEM
01 Guide to JUKI's 01Guide to JUKI's
6
01 Guide to JUKI's
RESEARCH AND DEVELOPMENT ACTIVITIES
01Guide to JUKI's
8 9
OUTLINE OF BUSINESS RESULTS
1. Business results
Consolidated net sales stood at 56,970 million yen, down
by 26.8% from the preceding fiscal year. Consolidated
operating income was posted as a loss of 11,187 million
yen (versus a negative 4,975 million yen in the preceding
fiscal year). Consolidated ordinary income was posted as a
loss of 11,102 million yen (versus a negative 5,259 million
yen in the preceding fiscal year). Consolidated net income
was posted as a loss of 11,233 million yen (versus a
negative 9,347 million yen in the preceding fiscal year).
(1) Business results by segment
㈰ Industrial Sewing Machines Business
Sales have shown an increasing trend after the fourth
quarter of the preceding fiscal year where the sales had
hit bottom, but its resilience was weak. As a result,
consolidated net sales of the Industrial Sewing
Machines Business as a whole stood at 36,092 million
yen, down by 19.0% from the preceding fiscal year).
Consolidated operating income was posted as a
negative 5,281 million yen (versus a negative 258
million yen in the preceding fiscal year).
㈪ SMT Systems Business
Sales have been on the steady increase due to the
effect of putting a high-speed pick-and-placer on the
market after the first quarter of the current fiscal year
where the sales had hit bottom, but its resilience was
weak. As a result, consolidated net sales of the SMT
Systems Business as a whole stood at 12,040 million
yen, down by 39.7% from the preceding fiscal year.
Consolidated operating income was posted as a
negative 3,570 million yen (versus a negative 1,793
million in the preceding fiscal year).
㈫ Household Sewing Machines Business
Due to the effect of putting new products on the market,
consolidated net sales of the Household Sewing
Machines Business as a whole stood at 2,424 million
yen, up by 2.9% from the preceding fiscal year.
Consolidated operating income was posted as a
negative 319 million yen (versus a negative 1,536
million yen in the preceding fiscal year).
㈬ Electronic Equipment and Computer Peripherals
Business
Due to a withdrawal from precision equipment (arcade-
related equipment) business in the second quarter of
the current fiscal year, consolidated net sales of the
Electronic Equipment and Computer Peripherals
Business as a whole stood as 2,381 million yen, down
by 55.4% from the preceding fiscal year. Consolidated
operating income was posted as a positive 25 million
yen, down by 93.9% from the preceding fiscal year.
㈭ Precision Casting Business
Due to a decline in demand in the related industries,
consolidated net sales as a whole of the Precision
Casting Business stood at 2,745 million yen, down by
26.9% from the preceding fiscal year. Consolidated
operating income was posted as a negative 133 million
yen (versus a positive 98 million yen in the preceding
fiscal year).
(2) Geographical Segments
㈰ Japan
Consolidated net sales stood at 15,450 million yen,
down by 39.9% from the preceding fiscal year.
Consolidated operating income was posted as a
negative 9,892 million yen (versus a negative 4,687
million yen in the preceding fiscal year).
㈪ Americas
Consolidated net sales stood at 5,057 million yen, down
by 38.2% from the preceding fiscal year. Consolidated
operating income was posted as a negative 196 million
yen (versus a positive 55 million yen in the preceding
fiscal year).
㈫ Asia
Consolidated net sales stood at 31,335 million yen,
down by 9.9% from the preceding fiscal year.
Consolidated operating income was posted as a
negative 751 million yen (versus a positive 970 million
yen in the preceding fiscal year).
㈬ Europe
Consolidated net sales stood at 5,122 million yen, down
by 44.2% from the preceding fiscal year. Consolidated
operating income was posted as a negative 227 million
yen (versus a positive 195 million yen in the preceding
fiscal year).
2. Cash Flows
Cash and cash equivalents on a consolidated basis in
the current fiscal year are hereinafter called "Funds."
The Funds decreased to 8,291 million yen at the end of
the current fiscal year, down by 633 million yen from the
end of the preceding fiscal year.
(Cash flow from operating activities)
Funds from operating activities in the current fiscal year
stood at a positive 1,224 million yen (versus a negative
of 10,841 million yen in the preceding fiscal year),
mainly due to a decrease in inventories, an increase in
notes and accounts payable-trade, and the allocation of
loss before income taxes and minority interests.
(Cash flow from investing activities)
Funds from investing activities in the current fiscal year
stood at a negative 10,440 million yen (versus a
negative 3,867 million yen in the preceding fiscal year),
mainly due to the acquisition of tangible fixed assets.
(Cash flow from financing activities)
Funds from financing activities from financing activities
in the current fiscal year stood at a positive 8,524 million
yen (versus a positive 14,622 million yen in the
preceding fiscal year), mainly due to an increase in
interest-bearing debt.
The research and development functions in our group are shared by the design department and research department. The former develops products for the business segments and the latter develops element technologies necessary for product development. Expenditure for R&D (Research and Development) activities for the entire group stood at 5,354 million yen in the current fiscal year (6.1% of the sales amount: net sales was calculated as an average for the past three years), down by 2,056 million yen from the preceding fiscal year (a 27.8% decrease). Meanwhile, the total number of industrial property rights (patent rights and design rights registered in Japan and overseas), an index of our R&D performance, was 1,279 as of the end of the current fiscal year, up by 32 from the preceding fiscal year.
1. R&D activities common to the entire group
(1) Environment-friendly_R&D activities
Sixteen products have been certified under the "Juki
Eco Label Certification System" started in March 2009.
We continue to work on environmental issues at a
higher level.
(2) R&D activities at the head office
Based on our mid-to-long term technological strategies,
we have been focusing on the research and
development of element technologies necessary for our
future activities. We have also been collaborating with
manufacturing departments and overseas offices to
upgrade the design infrastructure throughout the group
and reinforce our systems to support R&D activities.
2. R&D activities by segment
(1) Industrial Sewing Machines Business
The industrial sewing machines segment released
seven new products, including the DDL-9000B (a Direct-
drive, High-speed, 1-needle, Lockstitch Machine), the
MF-7700D and MF-7800D (Semi-dry-head, Flat-bed
(7700D) and Cylinder-bed (7800D), Top and Bottom
Coverstitch Machines), and the MF-3620 (a 4-needle,
Feed-off-the-arm, Flatseamer, Top and Bottom
Coverstitch Machine). In addition to being high in quality
and functionality, new entries are designed to run with
minimal impacts on the environment. We have also
been promoting an expanded range of products to meet
domestic demand in emerging countries through
product development focused on lower cost and higher
productivity.
(2) SMT Systems Business
The SMT systems segment released two major new
products. The first was a machine designed to handle
extra-large PWB from the FX-3 series of high-speed
pick-and-placers, electric tape feeders, and peripheral
devices. The second was the Placement Monitor, the
industry's first machine designed to monitor the status of
pickup and placement of electronics components in real
time (with a small camera mounted on the head of the
pick-and-placer). We also launched a machine with
straight conveyor specifications from the JX-100 series
for the BRICs markets and the JX-100LED, a compact
high-speed machine designed to handle LED
components on the JX-100 platform.
(3) Household Sewing Machines Business
The household sewing machines segment launched five
new products: three middle-ranking computer-controlled
sewing machines from the multi-featured Exceed series
(the HZL-F600, HZL-F400, and HZL-F300) that has a
comprehensive range of features and two Easy-Drop-in
Bobbin type sewing machines (the HZL-28 and HZL-
27Z) that are targeting the budget price zone in
domestic and international markets. Our Exceed series
and HZL-28 both received the good design awards (G
mark) in fiscal 2009. Our Household Sewing Machines
segment was also highly appraised for its product
performance and designs.
(4) Precision Casting Business
Recent advances in casting analysis technology have
enabled the precision casting segment to research the
establishment of a foundry technology appropriate for
our group's manufacturing methods in collaboration with
universities. As a result, we can expect cost reductions
and shortened lead times from prototyping to the
completion of commercial products.
01
JUKI booth at CISMA 2009 China held at Shanghai (Octobre 2009)
5
01Guide to JUKI's
(1) Corporate governance system
The Board of Directors supervises the progress of
business execution point by point and makes decisions
for important managerial matters, including items
stipulated by law. In addition, an outside director was
elected in the ordinary general meeting of shareholders
held on June 25, 2009. Together, the company and its
directors are working to strengthen the structure for
supervising management. We also have introduced an
Operating Officer system to streamline the execution of
business and clarify responsibilities. There are seven
directors and twelve operating officers in our company.
The directors have been doubling as operating officers,
except the outside director.
The company has set up a Management Strategy
Council under the Board of Directors. In addition to the
directors, other operating officers and department heads
in charge of respective functions attend the
Management Strategy Council to discuss the basic
policies and management strategies from various
perspectives for the execution of more appropriate
decision-making and business operation. Meanwhile,
out of the matters discussed in the Management
Strategy Council, more important matters are
deliberated and determined by the Board of Directors.
The company has established a Risk Management
Committee and Crisis-Management Task Force as key
components of its risk management system.
(2) Internal audit and auditors audit
The company has established an Internal Auditing
Department made up of ten people for the organization
of its internal audits, mainly business operation audits
for individual departments within our company and
subsidiary companies. The auditor's audit is conducted
in cooperation with the Internal Auditing Department and
the Accounting Auditors according to the audit policy
and the work-allotment plan decided in the Board of
Auditors. The company has also established an Auditors
Office as an organization to assist the auditors.
(3) Outside director and outside auditors
One outside director and three outside auditors are
appointed in our company. The outside director was
elected in the ordinary general meeting of shareholders
held on June 25, 2009.
The outside director and outside auditors provide
advice, exercise supervision, and conduct audits to
enhance the transparency of company management
and the disciplines from a standpoint independent from
management outside the company.
Neither the outside director nor the outside auditors
have personal relationships, capital ties, or business
relationships and other interests with or in our company.
AuditorsBoard of Auditors
Auditors Office
Election/Dismissal Election/Dismissal Election/dismissal
General Meeting of Shareholders
AccountingAuditors
DirectorsBoard of directors
Report
Report
Report
Audit
DismissalElection/Dismissal/Supervision
President
Management StrategyCouncil
Chief OfficersCCO
Internal AuditingDepartment
Internal audit
LegalDepartment
Activities for spreadingcompliance educationand its management
Presentation/Report of importantagenda
Presentation
Risk Management Committee
Instruction/ Supervision
Instruction/ Supervision Presentation/ Report
(When a serious crisis has occurred)
Crisis-ManagementTask Force
CrisisCountermeasure
Headquarters
Divisions, companies, staff organizations, subsidiaries, and affiliated companies
Guide to JUKI's
7
(1) Fundamental Corporate Management Policy
Our group has been striving to fulfill the trust and
expectation of all of our stakeholders-customers,
shareholders, business partners, employees and
society-by offering superior products and services and
promoting our basic management policy of "Total Quality
Management," with a focus on improved CS (Customer
Satisfaction).
Our basic aim in the execution of business is to
contribute to society by creating new values based on
the concept built in our "Mind & Technology”
(emotionally accessible technology) slogan, while
expanding our businesses worldwide.
(2) Management Strategies for the Medium to Long
Term and Issues to Address
We have formulated a new three-year Mid-Term
Management Plan commencing in fiscal 2008 and have
been pursuing business in a manner described below.
1. Promotion of management of quality
We will implement thorough compliance and reinforce
internal control, and at the same time, further promote
quality improvement of merchandises and services, as
well as address environmental issues even more
proactively. We will thereby endeavor to enhance the
trust of our stakeholders in, and improve the quality of,
the management of the company.
2. Enhancement of corporate value
We will strive to enhance our corporate value, and aim
to become a company that is needed by all of our
stakeholders-customers, shareholders, business
partners, employees and society.
3. Increased focus on profit and cash flows
In order to flexibly respond to changing market trends,
we will drastically review our business with a view to
making strategy shifts, and seek to increase market
share. Given the severe economic conditions, we will
focus on investment efficiency and re-construct an
organizational human resources system compatible with
our business scale, as well as reinforce our
management foundations in order to ensure profit and
cash flows.
4. Reinforcement of "Monodzukuri (the art of product
making)" (development, manufacturing, quality)
In addition to enhancing our technological development
capabilities which supports our growth, we will improve
our manufacturing technologies and cost
competitiveness. Through these efforts, we will reinforce
our capabilities of quality manufacturing.
5. Promotion of management that cultivates and
optimized human resources
We will seek to cultivate and optimize human resources
on a Group-wide basis.
MANAGEMENT POLICIES
CORPORATE GOVERNANCE SYSTEM
01 Guide to JUKI's 01Guide to JUKI's
6
01 Guide to JUKI's
RESEARCH AND DEVELOPMENT ACTIVITIES
01Guide to JUKI's
8 9
OUTLINE OF BUSINESS RESULTS
1. Business results
Consolidated net sales stood at 56,970 million yen, down
by 26.8% from the preceding fiscal year. Consolidated
operating income was posted as a loss of 11,187 million
yen (versus a negative 4,975 million yen in the preceding
fiscal year). Consolidated ordinary income was posted as a
loss of 11,102 million yen (versus a negative 5,259 million
yen in the preceding fiscal year). Consolidated net income
was posted as a loss of 11,233 million yen (versus a
negative 9,347 million yen in the preceding fiscal year).
(1) Business results by segment
㈰ Industrial Sewing Machines Business
Sales have shown an increasing trend after the fourth
quarter of the preceding fiscal year where the sales had
hit bottom, but its resilience was weak. As a result,
consolidated net sales of the Industrial Sewing
Machines Business as a whole stood at 36,092 million
yen, down by 19.0% from the preceding fiscal year).
Consolidated operating income was posted as a
negative 5,281 million yen (versus a negative 258
million yen in the preceding fiscal year).
㈪ SMT Systems Business
Sales have been on the steady increase due to the
effect of putting a high-speed pick-and-placer on the
market after the first quarter of the current fiscal year
where the sales had hit bottom, but its resilience was
weak. As a result, consolidated net sales of the SMT
Systems Business as a whole stood at 12,040 million
yen, down by 39.7% from the preceding fiscal year.
Consolidated operating income was posted as a
negative 3,570 million yen (versus a negative 1,793
million in the preceding fiscal year).
㈫ Household Sewing Machines Business
Due to the effect of putting new products on the market,
consolidated net sales of the Household Sewing
Machines Business as a whole stood at 2,424 million
yen, up by 2.9% from the preceding fiscal year.
Consolidated operating income was posted as a
negative 319 million yen (versus a negative 1,536
million yen in the preceding fiscal year).
㈬ Electronic Equipment and Computer Peripherals
Business
Due to a withdrawal from precision equipment (arcade-
related equipment) business in the second quarter of
the current fiscal year, consolidated net sales of the
Electronic Equipment and Computer Peripherals
Business as a whole stood as 2,381 million yen, down
by 55.4% from the preceding fiscal year. Consolidated
operating income was posted as a positive 25 million
yen, down by 93.9% from the preceding fiscal year.
㈭ Precision Casting Business
Due to a decline in demand in the related industries,
consolidated net sales as a whole of the Precision
Casting Business stood at 2,745 million yen, down by
26.9% from the preceding fiscal year. Consolidated
operating income was posted as a negative 133 million
yen (versus a positive 98 million yen in the preceding
fiscal year).
(2) Geographical Segments
㈰ Japan
Consolidated net sales stood at 15,450 million yen,
down by 39.9% from the preceding fiscal year.
Consolidated operating income was posted as a
negative 9,892 million yen (versus a negative 4,687
million yen in the preceding fiscal year).
㈪ Americas
Consolidated net sales stood at 5,057 million yen, down
by 38.2% from the preceding fiscal year. Consolidated
operating income was posted as a negative 196 million
yen (versus a positive 55 million yen in the preceding
fiscal year).
㈫ Asia
Consolidated net sales stood at 31,335 million yen,
down by 9.9% from the preceding fiscal year.
Consolidated operating income was posted as a
negative 751 million yen (versus a positive 970 million
yen in the preceding fiscal year).
㈬ Europe
Consolidated net sales stood at 5,122 million yen, down
by 44.2% from the preceding fiscal year. Consolidated
operating income was posted as a negative 227 million
yen (versus a positive 195 million yen in the preceding
fiscal year).
2. Cash Flows
Cash and cash equivalents on a consolidated basis in
the current fiscal year are hereinafter called "Funds."
The Funds decreased to 8,291 million yen at the end of
the current fiscal year, down by 633 million yen from the
end of the preceding fiscal year.
(Cash flow from operating activities)
Funds from operating activities in the current fiscal year
stood at a positive 1,224 million yen (versus a negative
of 10,841 million yen in the preceding fiscal year),
mainly due to a decrease in inventories, an increase in
notes and accounts payable-trade, and the allocation of
loss before income taxes and minority interests.
(Cash flow from investing activities)
Funds from investing activities in the current fiscal year
stood at a negative 10,440 million yen (versus a
negative 3,867 million yen in the preceding fiscal year),
mainly due to the acquisition of tangible fixed assets.
(Cash flow from financing activities)
Funds from financing activities from financing activities
in the current fiscal year stood at a positive 8,524 million
yen (versus a positive 14,622 million yen in the
preceding fiscal year), mainly due to an increase in
interest-bearing debt.
The research and development functions in our group are shared by the design department and research department. The former develops products for the business segments and the latter develops element technologies necessary for product development. Expenditure for R&D (Research and Development) activities for the entire group stood at 5,354 million yen in the current fiscal year (6.1% of the sales amount: net sales was calculated as an average for the past three years), down by 2,056 million yen from the preceding fiscal year (a 27.8% decrease). Meanwhile, the total number of industrial property rights (patent rights and design rights registered in Japan and overseas), an index of our R&D performance, was 1,279 as of the end of the current fiscal year, up by 32 from the preceding fiscal year.
1. R&D activities common to the entire group
(1) Environment-friendly_R&D activities
Sixteen products have been certified under the "Juki
Eco Label Certification System" started in March 2009.
We continue to work on environmental issues at a
higher level.
(2) R&D activities at the head office
Based on our mid-to-long term technological strategies,
we have been focusing on the research and
development of element technologies necessary for our
future activities. We have also been collaborating with
manufacturing departments and overseas offices to
upgrade the design infrastructure throughout the group
and reinforce our systems to support R&D activities.
2. R&D activities by segment
(1) Industrial Sewing Machines Business
The industrial sewing machines segment released
seven new products, including the DDL-9000B (a Direct-
drive, High-speed, 1-needle, Lockstitch Machine), the
MF-7700D and MF-7800D (Semi-dry-head, Flat-bed
(7700D) and Cylinder-bed (7800D), Top and Bottom
Coverstitch Machines), and the MF-3620 (a 4-needle,
Feed-off-the-arm, Flatseamer, Top and Bottom
Coverstitch Machine). In addition to being high in quality
and functionality, new entries are designed to run with
minimal impacts on the environment. We have also
been promoting an expanded range of products to meet
domestic demand in emerging countries through
product development focused on lower cost and higher
productivity.
(2) SMT Systems Business
The SMT systems segment released two major new
products. The first was a machine designed to handle
extra-large PWB from the FX-3 series of high-speed
pick-and-placers, electric tape feeders, and peripheral
devices. The second was the Placement Monitor, the
industry's first machine designed to monitor the status of
pickup and placement of electronics components in real
time (with a small camera mounted on the head of the
pick-and-placer). We also launched a machine with
straight conveyor specifications from the JX-100 series
for the BRICs markets and the JX-100LED, a compact
high-speed machine designed to handle LED
components on the JX-100 platform.
(3) Household Sewing Machines Business
The household sewing machines segment launched five
new products: three middle-ranking computer-controlled
sewing machines from the multi-featured Exceed series
(the HZL-F600, HZL-F400, and HZL-F300) that has a
comprehensive range of features and two Easy-Drop-in
Bobbin type sewing machines (the HZL-28 and HZL-
27Z) that are targeting the budget price zone in
domestic and international markets. Our Exceed series
and HZL-28 both received the good design awards (G
mark) in fiscal 2009. Our Household Sewing Machines
segment was also highly appraised for its product
performance and designs.
(4) Precision Casting Business
Recent advances in casting analysis technology have
enabled the precision casting segment to research the
establishment of a foundry technology appropriate for
our group's manufacturing methods in collaboration with
universities. As a result, we can expect cost reductions
and shortened lead times from prototyping to the
completion of commercial products.
01
JUKI booth at CISMA 2009 China held at Shanghai (Octobre 2009)
5
01Guide to JUKI's
(1) Corporate governance system
The Board of Directors supervises the progress of
business execution point by point and makes decisions
for important managerial matters, including items
stipulated by law. In addition, an outside director was
elected in the ordinary general meeting of shareholders
held on June 25, 2009. Together, the company and its
directors are working to strengthen the structure for
supervising management. We also have introduced an
Operating Officer system to streamline the execution of
business and clarify responsibilities. There are seven
directors and twelve operating officers in our company.
The directors have been doubling as operating officers,
except the outside director.
The company has set up a Management Strategy
Council under the Board of Directors. In addition to the
directors, other operating officers and department heads
in charge of respective functions attend the
Management Strategy Council to discuss the basic
policies and management strategies from various
perspectives for the execution of more appropriate
decision-making and business operation. Meanwhile,
out of the matters discussed in the Management
Strategy Council, more important matters are
deliberated and determined by the Board of Directors.
The company has established a Risk Management
Committee and Crisis-Management Task Force as key
components of its risk management system.
(2) Internal audit and auditors audit
The company has established an Internal Auditing
Department made up of ten people for the organization
of its internal audits, mainly business operation audits
for individual departments within our company and
subsidiary companies. The auditor's audit is conducted
in cooperation with the Internal Auditing Department and
the Accounting Auditors according to the audit policy
and the work-allotment plan decided in the Board of
Auditors. The company has also established an Auditors
Office as an organization to assist the auditors.
(3) Outside director and outside auditors
One outside director and three outside auditors are
appointed in our company. The outside director was
elected in the ordinary general meeting of shareholders
held on June 25, 2009.
The outside director and outside auditors provide
advice, exercise supervision, and conduct audits to
enhance the transparency of company management
and the disciplines from a standpoint independent from
management outside the company.
Neither the outside director nor the outside auditors
have personal relationships, capital ties, or business
relationships and other interests with or in our company.
AuditorsBoard of Auditors
Auditors Office
Election/Dismissal Election/Dismissal Election/dismissal
General Meeting of Shareholders
AccountingAuditors
DirectorsBoard of directors
Report
Report
Report
Audit
DismissalElection/Dismissal/Supervision
President
Management StrategyCouncil
Chief OfficersCCO
Internal AuditingDepartment
Internal audit
LegalDepartment
Activities for spreadingcompliance educationand its management
Presentation/Report of importantagenda
Presentation
Risk Management Committee
Instruction/ Supervision
Instruction/ Supervision Presentation/ Report
(When a serious crisis has occurred)
Crisis-ManagementTask Force
CrisisCountermeasure
Headquarters
Divisions, companies, staff organizations, subsidiaries, and affiliated companies
Financial Section
02Financial Section
12 13
02Financial Section
11
02 Financial Section
02Financial Section
14 15
02 Financial Section
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term borrowings (Notes 8 and 15)……………………………………………
Current portion of long-term debt (Notes 8, 14 and 15)……………………………
Payables (Note 15):
Trade notes (Note 12)………………………………………………………………
Trade accounts (Note 12)…………………………………………………………
Income taxes payable ………………………………………………………………
Accrued expenses……………………………………………………………………
Other current liabilities (Note 11)……………………………………………………
Total current liabilities……………………………………………………………
LONG-TERM LIABILITIES:
Long-term debt (Notes 8, 14 and 15)………………………………………………
Liability for retirement benefits (Note 9)……………………………………………
Other long-term liabilities (Note 11)…………………………………………………
Total long-term liabilities…………………………………………………………
COMMITMENTS AND CONTINGENT LIABILITIES (Notes 14, 16 and 17)
EQUITY (Note 10):
Common stock-authorized, 400,000,000 shares; issued,
129,370,899 shares in 2010 and 2009 ……………………………………………
Capital surplus…………………………………………………………………………
(Deficit) retained earnings ……………………………………………………………
Net unrealized gain (loss) on available-for-sale securities………………………
Net deferred loss on derivatives under hedge accounting………………………
Foreign currency translation adjustments …………………………………………
Treasury stock-at cost, 142,050 shares in 2010 and
137,789 shares in 2009……………………………………………………………
Total ………………………………………………………………………………
Minority interests ……………………………………………………………………
Total equity ………………………………………………………………………
TOTAL……………………………………………………………………………………
Millions of Yen
Thousands ofU.S. Dollars
(Note1)
2010 2009 2010
ASSETS
CURRENT ASSETS:
Cash and cash equivalents (Note 15)………………………………………………
Marketable securities (Notes 3 and 15)……………………………………………
Short-term investments (Note 4)……………………………………………………
Receivables:
Trade notes (Notes 12 and 15)……………………………………………………
Trade accounts (Notes 12 and 15)…………………………………………………
Other…………………………………………………………………………………
Allowance for doubtful accounts (Note 15)………………………………………
Inventories (Note 5)……………………………………………………………………
Deferred tax assets (Note 11)…………………………………………………………
Prepaid expenses and other current assets………………………………………
Total current assets………………………………………………………………
PROPERTY, PLANT AND EQUIPMENT (Notes 6, 7 and 8):
Land……………………………………………………………………………………
Buildings and structures………………………………………………………………
Machinery and equipment……………………………………………………………
Furniture and fixtures…………………………………………………………………
Construction in progress………………………………………………………………
Lease assets……………………………………………………………………………
Total…………………………………………………………………………………
Accumulated depreciation……………………………………………………………
Net property, plant and equipment………………………………………………
INVESTMENTS AND OTHER ASSETS:
Investment securities (Notes 3, 8 and 15)…………………………………………
Investments in and long-term loans to unconsolidated subsidiaries and associated companies …
Long-term receivables…………………………………………………………………
Deferred tax assets (Note 11)…………………………………………………………
Other assets (Note 7)…………………………………………………………………
Total investments and other assets ……………………………………………
TOTAL……………………………………………………………………………………
See notes to consolidated financial statements.
Millions of Yen
Thousands ofU.S. Dollars
(Note1)
Consolidated Balance SheetsJUKI CORPORATION and Consolidated Subsidiaries, March 31, 2010 and 2009
2010 2009 2010
￥8,292 6
57
1,407 11,746 1,089
(1,096) 29,298
494 4,558
55,851
7,585 34,191 18,297
6,406 16
1,065 67,560
(34,648) 32,912
1,994 237
38 6,402 3,647
12,318￥101,081
￥8,926
44
30
1,550
11,272
982
(1,066)
36,071
859
4,304
62,972
7,491
22,954
19,090
6,576
6,497
362
62,970
(33,954)
29,016
1,914
283
81
5,354
4,035
11,667
￥103,655
＄89,161
69
609
15,134
126,300
11,715
(11,782)
315,031
5,309
49,006
600,552
81,558
367,639
196,746
68,880
173
11,453
726,449
(372,561)
353,888
21,439
2,553
411
68,843
39,209
132,455
＄1,086,895
￥33,388 9,632
4,522 6,481
134 3,220 2,761
60,138
22,829 6,929
499 30,257
15,950 8,976
(8,839) 17
(99) (5,523)
(58) 10,424
262 10,686
￥101,081
￥38,135
7,356
2,445
2,501
207
4,141
9,717
64,502
10,511
6,700
353
17,564
15,950
8,977
2,395
(78)
(2)
(5,863)
(58)
21,321
268
21,589
￥103,655
＄359,008
103,569
48,622
69,690
1,440
34,624
29,687
646,640
245,469
74,503
5,379
325,351
171,508
96,520
(95,045)
180
(1,069)
(59,389)
(617)
112,088
2,816
114,904
＄1,086,895
02
JUKI booth at JISSO PROTEC 2009 (Jisso Process Technology Exhibition) held at Tokyo Big Sight (June 2009)
See notes to consolidated financial statements.
Millions of Yen
Thousands of U.S. Dollars (Note 1)
Consolidated Statements of Changes in Equity JUKI CORPORATION and Consolidated Subsidiaries, Years Ended March 31, 2010 and 2009
Number ofShares of
Common StockOutstanding
CommonStock
CapitalSurplus
(Deficit)RetainedEarnings
Net UnrealizedGain (Loss) on
Available-for-saleSecurities
ForeignCurrency
TranslationAdjustments
TreasuryStock
CommonStock
CapitalSurplus
(Deficit)RetainedEarnings
Net UnrealizedGain (Loss) onAvailable-for-sale
Securities
ForeignCurrency
TranslationAdjustments
TreasuryStock
See notes to consolidated financial statements.
Millions of Yen
Thousands of U.S. Dollars (Note 1)
Net Deferred Losson Derivatives under Hedge
Accounting
Net Deferred Losson Derivatives under Hedge
Accounting
TotalMinority Interests
Total Equity
TotalMinority Interests
Total Equity
BALANCE, APRIL 1, 2008……………
Adjustment of retained earnings
due to an adoption of PITF
No. 18 (Note 2.b)…………………
Net loss…………………………………
Cash dividends paid, ￥10 per share…
Purchase of treasury stock……………
Disposal of treasury stock……………
Net change in the year………………
BALANCE, MARCH 31, 2009…………
Net loss…………………………………
Purchase of treasury stock……………
Disposal of treasury stock……………
Net change in the year………………
BALANCE, MARCH 31, 2010…………
BALANCE, MARCH 31, 2009…………………………………
Net loss………………………………………………………
Purchase of treasury stock…………………………………
Disposal of treasury stock……………………………………
Net change in the year………………………………………
BALANCE, MARCH 31, 2010…………………………………
129,190,655
(30,453)
72,908
129,233,110
(6,832)
2,571
129,228,849
￥107
(185)
(78)
95
￥17
￥339
(71)
268
(6)
￥262
￥36,761
(20)
(9,347)
(1,292)
(5)
10
(4,786)
21,321
(11,234)
(1)
338
￥10,424
￥37,100
(20)
(9,347)
(1,292)
(5)
10
(4,857)
21,589
(11,234)
(1)
332
￥10,686
￥(87)
(5)
34
(58)
(1)
1
￥(58)
￥(1,261)
(4,602)
(5,863)
340
￥(5,523)
￥(3)
1
(2)
(97)
￥(99)
￥13,054
(20)
(9,347)
(1,292)
2,395
(11,234)
￥(8,839)
￥9,001
(24)
8,977
(1)
￥8,976
￥15,950
15,950
￥15,950
＄(835)
1,015
＄180
＄(24)
(1,045)
＄(1,069)
＄(63,045)
3,656
＄(59,389)
＄(621)
(8)
12
＄(617)
＄229,262
(120,795)
(8)
3
3,626
＄112,088
＄2,878
(62)
＄2,816
＄232,140
(120,795)
(8)
3
3,564
＄114,904
＄25,750
(120,795)
＄(95,045)
＄96,529
(9)
＄96,520
＄171,508
＄171,508
NET SALES (Note 12) …………………………………………………………………
COST OF SALES (Notes 12 and 13)…………………………………………………
Gross profit ………………………………………………………………………………
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (Note 13) …………
Operating loss ……………………………………………………………………
OTHER INCOME (EXPENSES):
Interest and dividend income…………………………………………………………
Interest expenses………………………………………………………………………
Commission for syndicate loan………………………………………………………
Gain on sales of property, plant and equipment……………………………………
Loss on sales and disposals of property, plant and equipment …………………
Loss on devaluation of investment securities………………………………………
Gain on sales of investment securities in associated company…………………
Loss on revaluations of inventories…………………………………………………
Loss on impairment of long-lived assets (Note 6)…………………………………
Foreign currency exchange gain (loss)-net………………………………………
Loss on restructuring divisions (Note 18)……………………………………………
Other-net ………………………………………………………………………………
Other expenses-net………………………………………………………………
LOSS BEFORE INCOME TAXES AND MINORITY INTERESTS…………………
INCOME TAXES (Note 11):
Current………………………………………………………………………………
Deferred…………………………………………………………………………………
Refund…………………………………………………………………………………
Total…………………………………………………………………………………
MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES
NET LOSS
PER SHARE OF COMMON STOCK (Note 2.p):
Basic net loss …………………………………………………………………………
Cash dividends applicable to the year………………………………………………
See notes to consolidated financial statements.
Millions of Yen
Thousands ofU.S. Dollars
(Note1)
Yen U.S. Dollars
2010 2009 2010
2010 2009 2010
Consolidated Statements of OperationsJUKI CORPORATION and Consolidated Subsidiaries, Years Ended March 31, 2010 and 2009
￥56,971
47,141
9,830
21,017
(11,187)
400
(1,124)
(548)
54
(186)
(93)
142
(125)
601
405
(474)
(11,661)
169
(587)
(418)
(9)
￥(11,234)
￥77,832
54,967
22,865
27,840
(4,975)
445
(1,123)
70
(108)
(408)
(416)
(979)
(375)
(2,516)
560
(4,850)
(9,825)
539
(446)
(564)
(471)
(7)
￥(9,347)
＄612,588
506,892
105,696
225,990
(120,294)
4,304
(12,084)
(5,897)
585
(1,999)
(998)
1,527
(1,343)
6,460
4,357
(5,088)
(125,382)
1,813
(6,307)
(4,494)
(93)
＄(120,795)
￥(86.93) ￥(72.34)
5.00
＄(0.93)
Financial Section
02Financial Section
12 13
02Financial Section
11
02 Financial Section
02Financial Section
14 15
02 Financial Section
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term borrowings (Notes 8 and 15)……………………………………………
Current portion of long-term debt (Notes 8, 14 and 15)……………………………
Payables (Note 15):
Trade notes (Note 12)………………………………………………………………
Trade accounts (Note 12)…………………………………………………………
Income taxes payable ………………………………………………………………
Accrued expenses……………………………………………………………………
Other current liabilities (Note 11)……………………………………………………
Total current liabilities……………………………………………………………
LONG-TERM LIABILITIES:
Long-term debt (Notes 8, 14 and 15)………………………………………………
Liability for retirement benefits (Note 9)……………………………………………
Other long-term liabilities (Note 11)…………………………………………………
Total long-term liabilities…………………………………………………………
COMMITMENTS AND CONTINGENT LIABILITIES (Notes 14, 16 and 17)
EQUITY (Note 10):
Common stock-authorized, 400,000,000 shares; issued,
129,370,899 shares in 2010 and 2009 ……………………………………………
Capital surplus…………………………………………………………………………
(Deficit) retained earnings ……………………………………………………………
Net unrealized gain (loss) on available-for-sale securities………………………
Net deferred loss on derivatives under hedge accounting………………………
Foreign currency translation adjustments …………………………………………
Treasury stock-at cost, 142,050 shares in 2010 and
137,789 shares in 2009……………………………………………………………
Total ………………………………………………………………………………
Minority interests ……………………………………………………………………
Total equity ………………………………………………………………………
TOTAL……………………………………………………………………………………
Millions of Yen
Thousands ofU.S. Dollars
(Note1)
2010 2009 2010
ASSETS
CURRENT ASSETS:
Cash and cash equivalents (Note 15)………………………………………………
Marketable securities (Notes 3 and 15)……………………………………………
Short-term investments (Note 4)……………………………………………………
Receivables:
Trade notes (Notes 12 and 15)……………………………………………………
Trade accounts (Notes 12 and 15)…………………………………………………
Other…………………………………………………………………………………
Allowance for doubtful accounts (Note 15)………………………………………
Inventories (Note 5)……………………………………………………………………
Deferred tax assets (Note 11)…………………………………………………………
Prepaid expenses and other current assets………………………………………
Total current assets………………………………………………………………
PROPERTY, PLANT AND EQUIPMENT (Notes 6, 7 and 8):
Land……………………………………………………………………………………
Buildings and structures………………………………………………………………
Machinery and equipment……………………………………………………………
Furniture and fixtures…………………………………………………………………
Construction in progress………………………………………………………………
Lease assets……………………………………………………………………………
Total…………………………………………………………………………………
Accumulated depreciation……………………………………………………………
Net property, plant and equipment………………………………………………
INVESTMENTS AND OTHER ASSETS:
Investment securities (Notes 3, 8 and 15)…………………………………………
Investments in and long-term loans to unconsolidated subsidiaries and associated companies …
Long-term receivables…………………………………………………………………
Deferred tax assets (Note 11)…………………………………………………………
Other assets (Note 7)…………………………………………………………………
Total investments and other assets ……………………………………………
TOTAL……………………………………………………………………………………
See notes to consolidated financial statements.
Millions of Yen
Thousands ofU.S. Dollars
(Note1)
Consolidated Balance SheetsJUKI CORPORATION and Consolidated Subsidiaries, March 31, 2010 and 2009
2010 2009 2010
￥8,292
6
57
1,407
11,746
1,089
(1,096)
29,298
494
4,558
55,851
7,585
34,191
18,297
6,406
16
1,065
67,560
(34,648)
32,912
1,994
237
38
6,402
3,647
12,318
￥101,081
￥8,926
44
30
1,550
11,272
982
(1,066)
36,071
859
4,304
62,972
7,491
22,954
19,090
6,576
6,497
362
62,970
(33,954)
29,016
1,914
283
81
5,354
4,035
11,667
￥103,655
＄89,161
69
609
15,134
126,300
11,715
(11,782)
315,031
5,309
49,006
600,552
81,558
367,639
196,746
68,880
173
11,453
726,449
(372,561)
353,888
21,439
2,553
411
68,843
39,209
132,455
＄1,086,895
￥33,388
9,632
4,522
6,481
134
3,220
2,761
60,138
22,829
6,929
499
30,257
15,950
8,976
(8,839)
17
(99)
(5,523)
(58)
10,424
262
10,686
￥101,081
￥38,135
7,356
2,445
2,501
207
4,141
9,717
64,502
10,511
6,700
353
17,564
15,950
8,977
2,395
(78)
(2)
(5,863)
(58)
21,321
268
21,589
￥103,655
＄359,008
103,569
48,622
69,690
1,440
34,624
29,687
646,640
245,469
74,503
5,379
325,351
171,508
96,520
(95,045)
180
(1,069)
(59,389)
(617)
112,088
2,816
114,904
＄1,086,895
02
JUKI booth at JISSO PROTEC 2009 (Jisso Process Technology Exhibition) held at Tokyo Big Sight (June 2009)
See notes to consolidated financial statements.
Millions of Yen
Thousands of U.S. Dollars (Note 1)
Consolidated Statements of Changes in Equity JUKI CORPORATION and Consolidated Subsidiaries, Years Ended March 31, 2010 and 2009
Number ofShares of
Common StockOutstanding
CommonStock
CapitalSurplus
(Deficit)RetainedEarnings
Net UnrealizedGain (Loss) on
Available-for-saleSecurities
ForeignCurrency
TranslationAdjustments
TreasuryStock
CommonStock
CapitalSurplus
(Deficit)RetainedEarnings
Net UnrealizedGain (Loss) onAvailable-for-sale
Securities
ForeignCurrency
TranslationAdjustments
TreasuryStock
See notes to consolidated financial statements.
Millions of Yen
Thousands of U.S. Dollars (Note 1)
Net Deferred Losson Derivatives under Hedge
Accounting
Net Deferred Losson Derivatives under Hedge
Accounting
TotalMinority Interests
Total Equity
TotalMinority Interests
Total Equity
BALANCE, APRIL 1, 2008……………
Adjustment of retained earnings
due to an adoption of PITF
No. 18 (Note 2.b)…………………
Net loss…………………………………
Cash dividends paid, ￥10 per share…
Purchase of treasury stock……………
Disposal of treasury stock……………
Net change in the year………………
BALANCE, MARCH 31, 2009…………
Net loss…………………………………
Purchase of treasury stock……………
Disposal of treasury stock……………
Net change in the year………………
BALANCE, MARCH 31, 2010…………
BALANCE, MARCH 31, 2009…………………………………
Net loss………………………………………………………
Purchase of treasury stock…………………………………
Disposal of treasury stock……………………………………
Net change in the year………………………………………
BALANCE, MARCH 31, 2010…………………………………
129,190,655
(30,453)
72,908
129,233,110
(6,832)
2,571
129,228,849
￥107
(185)
(78)
95
￥17
￥339
(71)
268
(6)
￥262
￥36,761
(20)
(9,347)
(1,292)
(5)
10
(4,786)
21,321
(11,234)
(1)
338
￥10,424
￥37,100
(20)
(9,347)
(1,292)
(5)
10
(4,857)
21,589
(11,234)
(1)
332
￥10,686
￥(87)
(5)
34
(58)
(1)
1
￥(58)
￥(1,261)
(4,602)
(5,863)
340
￥(5,523)
￥(3)
1
(2)
(97)
￥(99)
￥13,054
(20)
(9,347)
(1,292)
2,395
(11,234)
￥(8,839)
￥9,001
(24)
8,977
(1)
￥8,976
￥15,950
15,950
￥15,950
＄(835)
1,015
＄180
＄(24)
(1,045)
＄(1,069)
＄(63,045)
3,656
＄(59,389)
＄(621)
(8)
12
＄(617)
＄229,262
(120,795)
(8)
3
3,626
＄112,088
＄2,878
(62)
＄2,816
＄232,140
(120,795)
(8)
3
3,564
＄114,904
＄25,750
(120,795)
＄(95,045)
＄96,529
(9)
＄96,520
＄171,508
＄171,508
NET SALES (Note 12) …………………………………………………………………
COST OF SALES (Notes 12 and 13)…………………………………………………
Gross profit ………………………………………………………………………………
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (Note 13) …………
Operating loss ……………………………………………………………………
OTHER INCOME (EXPENSES):
Interest and dividend income…………………………………………………………
Interest expenses………………………………………………………………………
Commission for syndicate loan………………………………………………………
Gain on sales of property, plant and equipment……………………………………
Loss on sales and disposals of property, plant and equipment …………………
Loss on devaluation of investment securities………………………………………
Gain on sales of investment securities in associated company…………………
Loss on revaluations of inventories…………………………………………………
Loss on impairment of long-lived assets (Note 6)…………………………………
Foreign currency exchange gain (loss)-net………………………………………
Loss on restructuring divisions (Note 18)……………………………………………
Other-net ………………………………………………………………………………
Other expenses-net………………………………………………………………
LOSS BEFORE INCOME TAXES AND MINORITY INTERESTS…………………
INCOME TAXES (Note 11):
Current………………………………………………………………………………
Deferred…………………………………………………………………………………
Refund…………………………………………………………………………………
Total…………………………………………………………………………………
MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES
NET LOSS
PER SHARE OF COMMON STOCK (Note 2.p):
Basic net loss …………………………………………………………………………
Cash dividends applicable to the year………………………………………………
See notes to consolidated financial statements.
Millions of Yen
Thousands ofU.S. Dollars
(Note1)
Yen U.S. Dollars
2010 2009 2010
2010 2009 2010
Consolidated Statements of OperationsJUKI CORPORATION and Consolidated Subsidiaries, Years Ended March 31, 2010 and 2009
￥56,971
47,141
9,830
21,017
(11,187)
400
(1,124)
(548)
54
(186)
(93)
142
(125)
601
405
(474)
(11,661)
169
(587)
(418)
(9)
￥(11,234)
￥77,832
54,967
22,865
27,840
(4,975)
445
(1,123)
70
(108)
(408)
(416)
(979)
(375)
(2,516)
560
(4,850)
(9,825)
539
(446)
(564)
(471)
(7)
￥(9,347)
＄612,588
506,892
105,696
225,990
(120,294)
4,304
(12,084)
(5,897)
585
(1,999)
(998)
1,527
(1,343)
6,460
4,357
(5,088)
(125,382)
1,813
(6,307)
(4,494)
(93)
＄(120,795)
￥(86.93) ￥(72.34)
5.00
＄(0.93)
Financial Section
02Financial Section
12 13
02Financial Section
11
02 Financial Section
02Financial Section
14 15
02 Financial Section
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term borrowings (Notes 8 and 15)……………………………………………
Current portion of long-term debt (Notes 8, 14 and 15)……………………………
Payables (Note 15):
Trade notes (Note 12)………………………………………………………………
Trade accounts (Note 12)…………………………………………………………
Income taxes payable ………………………………………………………………
Accrued expenses……………………………………………………………………
Other current liabilities (Note 11)……………………………………………………
Total current liabilities……………………………………………………………
LONG-TERM LIABILITIES:
Long-term debt (Notes 8, 14 and 15)………………………………………………
Liability for retirement benefits (Note 9)……………………………………………
Other long-term liabilities (Note 11)…………………………………………………
Total long-term liabilities…………………………………………………………
COMMITMENTS AND CONTINGENT LIABILITIES (Notes 14, 16 and 17)
EQUITY (Note 10):
Common stock-authorized, 400,000,000 shares; issued,
129,370,899 shares in 2010 and 2009 ……………………………………………
Capital surplus…………………………………………………………………………
(Deficit) retained earnings ……………………………………………………………
Net unrealized gain (loss) on available-for-sale securities………………………
Net deferred loss on derivatives under hedge accounting………………………
Foreign currency translation adjustments …………………………………………
Treasury stock-at cost, 142,050 shares in 2010 and
137,789 shares in 2009……………………………………………………………
Total ………………………………………………………………………………
Minority interests ……………………………………………………………………
Total equity ………………………………………………………………………
TOTAL……………………………………………………………………………………
Millions of Yen
Thousands ofU.S. Dollars
(Note1)
2010 2009 2010
ASSETS
CURRENT ASSETS:
Cash and cash equivalents (Note 15)………………………………………………
Marketable securities (Notes 3 and 15)……………………………………………
Short-term investments (Note 4)……………………………………………………
Receivables:
Trade notes (Notes 12 and 15)……………………………………………………
Trade accounts (Notes 12 and 15)…………………………………………………
Other…………………………………………………………………………………
Allowance for doubtful accounts (Note 15)………………………………………
Inventories (Note 5)……………………………………………………………………
Deferred tax assets (Note 11)…………………………………………………………
Prepaid expenses and other current assets………………………………………
Total current assets………………………………………………………………
PROPERTY, PLANT AND EQUIPMENT (Notes 6, 7 and 8):
Land……………………………………………………………………………………
Buildings and structures………………………………………………………………
Machinery and equipment……………………………………………………………
Furniture and fixtures…………………………………………………………………
Construction in progress………………………………………………………………
Lease assets……………………………………………………………………………
Total…………………………………………………………………………………
Accumulated depreciation……………………………………………………………
Net property, plant and equipment………………………………………………
INVESTMENTS AND OTHER ASSETS:
Investment securities (Notes 3, 8 and 15)…………………………………………
Investments in and long-term loans to unconsolidated subsidiaries and associated companies …
Long-term receivables…………………………………………………………………
Deferred tax assets (Note 11)…………………………………………………………
Other assets (Note 7)…………………………………………………………………
Total investments and other assets ……………………………………………
TOTAL……………………………………………………………………………………
See notes to consolidated financial statements.
Millions of Yen
Thousands ofU.S. Dollars
(Note1)
Consolidated Balance SheetsJUKI CORPORATION and Consolidated Subsidiaries, March 31, 2010 and 2009
2010 2009 2010
￥8,292
6
57
1,407
11,746
1,089
(1,096)
29,298
494
4,558
55,851
7,585
34,191
18,297
6,406
16
1,065
67,560
(34,648)
32,912
1,994
237
38
6,402
3,647
12,318
￥101,081
￥8,926
44
30
1,550
11,272
982
(1,066)
36,071
859
4,304
62,972
7,491
22,954
19,090
6,576
6,497
362
62,970
(33,954)
29,016
1,914
283
81
5,354
4,035
11,667
￥103,655
＄89,161
69
609
15,134
126,300
11,715
(11,782)
315,031
5,309
49,006
600,552
81,558
367,639
196,746
68,880
173
11,453
726,449
(372,561)
353,888
21,439
2,553
411
68,843
39,209
132,455
＄1,086,895
￥33,388
9,632
4,522
6,481
134
3,220
2,761
60,138
22,829
6,929
499
30,257
15,950
8,976
(8,839)
17
(99)
(5,523)
(58)
10,424
262
10,686
￥101,081
￥38,135
7,356
2,445
2,501
207
4,141
9,717
64,502
10,511
6,700
353
17,564
15,950
8,977
2,395
(78)
(2)
(5,863)
(58)
21,321
268
21,589
￥103,655
＄359,008
103,569
48,622
69,690
1,440
34,624
29,687
646,640
245,469
74,503
5,379
325,351
171,508
96,520
(95,045)
180
(1,069)
(59,389)
(617)
112,088
2,816
114,904
＄1,086,895
02
JUKI booth at JISSO PROTEC 2009 (Jisso Process Technology Exhibition) held at Tokyo Big Sight (June 2009)
See notes to consolidated financial statements.
Millions of Yen
Thousands of U.S. Dollars (Note 1)
Consolidated Statements of Changes in Equity JUKI CORPORATION and Consolidated Subsidiaries, Years Ended March 31, 2010 and 2009
Number ofShares of
Common StockOutstanding
CommonStock
CapitalSurplus
(Deficit)RetainedEarnings
Net UnrealizedGain (Loss) on
Available-for-saleSecurities
ForeignCurrency
TranslationAdjustments
TreasuryStock
CommonStock
CapitalSurplus
(Deficit)RetainedEarnings
Net UnrealizedGain (Loss) onAvailable-for-sale
Securities
ForeignCurrency
TranslationAdjustments
TreasuryStock
See notes to consolidated financial statements.
Millions of Yen
Thousands of U.S. Dollars (Note 1)
Net Deferred Losson Derivatives under Hedge
Accounting
Net Deferred Losson Derivatives under Hedge
Accounting
TotalMinority Interests
Total Equity
TotalMinority Interests
Total Equity
BALANCE, APRIL 1, 2008……………
Adjustment of retained earnings
due to an adoption of PITF
No. 18 (Note 2.b)…………………
Net loss…………………………………
Cash dividends paid, ￥10 per share…
Purchase of treasury stock……………
Disposal of treasury stock……………
Net change in the year………………
BALANCE, MARCH 31, 2009…………
Net loss…………………………………
Purchase of treasury stock……………
Disposal of treasury stock……………
Net change in the year………………
BALANCE, MARCH 31, 2010…………
BALANCE, MARCH 31, 2009…………………………………
Net loss………………………………………………………
Purchase of treasury stock…………………………………
Disposal of treasury stock……………………………………
Net change in the year………………………………………
BALANCE, MARCH 31, 2010…………………………………
129,190,655
(30,453)
72,908
129,233,110
(6,832)
2,571
129,228,849
￥107
(185)
(78)
95
￥17
￥339
(71)
268
(6)
￥262
￥36,761
(20)
(9,347)
(1,292)
(5)
10
(4,786)
21,321
(11,234)
(1)
338
￥10,424
￥37,100
(20)
(9,347)
(1,292)
(5)
10
(4,857)
21,589
(11,234)
(1)
332
￥10,686
￥(87)
(5)
34
(58)
(1)
1
￥(58)
￥(1,261)
(4,602)
(5,863)
340
￥(5,523)
￥(3)
1
(2)
(97)
￥(99)
￥13,054
(20)
(9,347)
(1,292)
2,395
(11,234)
￥(8,839)
￥9,001
(24)
8,977
(1)
￥8,976
￥15,950
15,950
￥15,950
＄(835)
1,015
＄180
＄(24)
(1,045)
＄(1,069)
＄(63,045)
3,656
＄(59,389)
＄(621)
(8)
12
＄(617)
＄229,262
(120,795)
(8)
3
3,626
＄112,088
＄2,878
(62)
＄2,816
＄232,140
(120,795)
(8)
3
3,564
＄114,904
＄25,750
(120,795)
＄(95,045)
＄96,529
(9)
＄96,520
＄171,508
＄171,508
NET SALES (Note 12) …………………………………………………………………
COST OF SALES (Notes 12 and 13)…………………………………………………
Gross profit ………………………………………………………………………………
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (Note 13) …………
Operating loss ……………………………………………………………………
OTHER INCOME (EXPENSES):
Interest and dividend income…………………………………………………………
Interest expenses………………………………………………………………………
Commission for syndicate loan………………………………………………………
Gain on sales of property, plant and equipment……………………………………
Loss on sales and disposals of property, plant and equipment …………………
Loss on devaluation of investment securities………………………………………
Gain on sales of investment securities in associated company…………………
Loss on revaluations of inventories…………………………………………………
Loss on impairment of long-lived assets (Note 6)…………………………………
Foreign currency exchange gain (loss)-net………………………………………
Loss on restructuring divisions (Note 18)……………………………………………
Other-net ………………………………………………………………………………
Other expenses-net………………………………………………………………
LOSS BEFORE INCOME TAXES AND MINORITY INTERESTS…………………
INCOME TAXES (Note 11):
Current………………………………………………………………………………
Deferred…………………………………………………………………………………
Refund…………………………………………………………………………………
Total…………………………………………………………………………………
MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES
NET LOSS
PER SHARE OF COMMON STOCK (Note 2.p):
Basic net loss …………………………………………………………………………
Cash dividends applicable to the year………………………………………………
See notes to consolidated financial statements.
Millions of Yen
Thousands ofU.S. Dollars
(Note1)
Yen U.S. Dollars
2010 2009 2010
2010 2009 2010
Consolidated Statements of OperationsJUKI CORPORATION and Consolidated Subsidiaries, Years Ended March 31, 2010 and 2009
￥56,971
47,141
9,830
21,017
(11,187)
400
(1,124)
(548)
54
(186)
(93)
142
(125)
601
405
(474)
(11,661)
169
(587)
(418)
(9)
￥(11,234)
￥77,832
54,967
22,865
27,840
(4,975)
445
(1,123)
70
(108)
(408)
(416)
(979)
(375)
(2,516)
560
(4,850)
(9,825)
539
(446)
(564)
(471)
(7)
￥(9,347)
＄612,588
506,892
105,696
225,990
(120,294)
4,304
(12,084)
(5,897)
585
(1,999)
(998)
1,527
(1,343)
6,460
4,357
(5,088)
(125,382)
1,813
(6,307)
(4,494)
(93)
＄(120,795)
￥(86.93) ￥(72.34)
5.00
＄(0.93)
Financial Section
02Financial Section
12 13
02Financial Section
11
02 Financial Section
02Financial Section
14 15
02 Financial Section
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term borrowings (Notes 8 and 15)……………………………………………
Current portion of long-term debt (Notes 8, 14 and 15)……………………………
Payables (Note 15):
Trade notes (Note 12)………………………………………………………………
Trade accounts (Note 12)…………………………………………………………
Income taxes payable ………………………………………………………………
Accrued expenses……………………………………………………………………
Other current liabilities (Note 11)……………………………………………………
Total current liabilities……………………………………………………………
LONG-TERM LIABILITIES:
Long-term debt (Notes 8, 14 and 15)………………………………………………
Liability for retirement benefits (Note 9)……………………………………………
Other long-term liabilities (Note 11)…………………………………………………
Total long-term liabilities…………………………………………………………
COMMITMENTS AND CONTINGENT LIABILITIES (Notes 14, 16 and 17)
EQUITY (Note 10):
Common stock-authorized, 400,000,000 shares; issued,
129,370,899 shares in 2010 and 2009 ……………………………………………
Capital surplus…………………………………………………………………………
(Deficit) retained earnings ……………………………………………………………
Net unrealized gain (loss) on available-for-sale securities………………………
Net deferred loss on derivatives under hedge accounting………………………
Foreign currency translation adjustments …………………………………………
Treasury stock-at cost, 142,050 shares in 2010 and
137,789 shares in 2009……………………………………………………………
Total ………………………………………………………………………………
Minority interests ……………………………………………………………………
Total equity ………………………………………………………………………
TOTAL……………………………………………………………………………………
Millions of Yen
Thousands ofU.S. Dollars
(Note1)
2010 2009 2010
ASSETS
CURRENT ASSETS:
Cash and cash equivalents (Note 15)………………………………………………
Marketable securities (Notes 3 and 15)……………………………………………
Short-term investments (Note 4)……………………………………………………
Receivables:
Trade notes (Notes 12 and 15)……………………………………………………
Trade accounts (Notes 12 and 15)…………………………………………………
Other…………………………………………………………………………………
Allowance for doubtful accounts (Note 15)………………………………………
Inventories (Note 5)……………………………………………………………………
Deferred tax assets (Note 11)…………………………………………………………
Prepaid expenses and other current assets………………………………………
Total current assets………………………………………………………………
PROPERTY, PLANT AND EQUIPMENT (Notes 6, 7 and 8):
Land……………………………………………………………………………………
Buildings and structures………………………………………………………………
Machinery and equipment……………………………………………………………
Furniture and fixtures…………………………………………………………………
Construction in progress………………………………………………………………
Lease assets……………………………………………………………………………
Total…………………………………………………………………………………
Accumulated depreciation……………………………………………………………
Net property, plant and equipment………………………………………………
INVESTMENTS AND OTHER ASSETS:
Investment securities (Notes 3, 8 and 15)…………………………………………
Investments in and long-term loans to unconsolidated subsidiaries and associated companies …
Long-term receivables…………………………………………………………………
Deferred tax assets (Note 11)…………………………………………………………
Other assets (Note 7)…………………………………………………………………
Total investments and other assets ……………………………………………
TOTAL……………………………………………………………………………………
See notes to consolidated financial statements.
Millions of Yen
Thousands ofU.S. Dollars
(Note1)
Consolidated Balance SheetsJUKI CORPORATION and Consolidated Subsidiaries, March 31, 2010 and 2009
2010 2009 2010
￥8,292
6
57
1,407
11,746
1,089
(1,096)
29,298
494
4,558
55,851
7,585
34,191
18,297
6,406
16
1,065
67,560
(34,648)
32,912
1,994
237
38
6,402
3,647
12,318
￥101,081
￥8,926
44
30
1,550
11,272
982
(1,066)
36,071
859
4,304
62,972
7,491
22,954
19,090
6,576
6,497
362
62,970
(33,954)
29,016
1,914
283
81
5,354
4,035
11,667
￥103,655
＄89,161
69
609
15,134
126,300
11,715
(11,782)
315,031
5,309
49,006
600,552
81,558
367,639
196,746
68,880
173
11,453
726,449
(372,561)
353,888
21,439
2,553
411
68,843
39,209
132,455
＄1,086,895
￥33,388
9,632
4,522
6,481
134
3,220
2,761
60,138
22,829
6,929
499
30,257
15,950
8,976
(8,839)
17
(99)
(5,523)
(58)
10,424
262
10,686
￥101,081
￥38,135
7,356
2,445
2,501
207
4,141
9,717
64,502
10,511
6,700
353
17,564
15,950
8,977
2,395
(78)
(2)
(5,863)
(58)
21,321
268
21,589
￥103,655
＄359,008
103,569
48,622
69,690
1,440
34,624
29,687
646,640
245,469
74,503
5,379
325,351
171,508
96,520
(95,045)
180
(1,069)
(59,389)
(617)
112,088
2,816
114,904
＄1,086,895
02
JUKI booth at JISSO PROTEC 2009 (Jisso Process Technology Exhibition) held at Tokyo Big Sight (June 2009)
See notes to consolidated financial statements.
Millions of Yen
Thousands of U.S. Dollars (Note 1)
Consolidated Statements of Changes in Equity JUKI CORPORATION and Consolidated Subsidiaries, Years Ended March 31, 2010 and 2009
Number ofShares of
Common StockOutstanding
CommonStock
CapitalSurplus
(Deficit)RetainedEarnings
Net UnrealizedGain (Loss) on
Available-for-saleSecurities
ForeignCurrency
TranslationAdjustments
TreasuryStock
CommonStock
CapitalSurplus
(Deficit)RetainedEarnings
Net UnrealizedGain (Loss) onAvailable-for-sale
Securities
ForeignCurrency
TranslationAdjustments
TreasuryStock
See notes to consolidated financial statements.
Millions of Yen
Thousands of U.S. Dollars (Note 1)
Net Deferred Losson Derivatives under Hedge
Accounting
Net Deferred Losson Derivatives under Hedge
Accounting
TotalMinority Interests
Total Equity
TotalMinority Interests
Total Equity
BALANCE, APRIL 1, 2008……………
Adjustment of retained earnings
due to an adoption of PITF
No. 18 (Note 2.b)…………………
Net loss…………………………………
Cash dividends paid, ￥10 per share…
Purchase of treasury stock……………
Disposal of treasury stock……………
Net change in the year………………
BALANCE, MARCH 31, 2009…………
Net loss…………………………………
Purchase of treasury stock……………
Disposal of treasury stock……………
Net change in the year………………
BALANCE, MARCH 31, 2010…………
BALANCE, MARCH 31, 2009…………………………………
Net loss………………………………………………………
Purchase of treasury stock…………………………………
Disposal of treasury stock……………………………………
Net change in the year………………………………………
BALANCE, MARCH 31, 2010…………………………………
129,190,655
(30,453)
72,908
129,233,110
(6,832)
2,571
129,228,849
￥107
(185)
(78)
95
￥17
￥339
(71)
268
(6)
￥262
￥36,761
(20)
(9,347)
(1,292)
(5)
10
(4,786)
21,321
(11,234)
(1)
338
￥10,424
￥37,100
(20)
(9,347)
(1,292)
(5)
10
(4,857)
21,589
(11,234)
(1)
332
￥10,686
￥(87)
(5)
34
(58)
(1)
1
￥(58)
￥(1,261)
(4,602)
(5,863)
340
￥(5,523)
￥(3)
1
(2)
(97)
￥(99)
￥13,054
(20)
(9,347)
(1,292)
2,395
(11,234)
￥(8,839)
￥9,001
(24)
8,977
(1)
￥8,976
￥15,950
15,950
￥15,950
＄(835)
1,015
＄180
＄(24)
(1,045)
＄(1,069)
＄(63,045)
3,656
＄(59,389)
＄(621)
(8)
12
＄(617)
＄229,262
(120,795)
(8)
3
3,626
＄112,088
＄2,878
(62)
＄2,816
＄232,140
(120,795)
(8)
3
3,564
＄114,904
＄25,750
(120,795)
＄(95,045)
＄96,529
(9)
＄96,520
＄171,508
＄171,508
NET SALES (Note 12) …………………………………………………………………
COST OF SALES (Notes 12 and 13)…………………………………………………
Gross profit ………………………………………………………………………………
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (Note 13) …………
Operating loss ……………………………………………………………………
OTHER INCOME (EXPENSES):
Interest and dividend income…………………………………………………………
Interest expenses………………………………………………………………………
Commission for syndicate loan………………………………………………………
Gain on sales of property, plant and equipment……………………………………
Loss on sales and disposals of property, plant and equipment …………………
Loss on devaluation of investment securities………………………………………
Gain on sales of investment securities in associated company…………………
Loss on revaluations of inventories…………………………………………………
Loss on impairment of long-lived assets (Note 6)…………………………………
Foreign currency exchange gain (loss)-net………………………………………
Loss on restructuring divisions (Note 18)……………………………………………
Other-net ………………………………………………………………………………
Other expenses-net………………………………………………………………
LOSS BEFORE INCOME TAXES AND MINORITY INTERESTS…………………
INCOME TAXES (Note 11):
Current………………………………………………………………………………
Deferred…………………………………………………………………………………
Refund…………………………………………………………………………………
Total…………………………………………………………………………………
MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES
NET LOSS
PER SHARE OF COMMON STOCK (Note 2.p):
Basic net loss …………………………………………………………………………
Cash dividends applicable to the year………………………………………………
See notes to consolidated financial statements.
Millions of Yen
Thousands ofU.S. Dollars
(Note1)
Yen U.S. Dollars
2010 2009 2010
2010 2009 2010
Consolidated Statements of OperationsJUKI CORPORATION and Consolidated Subsidiaries, Years Ended March 31, 2010 and 2009
￥56,971
47,141
9,830
21,017
(11,187)
400
(1,124)
(548)
54
(186)
(93)
142
(125)
601
405
(474)
(11,661)
169
(587)
(418)
(9)
￥(11,234)
￥77,832
54,967
22,865
27,840
(4,975)
445
(1,123)
70
(108)
(408)
(416)
(979)
(375)
(2,516)
560
(4,850)
(9,825)
539
(446)
(564)
(471)
(7)
￥(9,347)
＄612,588
506,892
105,696
225,990
(120,294)
4,304
(12,084)
(5,897)
585
(1,999)
(998)
1,527
(1,343)
6,460
4,357
(5,088)
(125,382)
1,813
(6,307)
(4,494)
(93)
＄(120,795)
￥(86.93) ￥(72.34)
5.00
＄(0.93)
Financial Section
02Financial Section
12 13
02Financial Section
11
02 Financial Section
02Financial Section
14 15
02 Financial Section
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term borrowings (Notes 8 and 15)……………………………………………
Current portion of long-term debt (Notes 8, 14 and 15)……………………………
Payables (Note 15):
Trade notes (Note 12)………………………………………………………………
Trade accounts (Note 12)…………………………………………………………
Income taxes payable ………………………………………………………………
Accrued expenses……………………………………………………………………
Other current liabilities (Note 11)……………………………………………………
Total current liabilities……………………………………………………………
LONG-TERM LIABILITIES:
Long-term debt (Notes 8, 14 and 15)………………………………………………
Liability for retirement benefits (Note 9)……………………………………………
Other long-term liabilities (Note 11)…………………………………………………
Total long-term liabilities…………………………………………………………
COMMITMENTS AND CONTINGENT LIABILITIES (Notes 14, 16 and 17)
EQUITY (Note 10):
Common stock-authorized, 400,000,000 shares; issued,
129,370,899 shares in 2010 and 2009 ……………………………………………
Capital surplus…………………………………………………………………………
(Deficit) retained earnings ……………………………………………………………
Net unrealized gain (loss) on available-for-sale securities………………………
Net deferred loss on derivatives under hedge accounting………………………
Foreign currency translation adjustments …………………………………………
Treasury stock-at cost, 142,050 shares in 2010 and
137,789 shares in 2009……………………………………………………………
Total ………………………………………………………………………………
Minority interests ……………………………………………………………………
Total equity ………………………………………………………………………
TOTAL……………………………………………………………………………………
Millions of Yen
Thousands ofU.S. Dollars
(Note1)
2010 2009 2010
ASSETS
CURRENT ASSETS:
Cash and cash equivalents (Note 15)………………………………………………
Marketable securities (Notes 3 and 15)……………………………………………
Short-term investments (Note 4)……………………………………………………
Receivables:
Trade notes (Notes 12 and 15)……………………………………………………
Trade accounts (Notes 12 and 15)…………………………………………………
Other…………………………………………………………………………………
Allowance for doubtful accounts (Note 15)………………………………………
Inventories (Note 5)……………………………………………………………………
Deferred tax assets (Note 11)…………………………………………………………
Prepaid expenses and other current assets………………………………………
Total current assets………………………………………………………………
PROPERTY, PLANT AND EQUIPMENT (Notes 6, 7 and 8):
Land……………………………………………………………………………………
Buildings and structures………………………………………………………………
Machinery and equipment……………………………………………………………
Furniture and fixtures…………………………………………………………………
Construction in progress………………………………………………………………
Lease assets……………………………………………………………………………
Total…………………………………………………………………………………
Accumulated depreciation……………………………………………………………
Net property, plant and equipment………………………………………………
INVESTMENTS AND OTHER ASSETS:
Investment securities (Notes 3, 8 and 15)…………………………………………
Investments in and long-term loans to unconsolidated subsidiaries and associated companies …
Long-term receivables…………………………………………………………………
Deferred tax assets (Note 11)…………………………………………………………
Other assets (Note 7)…………………………………………………………………
Total investments and other assets ……………………………………………
TOTAL……………………………………………………………………………………
See notes to consolidated financial statements.
Millions of Yen
Thousands ofU.S. Dollars
(Note1)
Consolidated Balance SheetsJUKI CORPORATION and Consolidated Subsidiaries, March 31, 2010 and 2009
2010 2009 2010
￥8,292
6
57
1,407
11,746
1,089
(1,096)
29,298
494
4,558
55,851
7,585
34,191
18,297
6,406
16
1,065
67,560
(34,648)
32,912
1,994
237
38
6,402
3,647
12,318
￥101,081
￥8,926
44
30
1,550
11,272
982
(1,066)
36,071
859
4,304
62,972
7,491
22,954
19,090
6,576
6,497
362
62,970
(33,954)
29,016
1,914
283
81
5,354
4,035
11,667
￥103,655
＄89,161
69
609
15,134
126,300
11,715
(11,782)
315,031
5,309
49,006
600,552
81,558
367,639
196,746
68,880
173
11,453
726,449
(372,561)
353,888
21,439
2,553
411
68,843
39,209
132,455
＄1,086,895
￥33,388
9,632
4,522
6,481
134
3,220
2,761
60,138
22,829
6,929
499
30,257
15,950
8,976
(8,839)
17
(99)
(5,523)
(58)
10,424
262
10,686
￥101,081
￥38,135
7,356
2,445
2,501
207
4,141
9,717
64,502
10,511
6,700
353
17,564
15,950
8,977
2,395
(78)
(2)
(5,863)
(58)
21,321
268
21,589
￥103,655
＄359,008
103,569
48,622
69,690
1,440
34,624
29,687
646,640
245,469
74,503
5,379
325,351
171,508
96,520
(95,045)
180
(1,069)
(59,389)
(617)
112,088
2,816
114,904
＄1,086,895
02
JUKI booth at JISSO PROTEC 2009 (Jisso Process Technology Exhibition) held at Tokyo Big Sight (June 2009)
See notes to consolidated financial statements.
Millions of Yen
Thousands of U.S. Dollars (Note 1)
Consolidated Statements of Changes in Equity JUKI CORPORATION and Consolidated Subsidiaries, Years Ended March 31, 2010 and 2009
Number ofShares of
Common StockOutstanding
CommonStock
CapitalSurplus
(Deficit)RetainedEarnings
Net UnrealizedGain (Loss) on
Available-for-saleSecurities
ForeignCurrency
TranslationAdjustments
TreasuryStock
CommonStock
CapitalSurplus
(Deficit)RetainedEarnings
Net UnrealizedGain (Loss) onAvailable-for-sale
Securities
ForeignCurrency
TranslationAdjustments
TreasuryStock
See notes to consolidated financial statements.
Millions of Yen
Thousands of U.S. Dollars (Note 1)
Net Deferred Losson Derivatives under Hedge
Accounting
Net Deferred Losson Derivatives under Hedge
Accounting
TotalMinority Interests
Total Equity
TotalMinority Interests
Total Equity
BALANCE, APRIL 1, 2008……………
Adjustment of retained earnings
due to an adoption of PITF
No. 18 (Note 2.b)…………………
Net loss…………………………………
Cash dividends paid, ￥10 per share…
Purchase of treasury stock……………
Disposal of treasury stock……………
Net change in the year………………
BALANCE, MARCH 31, 2009…………
Net loss…………………………………
Purchase of treasury stock……………
Disposal of treasury stock……………
Net change in the year………………
BALANCE, MARCH 31, 2010…………
BALANCE, MARCH 31, 2009…………………………………
Net loss………………………………………………………
Purchase of treasury stock…………………………………
Disposal of treasury stock……………………………………
Net change in the year………………………………………
BALANCE, MARCH 31, 2010…………………………………
129,190,655
(30,453)
72,908
129,233,110
(6,832)
2,571
129,228,849
￥107
(185)
(78)
95
￥17
￥339
(71)
268
(6)
￥262
￥36,761
(20)
(9,347)
(1,292)
(5)
10
(4,786)
21,321
(11,234)
(1)
338
￥10,424
￥37,100
(20)
(9,347)
(1,292)
(5)
10
(4,857)
21,589
(11,234)
(1)
332
￥10,686
￥(87)
(5)
34
(58)
(1)
1
￥(58)
￥(1,261)
(4,602)
(5,863)
340
￥(5,523)
￥(3)
1
(2)
(97)
￥(99)
￥13,054
(20)
(9,347)
(1,292)
2,395
(11,234)
￥(8,839)
￥9,001
(24)
8,977
(1)
￥8,976
￥15,950
15,950
￥15,950
＄(835)
1,015
＄180
＄(24)
(1,045)
＄(1,069)
＄(63,045)
3,656
＄(59,389)
＄(621)
(8)
12
＄(617)
＄229,262
(120,795)
(8)
3
3,626
＄112,088
＄2,878
(62)
＄2,816
＄232,140
(120,795)
(8)
3
3,564
＄114,904
＄25,750
(120,795)
＄(95,045)
＄96,529
(9)
＄96,520
＄171,508
＄171,508
NET SALES (Note 12) …………………………………………………………………
COST OF SALES (Notes 12 and 13)…………………………………………………
Gross profit ………………………………………………………………………………
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (Note 13) …………
Operating loss ……………………………………………………………………
OTHER INCOME (EXPENSES):
Interest and dividend income…………………………………………………………
Interest expenses………………………………………………………………………
Commission for syndicate loan………………………………………………………
Gain on sales of property, plant and equipment……………………………………
Loss on sales and disposals of property, plant and equipment …………………
Loss on devaluation of investment securities………………………………………
Gain on sales of investment securities in associated company…………………
Loss on revaluations of inventories…………………………………………………
Loss on impairment of long-lived assets (Note 6)…………………………………
Foreign currency exchange gain (loss)-net………………………………………
Loss on restructuring divisions (Note 18)……………………………………………
Other-net ………………………………………………………………………………
Other expenses-net………………………………………………………………
LOSS BEFORE INCOME TAXES AND MINORITY INTERESTS…………………
INCOME TAXES (Note 11):
Current………………………………………………………………………………
Deferred…………………………………………………………………………………
Refund…………………………………………………………………………………
Total…………………………………………………………………………………
MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES
NET LOSS
PER SHARE OF COMMON STOCK (Note 2.p):
Basic net loss …………………………………………………………………………
Cash dividends applicable to the year………………………………………………
See notes to consolidated financial statements.
Millions of Yen
Thousands ofU.S. Dollars
(Note1)
Yen U.S. Dollars
2010 2009 2010
2010 2009 2010
Consolidated Statements of OperationsJUKI CORPORATION and Consolidated Subsidiaries, Years Ended March 31, 2010 and 2009
￥56,971
47,141
9,830
21,017
(11,187)
400
(1,124)
(548)
54
(186)
(93)
142
(125)
601
405
(474)
(11,661)
169
(587)
(418)
(9)
￥(11,234)
￥77,832
54,967
22,865
27,840
(4,975)
445
(1,123)
70
(108)
(408)
(416)
(979)
(375)
(2,516)
560
(4,850)
(9,825)
539
(446)
(564)
(471)
(7)
￥(9,347)
＄612,588
506,892
105,696
225,990
(120,294)
4,304
(12,084)
(5,897)
585
(1,999)
(998)
1,527
(1,343)
6,460
4,357
(5,088)
(125,382)
1,813
(6,307)
(4,494)
(93)
＄(120,795)
￥(86.93) ￥(72.34)
5.00
＄(0.93)
Financial Section
02Financial Section
12 13
02Financial Section
11
02 Financial Section
02Financial Section
14 15
02 Financial Section
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term borrowings (Notes 8 and 15)……………………………………………
Current portion of long-term debt (Notes 8, 14 and 15)……………………………
Payables (Note 15):
Trade notes (Note 12)………………………………………………………………
Trade accounts (Note 12)…………………………………………………………
Income taxes payable ………………………………………………………………
Accrued expenses……………………………………………………………………
Other current liabilities (Note 11)……………………………………………………
Total current liabilities……………………………………………………………
LONG-TERM LIABILITIES:
Long-term debt (Notes 8, 14 and 15)………………………………………………
Liability for retirement benefits (Note 9)……………………………………………
Other long-term liabilities (Note 11)…………………………………………………
Total long-term liabilities…………………………………………………………
COMMITMENTS AND CONTINGENT LIABILITIES (Notes 14, 16 and 17)
EQUITY (Note 10):
Common stock-authorized, 400,000,000 shares; issued,
129,370,899 shares in 2010 and 2009 ……………………………………………
Capital surplus…………………………………………………………………………
(Deficit) retained earnings ……………………………………………………………
Net unrealized gain (loss) on available-for-sale securities………………………
Net deferred loss on derivatives under hedge accounting………………………
Foreign currency translation adjustments …………………………………………
Treasury stock-at cost, 142,050 shares in 2010 and
137,789 shares in 2009……………………………………………………………
Total ………………………………………………………………………………
Minority interests ……………………………………………………………………
Total equity ………………………………………………………………………
TOTAL……………………………………………………………………………………
Millions of Yen
Thousands ofU.S. Dollars
(Note1)
2010 2009 2010
ASSETS
CURRENT ASSETS:
Cash and cash equivalents (Note 15)………………………………………………
Marketable securities (Notes 3 and 15)……………………………………………
Short-term investments (Note 4)……………………………………………………
Receivables:
Trade notes (Notes 12 and 15)……………………………………………………
Trade accounts (Notes 12 and 15)…………………………………………………
Other…………………………………………………………………………………
Allowance for doubtful accounts (Note 15)………………………………………
Inventories (Note 5)……………………………………………………………………
Deferred tax assets (Note 11)…………………………………………………………
Prepaid expenses and other current assets………………………………………
Total current assets………………………………………………………………
PROPERTY, PLANT AND EQUIPMENT (Notes 6, 7 and 8):
Land……………………………………………………………………………………
Buildings and structures………………………………………………………………
Machinery and equipment……………………………………………………………
Furniture and fixtures…………………………………………………………………
Construction in progress………………………………………………………………
Lease assets……………………………………………………………………………
Total…………………………………………………………………………………
Accumulated depreciation……………………………………………………………
Net property, plant and equipment………………………………………………
INVESTMENTS AND OTHER ASSETS:
Investment securities (Notes 3, 8 and 15)…………………………………………
Investments in and long-term loans to unconsolidated subsidiaries and associated companies …
Long-term receivables…………………………………………………………………
Deferred tax assets (Note 11)…………………………………………………………
Other assets (Note 7)…………………………………………………………………
Total investments and other assets ……………………………………………
TOTAL……………………………………………………………………………………
See notes to consolidated financial statements.
Millions of Yen
Thousands ofU.S. Dollars
(Note1)
Consolidated Balance SheetsJUKI CORPORATION and Consolidated Subsidiaries, March 31, 2010 and 2009
2010 2009 2010
￥8,292
6
57
1,407
11,746
1,089
(1,096)
29,298
494
4,558
55,851
7,585
34,191
18,297
6,406
16
1,065
67,560
(34,648)
32,912
1,994
237
38
6,402
3,647
12,318
￥101,081
￥8,926
44
30
1,550
11,272
982
(1,066)
36,071
859
4,304
62,972
7,491
22,954
19,090
6,576
6,497
362
62,970
(33,954)
29,016
1,914
283
81
5,354
4,035
11,667
￥103,655
＄89,161
69
609
15,134
126,300
11,715
(11,782)
315,031
5,309
49,006
600,552
81,558
367,639
196,746
68,880
173
11,453
726,449
(372,561)
353,888
21,439
2,553
411
68,843
39,209
132,455
＄1,086,895
￥33,388
9,632
4,522
6,481
134
3,220
2,761
60,138
22,829
6,929
499
30,257
15,950
8,976
(8,839)
17
(99)
(5,523)
(58)
10,424
262
10,686
￥101,081
￥38,135
7,356
2,445
2,501
207
4,141
9,717
64,502
10,511
6,700
353
17,564
15,950
8,977
2,395
(78)
(2)
(5,863)
(58)
21,321
268
21,589
￥103,655
＄359,008
103,569
48,622
69,690
1,440
34,624
29,687
646,640
245,469
74,503
5,379
325,351
171,508
96,520
(95,045)
180
(1,069)
(59,389)
(617)
112,088
2,816
114,904
＄1,086,895
02
JUKI booth at JISSO PROTEC 2009 (Jisso Process Technology Exhibition) held at Tokyo Big Sight (June 2009)
See notes to consolidated financial statements.
Millions of Yen
Thousands of U.S. Dollars (Note 1)
Consolidated Statements of Changes in Equity JUKI CORPORATION and Consolidated Subsidiaries, Years Ended March 31, 2010 and 2009
Number ofShares of
Common StockOutstanding
CommonStock
CapitalSurplus
(Deficit)RetainedEarnings
Net UnrealizedGain (Loss) on
Available-for-saleSecurities
ForeignCurrency
TranslationAdjustments
TreasuryStock
CommonStock
CapitalSurplus
(Deficit)RetainedEarnings
Net UnrealizedGain (Loss) onAvailable-for-sale
Securities
ForeignCurrency
TranslationAdjustments
TreasuryStock
See notes to consolidated financial statements.
Millions of Yen
Thousands of U.S. Dollars (Note 1)
Net Deferred Losson Derivatives under Hedge
Accounting
Net Deferred Losson Derivatives under Hedge
Accounting
TotalMinority Interests
Total Equity
TotalMinority Interests
Total Equity
BALANCE, APRIL 1, 2008……………
Adjustment of retained earnings
due to an adoption of PITF
No. 18 (Note 2.b)…………………
Net loss…………………………………
Cash dividends paid, ￥10 per share…
Purchase of treasury stock……………
Disposal of treasury stock……………
Net change in the year………………
BALANCE, MARCH 31, 2009…………
Net loss…………………………………
Purchase of treasury stock……………
Disposal of treasury stock……………
Net change in the year………………
BALANCE, MARCH 31, 2010…………
BALANCE, MARCH 31, 2009…………………………………
Net loss………………………………………………………
Purchase of treasury stock…………………………………
Disposal of treasury stock……………………………………
Net change in the year………………………………………
BALANCE, MARCH 31, 2010…………………………………
129,190,655
(30,453)
72,908
129,233,110
(6,832)
2,571
129,228,849
￥107
(185)
(78)
95
￥17
￥339
(71)
268
(6)
￥262
￥36,761
(20)
(9,347)
(1,292)
(5)
10
(4,786)
21,321
(11,234)
(1)
338
￥10,424
￥37,100
(20)
(9,347)
(1,292)
(5)
10
(4,857)
21,589
(11,234)
(1)
332
￥10,686
￥(87)
(5)
34
(58)
(1)
1
￥(58)
￥(1,261)
(4,602)
(5,863)
340
￥(5,523)
￥(3)
1
(2)
(97)
￥(99)
￥13,054
(20)
(9,347)
(1,292)
2,395
(11,234)
￥(8,839)
￥9,001
(24)
8,977
(1)
￥8,976
￥15,950
15,950
￥15,950
＄(835)
1,015
＄180
＄(24)
(1,045)
＄(1,069)
＄(63,045)
3,656
＄(59,389)
＄(621)
(8)
12
＄(617)
＄229,262
(120,795)
(8)
3
3,626
＄112,088
＄2,878
(62)
＄2,816
＄232,140
(120,795)
(8)
3
3,564
＄114,904
＄25,750
(120,795)
＄(95,045)
＄96,529
(9)
＄96,520
＄171,508
＄171,508
NET SALES (Note 12) …………………………………………………………………
COST OF SALES (Notes 12 and 13)…………………………………………………
Gross profit ………………………………………………………………………………
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (Note 13) …………
Operating loss ……………………………………………………………………
OTHER INCOME (EXPENSES):
Interest and dividend income…………………………………………………………
Interest expenses………………………………………………………………………
Commission for syndicate loan………………………………………………………
Gain on sales of property, plant and equipment……………………………………
Loss on sales and disposals of property, plant and equipment …………………
Loss on devaluation of investment securities………………………………………
Gain on sales of investment securities in associated company…………………
Loss on revaluations of inventories…………………………………………………
Loss on impairment of long-lived assets (Note 6)…………………………………
Foreign currency exchange gain (loss)-net………………………………………
Loss on restructuring divisions (Note 18)……………………………………………
Other-net ………………………………………………………………………………
Other expenses-net………………………………………………………………
LOSS BEFORE INCOME TAXES AND MINORITY INTERESTS…………………
INCOME TAXES (Note 11):
Current………………………………………………………………………………
Deferred…………………………………………………………………………………
Refund…………………………………………………………………………………
Total…………………………………………………………………………………
MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES
NET LOSS
PER SHARE OF COMMON STOCK (Note 2.p):
Basic net loss …………………………………………………………………………
Cash dividends applicable to the year………………………………………………
See notes to consolidated financial statements.
Millions of Yen
Thousands ofU.S. Dollars
(Note1)
Yen U.S. Dollars
2010 2009 2010
2010 2009 2010
Consolidated Statements of OperationsJUKI CORPORATION and Consolidated Subsidiaries, Years Ended March 31, 2010 and 2009
￥56,971
47,141
9,830
21,017
(11,187)
400
(1,124)
(548)
54
(186)
(93)
142
(125)
601
405
(474)
(11,661)
169
(587)
(418)
(9)
￥(11,234)
￥77,832
54,967
22,865
27,840
(4,975)
445
(1,123)
70
(108)
(408)
(416)
(979)
(375)
(2,516)
560
(4,850)
(9,825)
539
(446)
(564)
(471)
(7)
￥(9,347)
＄612,588
506,892
105,696
225,990
(120,294)
4,304
(12,084)
(5,897)
585
(1,999)
(998)
1,527
(1,343)
6,460
4,357
(5,088)
(125,382)
1,813
(6,307)
(4,494)
(93)
＄(120,795)
￥(86.93) ￥(72.34)
5.00
＄(0.93)
OPERATING ACTIVITIES:
Loss before income taxes and minority interests…………………………………
Adjustments for:
Income taxes-refund (paid)…………………………………………………………
Depreciation and amortization………………………………………………………
Amortization of consolidation goodwill……………………………………………
Loss on impairment of long-lived assets…………………………………………
Loss on restructuring divisions (Note 18)…………………………………………
Provision for doubtful accounts……………………………………………………
Provision for accrued pension and severance costs……………………………
Commission for syndicate loan……………………………………………………
Foreign currency exchange (gain) loss……………………………………………
Loss on devaluation of investment securities……………………………………
Gain on sales of investment securities in associated company………………
Gain on sales of property, plant and equipment…………………………………
Loss on sales and disposals of property, plant and equipment…………………
Changes in assets and liabilities, net of effects:
(Increase) decrease in receivables……………………………………………
Decrease in inventories…………………………………………………………
Increase (decrease) in payables…………………………………………………
Decrease in notes receivables discounted……………………………………
Expenditures for restructuring divisions (Note 19)……………………………
Other-net……………………………………………………………………………
Net cash provided by (used in) operating activities………………………
INVESTING ACTIVITIES:
Purchases of property, plant and equipment………………………………………
Proceeds from sales of property, plant and equipment……………………………
Purchases of investment securities…………………………………………………
Proceeds from sales of investment securities………………………………………
Other-net………………………………………………………………………………
Net cash used in investing activities…………………………………………
FORWARD………………………………………………………………………………
Millions of Yen
Thousands ofU.S. Dollars
(Note1)
FINANCING ACTIVITIES:
(Decrease) increase in short-term borrowings-net…………………………………
Proceeds from long-term debt………………………………………………………
Repayments of long-term debt………………………………………………………
Proceeds from issuance of bonds……………………………………………………
Payment for redemption of bonds……………………………………………………
Dividends paid…………………………………………………………………………
Commission for syndicate loan………………………………………………………
Other-net………………………………………………………………………………
Net cash provided by financing activities……………………………………
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS
ON CASH AND CASH EQUIVALENTS……………………………………………
NET DECREASE IN CASH AND CASH EQUIVALENTS…………………………
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR………………………
CASH AND CASH EQUIVALENTS, END OF YEAR………………………………
See notes to consolidated financial statements.
Millions of Yen
Thousands ofU.S. Dollars
(Note1)
Consolidated Statements of Cash FlowsJUKI CORPORATION and Consolidated Subsidiaries, Years Ended March 31, 2010 and 2009
2010 2009 2010 2010 2009 2010
＄(125,382)
10,288
38,006
207
1,343
(474)
2,527
5,897
(4,618)
998
(1,527)
(585)
1,999
(446)
77,031
65,182
(1,951)
(7,643)
(47,689)
13,163
(114,781)
1,186
(10)
67
1,273
(112,265)
＄(99,102)
(52,694)
234,727
(84,329)
(430)
(60)
(5,897)
339
91,656
630
(6,816)
95,977
＄89,161
16,499
8,200
(8,427)
198
(500)
(1,315)
(32)
14,623
(929)
(1,015)
9,941
￥8,926
(4,900)
21,830
(7,843)
(40)
(6)
(548)
31
8,524
58
(634)
8,926
￥8,292
￥(9,825)
(2,215)
3,463
19
979
2,516
625
(138)
496
408
(70)
108
8,177
291
(10,208)
(304)
(2,132)
(3,032)
(10,842)
(4,381)
407
(76)
183
(3,867)
￥(14,709)
￥(11,661)
957
3,535
19
125
(44)
235
548
(430)
93
(142)
(54)
186
(41)
7,164
6,062
(181)
(711)
(4,435)
1,225
(10,675)
110
(1)
6
119
(10,441)
￥(9,216)
02Financial Section
16 17
02 Financial Section
OPERATING ACTIVITIES:
Loss before income taxes and minority interests…………………………………
Adjustments for:
Income taxes-refund (paid)…………………………………………………………
Depreciation and amortization………………………………………………………
Amortization of consolidation goodwill……………………………………………
Loss on impairment of long-lived assets…………………………………………
Loss on restructuring divisions (Note 18)…………………………………………
Provision for doubtful accounts……………………………………………………
Provision for accrued pension and severance costs……………………………
Commission for syndicate loan……………………………………………………
Foreign currency exchange (gain) loss……………………………………………
Loss on devaluation of investment securities……………………………………
Gain on sales of investment securities in associated company………………
Gain on sales of property, plant and equipment…………………………………
Loss on sales and disposals of property, plant and equipment…………………
Changes in assets and liabilities, net of effects:
(Increase) decrease in receivables……………………………………………
Decrease in inventories…………………………………………………………
Increase (decrease) in payables…………………………………………………
Decrease in notes receivables discounted……………………………………
Expenditures for restructuring divisions (Note 19)……………………………
Other-net……………………………………………………………………………
Net cash provided by (used in) operating activities………………………
INVESTING ACTIVITIES:
Purchases of property, plant and equipment………………………………………
Proceeds from sales of property, plant and equipment……………………………
Purchases of investment securities…………………………………………………
Proceeds from sales of investment securities………………………………………
Other-net………………………………………………………………………………
Net cash used in investing activities…………………………………………
FORWARD………………………………………………………………………………
Millions of Yen
Thousands ofU.S. Dollars
(Note1)
FINANCING ACTIVITIES:
(Decrease) increase in short-term borrowings-net…………………………………
Proceeds from long-term debt………………………………………………………
Repayments of long-term debt………………………………………………………
Proceeds from issuance of bonds……………………………………………………
Payment for redemption of bonds……………………………………………………
Dividends paid…………………………………………………………………………
Commission for syndicate loan………………………………………………………
Other-net………………………………………………………………………………
Net cash provided by financing activities……………………………………
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS
ON CASH AND CASH EQUIVALENTS……………………………………………
NET DECREASE IN CASH AND CASH EQUIVALENTS…………………………
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR………………………
CASH AND CASH EQUIVALENTS, END OF YEAR………………………………
See notes to consolidated financial statements.
Millions of Yen
Thousands ofU.S. Dollars
(Note1)
Consolidated Statements of Cash FlowsJUKI CORPORATION and Consolidated Subsidiaries, Years Ended March 31, 2010 and 2009
2010 2009 2010 2010 2009 2010
＄(125,382)
10,288
38,006
207
1,343
(474)
2,527
5,897
(4,618)
998
(1,527)
(585)
1,999
(446)
77,031
65,182
(1,951)
(7,643)
(47,689)
13,163
(114,781)
1,186
(10)
67
1,273
(112,265)
＄(99,102)
(52,694)
234,727
(84,329)
(430)
(60)
(5,897)
339
91,656
630
(6,816)
95,977
＄89,161
16,499
8,200
(8,427)
198
(500)
(1,315)
(32)
14,623
(929)
(1,015)
9,941
￥8,926
(4,900)
21,830
(7,843)
(40)
(6)
(548)
31
8,524
58
(634)
8,926
￥8,292
￥(9,825)
(2,215)
3,463
19
979
2,516
625
(138)
496
408
(70)
108
8,177
291
(10,208)
(304)
(2,132)
(3,032)
(10,842)
(4,381)
407
(76)
183
(3,867)
￥(14,709)
￥(11,661)
957
3,535
19
125
(44)
235
548
(430)
93
(142)
(54)
186
(41)
7,164
6,062
(181)
(711)
(4,435)
1,225
(10,675)
110
(1)
6
119
(10,441)
￥(9,216)
02Financial Section
16 17
02 Financial Section
02 Financial Section 02Financial Section
18 19
02 Financial Section
20 21
02Financial Section
02 Financial Section 02Financial Section
22 23
Notes to Consolidated Financial StatementsJUKI CORPORATION and Consolidated Subsidiaries, Years Ended March 31, 2010 and 2009
02 Financial Section
24
02Financial Section
25
02 Financial Section
26
02Financial Section
27
BASIS OF PRESENTINGCONSOLIDATEDFINANCIAL STATEMENTS
The accompanying consolidated financial statements of
JUKI CORPORATION (the "Company") and its
consolidated subsidiaries (together, the "Group") have been
prepared in 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 in Japan
("Japanese GAAP"), which are different in certain respects
as to 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 a form which is
more familiar to readers outside Japan. In addition, certain
reclassifications have been made in the 2009 consolidated
financial statements to conform to classifications and
presentations used in 2010.
The consolidated financial statements are stated in
Japanese yen, the currency of the country in which the
Company is incorporated and operates. The translations of
Japanese yen amounts into U.S. dollar amounts are
included solely for the convenience of readers outside
Japan and have been made at the rate of ￥93 to ＄1, the
approximate rate of exchange at March 31, 2010. Such
translations should not be construed as representations
that the Japanese yen amounts could be converted into
U.S. dollars at that or any other rate.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a ) Consolidation
The consolidated financial statements as of March 31, 2010
include the accounts of the Company and its 34 significant
(36 in 2009) subsidiaries.
Under the control or influence concept, those companies
in which the Company, directly or indirectly, is able to
exercise control over operations are fully consolidated, and
those companies over which the Group has the ability to
exercise significant influence are accounted for by the
equity method.
Investments in 5 (5 in 2009) unconsolidated subsidiaries
and 4 (5 in 2009) associated companies are stated at cost.
If the equity method of accounting had been applied to the
investments in these companies, the effect on the
accompanying consolidated financial statements would not
be material.
Consolidation goodwill is the difference between the cost
and underlying net equity of investments in consolidated
subsidiaries and associated companies at acquisition and is
amortized on a straight-line basis over five years.
Consolidation goodwill is impaired if the expectation of its
future value is determined to be less than the value
estimated when it was acquired.
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.
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 (1) the accounting policies and procedures
applied to a parent company and its subsidiaries for similar
transactions and events under similar circumstances should
in principle be unified for the preparation of the
consolidated financial statements, (2) financial statements
prepared 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 unless
they are not material: (a) amortization of goodwill; (b)
scheduled amortization of actuarial gain or loss of pensions
that has been directly recorded in the equity; (c) expensing
capitalized development costs of R&D; (d) cancellation of
the fair value model accounting for property, plant and
equipment and investment properties and incorporation of
the cost model accounting; (e) recording the prior years'
effects of changes in accounting policies in the income
statement 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 for fiscal years beginning on or after April
1, 2008 with early adoption permitted.
The Company applied this accounting standard effective
April 1, 2008. In addition, the Company adjusted the
beginning balance of retained earnings at April 1, 2008 as if
this accounting standard had been retrospectively applied.
c ) Cash Equivalents
Cash equivalents are short-term investments that are
readily convertible into cash and that are exposed to
insignificant risk of changes in value.
Cash equivalents include time deposits, certificate of
deposits, commercial paper and mutual funds investing in
bonds that represent short-term investments, all of which
mature or become due within three months of the date of
acquisition.
d ) Inventories
Inventories are stated at the lower of cost, principally
determined by the average method or the first-in, first-out
method for merchandise, finished products, work in
process, raw materials and supplies, or net selling value.
e ) Marketable and Investment Securities
Marketable and investment securities are classified as
available-for-sale securities and are reported at fair value,
with unrealized gains and losses, net of applicable taxes,
reported in a separate component of equity. 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.
f ) Property, Plant and Equipment
Property, plant and equipment are stated at cost.
Depreciation of property, plant and equipment of the
Company and its consolidated domestic subsidiaries is
computed substantially by the declining-balance method
based on the estimated useful lives of the assets. However,
the straight-line method is applied to buildings acquired
after April 1, 1998 and lease assets by the Company and its
domestic subsidiaries, and to all property, plant and
equipment of consolidated foreign subsidiaries. The range
of useful lives is principally from 5 to 50 years for buildings
and structures, from 2 to 12 years for machinery and
equipment and from 2 to 15 years for furniture and fixtures.
The useful lives for lease assets are the terms of the
respective leases.
g ) Long-lived Assets
The Group reviews its long-lived assets for impairment
whenever events or changes in circumstance indicate the
carrying amount of an asset or asset group may not be
recoverable. An impairment loss would be recognized if the
carrying amount of an asset or asset group exceeds the
sum of 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 be
measured 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 the asset or the net selling price
at disposition.
h ) Allowance for Doubtful Accounts
The allowance for doubtful accounts is stated in amounts
considered to be appropriate based on the past credit loss
experience and an evaluation of potential losses in the
receivables outstanding.
i ) Liability for Retirement Benefits and Pension Plans
The Company has retirement benefits and pension plans
for employees. Employees terminating at the mandatory
retirement age are entitled to pension payments under the
funded pension plan.
The transitional obligation, determined as of April
1, 2000, is being amortized over 10 years.
Actuarial gains and losses are amortized using the
straight-line method over 10 years as a certain period within
the remaining years of service of employees from the next
year after they arise.
Prior service cost is charged to income as incurred.
On July 31, 2008, the ASBJ has issued an accounting
standard-ASBJ Statement No. 19 "Partial Amendments to
Accounting Standard for Retirement Benefits (Part 3)."
The Group has adopted this statement from the
beginning of this fiscal year. There is no effect of this in the
2010 consolidated statement of operations.
Retirement benefits to directors and corporate auditors of
five consolidated domestic subsidiaries are provided at
100% of the amount which would be paid if they all retired
at the balance sheet date.
Effective June 28, 2007, the Company terminated its
unfunded retirement allowance plan for all directors and
corporate auditors. The outstanding balance of retirement
allowances for directors and corporate auditors as of March
31, 2010 has been classified as the liability for retirement
benefits.
j ) Research and Development Costs
Research and development costs are charged to income as
incurred.
k ) Leases
In March 2007, the ASBJ issued ASBJ Statement No. 13,
"Accounting Standard for Lease Transactions," which
revised the previous accounting standard for lease
transactions issued in June 1993. The revised accounting
standard for lease transactions was effective for fiscal years
beginning on or after April 1, 2008.
Under the previous accounting standard, finance leases
that were deemed to transfer ownership of the leased
property to the lessee were capitalized. However, other
finance leases were permitted to be accounted for as
operating lease transactions if certain "as if capitalized"
information was disclosed in the note to the lessee's
financial statements. The revised accounting standard
requires that all finance lease transactions be capitalized to
recognize lease assets and lease obligations in the balance
sheet. In addition, the accounting standard permits leases
which existed at the transition date and do not transfer
ownership of the leased property to the lessee to continue
to be accounted for as operating lease transactions.
The Company applied the revised accounting standard
effective April 1, 2008. In addition, the Company continues
to account for leases which existed at the transition date
and do not transfer ownership of the leased property to the
lessee as operating lease transactions.
All other leases are accounted for as operating leases.
l ) Income Taxes
The provision for income taxes is computed based on the
pretax income included in the consolidated statements of
operations. The asset and liability approach is used to
recognize deferred tax assets and liabilities for the
expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets
and liabilities. Deferred taxes are measured by applying
currently enacted tax laws to the temporary differences.
m ) Foreign Currency Transactions
All short-term and long-term monetary 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 consolidated statements of
operations to the extent that they are not hedged by
forward exchange contracts.
n ) Foreign Currency Financial Statements
The balance sheet accounts of the consolidated foreign
subsidiaries are translated into Japanese yen at 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 are shown as "Foreign
currency translation adjustments" in a separate component
of equity.
Revenue and expense accounts of consolidated foreign
subsidiaries are translated into yen at the average
exchange rate.
o ) Derivatives and Hedging Activities
The Group uses derivative financial instruments
("derivatives") to manage its exposures to fluctuations in
foreign exchange and interest rates. Foreign exchange
forward contracts, currency swaps, currency options and
interest rate swaps are utilized by the Group to reduce
foreign currency exchange and interest rate risks. The
Group does not enter into derivatives for trading or
speculative purposes.
Derivative financial instruments and foreign currency
transactions are classified and accounted for as follows: (a)
all derivatives are recognized as either assets or liabilities
and measured at fair value, and gains or losses on
derivative transactions are recognized in the consolidated
statements of operations and (b) for derivatives used for
hedging purposes, if derivatives qualify for hedge
accounting because of high correlation and effectiveness
between the hedging instruments and the hedged items,
gains or losses on derivatives are deferred until maturity of
the hedged transactions.
The foreign exchange forward contracts, currency swaps
and currency options utilized to hedge foreign exchange
exposures for export sales are measured at the fair value
and the unrealized gains/losses are recognized in income.
Forward contracts applied for forecasted (or committed)
transactions are also measured at the fair value but the
unrealized gains/losses are deferred until the underlying
transactions are completed.
The interest rate swaps which qualify for hedge
accounting and meet specific matching criteria are not
remeasured at market value but the differential paid or
received under the swap agreements are recognized and
included in interest expenses or income.
p ) Per Share Information
Basic net loss per share is computed by dividing net loss
available to common shareholders by the weighted-average
number of common shares outstanding for the period.
Diluted net income per share is not disclosed because
the Company had no dilutive securities outstanding at
March 31, 2010 and 2009.
Cash dividends per share presented in the
accompanying consolidated statements of operations are
dividends applicable to the respective years including
dividends to be paid after the end of the year.
q ) New Accounting Pronouncements
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
Accounting Standard 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 the acquisition,
construction, development and the normal operation of a
tangible fixed asset and is associated with the retirement of
such tangible fixed asset.
The asset retirement obligation is recognized as the sum
of the discounted cash flows required for the future asset
retirement and is recorded in the period in which the
obligation is incurred if a reasonable estimate can be made.
If a reasonable estimate of the asset retirement obligation
cannot be made in the period the asset retirement
obligation is incurred, the liability should be recognized
when 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 the
asset. Over time, the liability is accreted to its present value
each period. Any subsequent revisions to the timing or the
amount of the original estimate of undiscounted cash flows
are reflected as an increase or a decrease in the carrying
amount of the liability and the capitalized amount of the
related asset retirement cost. This standard is effective for
fiscal years beginning on or after April 1, 2010 with early
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 and Error
Corrections." Accounting treatments under this standard
and guidance are as follows:
(1) Changes in accounting policies
When a new accounting policy is applied with revision of
accounting standards, a new policy is applied
retrospectively unless the revised accounting standards
include specific transitional provisions. When the
revised accounting standards include specific
transitional provisions, an entity shall comply with the
specific transitional provisions.
(2) Changes in presentations
When the presentation of financial statements is
changed, prior period financial statements are
reclassified in accordance with the new 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 is accounted for prospectively if the change
affects both the period of 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 to accounting 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 "Guidance on
Accounting Standard for Segment Information Disclosures."
Under the standard and guidance, an entity is required to
report financial and descriptive information about its
reportable segments. Reportable segments are operating
segments or aggregations of operating segments that meet
specified criteria. Operating segments are components of
an entity about which separate financial information is
available and such information is evaluated regularly by the
chief operating decision maker in deciding how to allocate
resources and in assessing performance. Generally,
segment information is required to be reported on the same
basis as is used internally 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.
MARKETABLE AND INVESTMENT SECURITIES
Marketable and investment securities as of March 31, 2010
and 2009, consisted of the following:
The costs and aggregate fair values of marketable and
investment securities as of March 31, 2010 and 2009 were
as follows:
Available-for-sale securities and bonds and other securities
whose fair value is not readily determinable as of March 31,
2009 were as follows. The similar information for 2010 is
disclosed in Note 15.
Proceeds from sales of available-for-sale securities for the
year ended March 31, 2009 were ￥0 million. Gross
realized gains and losses on these sales, computed on the
moving average cost basis, were nil for the year ended
March 31, 2009.
The impairment losses on available-for-sale equity
securities for the years ended March 31, 2010 and 2009
were ￥93 million (＄998 thousand) and ￥408 million,
respectively.
SHORT-TERM INVESTMENTS
Short-term investments as of March 31, 2010 and 2009,
consisted of time deposits with an original maturity over
three months.
INVENTORIES
Inventories as of March 31, 2010 and 2009, consisted of
the following:
LONG-LIVED ASSETS
For the years ended March 31, 2010 and 2009, the
Company and its consolidated domestic subsidiaries
recognized losses on impairment for the following assets:
For purposes of evaluating and measuring impairment,
assets used for business are considered to constitute a
group by each industry segment of the Company and each
of the consolidated subsidiaries, while idle assets and
investment property are individually considered.
Carrying amounts of certain idle real estate and
investment property were devalued to their recoverable
amounts, due to substantial declines in fair market value.
The breakdown of the impairment losses was as follows:
The recoverable amount of the idle real estate and others
was measured by its net selling price based on appraisal of
real estate price.
The recoverable amount of investment property was
measured at their value in use and the discount rate used
for computation of present value of future cash flows was
6.8% for the year ended March 31, 2010.
The recoverable amounts of idle facilities and others
were determined to be zero.
INVESTMENT PROPERTY
On November 28, 2008, the ASBJ issued ASBJ Statement
No. 20 "Accounting Standard for Investment Property and
Related Disclosures" and issued ASBJ Guidance No. 23
"Guidance on Accounting Standard for Investment Property
and Related Disclosures." This accounting standard and the
guidance are applicable to investment property and related
disclosures at the end of the fiscal years ending on or after
March 31, 2010. The Group applied the new accounting
standard and guidance effective March 31, 2010.
The Group holds some rental properties such as office
buildings and land in Tokyo and other areas. Net loss of
rental income and operating expenses for those rental
properties was ￥43 million (＄463 thousand) and
impairment losses were ￥51 million (＄553 thousand) for
the fiscal year ended March 31, 2010.
In addition, the carrying amounts, changes in such
balances and market prices of such properties are as
follows:
Notes: 1. Carrying amount recognized in balance sheet is
net of accumulated depreciation and
accumulated impairment losses, if any.
2. Increase during the fiscal year ended March 31,
2010 primarily represents change in the manner
in which an asset is used of ￥507 million (＄
5,456 thousand), and decrease primarily
represents the recognition of depreciation of ￥79
million (＄855 thousand).
3. Fair value of properties as of March 31, 2010 is
principally measured by the Group in accordance
with its Japanese Real-estate Appraisal
Standard.
SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Short-term borrowings as of March 31, 2010 and 2009,
consisted of notes to banks and bank overdrafts. The
annual interest rates applicable to the short-term
borrowings ranged from 0.85% to 5.31% and 0.88% to
7.61% at March 31, 2010 and 2009, respectively.
Long-term debt as of March 31, 2010 and 2009, consisted
of the following:
The Company had agreements of commitment lines with
four banks in 2010 and six banks in 2009, and the
aggregate amount of unused line of credit was as follows:
Annual maturities of long-term debt, excluding finance
leases (see Note 14), as of March 31, 2010, for the next
five years and thereafter were as follows:
As of March 31, 2010, the following assets were pledged to
secure long-term debt aggregating ￥20,440 million (＄
219,791 thousand), and certain short-term borrowings and
current portion of long-term debt aggregating ￥23,237
million (＄249,856 thousand):
In addition, certain short-term borrowings and long-term
debt outstanding as of March 31, 2010, ￥25,290 million (＄
271,935 thousand) are subject to debt covenant terms
concerning the condition of total equity and ordinary income
(loss) as of March 31, 2010.
RETIREMENT AND PENSION PLANS
The Company and most of its domestic consolidated
subsidiaries have severance payments and pension plans
covering substantially all employees. The amounts of the
severance and pension payments are, in general,
determined on the basis of length of service and current
basic salary at the time of termination of service. If the
termination is involuntary, the employee is entitled to
greater payments than in the case of voluntary retirement.
Certain foreign consolidated subsidiaries have a defined
contribution pension plan. Retirement allowances for
directors and corporate auditors of domestic consolidated
subsidiaries are paid subject to approval of the
shareholders in accordance with the Companies Act of
Japan ("Companies Act"). Liability for retirement benefits at
March 31, 2010 and 2009, included those for directors and
corporate auditors in the amount of ￥387 million (＄4,161
thousand) and ￥393 million, respectively.
The liability for employees' retirement benefits at March
31, 2010 and 2009, consisted of the following:
The components of net periodic benefit costs for the years
ended March 31, 2010 and 2009 are as follows:
Assumptions used for the years ended March 31, 2010 and
2009 are set forth as follows:
EQUITY
Japanese companies are subject to 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 meet certain criteria such as; (1) having the
Board of Directors, (2) having independent auditors, (3)
having the 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, the Board of Directors may declare dividends
(except for dividends in kind) at any time during the fiscal
year if the company has prescribed so in its articles of
incorporation. However, the Company cannot do so
because it does not meet all the above criteria.
The Companies Act permits companies to distribute
dividends-in-kind (non-cash assets) to shareholders subject
to a certain limitation and additional requirements.
Semiannual interim dividends may also be paid once a
year upon resolution by the Board of Directors if the articles
of incorporation of the company so stipulate. The
Companies Act provides certain limitations on the amounts
available for dividends or the purchase of treasury 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 of retained earnings) or as additional paid-in
capital (a component of capital surplus) depending on the
equity account charged upon the payment of such
dividends until the total of aggregate amount of legal
reserve and additional paid-in capital equals 25% of the
common stock. Under the Companies Act, the total amount
of additional 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 Board of Directors. The amount of
treasury stock purchased cannot exceed the amount
available for distribution to the shareholders which is
determined by specific formula. Under the Companies Act,
stock acquisition rights are presented as a separate
component of equity. The Companies Act also provides that
companies can purchase both treasury stock acquisition
rights and treasury stock. Such treasury stock acquisition
rights are presented as a separate component of equity or
deducted directly from stock acquisition rights.
INCOME TAXES
The Company and its consolidated domestic subsidiaries
are subject to Japanese national and local income taxes
which, in the aggregate, resulted in a normal effective
statutory tax rate of approximately 40.7% 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:
A reconciliation between the normal effective statutory tax
rates and the actual effective tax rates reflected in the
accompanying consolidated statements of operations for
the years ended March 31, 2010 and 2009 is as follows:
At March 31, 2010, certain consolidated subsidiaries have
tax loss carryforwards aggregating approximately ￥10,596
million (＄113,940 thousand) which are available to be
offset against taxable income of such subsidiaries in future
years. These tax loss carryforwards, if not utilized, will
expire as follows:
RELATED PARTY TRANSACTIONS
Transactions of the Group with unconsolidated subsidiaries
and associated companies for the years ended March 31,
2010 and 2009, were as follows:
RESEARCH AND DEVELOPMENT COSTS
Research and development costs charged to income were
￥5,355 million (＄57,576 thousand) and ￥7,411 million for
the years ended March 31, 2010 and 2009, respectively.
LEASES
The Group leases certain furniture and fixture, machinery, computer equipment and other assets.
Total rental expenses including lease payments under finance leases for the years ended March 31, 2010 and 2009 were
￥777 million (＄8,252 thousand) and ￥801 million, respectively.
Obligations under finance leases were as follows:
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 be
capitalized to recognize lease assets and lease obligations in the balance sheet. However, the 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 note 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 on an "as if capitalized" basis was as follows:
Obligations under finance leases:
1
2
3
4
5
67
10
11
9
8
12
13
14
Merchandise…………………………
Finished goods………………………
Work-in-process……………………
Raw materials………………………
Supplies………………………………
TOTAL…………………………………
Millions of YenThousands ofU.S. Dollars
2010 2009 2010
＄8,044
207,709
50,800
45,649
2,829
＄315,031
￥1,375
25,912
3,644
4,925
215
￥36,071
￥748
19,317
4,725
4,245
263
￥29,298
Millions of YenThousands ofU.S. Dollars
The total amount of commitment
lines…………………………………
Used line of credit…………………
Unused line of credit…………………
2010 2009 2010
＄79,570
67,635
＄11,935
￥9,000
9,000
￥7,400
6,290
￥1,110
Millions of YenThousands ofU.S. Dollars
Current-Government and
corporate bonds……………………
Non-current:
Marketable equity securities………
Other…………………………………
TOTAL…………………………………
2010 2009 2010
＄69
＄16,526
4,913
＄21,439
￥44
￥1,390
524
￥1,914
￥6
￥1,537
457
￥1,994
Millions of YenThousands ofU.S. Dollars
Land……………………………………
Buildings and structures……………
Machinery and equipment…………
Furniture and fixtures………………
Others…………………………………
Total……………………………………
2010 2009 2010
＄553
215
266
309
＄1,343
￥914
50
15
￥979
￥51
20
25
29
￥125
Millions of Yen
March 31, 2010
Available-for-sale:
Equity securities………
Other……………………
Fair ValueUnrealized
LossesUnrealized
GainsCost
￥1,484
238
￥220
8
￥167
16
￥1,537
230
Millions of Yen
Fair ValueUnrealized
LossesUnrealized
GainsCostMarch 31, 2009
Available-for-sale:
Equity securities………
Other……………………
￥1,493
242
￥37 ￥140
28
￥1,390
214
Thousands of U.S. Dollars
Fair ValueUnrealized
LossesUnrealized
GainsCostMarch 31, 2010
Available-for-sale:
Equity securities………
Other……………………
＄15,958
2,556
＄2,365
92
＄1,797
176
＄16,526
2,472
Carrying Amount
Millions of YenMarch 31, 2009
Available-for-sale:Equity securities……………………
Bonds and other securities………………………………
TOTAL………………………………………………………
￥306
48
￥354
Millions of YenThousands ofU.S. DollarsYear Ending March 31
2011………………………………………………
2012………………………………………………
2013………………………………………………
2014………………………………………………
2015………………………………………………
2016 and thereafter……………………………
TOTAL……………………………………………
＄100,534
88,812
70,184
37,438
30,805
9,700
＄337,473
￥9,350
8,259
6,527
3,482
2,865
902
￥31,385
Millions of YenThousands ofU.S. Dollars
Projected benefit obligation…………
Fair value of plan assets……………
Unrecognized actuarial loss ………
Unrecognized transitional obligation…
Net liability……………………………
2010 2009 2010
￥13,224
(4,373)
(1,940)
(605)
￥6,306
＄128,898
(46,192)
(12,364)
＄70,342
￥11,988
(4,296)
(1,150)
￥6,542
Millions of YenThousands ofU.S. Dollars
Service cost……………………………
Interest cost……………………………
Expected return on plan assets ……
Amortization of transitional obligation…
Recognized actuarial loss……………
Additional retirement payments and others…
Net periodic benefit costs……………
2010 2009 2010
￥975
213
(103)
638
301
793
￥2,817
＄8,065
2,473
(959)
6,500
3,993
2,083
＄22,155
￥750
230
(89)
604
371
194
￥2,060
2010 2009
Discount rate……………………………………
Expected rate of return on plan assets ………
Amortization period of prior service cost………
Recognition period of actuarial gain/loss………
Amortization period of transitional obligation…
2.0%
2.5%
1 year
10 years
10 years
2.0%
2.5%
1 year
10 years
10 years
Millions of YenThousands ofU.S. Dollars
Investment securities……………………………
Land………………………………………………
Buildings-net of accumulated depreciation……
Machinery-net of accumulated depreciation …
TOTAL……………………………………………
＄15,511
60,499
184,511
8,081
＄268,602
￥1,442
5,626
17,160
752
￥24,980
2010 2009 2010Use Type of Assets
Millions of Yen
Idle real estate and othersIdle real estate
Idle real estate
Investment property Idle facilities and others
Total………………………………………………
Land and others
Land, buildings and structuresLand, buildings and structuresLand
Machinery and equipment, furniture and fixtures
Miyagi Prefecture and others…………Hiroshima Prefecture…………Fukushima Prefecture…………Tochigi Prefecture……
Tochigi Prefecture and others…………
Location
￥905
59
15
￥979
￥76
4
45
￥125
Thousands ofU.S. Dollars
＄819
43
481
＄1,343
Millions of YenThousands ofU.S. Dollars
1.08% to 1.21% unsecured
bonds, due 2010-2014……………
1.23% to 7.2% loans from banks,
due 2010-2019……………………
1.65% loans from insurance
companies…………………………
Obligations under finance leases……
TOTAL……………………………
Current portion………………………
Long-term debt, less current portion…
2010 2009 2010
＄7,098
328,870
1,505
11,565
349,038
(103,569)
＄245,469
￥700
16,556
180
431
17,867
(7,356)
￥10,511
￥660
30,585
140
1,076
32,461
(9,632)
￥22,829
Millions of Yen
April 1, 2009
￥3,351 ￥377 ￥3,728 ￥6,309
Carrying Amount
Increase/Decrease March 31, 2010
Fair Value
March 31, 2010
Thousands of U.S. Dollars
April 1, 2009
＄36,036 ＄4,048 ＄40,084 ＄67,837
Carrying Amount
Increase/Decrease March 31, 2010
Fair Value
March 31, 2010
Millions of YenThousands ofU.S. Dollars
Deferred tax assets:
Unrealized profit on inventories…
Loss on disposals of inventories……
Unrealized gains on sales of property……
Accrued bonuses……………………
Enterprise tax…………………………
Allowance for doubtful accounts……
Liability for severance payments……
Loss on devaluations of investment
securities……………………………
Tax loss carryforwards………………
Net unrealized loss on available-for-
sale securities………………………
Other…………………………………
Less valuation allowance……………
TOTAL………………………………
Offset with deferred tax liabilities……
Net deferred tax assets………………
Deferred tax liabilities:
Undistributed earnings of associated
companies…………………………
Net unrealized gain on available-
for-sale securities…………………
Other…………………………………
TOTAL………………………………
Offset with deferred tax assets………
Net deferred tax liabilities……………
2010 2009 2010
￥343
70
732
256
41
426
2,451
67
11,871
1,095
(10,278)
7,074
(178)
￥6,896
￥142
28
21
191
(178)
￥13
￥1,175
50
732
327
24
391
2,421
54
7,462
53
1,240
(7,500)
6,429
(216)
￥6,213
￥193
97
290
(216)
￥74
＄3,685
748
7,867
2,751
444
4,581
26,349
716
127,647
11,795
(110,518)
76,065
(1,913)
＄74,152
＄1,524
304
223
2,051
(1,913)
＄138
2010 2009
Normal effective statutory tax rate…………………
Non-deductible items………………………………
Difference of statutory tax rates between Japan
and foreign countries……………………………
Lower income tax rates applicable to income
in certain foreign countries………………………
Reversal of dividend income in consolidated
subsidiaries………………………………………
Deficit of consolidated subsidiaries………………
Unrealized profits without recognition of deferred tax……
Change in valuation allowance……………………
Reversal of loss on devaluations of
investments in consolidated subsidiaries………
Effect of tax deduction………………………………
Other-net……………………………………………
Actual effective tax rate……………………………
40.7%
(8.5)
(2.6)
(0.3)
(11.5)
5.0
(20.9)
2.3
(0.6)
3.6%
40.7%
10.9
(1.9)
(18.1)
(6.9)
(28.9)
3.2
5.3
0.5
4.8%
Millions of YenThousands ofU.S. DollarsYear Ending March 31
2011………………………………………………�
2012………………………………………………�
2013………………………………………………
2014………………………………………………
2015 and thereafter………………………………
TOTAL……………………………………………
￥21
43
190
233
10,109
￥10,596
＄230
459
2,045
2,511
108,695
＄113,940
Due within one year………………………………
Due after one year………………………………
TOTAL……………………………………………
￥282
794
￥1,076
＄3,034
8,531
＄11,565
Millions of YenThousands ofU.S. Dollars
2010 2010
Millions of YenThousands ofU.S. Dollars
Sales to related parties………………
Purchases from related parties…………
Trade notes and accounts receivable…
Trade notes and accounts payable……
2010 2009 2010
￥673
198
561
6
￥406
238
753
＄4,366
2,557
8,095
Millions of Yen
Acquisition cost…………………………………………………
Accumulated depreciation………………………………………
Net leased property……………………………………………
TotalSoftwareFurniture and
FixturesMachinery and
Equipment
2010 2009Thousands of U.S. Dollars
TotalSoftwareFurniture and
FixturesMachinery and
Equipment
￥1,110
619
￥491
￥938
591
￥347
￥787
473
￥314
￥2,835
1,683
￥1,152
￥848
539
￥309
￥528
422
￥106
￥693
534
￥159
￥2,069
1,495
￥574
Acquisition cost…………………………………………………
Accumulated depreciation……………………………………
Net leased property……………………………………………
Thousands of U.S. Dollars
TotalSoftwareFurniture and
FixturesMachinery and
Equipment
2010
＄9,122
5,800
＄3,322
＄5,683
4,537
＄1,146
＄7,447
5,743
＄1,704
＄22,252
16,080
＄6,172
Millions of YenThousands ofU.S. Dollars
Due within one year………………………………………………………
Due after one year…………………………………………………………
TOTAL……………………………………………………………………
2010 2009 2010
￥325
290
￥615
￥535
677
￥1,212
＄3,495
3,123
＄6,618
02 Financial Section 02Financial Section
18 19
02 Financial Section
20 21
02Financial Section
02 Financial Section 02Financial Section
22 23
Notes to Consolidated Financial StatementsJUKI CORPORATION and Consolidated Subsidiaries, Years Ended March 31, 2010 and 2009
02 Financial Section
24
02Financial Section
25
02 Financial Section
26
02Financial Section
27
BASIS OF PRESENTINGCONSOLIDATEDFINANCIAL STATEMENTS
The accompanying consolidated financial statements of
JUKI CORPORATION (the "Company") and its
consolidated subsidiaries (together, the "Group") have been
prepared in 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 in Japan
("Japanese GAAP"), which are different in certain respects
as to 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 a form which is
more familiar to readers outside Japan. In addition, certain
reclassifications have been made in the 2009 consolidated
financial statements to conform to classifications and
presentations used in 2010.
The consolidated financial statements are stated in
Japanese yen, the currency of the country in which the
Company is incorporated and operates. The translations of
Japanese yen amounts into U.S. dollar amounts are
included solely for the convenience of readers outside
Japan and have been made at the rate of ￥93 to ＄1, the
approximate rate of exchange at March 31, 2010. Such
translations should not be construed as representations that
the Japanese yen amounts could be converted into U.S.
dollars at that or any other rate.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a ) Consolidation
The consolidated financial statements as of March 31, 2010
include the accounts of the Company and its 34 significant
(36 in 2009) subsidiaries.
Under the control or influence concept, those companies
in which the Company, directly or indirectly, is able to
exercise control over operations are fully consolidated, and
those companies over which the Group has the ability to
exercise significant influence are accounted for by the
equity method.
Investments in 5 (5 in 2009) unconsolidated subsidiaries
and 4 (5 in 2009) associated companies are stated at cost.
If the equity method of accounting had been applied to the
investments in these companies, the effect on the
accompanying consolidated financial statements would not
be material.
Consolidation goodwill is the difference between the cost
and underlying net equity of investments in consolidated
subsidiaries and associated companies at acquisition and is
amortized on a straight-line basis over five years.
Consolidation goodwill is impaired if the expectation of its
future value is determined to be less than the value
estimated when it was acquired.
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.
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 (1) the accounting policies and procedures
applied to a parent company and its subsidiaries for similar
transactions and events under similar circumstances should
in principle be unified for the preparation of the
consolidated financial statements, (2) financial statements
prepared 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 unless
they are not material: (a) amortization of goodwill; (b)
scheduled amortization of actuarial gain or loss of pensions
that has been directly recorded in the equity; (c) expensing
capitalized development costs of R&D; (d) cancellation of
the fair value model accounting for property, plant and
equipment and investment properties and incorporation of
the cost model accounting; (e) recording the prior years'
effects of changes in accounting policies in the income
statement 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 for fiscal years beginning on or after April
1, 2008 with early adoption permitted.
The Company applied this accounting standard effective
April 1, 2008. In addition, the Company adjusted the
beginning balance of retained earnings at April 1, 2008 as if
this accounting standard had been retrospectively applied.
c ) Cash Equivalents
Cash equivalents are short-term investments that are
readily convertible into cash and that are exposed to
insignificant risk of changes in value.
Cash equivalents include time deposits, certificate of
deposits, commercial paper and mutual funds investing in
bonds that represent short-term investments, all of which
mature or become due within three months of the date of
acquisition.
d ) Inventories
Inventories are stated at the lower of cost, principally
determined by the average method or the first-in, first-out
method for merchandise, finished products, work in
process, raw materials and supplies, or net selling value.
e ) Marketable and Investment Securities
Marketable and investment securities are classified as
available-for-sale securities and are reported at fair value,
with unrealized gains and losses, net of applicable taxes,
reported in a separate component of equity. 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.
f ) Property, Plant and Equipment
Property, plant and equipment are stated at cost.
Depreciation of property, plant and equipment of the
Company and its consolidated domestic subsidiaries is
computed substantially by the declining-balance method
based on the estimated useful lives of the assets. However,
the straight-line method is applied to buildings acquired
after April 1, 1998 and lease assets by the Company and its
domestic subsidiaries, and to all property, plant and
equipment of consolidated foreign subsidiaries. The range
of useful lives is principally from 5 to 50 years for buildings
and structures, from 2 to 12 years for machinery and
equipment and from 2 to 15 years for furniture and fixtures.
The useful lives for lease assets are the terms of the
respective leases.
g ) Long-lived Assets
The Group reviews its long-lived assets for impairment
whenever events or changes in circumstance indicate the
carrying amount of an asset or asset group may not be
recoverable. An impairment loss would be recognized if the
carrying amount of an asset or asset group exceeds the
sum of 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 be
measured 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 the asset or the net selling price
at disposition.
h ) Allowance for Doubtful Accounts
The allowance for doubtful accounts is stated in amounts
considered to be appropriate based on the past credit loss
experience and an evaluation of potential losses in the
receivables outstanding.
i ) Liability for Retirement Benefits and Pension Plans
The Company has retirement benefits and pension plans
for employees. Employees terminating at the mandatory
retirement age are entitled to pension payments under the
funded pension plan.
The transitional obligation, determined as of April
1, 2000, is being amortized over 10 years.
Actuarial gains and losses are amortized using the
straight-line method over 10 years as a certain period within
the remaining years of service of employees from the next
year after they arise.
Prior service cost is charged to income as incurred.
On July 31, 2008, the ASBJ has issued an accounting
standard-ASBJ Statement No. 19 "Partial Amendments to
Accounting Standard for Retirement Benefits (Part 3)."
The Group has adopted this statement from the
beginning of this fiscal year. There is no effect of this in the
2010 consolidated statement of operations.
Retirement benefits to directors and corporate auditors of
five consolidated domestic subsidiaries are provided at
100% of the amount which would be paid if they all retired
at the balance sheet date.
Effective June 28, 2007, the Company terminated its
unfunded retirement allowance plan for all directors and
corporate auditors. The outstanding balance of retirement
allowances for directors and corporate auditors as of March
31, 2010 has been classified as the liability for retirement
benefits.
j ) Research and Development Costs
Research and development costs are charged to income as
incurred.
k ) Leases
In March 2007, the ASBJ issued ASBJ Statement No. 13,
"Accounting Standard for Lease Transactions," which
revised the previous accounting standard for lease
transactions issued in June 1993. The revised accounting
standard for lease transactions was effective for fiscal years
beginning on or after April 1, 2008.
Under the previous accounting standard, finance leases
that were deemed to transfer ownership of the leased
property to the lessee were capitalized. However, other
finance leases were permitted to be accounted for as
operating lease transactions if certain "as if capitalized"
information was disclosed in the note to the lessee's
financial statements. The revised accounting standard
requires that all finance lease transactions be capitalized to
recognize lease assets and lease obligations in the balance
sheet. In addition, the accounting standard permits leases
which existed at the transition date and do not transfer
ownership of the leased property to the lessee to continue
to be accounted for as operating lease transactions.
The Company applied the revised accounting standard
effective April 1, 2008. In addition, the Company continues
to account for leases which existed at the transition date
and do not transfer ownership of the leased property to the
lessee as operating lease transactions.
All other leases are accounted for as operating leases.
l ) Income Taxes
The provision for income taxes is computed based on the
pretax income included in the consolidated statements of
operations. The asset and liability approach is used to
recognize deferred tax assets and liabilities for the
expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets
and liabilities. Deferred taxes are measured by applying
currently enacted tax laws to the temporary differences.
m ) Foreign Currency Transactions
All short-term and long-term monetary 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 consolidated statements of
operations to the extent that they are not hedged by
forward exchange contracts.
n ) Foreign Currency Financial Statements
The balance sheet accounts of the consolidated foreign
subsidiaries are translated into Japanese yen at 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 are shown as "Foreign
currency translation adjustments" in a separate component
of equity.
Revenue and expense accounts of consolidated foreign
subsidiaries are translated into yen at the average
exchange rate.
o ) Derivatives and Hedging Activities
The Group uses derivative financial instruments
("derivatives") to manage its exposures to fluctuations in
foreign exchange and interest rates. Foreign exchange
forward contracts, currency swaps, currency options and
interest rate swaps are utilized by the Group to reduce
foreign currency exchange and interest rate risks. The
Group does not enter into derivatives for trading or
speculative purposes.
Derivative financial instruments and foreign currency
transactions are classified and accounted for as follows: (a)
all derivatives are recognized as either assets or liabilities
and measured at fair value, and gains or losses on
derivative transactions are recognized in the consolidated
statements of operations and (b) for derivatives used for
hedging purposes, if derivatives qualify for hedge
accounting because of high correlation and effectiveness
between the hedging instruments and the hedged items,
gains or losses on derivatives are deferred until maturity of
the hedged transactions.
The foreign exchange forward contracts, currency swaps
and currency options utilized to hedge foreign exchange
exposures for export sales are measured at the fair value
and the unrealized gains/losses are recognized in income.
Forward contracts applied for forecasted (or committed)
transactions are also measured at the fair value but the
unrealized gains/losses are deferred until the underlying
transactions are completed.
The interest rate swaps which qualify for hedge
accounting and meet specific matching criteria are not
remeasured at market value but the differential paid or
received under the swap agreements are recognized and
included in interest expenses or income.
p ) Per Share Information
Basic net loss per share is computed by dividing net loss
available to common shareholders by the weighted-average
number of common shares outstanding for the period.
Diluted net income per share is not disclosed because
the Company had no dilutive securities outstanding at
March 31, 2010 and 2009.
Cash dividends per share presented in the
accompanying consolidated statements of operations are
dividends applicable to the respective years including
dividends to be paid after the end of the year.
q ) New Accounting Pronouncements
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
Accounting Standard 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 the acquisition,
construction, development and the normal operation of a
tangible fixed asset and is associated with the retirement of
such tangible fixed asset.
The asset retirement obligation is recognized as the sum
of the discounted cash flows required for the future asset
retirement and is recorded in the period in which the
obligation is incurred if a reasonable estimate can be made.
If a reasonable estimate of the asset retirement obligation
cannot be made in the period the asset retirement
obligation is incurred, the liability should be recognized
when 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 the
asset. Over time, the liability is accreted to its present value
each period. Any subsequent revisions to the timing or the
amount of the original estimate of undiscounted cash flows
are reflected as an increase or a decrease in the carrying
amount of the liability and the capitalized amount of the
related asset retirement cost. This standard is effective for
fiscal years beginning on or after April 1, 2010 with early
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 and Error
Corrections." Accounting treatments under this standard
and guidance are as follows:
(1) Changes in accounting policies
When a new accounting policy is applied with revision of
accounting standards, a new policy is applied
retrospectively unless the revised accounting standards
include specific transitional provisions. When the
revised accounting standards include specific
transitional provisions, an entity shall comply with the
specific transitional provisions.
(2) Changes in presentations
When the presentation of financial statements is
changed, prior period financial statements are
reclassified in accordance with the new 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 is accounted for prospectively if the change
affects both the period of 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 to accounting 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 "Guidance on
Accounting Standard for Segment Information Disclosures."
Under the standard and guidance, an entity is required to
report financial and descriptive information about its
reportable segments. Reportable segments are operating
segments or aggregations of operating segments that meet
specified criteria. Operating segments are components of
an entity about which separate financial information is
available and such information is evaluated regularly by the
chief operating decision maker in deciding how to allocate
resources and in assessing performance. Generally,
segment information is required to be reported on the same
basis as is used internally 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.
MARKETABLE AND INVESTMENT SECURITIES
Marketable and investment securities as of March 31, 2010
and 2009, consisted of the following:
The costs and aggregate fair values of marketable and
investment securities as of March 31, 2010 and 2009 were
as follows:
Available-for-sale securities and bonds and other securities
whose fair value is not readily determinable as of March 31,
2009 were as follows. The similar information for 2010 is
disclosed in Note 15.
Proceeds from sales of available-for-sale securities for the
year ended March 31, 2009 were ￥0 million. Gross
realized gains and losses on these sales, computed on the
moving average cost basis, were nil for the year ended
March 31, 2009.
The impairment losses on available-for-sale equity
securities for the years ended March 31, 2010 and 2009
were ￥93 million (＄998 thousand) and ￥408 million,
respectively.
SHORT-TERM INVESTMENTS
Short-term investments as of March 31, 2010 and 2009,
consisted of time deposits with an original maturity over
three months.
INVENTORIES
Inventories as of March 31, 2010 and 2009, consisted of
the following:
LONG-LIVED ASSETS
For the years ended March 31, 2010 and 2009, the
Company and its consolidated domestic subsidiaries
recognized losses on impairment for the following assets:
For purposes of evaluating and measuring impairment,
assets used for business are considered to constitute a
group by each industry segment of the Company and each
of the consolidated subsidiaries, while idle assets and
investment property are individually considered.
Carrying amounts of certain idle real estate and
investment property were devalued to their recoverable
amounts, due to substantial declines in fair market value.
The breakdown of the impairment losses was as follows:
The recoverable amount of the idle real estate and others
was measured by its net selling price based on appraisal of
real estate price.
The recoverable amount of investment property was
measured at their value in use and the discount rate used
for computation of present value of future cash flows was
6.8% for the year ended March 31, 2010.
The recoverable amounts of idle facilities and others
were determined to be zero.
INVESTMENT PROPERTY
On November 28, 2008, the ASBJ issued ASBJ Statement
No. 20 "Accounting Standard for Investment Property and
Related Disclosures" and issued ASBJ Guidance No. 23
"Guidance on Accounting Standard for Investment Property
and Related Disclosures." This accounting standard and the
guidance are applicable to investment property and related
disclosures at the end of the fiscal years ending on or after
March 31, 2010. The Group applied the new accounting
standard and guidance effective March 31, 2010.
The Group holds some rental properties such as office
buildings and land in Tokyo and other areas. Net loss of
rental income and operating expenses for those rental
properties was ￥43 million (＄463 thousand) and
impairment losses were ￥51 million (＄553 thousand) for
the fiscal year ended March 31, 2010.
In addition, the carrying amounts, changes in such
balances and market prices of such properties are as
follows:
Notes: 1. Carrying amount recognized in balance sheet is
net of accumulated depreciation and
accumulated impairment losses, if any.
2. Increase during the fiscal year ended March 31,
2010 primarily represents change in the manner
in which an asset is used of ￥507 million (＄
5,456 thousand), and decrease primarily
represents the recognition of depreciation of ￥79
million (＄855 thousand).
3. Fair value of properties as of March 31, 2010 is
principally measured by the Group in accordance
with its Japanese Real-estate Appraisal
Standard.
SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Short-term borrowings as of March 31, 2010 and 2009,
consisted of notes to banks and bank overdrafts. The
annual interest rates applicable to the short-term
borrowings ranged from 0.85% to 5.31% and 0.88% to
7.61% at March 31, 2010 and 2009, respectively.
Long-term debt as of March 31, 2010 and 2009, consisted
of the following:
The Company had agreements of commitment lines with
four banks in 2010 and six banks in 2009, and the
aggregate amount of unused line of credit was as follows:
Annual maturities of long-term debt, excluding finance
leases (see Note 14), as of March 31, 2010, for the next
five years and thereafter were as follows:
As of March 31, 2010, the following assets were pledged to
secure long-term debt aggregating ￥20,440 million (＄
219,791 thousand), and certain short-term borrowings and
current portion of long-term debt aggregating ￥23,237
million (＄249,856 thousand):
In addition, certain short-term borrowings and long-term
debt outstanding as of March 31, 2010, ￥25,290 million (＄
271,935 thousand) are subject to debt covenant terms
concerning the condition of total equity and ordinary income
(loss) as of March 31, 2010.
RETIREMENT AND PENSION PLANS
The Company and most of its domestic consolidated
subsidiaries have severance payments and pension plans
covering substantially all employees. The amounts of the
severance and pension payments are, in general,
determined on the basis of length of service and current
basic salary at the time of termination of service. If the
termination is involuntary, the employee is entitled to
greater payments than in the case of voluntary retirement.
Certain foreign consolidated subsidiaries have a defined
contribution pension plan. Retirement allowances for
directors and corporate auditors of domestic consolidated
subsidiaries are paid subject to approval of the
shareholders in accordance with the Companies Act of
Japan ("Companies Act"). Liability for retirement benefits at
March 31, 2010 and 2009, included those for directors and
corporate auditors in the amount of ￥387 million (＄4,161
thousand) and ￥393 million, respectively.
The liability for employees' retirement benefits at March
31, 2010 and 2009, consisted of the following:
The components of net periodic benefit costs for the years
ended March 31, 2010 and 2009 are as follows:
Assumptions used for the years ended March 31, 2010 and
2009 are set forth as follows:
EQUITY
Japanese companies are subject to 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 meet certain criteria such as; (1) having the
Board of Directors, (2) having independent auditors, (3)
having the 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, the Board of Directors may declare dividends
(except for dividends in kind) at any time during the fiscal
year if the company has prescribed so in its articles of
incorporation. However, the Company cannot do so
because it does not meet all the above criteria.
The Companies Act permits companies to distribute
dividends-in-kind (non-cash assets) to shareholders subject
to a certain limitation and additional requirements.
Semiannual interim dividends may also be paid once a
year upon resolution by the Board of Directors if the articles
of incorporation of the company so stipulate. The
Companies Act provides certain limitations on the amounts
available for dividends or the purchase of treasury 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 of retained earnings) or as additional paid-in
capital (a component of capital surplus) depending on the
equity account charged upon the payment of such
dividends until the total of aggregate amount of legal
reserve and additional paid-in capital equals 25% of the
common stock. Under the Companies Act, the total amount
of additional 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 Board of Directors. The amount of
treasury stock purchased cannot exceed the amount
available for distribution to the shareholders which is
determined by specific formula. Under the Companies Act,
stock acquisition rights are presented as a separate
component of equity. The Companies Act also provides that
companies can purchase both treasury stock acquisition
rights and treasury stock. Such treasury stock acquisition
rights are presented as a separate component of equity or
deducted directly from stock acquisition rights.
INCOME TAXES
The Company and its consolidated domestic subsidiaries
are subject to Japanese national and local income taxes
which, in the aggregate, resulted in a normal effective
statutory tax rate of approximately 40.7% 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:
A reconciliation between the normal effective statutory tax
rates and the actual effective tax rates reflected in the
accompanying consolidated statements of operations for
the years ended March 31, 2010 and 2009 is as follows:
At March 31, 2010, certain consolidated subsidiaries have
tax loss carryforwards aggregating approximately ￥10,596
million (＄113,940 thousand) which are available to be
offset against taxable income of such subsidiaries in future
years. These tax loss carryforwards, if not utilized, will
expire as follows:
RELATED PARTY TRANSACTIONS
Transactions of the Group with unconsolidated subsidiaries
and associated companies for the years ended March 31,
2010 and 2009, were as follows:
RESEARCH AND DEVELOPMENT COSTS
Research and development costs charged to income were
￥5,355 million (＄57,576 thousand) and ￥7,411 million for
the years ended March 31, 2010 and 2009, respectively.
LEASES
The Group leases certain furniture and fixture, machinery, computer equipment and other assets.
Total rental expenses including lease payments under finance leases for the years ended March 31, 2010 and 2009 were
￥777 million (＄8,252 thousand) and ￥801 million, respectively.
Obligations under finance leases were as follows:
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 be
capitalized to recognize lease assets and lease obligations in the balance sheet. However, the 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 note 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 on an "as if capitalized" basis was as follows:
Obligations under finance leases:
1
2
3
4
5
67
10
11
9
8
12
13
14
Merchandise…………………………
Finished goods………………………
Work-in-process……………………
Raw materials………………………
Supplies………………………………
TOTAL…………………………………
Millions of YenThousands ofU.S. Dollars
2010 2009 2010
＄8,044
207,709
50,800
45,649
2,829
＄315,031
￥1,375
25,912
3,644
4,925
215
￥36,071
￥748
19,317
4,725
4,245
263
￥29,298
Millions of YenThousands ofU.S. Dollars
The total amount of commitment
lines…………………………………
Used line of credit…………………
Unused line of credit…………………
2010 2009 2010
＄79,570
67,635
＄11,935
￥9,000
9,000
￥7,400
6,290
￥1,110
Millions of YenThousands ofU.S. Dollars
Current-Government and
corporate bonds……………………
Non-current:
Marketable equity securities………
Other…………………………………
TOTAL…………………………………
2010 2009 2010
＄69
＄16,526
4,913
＄21,439
￥44
￥1,390
524
￥1,914
￥6
￥1,537
457
￥1,994
Millions of YenThousands ofU.S. Dollars
Land……………………………………
Buildings and structures……………
Machinery and equipment…………
Furniture and fixtures………………
Others…………………………………
Total……………………………………
2010 2009 2010
＄553
215
266
309
＄1,343
￥914
50
15
￥979
￥51
20
25
29
￥125
Millions of Yen
March 31, 2010
Available-for-sale:
Equity securities………
Other……………………
Fair ValueUnrealized
LossesUnrealized
GainsCost
￥1,484
238
￥220
8
￥167
16
￥1,537
230
Millions of Yen
Fair ValueUnrealized
LossesUnrealized
GainsCostMarch 31, 2009
Available-for-sale:
Equity securities………
Other……………………
￥1,493
242
￥37 ￥140
28
￥1,390
214
Thousands of U.S. Dollars
Fair ValueUnrealized
LossesUnrealized
GainsCostMarch 31, 2010
Available-for-sale:
Equity securities………
Other……………………
＄15,958
2,556
＄2,365
92
＄1,797
176
＄16,526
2,472
Carrying Amount
Millions of YenMarch 31, 2009
Available-for-sale:Equity securities……………………
Bonds and other securities………………………………
TOTAL………………………………………………………
￥306
48
￥354
Millions of YenThousands ofU.S. DollarsYear Ending March 31
2011………………………………………………
2012………………………………………………
2013………………………………………………
2014………………………………………………
2015………………………………………………
2016 and thereafter……………………………
TOTAL……………………………………………
＄100,534
88,812
70,184
37,438
30,805
9,700
＄337,473
￥9,350
8,259
6,527
3,482
2,865
902
￥31,385
Millions of YenThousands ofU.S. Dollars
Projected benefit obligation…………
Fair value of plan assets……………
Unrecognized actuarial loss ………
Unrecognized transitional obligation…
Net liability……………………………
2010 2009 2010
￥13,224
(4,373)
(1,940)
(605)
￥6,306
＄128,898
(46,192)
(12,364)
＄70,342
￥11,988
(4,296)
(1,150)
￥6,542
Millions of YenThousands ofU.S. Dollars
Service cost……………………………
Interest cost……………………………
Expected return on plan assets ……
Amortization of transitional obligation…
Recognized actuarial loss……………
Additional retirement payments and others…
Net periodic benefit costs……………
2010 2009 2010
￥975
213
(103)
638
301
793
￥2,817
＄8,065
2,473
(959)
6,500
3,993
2,083
＄22,155
￥750
230
(89)
604
371
194
￥2,060
2010 2009
Discount rate……………………………………
Expected rate of return on plan assets ………
Amortization period of prior service cost………
Recognition period of actuarial gain/loss………
Amortization period of transitional obligation…
2.0%
2.5%
1 year
10 years
10 years
2.0%
2.5%
1 year
10 years
10 years
Millions of YenThousands ofU.S. Dollars
Investment securities……………………………
Land………………………………………………
Buildings-net of accumulated depreciation……
Machinery-net of accumulated depreciation …
TOTAL……………………………………………
＄15,511
60,499
184,511
8,081
＄268,602
￥1,442
5,626
17,160
752
￥24,980
2010 2009 2010Use Type of Assets
Millions of Yen
Idle real estate and othersIdle real estate
Idle real estate
Investment property Idle facilities and others
Total………………………………………………
Land and others
Land, buildings and structuresLand, buildings and structuresLand
Machinery and equipment, furniture and fixtures
Miyagi Prefecture and others…………Hiroshima Prefecture…………Fukushima Prefecture…………Tochigi Prefecture……
Tochigi Prefecture and others…………
Location
￥905
59
15
￥979
￥76
4
45
￥125
Thousands ofU.S. Dollars
＄819
43
481
＄1,343
Millions of YenThousands ofU.S. Dollars
1.08% to 1.21% unsecured
bonds, due 2010-2014……………
1.23% to 7.2% loans from banks,
due 2010-2019……………………
1.65% loans from insurance
companies…………………………
Obligations under finance leases……
TOTAL……………………………
Current portion………………………
Long-term debt, less current portion…
2010 2009 2010
＄7,098
328,870
1,505
11,565
349,038
(103,569)
＄245,469
￥700
16,556
180
431
17,867
(7,356)
￥10,511
￥660
30,585
140
1,076
32,461
(9,632)
￥22,829
Millions of Yen
April 1, 2009
￥3,351 ￥377 ￥3,728 ￥6,309
Carrying Amount
Increase/Decrease March 31, 2010
Fair Value
March 31, 2010
Thousands of U.S. Dollars
April 1, 2009
＄36,036 ＄4,048 ＄40,084 ＄67,837
Carrying Amount
Increase/Decrease March 31, 2010
Fair Value
March 31, 2010
Millions of YenThousands ofU.S. Dollars
Deferred tax assets:
Unrealized profit on inventories…
Loss on disposals of inventories……
Unrealized gains on sales of property……
Accrued bonuses……………………
Enterprise tax…………………………
Allowance for doubtful accounts……
Liability for severance payments……
Loss on devaluations of investment
securities……………………………
Tax loss carryforwards………………
Net unrealized loss on available-for-
sale securities………………………
Other…………………………………
Less valuation allowance……………
TOTAL………………………………
Offset with deferred tax liabilities……
Net deferred tax assets………………
Deferred tax liabilities:
Undistributed earnings of associated
companies…………………………
Net unrealized gain on available-
for-sale securities…………………
Other…………………………………
TOTAL………………………………
Offset with deferred tax assets………
Net deferred tax liabilities……………
2010 2009 2010
￥343
70
732
256
41
426
2,451
67
11,871
1,095
(10,278)
7,074
(178)
￥6,896
￥142
28
21
191
(178)
￥13
￥1,175
50
732
327
24
391
2,421
54
7,462
53
1,240
(7,500)
6,429
(216)
￥6,213
￥193
97
290
(216)
￥74
＄3,685
748
7,867
2,751
444
4,581
26,349
716
127,647
11,795
(110,518)
76,065
(1,913)
＄74,152
＄1,524
304
223
2,051
(1,913)
＄138
2010 2009
Normal effective statutory tax rate…………………
Non-deductible items………………………………
Difference of statutory tax rates between Japan
and foreign countries……………………………
Lower income tax rates applicable to income
in certain foreign countries………………………
Reversal of dividend income in consolidated
subsidiaries………………………………………
Deficit of consolidated subsidiaries………………
Unrealized profits without recognition of deferred tax……
Change in valuation allowance……………………
Reversal of loss on devaluations of
investments in consolidated subsidiaries………
Effect of tax deduction………………………………
Other-net……………………………………………
Actual effective tax rate……………………………
40.7%
(8.5)
(2.6)
(0.3)
(11.5)
5.0
(20.9)
2.3
(0.6)
3.6%
40.7%
10.9
(1.9)
(18.1)
(6.9)
(28.9)
3.2
5.3
0.5
4.8%
Millions of YenThousands ofU.S. DollarsYear Ending March 31
2011………………………………………………�
2012………………………………………………�
2013………………………………………………
2014………………………………………………
2015 and thereafter………………………………
TOTAL……………………………………………
￥21
43
190
233
10,109
￥10,596
＄230
459
2,045
2,511
108,695
＄113,940
Due within one year………………………………
Due after one year………………………………
TOTAL……………………………………………
￥282
794
￥1,076
＄3,034
8,531
＄11,565
Millions of YenThousands ofU.S. Dollars
2010 2010
Millions of YenThousands ofU.S. Dollars
Sales to related parties………………
Purchases from related parties…………
Trade notes and accounts receivable…
Trade notes and accounts payable……
2010 2009 2010
￥673
198
561
6
￥406
238
753
＄4,366
2,557
8,095
Millions of Yen
Acquisition cost…………………………………………………
Accumulated depreciation………………………………………
Net leased property……………………………………………
TotalSoftwareFurniture and
FixturesMachinery and
Equipment
2010 2009Thousands of U.S. Dollars
TotalSoftwareFurniture and
FixturesMachinery and
Equipment
￥1,110
619
￥491
￥938
591
￥347
￥787
473
￥314
￥2,835
1,683
￥1,152
￥848
539
￥309
￥528
422
￥106
￥693
534
￥159
￥2,069
1,495
￥574
Acquisition cost…………………………………………………
Accumulated depreciation……………………………………
Net leased property……………………………………………
Thousands of U.S. Dollars
TotalSoftwareFurniture and
FixturesMachinery and
Equipment
2010
＄9,122
5,800
＄3,322
＄5,683
4,537
＄1,146
＄7,447
5,743
＄1,704
＄22,252
16,080
＄6,172
Millions of YenThousands ofU.S. Dollars
Due within one year………………………………………………………
Due after one year…………………………………………………………
TOTAL……………………………………………………………………
2010 2009 2010
￥325
290
￥615
￥535
677
￥1,212
＄3,495
3,123
＄6,618
02 Financial Section 02Financial Section
18 19
02 Financial Section
20 21
02Financial Section
02 Financial Section 02Financial Section
22 23
Notes to Consolidated Financial StatementsJUKI CORPORATION and Consolidated Subsidiaries, Years Ended March 31, 2010 and 2009
02 Financial Section
24
02Financial Section
25
02 Financial Section
26
02Financial Section
27
BASIS OF PRESENTINGCONSOLIDATEDFINANCIAL STATEMENTS
The accompanying consolidated financial statements of
JUKI CORPORATION (the "Company") and its
consolidated subsidiaries (together, the "Group") have been
prepared in 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 in Japan
("Japanese GAAP"), which are different in certain respects
as to 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 a form which is
more familiar to readers outside Japan. In addition, certain
reclassifications have been made in the 2009 consolidated
financial statements to conform to classifications and
presentations used in 2010.
The consolidated financial statements are stated in
Japanese yen, the currency of the country in which the
Company is incorporated and operates. The translations of
Japanese yen amounts into U.S. dollar amounts are
included solely for the convenience of readers outside
Japan and have been made at the rate of ￥93 to ＄1, the
approximate rate of exchange at March 31, 2010. Such
translations should not be construed as representations that
the Japanese yen amounts could be converted into U.S.
dollars at that or any other rate.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a ) Consolidation
The consolidated financial statements as of March 31, 2010
include the accounts of the Company and its 34 significant
(36 in 2009) subsidiaries.
Under the control or influence concept, those companies
in which the Company, directly or indirectly, is able to
exercise control over operations are fully consolidated, and
those companies over which the Group has the ability to
exercise significant influence are accounted for by the
equity method.
Investments in 5 (5 in 2009) unconsolidated subsidiaries
and 4 (5 in 2009) associated companies are stated at cost.
If the equity method of accounting had been applied to the
investments in these companies, the effect on the
accompanying consolidated financial statements would not
be material.
Consolidation goodwill is the difference between the cost
and underlying net equity of investments in consolidated
subsidiaries and associated companies at acquisition and is
amortized on a straight-line basis over five years.
Consolidation goodwill is impaired if the expectation of its
future value is determined to be less than the value
estimated when it was acquired.
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.
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 (1) the accounting policies and procedures
applied to a parent company and its subsidiaries for similar
transactions and events under similar circumstances should
in principle be unified for the preparation of the
consolidated financial statements, (2) financial statements
prepared 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 unless
they are not material: (a) amortization of goodwill; (b)
scheduled amortization of actuarial gain or loss of pensions
that has been directly recorded in the equity; (c) expensing
capitalized development costs of R&D; (d) cancellation of
the fair value model accounting for property, plant and
equipment and investment properties and incorporation of
the cost model accounting; (e) recording the prior years'
effects of changes in accounting policies in the income
statement 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 for fiscal years beginning on or after April
1, 2008 with early adoption permitted.
The Company applied this accounting standard effective
April 1, 2008. In addition, the Company adjusted the
beginning balance of retained earnings at April 1, 2008 as if
this accounting standard had been retrospectively applied.
c ) Cash Equivalents
Cash equivalents are short-term investments that are
readily convertible into cash and that are exposed to
insignificant risk of changes in value.
Cash equivalents include time deposits, certificate of
deposits, commercial paper and mutual funds investing in
bonds that represent short-term investments, all of which
mature or become due within three months of the date of
acquisition.
d ) Inventories
Inventories are stated at the lower of cost, principally
determined by the average method or the first-in, first-out
method for merchandise, finished products, work in
process, raw materials and supplies, or net selling value.
e ) Marketable and Investment Securities
Marketable and investment securities are classified as
available-for-sale securities and are reported at fair value,
with unrealized gains and losses, net of applicable taxes,
reported in a separate component of equity. 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.
f ) Property, Plant and Equipment
Property, plant and equipment are stated at cost.
Depreciation of property, plant and equipment of the
Company and its consolidated domestic subsidiaries is
computed substantially by the declining-balance method
based on the estimated useful lives of the assets. However,
the straight-line method is applied to buildings acquired
after April 1, 1998 and lease assets by the Company and its
domestic subsidiaries, and to all property, plant and
equipment of consolidated foreign subsidiaries. The range
of useful lives is principally from 5 to 50 years for buildings
and structures, from 2 to 12 years for machinery and
equipment and from 2 to 15 years for furniture and fixtures.
The useful lives for lease assets are the terms of the
respective leases.
g ) Long-lived Assets
The Group reviews its long-lived assets for impairment
whenever events or changes in circumstance indicate the
carrying amount of an asset or asset group may not be
recoverable. An impairment loss would be recognized if the
carrying amount of an asset or asset group exceeds the
sum of 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 be
measured 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 the asset or the net selling price
at disposition.
h ) Allowance for Doubtful Accounts
The allowance for doubtful accounts is stated in amounts
considered to be appropriate based on the past credit loss
experience and an evaluation of potential losses in the
receivables outstanding.
i ) Liability for Retirement Benefits and Pension Plans
The Company has retirement benefits and pension plans
for employees. Employees terminating at the mandatory
retirement age are entitled to pension payments under the
funded pension plan.
The transitional obligation, determined as of April
1, 2000, is being amortized over 10 years.
Actuarial gains and losses are amortized using the
straight-line method over 10 years as a certain period within
the remaining years of service of employees from the next
year after they arise.
Prior service cost is charged to income as incurred.
On July 31, 2008, the ASBJ has issued an accounting
standard-ASBJ Statement No. 19 "Partial Amendments to
Accounting Standard for Retirement Benefits (Part 3)."
The Group has adopted this statement from the
beginning of this fiscal year. There is no effect of this in the
2010 consolidated statement of operations.
Retirement benefits to directors and corporate auditors of
five consolidated domestic subsidiaries are provided at
100% of the amount which would be paid if they all retired
at the balance sheet date.
Effective June 28, 2007, the Company terminated its
unfunded retirement allowance plan for all directors and
corporate auditors. The outstanding balance of retirement
allowances for directors and corporate auditors as of March
31, 2010 has been classified as the liability for retirement
benefits.
j ) Research and Development Costs
Research and development costs are charged to income as
incurred.
k ) Leases
In March 2007, the ASBJ issued ASBJ Statement No. 13,
"Accounting Standard for Lease Transactions," which
revised the previous accounting standard for lease
transactions issued in June 1993. The revised accounting
standard for lease transactions was effective for fiscal years
beginning on or after April 1, 2008.
Under the previous accounting standard, finance leases
that were deemed to transfer ownership of the leased
property to the lessee were capitalized. However, other
finance leases were permitted to be accounted for as
operating lease transactions if certain "as if capitalized"
information was disclosed in the note to the lessee's
financial statements. The revised accounting standard
requires that all finance lease transactions be capitalized to
recognize lease assets and lease obligations in the balance
sheet. In addition, the accounting standard permits leases
which existed at the transition date and do not transfer
ownership of the leased property to the lessee to continue
to be accounted for as operating lease transactions.
The Company applied the revised accounting standard
effective April 1, 2008. In addition, the Company continues
to account for leases which existed at the transition date
and do not transfer ownership of the leased property to the
lessee as operating lease transactions.
All other leases are accounted for as operating leases.
l ) Income Taxes
The provision for income taxes is computed based on the
pretax income included in the consolidated statements of
operations. The asset and liability approach is used to
recognize deferred tax assets and liabilities for the
expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets
and liabilities. Deferred taxes are measured by applying
currently enacted tax laws to the temporary differences.
m ) Foreign Currency Transactions
All short-term and long-term monetary 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 consolidated statements of
operations to the extent that they are not hedged by
forward exchange contracts.
n ) Foreign Currency Financial Statements
The balance sheet accounts of the consolidated foreign
subsidiaries are translated into Japanese yen at 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 are shown as "Foreign
currency translation adjustments" in a separate component
of equity.
Revenue and expense accounts of consolidated foreign
subsidiaries are translated into yen at the average
exchange rate.
o ) Derivatives and Hedging Activities
The Group uses derivative financial instruments
("derivatives") to manage its exposures to fluctuations in
foreign exchange and interest rates. Foreign exchange
forward contracts, currency swaps, currency options and
interest rate swaps are utilized by the Group to reduce
foreign currency exchange and interest rate risks. The
Group does not enter into derivatives for trading or
speculative purposes.
Derivative financial instruments and foreign currency
transactions are classified and accounted for as follows: (a)
all derivatives are recognized as either assets or liabilities
and measured at fair value, and gains or losses on
derivative transactions are recognized in the consolidated
statements of operations and (b) for derivatives used for
hedging purposes, if derivatives qualify for hedge
accounting because of high correlation and effectiveness
between the hedging instruments and the hedged items,
gains or losses on derivatives are deferred until maturity of
the hedged transactions.
The foreign exchange forward contracts, currency swaps
and currency options utilized to hedge foreign exchange
exposures for export sales are measured at the fair value
and the unrealized gains/losses are recognized in income.
Forward contracts applied for forecasted (or committed)
transactions are also measured at the fair value but the
unrealized gains/losses are deferred until the underlying
transactions are completed.
The interest rate swaps which qualify for hedge
accounting and meet specific matching criteria are not
remeasured at market value but the differential paid or
received under the swap agreements are recognized and
included in interest expenses or income.
p ) Per Share Information
Basic net loss per share is computed by dividing net loss
available to common shareholders by the weighted-average
number of common shares outstanding for the period.
Diluted net income per share is not disclosed because
the Company had no dilutive securities outstanding at
March 31, 2010 and 2009.
Cash dividends per share presented in the
accompanying consolidated statements of operations are
dividends applicable to the respective years including
dividends to be paid after the end of the year.
q ) New Accounting Pronouncements
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
Accounting Standard 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 the acquisition,
construction, development and the normal operation of a
tangible fixed asset and is associated with the retirement of
such tangible fixed asset.
The asset retirement obligation is recognized as the sum
of the discounted cash flows required for the future asset
retirement and is recorded in the period in which the
obligation is incurred if a reasonable estimate can be made.
If a reasonable estimate of the asset retirement obligation
cannot be made in the period the asset retirement
obligation is incurred, the liability should be recognized
when 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 the
asset. Over time, the liability is accreted to its present value
each period. Any subsequent revisions to the timing or the
amount of the original estimate of undiscounted cash flows
are reflected as an increase or a decrease in the carrying
amount of the liability and the capitalized amount of the
related asset retirement cost. This standard is effective for
fiscal years beginning on or after April 1, 2010 with early
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 and Error
Corrections." Accounting treatments under this standard
and guidance are as follows:
(1) Changes in accounting policies
When a new accounting policy is applied with revision of
accounting standards, a new policy is applied
retrospectively unless the revised accounting standards
include specific transitional provisions. When the
revised accounting standards include specific
transitional provisions, an entity shall comply with the
specific transitional provisions.
(2) Changes in presentations
When the presentation of financial statements is
changed, prior period financial statements are
reclassified in accordance with the new 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 is accounted for prospectively if the change
affects both the period of 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 to accounting 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 "Guidance on
Accounting Standard for Segment Information Disclosures."
Under the standard and guidance, an entity is required to
report financial and descriptive information about its
reportable segments. Reportable segments are operating
segments or aggregations of operating segments that meet
specified criteria. Operating segments are components of
an entity about which separate financial information is
available and such information is evaluated regularly by the
chief operating decision maker in deciding how to allocate
resources and in assessing performance. Generally,
segment information is required to be reported on the same
basis as is used internally 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.
MARKETABLE AND INVESTMENT SECURITIES
Marketable and investment securities as of March 31, 2010
and 2009, consisted of the following:
The costs and aggregate fair values of marketable and
investment securities as of March 31, 2010 and 2009 were
as follows:
Available-for-sale securities and bonds and other securities
whose fair value is not readily determinable as of March 31,
2009 were as follows. The similar information for 2010 is
disclosed in Note 15.
Proceeds from sales of available-for-sale securities for the
year ended March 31, 2009 were ￥0 million. Gross
realized gains and losses on these sales, computed on the
moving average cost basis, were nil for the year ended
March 31, 2009.
The impairment losses on available-for-sale equity
securities for the years ended March 31, 2010 and 2009
were ￥93 million (＄998 thousand) and ￥408 million,
respectively.
SHORT-TERM INVESTMENTS
Short-term investments as of March 31, 2010 and 2009,
consisted of time deposits with an original maturity over
three months.
INVENTORIES
Inventories as of March 31, 2010 and 2009, consisted of
the following:
LONG-LIVED ASSETS
For the years ended March 31, 2010 and 2009, the
Company and its consolidated domestic subsidiaries
recognized losses on impairment for the following assets:
For purposes of evaluating and measuring impairment,
assets used for business are considered to constitute a
group by each industry segment of the Company and each
of the consolidated subsidiaries, while idle assets and
investment property are individually considered.
Carrying amounts of certain idle real estate and
investment property were devalued to their recoverable
amounts, due to substantial declines in fair market value.
The breakdown of the impairment losses was as follows:
The recoverable amount of the idle real estate and others
was measured by its net selling price based on appraisal of
real estate price.
The recoverable amount of investment property was
measured at their value in use and the discount rate used
for computation of present value of future cash flows was
6.8% for the year ended March 31, 2010.
The recoverable amounts of idle facilities and others
were determined to be zero.
INVESTMENT PROPERTY
On November 28, 2008, the ASBJ issued ASBJ Statement
No. 20 "Accounting Standard for Investment Property and
Related Disclosures" and issued ASBJ Guidance No. 23
"Guidance on Accounting Standard for Investment Property
and Related Disclosures." This accounting standard and the
guidance are applicable to investment property and related
disclosures at the end of the fiscal years ending on or after
March 31, 2010. The Group applied the new accounting
standard and guidance effective March 31, 2010.
The Group holds some rental properties such as office
buildings and land in Tokyo and other areas. Net loss of
rental income and operating expenses for those rental
properties was ￥43 million (＄463 thousand) and
impairment losses were ￥51 million (＄553 thousand) for
the fiscal year ended March 31, 2010.
In addition, the carrying amounts, changes in such
balances and market prices of such properties are as
follows:
Notes: 1. Carrying amount recognized in balance sheet is
net of accumulated depreciation and
accumulated impairment losses, if any.
2. Increase during the fiscal year ended March 31,
2010 primarily represents change in the manner
in which an asset is used of ￥507 million (＄
5,456 thousand), and decrease primarily
represents the recognition of depreciation of ￥79
million (＄855 thousand).
3. Fair value of properties as of March 31, 2010 is
principally measured by the Group in accordance
with its Japanese Real-estate Appraisal
Standard.
SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Short-term borrowings as of March 31, 2010 and 2009,
consisted of notes to banks and bank overdrafts. The
annual interest rates applicable to the short-term
borrowings ranged from 0.85% to 5.31% and 0.88% to
7.61% at March 31, 2010 and 2009, respectively.
Long-term debt as of March 31, 2010 and 2009, consisted
of the following:
The Company had agreements of commitment lines with
four banks in 2010 and six banks in 2009, and the
aggregate amount of unused line of credit was as follows:
Annual maturities of long-term debt, excluding finance
leases (see Note 14), as of March 31, 2010, for the next
five years and thereafter were as follows:
As of March 31, 2010, the following assets were pledged to
secure long-term debt aggregating ￥20,440 million (＄
219,791 thousand), and certain short-term borrowings and
current portion of long-term debt aggregating ￥23,237
million (＄249,856 thousand):
In addition, certain short-term borrowings and long-term
debt outstanding as of March 31, 2010, ￥25,290 million (＄
271,935 thousand) are subject to debt covenant terms
concerning the condition of total equity and ordinary income
(loss) as of March 31, 2010.
RETIREMENT AND PENSION PLANS
The Company and most of its domestic consolidated
subsidiaries have severance payments and pension plans
covering substantially all employees. The amounts of the
severance and pension payments are, in general,
determined on the basis of length of service and current
basic salary at the time of termination of service. If the
termination is involuntary, the employee is entitled to
greater payments than in the case of voluntary retirement.
Certain foreign consolidated subsidiaries have a defined
contribution pension plan. Retirement allowances for
directors and corporate auditors of domestic consolidated
subsidiaries are paid subject to approval of the
shareholders in accordance with the Companies Act of
Japan ("Companies Act"). Liability for retirement benefits at
March 31, 2010 and 2009, included those for directors and
corporate auditors in the amount of ￥387 million (＄4,161
thousand) and ￥393 million, respectively.
The liability for employees' retirement benefits at March
31, 2010 and 2009, consisted of the following:
The components of net periodic benefit costs for the years
ended March 31, 2010 and 2009 are as follows:
Assumptions used for the years ended March 31, 2010 and
2009 are set forth as follows:
EQUITY
Japanese companies are subject to 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 meet certain criteria such as; (1) having the
Board of Directors, (2) having independent auditors, (3)
having the 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, the Board of Directors may declare dividends
(except for dividends in kind) at any time during the fiscal
year if the company has prescribed so in its articles of
incorporation. However, the Company cannot do so
because it does not meet all the above criteria.
The Companies Act permits companies to distribute
dividends-in-kind (non-cash assets) to shareholders subject
to a certain limitation and additional requirements.
Semiannual interim dividends may also be paid once a
year upon resolution by the Board of Directors if the articles
of incorporation of the company so stipulate. The
Companies Act provides certain limitations on the amounts
available for dividends or the purchase of treasury 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 of retained earnings) or as additional paid-in
capital (a component of capital surplus) depending on the
equity account charged upon the payment of such
dividends until the total of aggregate amount of legal
reserve and additional paid-in capital equals 25% of the
common stock. Under the Companies Act, the total amount
of additional 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 Board of Directors. The amount of
treasury stock purchased cannot exceed the amount
available for distribution to the shareholders which is
determined by specific formula. Under the Companies Act,
stock acquisition rights are presented as a separate
component of equity. The Companies Act also provides that
companies can purchase both treasury stock acquisition
rights and treasury stock. Such treasury stock acquisition
rights are presented as a separate component of equity or
deducted directly from stock acquisition rights.
INCOME TAXES
The Company and its consolidated domestic subsidiaries
are subject to Japanese national and local income taxes
which, in the aggregate, resulted in a normal effective
statutory tax rate of approximately 40.7% 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:
A reconciliation between the normal effective statutory tax
rates and the actual effective tax rates reflected in the
accompanying consolidated statements of operations for
the years ended March 31, 2010 and 2009 is as follows:
At March 31, 2010, certain consolidated subsidiaries have
tax loss carryforwards aggregating approximately ￥10,596
million (＄113,940 thousand) which are available to be
offset against taxable income of such subsidiaries in future
years. These tax loss carryforwards, if not utilized, will
expire as follows:
RELATED PARTY TRANSACTIONS
Transactions of the Group with unconsolidated subsidiaries
and associated companies for the years ended March 31,
2010 and 2009, were as follows:
RESEARCH AND DEVELOPMENT COSTS
Research and development costs charged to income were
￥5,355 million (＄57,576 thousand) and ￥7,411 million for
the years ended March 31, 2010 and 2009, respectively.
LEASES
The Group leases certain furniture and fixture, machinery, computer equipment and other assets.
Total rental expenses including lease payments under finance leases for the years ended March 31, 2010 and 2009 were
￥777 million (＄8,252 thousand) and ￥801 million, respectively.
Obligations under finance leases were as follows:
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 be
capitalized to recognize lease assets and lease obligations in the balance sheet. However, the 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 note 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 on an "as if capitalized" basis was as follows:
Obligations under finance leases:
1
2
3
4
5
67
10
11
9
8
12
13
14
Merchandise…………………………
Finished goods………………………
Work-in-process……………………
Raw materials………………………
Supplies………………………………
TOTAL…………………………………
Millions of YenThousands ofU.S. Dollars
2010 2009 2010
＄8,044
207,709
50,800
45,649
2,829
＄315,031
￥1,375
25,912
3,644
4,925
215
￥36,071
￥748
19,317
4,725
4,245
263
￥29,298
Millions of YenThousands ofU.S. Dollars
The total amount of commitment
lines…………………………………
Used line of credit…………………
Unused line of credit…………………
2010 2009 2010
＄79,570
67,635
＄11,935
￥9,000
9,000
￥7,400
6,290
￥1,110
Millions of YenThousands ofU.S. Dollars
Current-Government and
corporate bonds……………………
Non-current:
Marketable equity securities………
Other…………………………………
TOTAL…………………………………
2010 2009 2010
＄69
＄16,526
4,913
＄21,439
￥44
￥1,390
524
￥1,914
￥6
￥1,537
457
￥1,994
Millions of YenThousands ofU.S. Dollars
Land……………………………………
Buildings and structures……………
Machinery and equipment…………
Furniture and fixtures………………
Others…………………………………
Total……………………………………
2010 2009 2010
＄553
215
266
309
＄1,343
￥914
50
15
￥979
￥51
20
25
29
￥125
Millions of Yen
March 31, 2010
Available-for-sale:
Equity securities………
Other……………………
Fair ValueUnrealized
LossesUnrealized
GainsCost
￥1,484
238
￥220
8
￥167
16
￥1,537
230
Millions of Yen
Fair ValueUnrealized
LossesUnrealized
GainsCostMarch 31, 2009
Available-for-sale:
Equity securities………
Other……………………
￥1,493
242
￥37 ￥140
28
￥1,390
214
Thousands of U.S. Dollars
Fair ValueUnrealized
LossesUnrealized
GainsCostMarch 31, 2010
Available-for-sale:
Equity securities………
Other……………………
＄15,958
2,556
＄2,365
92
＄1,797
176
＄16,526
2,472
Carrying Amount
Millions of YenMarch 31, 2009
Available-for-sale:Equity securities……………………
Bonds and other securities………………………………
TOTAL………………………………………………………
￥306
48
￥354
Millions of YenThousands ofU.S. DollarsYear Ending March 31
2011………………………………………………
2012………………………………………………
2013………………………………………………
2014………………………………………………
2015………………………………………………
2016 and thereafter……………………………
TOTAL……………………………………………
＄100,534
88,812
70,184
37,438
30,805
9,700
＄337,473
￥9,350
8,259
6,527
3,482
2,865
902
￥31,385
Millions of YenThousands ofU.S. Dollars
Projected benefit obligation…………
Fair value of plan assets……………
Unrecognized actuarial loss ………
Unrecognized transitional obligation…
Net liability……………………………
2010 2009 2010
￥13,224
(4,373)
(1,940)
(605)
￥6,306
＄128,898
(46,192)
(12,364)
＄70,342
￥11,988
(4,296)
(1,150)
￥6,542
Millions of YenThousands ofU.S. Dollars
Service cost……………………………
Interest cost……………………………
Expected return on plan assets ……
Amortization of transitional obligation…
Recognized actuarial loss……………
Additional retirement payments and others…
Net periodic benefit costs……………
2010 2009 2010
￥975
213
(103)
638
301
793
￥2,817
＄8,065
2,473
(959)
6,500
3,993
2,083
＄22,155
￥750
230
(89)
604
371
194
￥2,060
2010 2009
Discount rate……………………………………
Expected rate of return on plan assets ………
Amortization period of prior service cost………
Recognition period of actuarial gain/loss………
Amortization period of transitional obligation…
2.0%
2.5%
1 year
10 years
10 years
2.0%
2.5%
1 year
10 years
10 years
Millions of YenThousands ofU.S. Dollars
Investment securities……………………………
Land………………………………………………
Buildings-net of accumulated depreciation……
Machinery-net of accumulated depreciation …
TOTAL……………………………………………
＄15,511
60,499
184,511
8,081
＄268,602
￥1,442
5,626
17,160
752
￥24,980
2010 2009 2010Use Type of Assets
Millions of Yen
Idle real estate and othersIdle real estate
Idle real estate
Investment property Idle facilities and others
Total………………………………………………
Land and others
Land, buildings and structuresLand, buildings and structuresLand
Machinery and equipment, furniture and fixtures
Miyagi Prefecture and others…………Hiroshima Prefecture…………Fukushima Prefecture…………Tochigi Prefecture……
Tochigi Prefecture and others…………
Location
￥905
59
15
￥979
￥76
4
45
￥125
Thousands ofU.S. Dollars
＄819
43
481
＄1,343
Millions of YenThousands ofU.S. Dollars
1.08% to 1.21% unsecured
bonds, due 2010-2014……………
1.23% to 7.2% loans from banks,
due 2010-2019……………………
1.65% loans from insurance
companies…………………………
Obligations under finance leases……
TOTAL……………………………
Current portion………………………
Long-term debt, less current portion…
2010 2009 2010
＄7,098
328,870
1,505
11,565
349,038
(103,569)
＄245,469
￥700
16,556
180
431
17,867
(7,356)
￥10,511
￥660
30,585
140
1,076
32,461
(9,632)
￥22,829
Millions of Yen
April 1, 2009
￥3,351 ￥377 ￥3,728 ￥6,309
Carrying Amount
Increase/Decrease March 31, 2010
Fair Value
March 31, 2010
Thousands of U.S. Dollars
April 1, 2009
＄36,036 ＄4,048 ＄40,084 ＄67,837
Carrying Amount
Increase/Decrease March 31, 2010
Fair Value
March 31, 2010
Millions of YenThousands ofU.S. Dollars
Deferred tax assets:
Unrealized profit on inventories…
Loss on disposals of inventories……
Unrealized gains on sales of property……
Accrued bonuses……………………
Enterprise tax…………………………
Allowance for doubtful accounts……
Liability for severance payments……
Loss on devaluations of investment
securities……………………………
Tax loss carryforwards………………
Net unrealized loss on available-for-
sale securities………………………
Other…………………………………
Less valuation allowance……………
TOTAL………………………………
Offset with deferred tax liabilities……
Net deferred tax assets………………
Deferred tax liabilities:
Undistributed earnings of associated
companies…………………………
Net unrealized gain on available-
for-sale securities…………………
Other…………………………………
TOTAL………………………………
Offset with deferred tax assets………
Net deferred tax liabilities……………
2010 2009 2010
￥343
70
732
256
41
426
2,451
67
11,871
1,095
(10,278)
7,074
(178)
￥6,896
￥142
28
21
191
(178)
￥13
￥1,175
50
732
327
24
391
2,421
54
7,462
53
1,240
(7,500)
6,429
(216)
￥6,213
￥193
97
290
(216)
￥74
＄3,685
748
7,867
2,751
444
4,581
26,349
716
127,647
11,795
(110,518)
76,065
(1,913)
＄74,152
＄1,524
304
223
2,051
(1,913)
＄138
2010 2009
Normal effective statutory tax rate…………………
Non-deductible items………………………………
Difference of statutory tax rates between Japan
and foreign countries……………………………
Lower income tax rates applicable to income
in certain foreign countries………………………
Reversal of dividend income in consolidated
subsidiaries………………………………………
Deficit of consolidated subsidiaries………………
Unrealized profits without recognition of deferred tax……
Change in valuation allowance……………………
Reversal of loss on devaluations of
investments in consolidated subsidiaries………
Effect of tax deduction………………………………
Other-net……………………………………………
Actual effective tax rate……………………………
40.7%
(8.5)
(2.6)
(0.3)
(11.5)
5.0
(20.9)
2.3
(0.6)
3.6%
40.7%
10.9
(1.9)
(18.1)
(6.9)
(28.9)
3.2
5.3
0.5
4.8%
Millions of YenThousands ofU.S. DollarsYear Ending March 31
2011………………………………………………�
2012………………………………………………�
2013………………………………………………
2014………………………………………………
2015 and thereafter………………………………
TOTAL……………………………………………
￥21
43
190
233
10,109
￥10,596
＄230
459
2,045
2,511
108,695
＄113,940
Due within one year………………………………
Due after one year………………………………
TOTAL……………………………………………
￥282
794
￥1,076
＄3,034
8,531
＄11,565
Millions of YenThousands ofU.S. Dollars
2010 2010
Millions of YenThousands ofU.S. Dollars
Sales to related parties………………
Purchases from related parties…………
Trade notes and accounts receivable…
Trade notes and accounts payable……
2010 2009 2010
￥673
198
561
6
￥406
238
753
＄4,366
2,557
8,095
Millions of Yen
Acquisition cost…………………………………………………
Accumulated depreciation………………………………………
Net leased property……………………………………………
TotalSoftwareFurniture and
FixturesMachinery and
Equipment
2010 2009Thousands of U.S. Dollars
TotalSoftwareFurniture and
FixturesMachinery and
Equipment
￥1,110
619
￥491
￥938
591
￥347
￥787
473
￥314
￥2,835
1,683
￥1,152
￥848
539
￥309
￥528
422
￥106
￥693
534
￥159
￥2,069
1,495
￥574
Acquisition cost…………………………………………………
Accumulated depreciation……………………………………
Net leased property……………………………………………
Thousands of U.S. Dollars
TotalSoftwareFurniture and
FixturesMachinery and
Equipment
2010
＄9,122
5,800
＄3,322
＄5,683
4,537
＄1,146
＄7,447
5,743
＄1,704
＄22,252
16,080
＄6,172
Millions of YenThousands ofU.S. Dollars
Due within one year………………………………………………………
Due after one year…………………………………………………………
TOTAL……………………………………………………………………
2010 2009 2010
￥325
290
￥615
￥535
677
￥1,212
＄3,495
3,123
＄6,618
02 Financial Section 02Financial Section
18 19
02 Financial Section
20 21
02Financial Section
02 Financial Section 02Financial Section
22 23
Notes to Consolidated Financial StatementsJUKI CORPORATION and Consolidated Subsidiaries, Years Ended March 31, 2010 and 2009
02 Financial Section
24
02Financial Section
25
02 Financial Section
26
02Financial Section
27
BASIS OF PRESENTINGCONSOLIDATEDFINANCIAL STATEMENTS
The accompanying consolidated financial statements of
JUKI CORPORATION (the "Company") and its
consolidated subsidiaries (together, the "Group") have been
prepared in 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 in Japan
("Japanese GAAP"), which are different in certain respects
as to 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 a form which is
more familiar to readers outside Japan. In addition, certain
reclassifications have been made in the 2009 consolidated
financial statements to conform to classifications and
presentations used in 2010.
The consolidated financial statements are stated in
Japanese yen, the currency of the country in which the
Company is incorporated and operates. The translations of
Japanese yen amounts into U.S. dollar amounts are
included solely for the convenience of readers outside
Japan and have been made at the rate of ￥93 to ＄1, the
approximate rate of exchange at March 31, 2010. Such
translations should not be construed as representations that
the Japanese yen amounts could be converted into U.S.
dollars at that or any other rate.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a ) Consolidation
The consolidated financial statements as of March 31, 2010
include the accounts of the Company and its 34 significant
(36 in 2009) subsidiaries.
Under the control or influence concept, those companies
in which the Company, directly or indirectly, is able to
exercise control over operations are fully consolidated, and
those companies over which the Group has the ability to
exercise significant influence are accounted for by the
equity method.
Investments in 5 (5 in 2009) unconsolidated subsidiaries
and 4 (5 in 2009) associated companies are stated at cost.
If the equity method of accounting had been applied to the
investments in these companies, the effect on the
accompanying consolidated financial statements would not
be material.
Consolidation goodwill is the difference between the cost
and underlying net equity of investments in consolidated
subsidiaries and associated companies at acquisition and is
amortized on a straight-line basis over five years.
Consolidation goodwill is impaired if the expectation of its
future value is determined to be less than the value
estimated when it was acquired.
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.
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 (1) the accounting policies and procedures
applied to a parent company and its subsidiaries for similar
transactions and events under similar circumstances should
in principle be unified for the preparation of the
consolidated financial statements, (2) financial statements
prepared 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 unless
they are not material: (a) amortization of goodwill; (b)
scheduled amortization of actuarial gain or loss of pensions
that has been directly recorded in the equity; (c) expensing
capitalized development costs of R&D; (d) cancellation of
the fair value model accounting for property, plant and
equipment and investment properties and incorporation of
the cost model accounting; (e) recording the prior years'
effects of changes in accounting policies in the income
statement 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 for fiscal years beginning on or after April
1, 2008 with early adoption permitted.
The Company applied this accounting standard effective
April 1, 2008. In addition, the Company adjusted the
beginning balance of retained earnings at April 1, 2008 as if
this accounting standard had been retrospectively applied.
c ) Cash Equivalents
Cash equivalents are short-term investments that are
readily convertible into cash and that are exposed to
insignificant risk of changes in value.
Cash equivalents include time deposits, certificate of
deposits, commercial paper and mutual funds investing in
bonds that represent short-term investments, all of which
mature or become due within three months of the date of
acquisition.
d ) Inventories
Inventories are stated at the lower of cost, principally
determined by the average method or the first-in, first-out
method for merchandise, finished products, work in
process, raw materials and supplies, or net selling value.
e ) Marketable and Investment Securities
Marketable and investment securities are classified as
available-for-sale securities and are reported at fair value,
with unrealized gains and losses, net of applicable taxes,
reported in a separate component of equity. 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.
f ) Property, Plant and Equipment
Property, plant and equipment are stated at cost.
Depreciation of property, plant and equipment of the
Company and its consolidated domestic subsidiaries is
computed substantially by the declining-balance method
based on the estimated useful lives of the assets. However,
the straight-line method is applied to buildings acquired
after April 1, 1998 and lease assets by the Company and its
domestic subsidiaries, and to all property, plant and
equipment of consolidated foreign subsidiaries. The range
of useful lives is principally from 5 to 50 years for buildings
and structures, from 2 to 12 years for machinery and
equipment and from 2 to 15 years for furniture and fixtures.
The useful lives for lease assets are the terms of the
respective leases.
g ) Long-lived Assets
The Group reviews its long-lived assets for impairment
whenever events or changes in circumstance indicate the
carrying amount of an asset or asset group may not be
recoverable. An impairment loss would be recognized if the
carrying amount of an asset or asset group exceeds the
sum of 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 be
measured 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 the asset or the net selling price
at disposition.
h ) Allowance for Doubtful Accounts
The allowance for doubtful accounts is stated in amounts
considered to be appropriate based on the past credit loss
experience and an evaluation of potential losses in the
receivables outstanding.
i ) Liability for Retirement Benefits and Pension Plans
The Company has retirement benefits and pension plans
for employees. Employees terminating at the mandatory
retirement age are entitled to pension payments under the
funded pension plan.
The transitional obligation, determined as of April
1, 2000, is being amortized over 10 years.
Actuarial gains and losses are amortized using the
straight-line method over 10 years as a certain period within
the remaining years of service of employees from the next
year after they arise.
Prior service cost is charged to income as incurred.
On July 31, 2008, the ASBJ has issued an accounting
standard-ASBJ Statement No. 19 "Partial Amendments to
Accounting Standard for Retirement Benefits (Part 3)."
The Group has adopted this statement from the
beginning of this fiscal year. There is no effect of this in the
2010 consolidated statement of operations.
Retirement benefits to directors and corporate auditors of
five consolidated domestic subsidiaries are provided at
100% of the amount which would be paid if they all retired
at the balance sheet date.
Effective June 28, 2007, the Company terminated its
unfunded retirement allowance plan for all directors and
corporate auditors. The outstanding balance of retirement
allowances for directors and corporate auditors as of March
31, 2010 has been classified as the liability for retirement
benefits.
j ) Research and Development Costs
Research and development costs are charged to income as
incurred.
k ) Leases
In March 2007, the ASBJ issued ASBJ Statement No. 13,
"Accounting Standard for Lease Transactions," which
revised the previous accounting standard for lease
transactions issued in June 1993. The revised accounting
standard for lease transactions was effective for fiscal years
beginning on or after April 1, 2008.
Under the previous accounting standard, finance leases
that were deemed to transfer ownership of the leased
property to the lessee were capitalized. However, other
finance leases were permitted to be accounted for as
operating lease transactions if certain "as if capitalized"
information was disclosed in the note to the lessee's
financial statements. The revised accounting standard
requires that all finance lease transactions be capitalized to
recognize lease assets and lease obligations in the balance
sheet. In addition, the accounting standard permits leases
which existed at the transition date and do not transfer
ownership of the leased property to the lessee to continue
to be accounted for as operating lease transactions.
The Company applied the revised accounting standard
effective April 1, 2008. In addition, the Company continues
to account for leases which existed at the transition date
and do not transfer ownership of the leased property to the
lessee as operating lease transactions.
All other leases are accounted for as operating leases.
l ) Income Taxes
The provision for income taxes is computed based on the
pretax income included in the consolidated statements of
operations. The asset and liability approach is used to
recognize deferred tax assets and liabilities for the
expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets
and liabilities. Deferred taxes are measured by applying
currently enacted tax laws to the temporary differences.
m ) Foreign Currency Transactions
All short-term and long-term monetary 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 consolidated statements of
operations to the extent that they are not hedged by
forward exchange contracts.
n ) Foreign Currency Financial Statements
The balance sheet accounts of the consolidated foreign
subsidiaries are translated into Japanese yen at 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 are shown as "Foreign
currency translation adjustments" in a separate component
of equity.
Revenue and expense accounts of consolidated foreign
subsidiaries are translated into yen at the average
exchange rate.
o ) Derivatives and Hedging Activities
The Group uses derivative financial instruments
("derivatives") to manage its exposures to fluctuations in
foreign exchange and interest rates. Foreign exchange
forward contracts, currency swaps, currency options and
interest rate swaps are utilized by the Group to reduce
foreign currency exchange and interest rate risks. The
Group does not enter into derivatives for trading or
speculative purposes.
Derivative financial instruments and foreign currency
transactions are classified and accounted for as follows: (a)
all derivatives are recognized as either assets or liabilities
and measured at fair value, and gains or losses on
derivative transactions are recognized in the consolidated
statements of operations and (b) for derivatives used for
hedging purposes, if derivatives qualify for hedge
accounting because of high correlation and effectiveness
between the hedging instruments and the hedged items,
gains or losses on derivatives are deferred until maturity of
the hedged transactions.
The foreign exchange forward contracts, currency swaps
and currency options utilized to hedge foreign exchange
exposures for export sales are measured at the fair value
and the unrealized gains/losses are recognized in income.
Forward contracts applied for forecasted (or committed)
transactions are also measured at the fair value but the
unrealized gains/losses are deferred until the underlying
transactions are completed.
The interest rate swaps which qualify for hedge
accounting and meet specific matching criteria are not
remeasured at market value but the differential paid or
received under the swap agreements are recognized and
included in interest expenses or income.
p ) Per Share Information
Basic net loss per share is computed by dividing net loss
available to common shareholders by the weighted-average
number of common shares outstanding for the period.
Diluted net income per share is not disclosed because
the Company had no dilutive securities outstanding at
March 31, 2010 and 2009.
Cash dividends per share presented in the
accompanying consolidated statements of operations are
dividends applicable to the respective years including
dividends to be paid after the end of the year.
q ) New Accounting Pronouncements
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
Accounting Standard 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 the acquisition,
construction, development and the normal operation of a
tangible fixed asset and is associated with the retirement of
such tangible fixed asset.
The asset retirement obligation is recognized as the sum
of the discounted cash flows required for the future asset
retirement and is recorded in the period in which the
obligation is incurred if a reasonable estimate can be made.
If a reasonable estimate of the asset retirement obligation
cannot be made in the period the asset retirement
obligation is incurred, the liability should be recognized
when 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 the
asset. Over time, the liability is accreted to its present value
each period. Any subsequent revisions to the timing or the
amount of the original estimate of undiscounted cash flows
are reflected as an increase or a decrease in the carrying
amount of the liability and the capitalized amount of the
related asset retirement cost. This standard is effective for
fiscal years beginning on or after April 1, 2010 with early
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 and Error
Corrections." Accounting treatments under this standard
and guidance are as follows:
(1) Changes in accounting policies
When a new accounting policy is applied with revision of
accounting standards, a new policy is applied
retrospectively unless the revised accounting standards
include specific transitional provisions. When the
revised accounting standards include specific
transitional provisions, an entity shall comply with the
specific transitional provisions.
(2) Changes in presentations
When the presentation of financial statements is
changed, prior period financial statements are
reclassified in accordance with the new 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 is accounted for prospectively if the change
affects both the period of 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 to accounting 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 "Guidance on
Accounting Standard for Segment Information Disclosures."
Under the standard and guidance, an entity is required to
report financial and descriptive information about its
reportable segments. Reportable segments are operating
segments or aggregations of operating segments that meet
specified criteria. Operating segments are components of
an entity about which separate financial information is
available and such information is evaluated regularly by the
chief operating decision maker in deciding how to allocate
resources and in assessing performance. Generally,
segment information is required to be reported on the same
basis as is used internally 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.
MARKETABLE AND INVESTMENT SECURITIES
Marketable and investment securities as of March 31, 2010
and 2009, consisted of the following:
The costs and aggregate fair values of marketable and
investment securities as of March 31, 2010 and 2009 were
as follows:
Available-for-sale securities and bonds and other securities
whose fair value is not readily determinable as of March 31,
2009 were as follows. The similar information for 2010 is
disclosed in Note 15.
Proceeds from sales of available-for-sale securities for the
year ended March 31, 2009 were ￥0 million. Gross
realized gains and losses on these sales, computed on the
moving average cost basis, were nil for the year ended
March 31, 2009.
The impairment losses on available-for-sale equity
securities for the years ended March 31, 2010 and 2009
were ￥93 million (＄998 thousand) and ￥408 million,
respectively.
SHORT-TERM INVESTMENTS
Short-term investments as of March 31, 2010 and 2009,
consisted of time deposits with an original maturity over
three months.
INVENTORIES
Inventories as of March 31, 2010 and 2009, consisted of
the following:
LONG-LIVED ASSETS
For the years ended March 31, 2010 and 2009, the
Company and its consolidated domestic subsidiaries
recognized losses on impairment for the following assets:
For purposes of evaluating and measuring impairment,
assets used for business are considered to constitute a
group by each industry segment of the Company and each
of the consolidated subsidiaries, while idle assets and
investment property are individually considered.
Carrying amounts of certain idle real estate and
investment property were devalued to their recoverable
amounts, due to substantial declines in fair market value.
The breakdown of the impairment losses was as follows:
The recoverable amount of the idle real estate and others
was measured by its net selling price based on appraisal of
real estate price.
The recoverable amount of investment property was
measured at their value in use and the discount rate used
for computation of present value of future cash flows was
6.8% for the year ended March 31, 2010.
The recoverable amounts of idle facilities and others
were determined to be zero.
INVESTMENT PROPERTY
On November 28, 2008, the ASBJ issued ASBJ Statement
No. 20 "Accounting Standard for Investment Property and
Related Disclosures" and issued ASBJ Guidance No. 23
"Guidance on Accounting Standard for Investment Property
and Related Disclosures." This accounting standard and the
guidance are applicable to investment property and related
disclosures at the end of the fiscal years ending on or after
March 31, 2010. The Group applied the new accounting
standard and guidance effective March 31, 2010.
The Group holds some rental properties such as office
buildings and land in Tokyo and other areas. Net loss of
rental income and operating expenses for those rental
properties was ￥43 million (＄463 thousand) and
impairment losses were ￥51 million (＄553 thousand) for
the fiscal year ended March 31, 2010.
In addition, the carrying amounts, changes in such
balances and market prices of such properties are as
follows:
Notes: 1. Carrying amount recognized in balance sheet is
net of accumulated depreciation and
accumulated impairment losses, if any.
2. Increase during the fiscal year ended March 31,
2010 primarily represents change in the manner
in which an asset is used of ￥507 million (＄
5,456 thousand), and decrease primarily
represents the recognition of depreciation of ￥79
million (＄855 thousand).
3. Fair value of properties as of March 31, 2010 is
principally measured by the Group in accordance
with its Japanese Real-estate Appraisal
Standard.
SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Short-term borrowings as of March 31, 2010 and 2009,
consisted of notes to banks and bank overdrafts. The
annual interest rates applicable to the short-term
borrowings ranged from 0.85% to 5.31% and 0.88% to
7.61% at March 31, 2010 and 2009, respectively.
Long-term debt as of March 31, 2010 and 2009, consisted
of the following:
The Company had agreements of commitment lines with
four banks in 2010 and six banks in 2009, and the
aggregate amount of unused line of credit was as follows:
Annual maturities of long-term debt, excluding finance
leases (see Note 14), as of March 31, 2010, for the next
five years and thereafter were as follows:
As of March 31, 2010, the following assets were pledged to
secure long-term debt aggregating ￥20,440 million (＄
219,791 thousand), and certain short-term borrowings and
current portion of long-term debt aggregating ￥23,237
million (＄249,856 thousand):
In addition, certain short-term borrowings and long-term
debt outstanding as of March 31, 2010, ￥25,290 million (＄
271,935 thousand) are subject to debt covenant terms
concerning the condition of total equity and ordinary income
(loss) as of March 31, 2010.
RETIREMENT AND PENSION PLANS
The Company and most of its domestic consolidated
subsidiaries have severance payments and pension plans
covering substantially all employees. The amounts of the
severance and pension payments are, in general,
determined on the basis of length of service and current
basic salary at the time of termination of service. If the
termination is involuntary, the employee is entitled to
greater payments than in the case of voluntary retirement.
Certain foreign consolidated subsidiaries have a defined
contribution pension plan. Retirement allowances for
directors and corporate auditors of domestic consolidated
subsidiaries are paid subject to approval of the
shareholders in accordance with the Companies Act of
Japan ("Companies Act"). Liability for retirement benefits at
March 31, 2010 and 2009, included those for directors and
corporate auditors in the amount of ￥387 million (＄4,161
thousand) and ￥393 million, respectively.
The liability for employees' retirement benefits at March
31, 2010 and 2009, consisted of the following:
The components of net periodic benefit costs for the years
ended March 31, 2010 and 2009 are as follows:
Assumptions used for the years ended March 31, 2010 and
2009 are set forth as follows:
EQUITY
Japanese companies are subject to 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 meet certain criteria such as; (1) having the
Board of Directors, (2) having independent auditors, (3)
having the 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, the Board of Directors may declare dividends
(except for dividends in kind) at any time during the fiscal
year if the company has prescribed so in its articles of
incorporation. However, the Company cannot do so
because it does not meet all the above criteria.
The Companies Act permits companies to distribute
dividends-in-kind (non-cash assets) to shareholders subject
to a certain limitation and additional requirements.
Semiannual interim dividends may also be paid once a
year upon resolution by the Board of Directors if the articles
of incorporation of the company so stipulate. The
Companies Act provides certain limitations on the amounts
available for dividends or the purchase of treasury 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 of retained earnings) or as additional paid-in
capital (a component of capital surplus) depending on the
equity account charged upon the payment of such
dividends until the total of aggregate amount of legal
reserve and additional paid-in capital equals 25% of the
common stock. Under the Companies Act, the total amount
of additional 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 Board of Directors. The amount of
treasury stock purchased cannot exceed the amount
available for distribution to the shareholders which is
determined by specific formula. Under the Companies Act,
stock acquisition rights are presented as a separate
component of equity. The Companies Act also provides that
companies can purchase both treasury stock acquisition
rights and treasury stock. Such treasury stock acquisition
rights are presented as a separate component of equity or
deducted directly from stock acquisition rights.
INCOME TAXES
The Company and its consolidated domestic subsidiaries
are subject to Japanese national and local income taxes
which, in the aggregate, resulted in a normal effective
statutory tax rate of approximately 40.7% 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:
A reconciliation between the normal effective statutory tax
rates and the actual effective tax rates reflected in the
accompanying consolidated statements of operations for
the years ended March 31, 2010 and 2009 is as follows:
At March 31, 2010, certain consolidated subsidiaries have
tax loss carryforwards aggregating approximately ￥10,596
million (＄113,940 thousand) which are available to be
offset against taxable income of such subsidiaries in future
years. These tax loss carryforwards, if not utilized, will
expire as follows:
RELATED PARTY TRANSACTIONS
Transactions of the Group with unconsolidated subsidiaries
and associated companies for the years ended March 31,
2010 and 2009, were as follows:
RESEARCH AND DEVELOPMENT COSTS
Research and development costs charged to income were
￥5,355 million (＄57,576 thousand) and ￥7,411 million for
the years ended March 31, 2010 and 2009, respectively.
LEASES
The Group leases certain furniture and fixture, machinery, computer equipment and other assets.
Total rental expenses including lease payments under finance leases for the years ended March 31, 2010 and 2009 were
￥777 million (＄8,252 thousand) and ￥801 million, respectively.
Obligations under finance leases were as follows:
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 be
capitalized to recognize lease assets and lease obligations in the balance sheet. However, the 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 note 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 on an "as if capitalized" basis was as follows:
Obligations under finance leases:
1
2
3
4
5
67
10
11
9
8
12
13
14
Merchandise…………………………
Finished goods………………………
Work-in-process……………………
Raw materials………………………
Supplies………………………………
TOTAL…………………………………
Millions of YenThousands ofU.S. Dollars
2010 2009 2010
＄8,044
207,709
50,800
45,649
2,829
＄315,031
￥1,375
25,912
3,644
4,925
215
￥36,071
￥748
19,317
4,725
4,245
263
￥29,298
Millions of YenThousands ofU.S. Dollars
The total amount of commitment
lines…………………………………
Used line of credit…………………
Unused line of credit…………………
2010 2009 2010
＄79,570
67,635
＄11,935
￥9,000
9,000
￥7,400
6,290
￥1,110
Millions of YenThousands ofU.S. Dollars
Current-Government and
corporate bonds……………………
Non-current:
Marketable equity securities………
Other…………………………………
TOTAL…………………………………
2010 2009 2010
＄69
＄16,526
4,913
＄21,439
￥44
￥1,390
524
￥1,914
￥6
￥1,537
457
￥1,994
Millions of YenThousands ofU.S. Dollars
Land……………………………………
Buildings and structures……………
Machinery and equipment…………
Furniture and fixtures………………
Others…………………………………
Total……………………………………
2010 2009 2010
＄553
215
266
309
＄1,343
￥914
50
15
￥979
￥51
20
25
29
￥125
Millions of Yen
March 31, 2010
Available-for-sale:
Equity securities………
Other……………………
Fair ValueUnrealized
LossesUnrealized
GainsCost
￥1,484
238
￥220
8
￥167
16
￥1,537
230
Millions of Yen
Fair ValueUnrealized
LossesUnrealized
GainsCostMarch 31, 2009
Available-for-sale:
Equity securities………
Other……………………
￥1,493
242
￥37 ￥140
28
￥1,390
214
Thousands of U.S. Dollars
Fair ValueUnrealized
LossesUnrealized
GainsCostMarch 31, 2010
Available-for-sale:
Equity securities………
Other……………………
＄15,958
2,556
＄2,365
92
＄1,797
176
＄16,526
2,472
Carrying Amount
Millions of YenMarch 31, 2009
Available-for-sale:Equity securities……………………
Bonds and other securities………………………………
TOTAL………………………………………………………
￥306
48
￥354
Millions of YenThousands ofU.S. DollarsYear Ending March 31
2011………………………………………………
2012………………………………………………
2013………………………………………………
2014………………………………………………
2015………………………………………………
2016 and thereafter……………………………
TOTAL……………………………………………
＄100,534
88,812
70,184
37,438
30,805
9,700
＄337,473
￥9,350
8,259
6,527
3,482
2,865
902
￥31,385
Millions of YenThousands ofU.S. Dollars
Projected benefit obligation…………
Fair value of plan assets……………
Unrecognized actuarial loss ………
Unrecognized transitional obligation…
Net liability……………………………
2010 2009 2010
￥13,224
(4,373)
(1,940)
(605)
￥6,306
＄128,898
(46,192)
(12,364)
＄70,342
￥11,988
(4,296)
(1,150)
￥6,542
Millions of YenThousands ofU.S. Dollars
Service cost……………………………
Interest cost……………………………
Expected return on plan assets ……
Amortization of transitional obligation…
Recognized actuarial loss……………
Additional retirement payments and others…
Net periodic benefit costs……………
2010 2009 2010
￥975
213
(103)
638
301
793
￥2,817
＄8,065
2,473
(959)
6,500
3,993
2,083
＄22,155
￥750
230
(89)
604
371
194
￥2,060
2010 2009
Discount rate……………………………………
Expected rate of return on plan assets ………
Amortization period of prior service cost………
Recognition period of actuarial gain/loss………
Amortization period of transitional obligation…
2.0%
2.5%
1 year
10 years
10 years
2.0%
2.5%
1 year
10 years
10 years
Millions of YenThousands ofU.S. Dollars
Investment securities……………………………
Land………………………………………………
Buildings-net of accumulated depreciation……
Machinery-net of accumulated depreciation …
TOTAL……………………………………………
＄15,511
60,499
184,511
8,081
＄268,602
￥1,442
5,626
17,160
752
￥24,980
2010 2009 2010Use Type of Assets
Millions of Yen
Idle real estate and othersIdle real estate
Idle real estate
Investment property Idle facilities and others
Total………………………………………………
Land and others
Land, buildings and structuresLand, buildings and structuresLand
Machinery and equipment, furniture and fixtures
Miyagi Prefecture and others…………Hiroshima Prefecture…………Fukushima Prefecture…………Tochigi Prefecture……
Tochigi Prefecture and others…………
Location
￥905
59
15
￥979
￥76
4
45
￥125
Thousands ofU.S. Dollars
＄819
43
481
＄1,343
Millions of YenThousands ofU.S. Dollars
1.08% to 1.21% unsecured
bonds, due 2010-2014……………
1.23% to 7.2% loans from banks,
due 2010-2019……………………
1.65% loans from insurance
companies…………………………
Obligations under finance leases……
TOTAL……………………………
Current portion………………………
Long-term debt, less current portion…
2010 2009 2010
＄7,098
328,870
1,505
11,565
349,038
(103,569)
＄245,469
￥700
16,556
180
431
17,867
(7,356)
￥10,511
￥660
30,585
140
1,076
32,461
(9,632)
￥22,829
Millions of Yen
April 1, 2009
￥3,351 ￥377 ￥3,728 ￥6,309
Carrying Amount
Increase/Decrease March 31, 2010
Fair Value
March 31, 2010
Thousands of U.S. Dollars
April 1, 2009
＄36,036 ＄4,048 ＄40,084 ＄67,837
Carrying Amount
Increase/Decrease March 31, 2010
Fair Value
March 31, 2010
Millions of YenThousands ofU.S. Dollars
Deferred tax assets:
Unrealized profit on inventories…
Loss on disposals of inventories……
Unrealized gains on sales of property……
Accrued bonuses……………………
Enterprise tax…………………………
Allowance for doubtful accounts……
Liability for severance payments……
Loss on devaluations of investment
securities……………………………
Tax loss carryforwards………………
Net unrealized loss on available-for-
sale securities………………………
Other…………………………………
Less valuation allowance……………
TOTAL………………………………
Offset with deferred tax liabilities……
Net deferred tax assets………………
Deferred tax liabilities:
Undistributed earnings of associated
companies…………………………
Net unrealized gain on available-
for-sale securities…………………
Other…………………………………
TOTAL………………………………
Offset with deferred tax assets………
Net deferred tax liabilities……………
2010 2009 2010
￥343
70
732
256
41
426
2,451
67
11,871
1,095
(10,278)
7,074
(178)
￥6,896
￥142
28
21
191
(178)
￥13
￥1,175
50
732
327
24
391
2,421
54
7,462
53
1,240
(7,500)
6,429
(216)
￥6,213
￥193
97
290
(216)
￥74
＄3,685
748
7,867
2,751
444
4,581
26,349
716
127,647
11,795
(110,518)
76,065
(1,913)
＄74,152
＄1,524
304
223
2,051
(1,913)
＄138
2010 2009
Normal effective statutory tax rate…………………
Non-deductible items………………………………
Difference of statutory tax rates between Japan
and foreign countries……………………………
Lower income tax rates applicable to income
in certain foreign countries………………………
Reversal of dividend income in consolidated
subsidiaries………………………………………
Deficit of consolidated subsidiaries………………
Unrealized profits without recognition of deferred tax……
Change in valuation allowance……………………
Reversal of loss on devaluations of
investments in consolidated subsidiaries………
Effect of tax deduction………………………………
Other-net……………………………………………
Actual effective tax rate……………………………
40.7%
(8.5)
(2.6)
(0.3)
(11.5)
5.0
(20.9)
2.3
(0.6)
3.6%
40.7%
10.9
(1.9)
(18.1)
(6.9)
(28.9)
3.2
5.3
0.5
4.8%
Millions of YenThousands ofU.S. DollarsYear Ending March 31
2011………………………………………………�
2012………………………………………………�
2013………………………………………………
2014………………………………………………
2015 and thereafter………………………………
TOTAL……………………………………………
￥21
43
190
233
10,109
￥10,596
＄230
459
2,045
2,511
108,695
＄113,940
Due within one year………………………………
Due after one year………………………………
TOTAL……………………………………………
￥282
794
￥1,076
＄3,034
8,531
＄11,565
Millions of YenThousands ofU.S. Dollars
2010 2010
Millions of YenThousands ofU.S. Dollars
Sales to related parties………………
Purchases from related parties…………
Trade notes and accounts receivable…
Trade notes and accounts payable……
2010 2009 2010
￥673
198
561
6
￥406
238
753
＄4,366
2,557
8,095
Millions of Yen
Acquisition cost…………………………………………………
Accumulated depreciation………………………………………
Net leased property……………………………………………
TotalSoftwareFurniture and
FixturesMachinery and
Equipment
2010 2009Thousands of U.S. Dollars
TotalSoftwareFurniture and
FixturesMachinery and
Equipment
￥1,110
619
￥491
￥938
591
￥347
￥787
473
￥314
￥2,835
1,683
￥1,152
￥848
539
￥309
￥528
422
￥106
￥693
534
￥159
￥2,069
1,495
￥574
Acquisition cost…………………………………………………
Accumulated depreciation……………………………………
Net leased property……………………………………………
Thousands of U.S. Dollars
TotalSoftwareFurniture and
FixturesMachinery and
Equipment
2010
＄9,122
5,800
＄3,322
＄5,683
4,537
＄1,146
＄7,447
5,743
＄1,704
＄22,252
16,080
＄6,172
Millions of YenThousands ofU.S. Dollars
Due within one year………………………………………………………
Due after one year…………………………………………………………
TOTAL……………………………………………………………………
2010 2009 2010
￥325
290
￥615
￥535
677
￥1,212
＄3,495
3,123
＄6,618
02 Financial Section 02Financial Section
18 19
02 Financial Section
20 21
02Financial Section
02 Financial Section 02Financial Section
22 23
Notes to Consolidated Financial StatementsJUKI CORPORATION and Consolidated Subsidiaries, Years Ended March 31, 2010 and 2009
02 Financial Section
24
02Financial Section
25
02 Financial Section
26
02Financial Section
27
BASIS OF PRESENTINGCONSOLIDATEDFINANCIAL STATEMENTS
The accompanying consolidated financial statements of
JUKI CORPORATION (the "Company") and its
consolidated subsidiaries (together, the "Group") have been
prepared in 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 in Japan
("Japanese GAAP"), which are different in certain respects
as to 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 a form which is
more familiar to readers outside Japan. In addition, certain
reclassifications have been made in the 2009 consolidated
financial statements to conform to classifications and
presentations used in 2010.
The consolidated financial statements are stated in
Japanese yen, the currency of the country in which the
Company is incorporated and operates. The translations of
Japanese yen amounts into U.S. dollar amounts are
included solely for the convenience of readers outside
Japan and have been made at the rate of ￥93 to ＄1, the
approximate rate of exchange at March 31, 2010. Such
translations should not be construed as representations that
the Japanese yen amounts could be converted into U.S.
dollars at that or any other rate.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a ) Consolidation
The consolidated financial statements as of March 31, 2010
include the accounts of the Company and its 34 significant
(36 in 2009) subsidiaries.
Under the control or influence concept, those companies
in which the Company, directly or indirectly, is able to
exercise control over operations are fully consolidated, and
those companies over which the Group has the ability to
exercise significant influence are accounted for by the
equity method.
Investments in 5 (5 in 2009) unconsolidated subsidiaries
and 4 (5 in 2009) associated companies are stated at cost.
If the equity method of accounting had been applied to the
investments in these companies, the effect on the
accompanying consolidated financial statements would not
be material.
Consolidation goodwill is the difference between the cost
and underlying net equity of investments in consolidated
subsidiaries and associated companies at acquisition and is
amortized on a straight-line basis over five years.
Consolidation goodwill is impaired if the expectation of its
future value is determined to be less than the value
estimated when it was acquired.
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.
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 (1) the accounting policies and procedures
applied to a parent company and its subsidiaries for similar
transactions and events under similar circumstances should
in principle be unified for the preparation of the
consolidated financial statements, (2) financial statements
prepared 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 unless
they are not material: (a) amortization of goodwill; (b)
scheduled amortization of actuarial gain or loss of pensions
that has been directly recorded in the equity; (c) expensing
capitalized development costs of R&D; (d) cancellation of
the fair value model accounting for property, plant and
equipment and investment properties and incorporation of
the cost model accounting; (e) recording the prior years'
effects of changes in accounting policies in the income
statement 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 for fiscal years beginning on or after April
1, 2008 with early adoption permitted.
The Company applied this accounting standard effective
April 1, 2008. In addition, the Company adjusted the
beginning balance of retained earnings at April 1, 2008 as if
this accounting standard had been retrospectively applied.
c ) Cash Equivalents
Cash equivalents are short-term investments that are
readily convertible into cash and that are exposed to
insignificant risk of changes in value.
Cash equivalents include time deposits, certificate of
deposits, commercial paper and mutual funds investing in
bonds that represent short-term investments, all of which
mature or become due within three months of the date of
acquisition.
d ) Inventories
Inventories are stated at the lower of cost, principally
determined by the average method or the first-in, first-out
method for merchandise, finished products, work in
process, raw materials and supplies, or net selling value.
e ) Marketable and Investment Securities
Marketable and investment securities are classified as
available-for-sale securities and are reported at fair value,
with unrealized gains and losses, net of applicable taxes,
reported in a separate component of equity. 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.
f ) Property, Plant and Equipment
Property, plant and equipment are stated at cost.
Depreciation of property, plant and equipment of the
Company and its consolidated domestic subsidiaries is
computed substantially by the declining-balance method
based on the estimated useful lives of the assets. However,
the straight-line method is applied to buildings acquired
after April 1, 1998 and lease assets by the Company and its
domestic subsidiaries, and to all property, plant and
equipment of consolidated foreign subsidiaries. The range
of useful lives is principally from 5 to 50 years for buildings
and structures, from 2 to 12 years for machinery and
equipment and from 2 to 15 years for furniture and fixtures.
The useful lives for lease assets are the terms of the
respective leases.
g ) Long-lived Assets
The Group reviews its long-lived assets for impairment
whenever events or changes in circumstance indicate the
carrying amount of an asset or asset group may not be
recoverable. An impairment loss would be recognized if the
carrying amount of an asset or asset group exceeds the
sum of 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 be
measured 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 the asset or the net selling price
at disposition.
h ) Allowance for Doubtful Accounts
The allowance for doubtful accounts is stated in amounts
considered to be appropriate based on the past credit loss
experience and an evaluation of potential losses in the
receivables outstanding.
i ) Liability for Retirement Benefits and Pension Plans
The Company has retirement benefits and pension plans
for employees. Employees terminating at the mandatory
retirement age are entitled to pension payments under the
funded pension plan.
The transitional obligation, determined as of April
1, 2000, is being amortized over 10 years.
Actuarial gains and losses are amortized using the
straight-line method over 10 years as a certain period within
the remaining years of service of employees from the next
year after they arise.
Prior service cost is charged to income as incurred.
On July 31, 2008, the ASBJ has issued an accounting
standard-ASBJ Statement No. 19 "Partial Amendments to
Accounting Standard for Retirement Benefits (Part 3)."
The Group has adopted this statement from the
beginning of this fiscal year. There is no effect of this in the
2010 consolidated statement of operations.
Retirement benefits to directors and corporate auditors of
five consolidated domestic subsidiaries are provided at
100% of the amount which would be paid if they all retired
at the balance sheet date.
Effective June 28, 2007, the Company terminated its
unfunded retirement allowance plan for all directors and
corporate auditors. The outstanding balance of retirement
allowances for directors and corporate auditors as of March
31, 2010 has been classified as the liability for retirement
benefits.
j ) Research and Development Costs
Research and development costs are charged to income as
incurred.
k ) Leases
In March 2007, the ASBJ issued ASBJ Statement No. 13,
"Accounting Standard for Lease Transactions," which
revised the previous accounting standard for lease
transactions issued in June 1993. The revised accounting
standard for lease transactions was effective for fiscal years
beginning on or after April 1, 2008.
Under the previous accounting standard, finance leases
that were deemed to transfer ownership of the leased
property to the lessee were capitalized. However, other
finance leases were permitted to be accounted for as
operating lease transactions if certain "as if capitalized"
information was disclosed in the note to the lessee's
financial statements. The revised accounting standard
requires that all finance lease transactions be capitalized to
recognize lease assets and lease obligations in the balance
sheet. In addition, the accounting standard permits leases
which existed at the transition date and do not transfer
ownership of the leased property to the lessee to continue
to be accounted for as operating lease transactions.
The Company applied the revised accounting standard
effective April 1, 2008. In addition, the Company continues
to account for leases which existed at the transition date
and do not transfer ownership of the leased property to the
lessee as operating lease transactions.
All other leases are accounted for as operating leases.
l ) Income Taxes
The provision for income taxes is computed based on the
pretax income included in the consolidated statements of
operations. The asset and liability approach is used to
recognize deferred tax assets and liabilities for the
expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets
and liabilities. Deferred taxes are measured by applying
currently enacted tax laws to the temporary differences.
m ) Foreign Currency Transactions
All short-term and long-term monetary 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 consolidated statements of
operations to the extent that they are not hedged by
forward exchange contracts.
n ) Foreign Currency Financial Statements
The balance sheet accounts of the consolidated foreign
subsidiaries are translated into Japanese yen at 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 are shown as "Foreign
currency translation adjustments" in a separate component
of equity.
Revenue and expense accounts of consolidated foreign
subsidiaries are translated into yen at the average
exchange rate.
o ) Derivatives and Hedging Activities
The Group uses derivative financial instruments
("derivatives") to manage its exposures to fluctuations in
foreign exchange and interest rates. Foreign exchange
forward contracts, currency swaps, currency options and
interest rate swaps are utilized by the Group to reduce
foreign currency exchange and interest rate risks. The
Group does not enter into derivatives for trading or
speculative purposes.
Derivative financial instruments and foreign currency
transactions are classified and accounted for as follows: (a)
all derivatives are recognized as either assets or liabilities
and measured at fair value, and gains or losses on
derivative transactions are recognized in the consolidated
statements of operations and (b) for derivatives used for
hedging purposes, if derivatives qualify for hedge
accounting because of high correlation and effectiveness
between the hedging instruments and the hedged items,
gains or losses on derivatives are deferred until maturity of
the hedged transactions.
The foreign exchange forward contracts, currency swaps
and currency options utilized to hedge foreign exchange
exposures for export sales are measured at the fair value
and the unrealized gains/losses are recognized in income.
Forward contracts applied for forecasted (or committed)
transactions are also measured at the fair value but the
unrealized gains/losses are deferred until the underlying
transactions are completed.
The interest rate swaps which qualify for hedge
accounting and meet specific matching criteria are not
remeasured at market value but the differential paid or
received under the swap agreements are recognized and
included in interest expenses or income.
p ) Per Share Information
Basic net loss per share is computed by dividing net loss
available to common shareholders by the weighted-average
number of common shares outstanding for the period.
Diluted net income per share is not disclosed because
the Company had no dilutive securities outstanding at
March 31, 2010 and 2009.
Cash dividends per share presented in the
accompanying consolidated statements of operations are
dividends applicable to the respective years including
dividends to be paid after the end of the year.
q ) New Accounting Pronouncements
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
Accounting Standard 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 the acquisition,
construction, development and the normal operation of a
tangible fixed asset and is associated with the retirement of
such tangible fixed asset.
The asset retirement obligation is recognized as the sum
of the discounted cash flows required for the future asset
retirement and is recorded in the period in which the
obligation is incurred if a reasonable estimate can be made.
If a reasonable estimate of the asset retirement obligation
cannot be made in the period the asset retirement
obligation is incurred, the liability should be recognized
when 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 the
asset. Over time, the liability is accreted to its present value
each period. Any subsequent revisions to the timing or the
amount of the original estimate of undiscounted cash flows
are reflected as an increase or a decrease in the carrying
amount of the liability and the capitalized amount of the
related asset retirement cost. This standard is effective for
fiscal years beginning on or after April 1, 2010 with early
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 and Error
Corrections." Accounting treatments under this standard
and guidance are as follows:
(1) Changes in accounting policies
When a new accounting policy is applied with revision of
accounting standards, a new policy is applied
retrospectively unless the revised accounting standards
include specific transitional provisions. When the
revised accounting standards include specific
transitional provisions, an entity shall comply with the
specific transitional provisions.
(2) Changes in presentations
When the presentation of financial statements is
changed, prior period financial statements are
reclassified in accordance with the new 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 is accounted for prospectively if the change
affects both the period of 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 to accounting 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 "Guidance on
Accounting Standard for Segment Information Disclosures."
Under the standard and guidance, an entity is required to
report financial and descriptive information about its
reportable segments. Reportable segments are operating
segments or aggregations of operating segments that meet
specified criteria. Operating segments are components of
an entity about which separate financial information is
available and such information is evaluated regularly by the
chief operating decision maker in deciding how to allocate
resources and in assessing performance. Generally,
segment information is required to be reported on the same
basis as is used internally 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.
MARKETABLE AND INVESTMENT SECURITIES
Marketable and investment securities as of March 31, 2010
and 2009, consisted of the following:
The costs and aggregate fair values of marketable and
investment securities as of March 31, 2010 and 2009 were
as follows:
Available-for-sale securities and bonds and other securities
whose fair value is not readily determinable as of March 31,
2009 were as follows. The similar information for 2010 is
disclosed in Note 15.
Proceeds from sales of available-for-sale securities for the
year ended March 31, 2009 were ￥0 million. Gross
realized gains and losses on these sales, computed on the
moving average cost basis, were nil for the year ended
March 31, 2009.
The impairment losses on available-for-sale equity
securities for the years ended March 31, 2010 and 2009
were ￥93 million (＄998 thousand) and ￥408 million,
respectively.
SHORT-TERM INVESTMENTS
Short-term investments as of March 31, 2010 and 2009,
consisted of time deposits with an original maturity over
three months.
INVENTORIES
Inventories as of March 31, 2010 and 2009, consisted of
the following:
LONG-LIVED ASSETS
For the years ended March 31, 2010 and 2009, the
Company and its consolidated domestic subsidiaries
recognized losses on impairment for the following assets:
For purposes of evaluating and measuring impairment,
assets used for business are considered to constitute a
group by each industry segment of the Company and each
of the consolidated subsidiaries, while idle assets and
investment property are individually considered.
Carrying amounts of certain idle real estate and
investment property were devalued to their recoverable
amounts, due to substantial declines in fair market value.
The breakdown of the impairment losses was as follows:
The recoverable amount of the idle real estate and others
was measured by its net selling price based on appraisal of
real estate price.
The recoverable amount of investment property was
measured at their value in use and the discount rate used
for computation of present value of future cash flows was
6.8% for the year ended March 31, 2010.
The recoverable amounts of idle facilities and others
were determined to be zero.
INVESTMENT PROPERTY
On November 28, 2008, the ASBJ issued ASBJ Statement
No. 20 "Accounting Standard for Investment Property and
Related Disclosures" and issued ASBJ Guidance No. 23
"Guidance on Accounting Standard for Investment Property
and Related Disclosures." This accounting standard and the
guidance are applicable to investment property and related
disclosures at the end of the fiscal years ending on or after
March 31, 2010. The Group applied the new accounting
standard and guidance effective March 31, 2010.
The Group holds some rental properties such as office
buildings and land in Tokyo and other areas. Net loss of
rental income and operating expenses for those rental
properties was ￥43 million (＄463 thousand) and
impairment losses were ￥51 million (＄553 thousand) for
the fiscal year ended March 31, 2010.
In addition, the carrying amounts, changes in such
balances and market prices of such properties are as
follows:
Notes: 1. Carrying amount recognized in balance sheet is
net of accumulated depreciation and
accumulated impairment losses, if any.
2. Increase during the fiscal year ended March 31,
2010 primarily represents change in the manner
in which an asset is used of ￥507 million (＄
5,456 thousand), and decrease primarily
represents the recognition of depreciation of ￥79
million (＄855 thousand).
3. Fair value of properties as of March 31, 2010 is
principally measured by the Group in accordance
with its Japanese Real-estate Appraisal
Standard.
SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Short-term borrowings as of March 31, 2010 and 2009,
consisted of notes to banks and bank overdrafts. The
annual interest rates applicable to the short-term
borrowings ranged from 0.85% to 5.31% and 0.88% to
7.61% at March 31, 2010 and 2009, respectively.
Long-term debt as of March 31, 2010 and 2009, consisted
of the following:
The Company had agreements of commitment lines with
four banks in 2010 and six banks in 2009, and the
aggregate amount of unused line of credit was as follows:
Annual maturities of long-term debt, excluding finance
leases (see Note 14), as of March 31, 2010, for the next
five years and thereafter were as follows:
As of March 31, 2010, the following assets were pledged to
secure long-term debt aggregating ￥20,440 million (＄
219,791 thousand), and certain short-term borrowings and
current portion of long-term debt aggregating ￥23,237
million (＄249,856 thousand):
In addition, certain short-term borrowings and long-term
debt outstanding as of March 31, 2010, ￥25,290 million (＄
271,935 thousand) are subject to debt covenant terms
concerning the condition of total equity and ordinary income
(loss) as of March 31, 2010.
RETIREMENT AND PENSION PLANS
The Company and most of its domestic consolidated
subsidiaries have severance payments and pension plans
covering substantially all employees. The amounts of the
severance and pension payments are, in general,
determined on the basis of length of service and current
basic salary at the time of termination of service. If the
termination is involuntary, the employee is entitled to
greater payments than in the case of voluntary retirement.
Certain foreign consolidated subsidiaries have a defined
contribution pension plan. Retirement allowances for
directors and corporate auditors of domestic consolidated
subsidiaries are paid subject to approval of the
shareholders in accordance with the Companies Act of
Japan ("Companies Act"). Liability for retirement benefits at
March 31, 2010 and 2009, included those for directors and
corporate auditors in the amount of ￥387 million (＄4,161
thousand) and ￥393 million, respectively.
The liability for employees' retirement benefits at March
31, 2010 and 2009, consisted of the following:
The components of net periodic benefit costs for the years
ended March 31, 2010 and 2009 are as follows:
Assumptions used for the years ended March 31, 2010 and
2009 are set forth as follows:
EQUITY
Japanese companies are subject to 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 meet certain criteria such as; (1) having the
Board of Directors, (2) having independent auditors, (3)
having the 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, the Board of Directors may declare dividends
(except for dividends in kind) at any time during the fiscal
year if the company has prescribed so in its articles of
incorporation. However, the Company cannot do so
because it does not meet all the above criteria.
The Companies Act permits companies to distribute
dividends-in-kind (non-cash assets) to shareholders subject
to a certain limitation and additional requirements.
Semiannual interim dividends may also be paid once a
year upon resolution by the Board of Directors if the articles
of incorporation of the company so stipulate. The
Companies Act provides certain limitations on the amounts
available for dividends or the purchase of treasury 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 of retained earnings) or as additional paid-in
capital (a component of capital surplus) depending on the
equity account charged upon the payment of such
dividends until the total of aggregate amount of legal
reserve and additional paid-in capital equals 25% of the
common stock. Under the Companies Act, the total amount
of additional 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 Board of Directors. The amount of
treasury stock purchased cannot exceed the amount
available for distribution to the shareholders which is
determined by specific formula. Under the Companies Act,
stock acquisition rights are presented as a separate
component of equity. The Companies Act also provides that
companies can purchase both treasury stock acquisition
rights and treasury stock. Such treasury stock acquisition
rights are presented as a separate component of equity or
deducted directly from stock acquisition rights.
INCOME TAXES
The Company and its consolidated domestic subsidiaries
are subject to Japanese national and local income taxes
which, in the aggregate, resulted in a normal effective
statutory tax rate of approximately 40.7% 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:
A reconciliation between the normal effective statutory tax
rates and the actual effective tax rates reflected in the
accompanying consolidated statements of operations for
the years ended March 31, 2010 and 2009 is as follows:
At March 31, 2010, certain consolidated subsidiaries have
tax loss carryforwards aggregating approximately ￥10,596
million (＄113,940 thousand) which are available to be
offset against taxable income of such subsidiaries in future
years. These tax loss carryforwards, if not utilized, will
expire as follows:
RELATED PARTY TRANSACTIONS
Transactions of the Group with unconsolidated subsidiaries
and associated companies for the years ended March 31,
2010 and 2009, were as follows:
RESEARCH AND DEVELOPMENT COSTS
Research and development costs charged to income were
￥5,355 million (＄57,576 thousand) and ￥7,411 million for
the years ended March 31, 2010 and 2009, respectively.
LEASES
The Group leases certain furniture and fixture, machinery, computer equipment and other assets.
Total rental expenses including lease payments under finance leases for the years ended March 31, 2010 and 2009 were
￥777 million (＄8,252 thousand) and ￥801 million, respectively.
Obligations under finance leases were as follows:
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 be
capitalized to recognize lease assets and lease obligations in the balance sheet. However, the 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 note 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 on an "as if capitalized" basis was as follows:
Obligations under finance leases:
1
2
3
4
5
67
10
11
9
8
12
13
14
Merchandise…………………………
Finished goods………………………
Work-in-process……………………
Raw materials………………………
Supplies………………………………
TOTAL…………………………………
Millions of YenThousands ofU.S. Dollars
2010 2009 2010
＄8,044
207,709
50,800
45,649
2,829
＄315,031
￥1,375
25,912
3,644
4,925
215
￥36,071
￥748
19,317
4,725
4,245
263
￥29,298
Millions of YenThousands ofU.S. Dollars
The total amount of commitment
lines…………………………………
Used line of credit…………………
Unused line of credit…………………
2010 2009 2010
＄79,570
67,635
＄11,935
￥9,000
9,000
￥7,400
6,290
￥1,110
Millions of YenThousands ofU.S. Dollars
Current-Government and
corporate bonds……………………
Non-current:
Marketable equity securities………
Other…………………………………
TOTAL…………………………………
2010 2009 2010
＄69
＄16,526
4,913
＄21,439
￥44
￥1,390
524
￥1,914
￥6
￥1,537
457
￥1,994
Millions of YenThousands ofU.S. Dollars
Land……………………………………
Buildings and structures……………
Machinery and equipment…………
Furniture and fixtures………………
Others…………………………………
Total……………………………………
2010 2009 2010
＄553
215
266
309
＄1,343
￥914
50
15
￥979
￥51
20
25
29
￥125
Millions of Yen
March 31, 2010
Available-for-sale:
Equity securities………
Other……………………
Fair ValueUnrealized
LossesUnrealized
GainsCost
￥1,484
238
￥220
8
￥167
16
￥1,537
230
Millions of Yen
Fair ValueUnrealized
LossesUnrealized
GainsCostMarch 31, 2009
Available-for-sale:
Equity securities………
Other……………………
￥1,493
242
￥37 ￥140
28
￥1,390
214
Thousands of U.S. Dollars
Fair ValueUnrealized
LossesUnrealized
GainsCostMarch 31, 2010
Available-for-sale:
Equity securities………
Other……………………
＄15,958
2,556
＄2,365
92
＄1,797
176
＄16,526
2,472
Carrying Amount
Millions of YenMarch 31, 2009
Available-for-sale:Equity securities……………………
Bonds and other securities………………………………
TOTAL………………………………………………………
￥306
48
￥354
Millions of YenThousands ofU.S. DollarsYear Ending March 31
2011………………………………………………
2012………………………………………………
2013………………………………………………
2014………………………………………………
2015………………………………………………
2016 and thereafter……………………………
TOTAL……………………………………………
＄100,534
88,812
70,184
37,438
30,805
9,700
＄337,473
￥9,350
8,259
6,527
3,482
2,865
902
￥31,385
Millions of YenThousands ofU.S. Dollars
Projected benefit obligation…………
Fair value of plan assets……………
Unrecognized actuarial loss ………
Unrecognized transitional obligation…
Net liability……………………………
2010 2009 2010
￥13,224
(4,373)
(1,940)
(605)
￥6,306
＄128,898
(46,192)
(12,364)
＄70,342
￥11,988
(4,296)
(1,150)
￥6,542
Millions of YenThousands ofU.S. Dollars
Service cost……………………………
Interest cost……………………………
Expected return on plan assets ……
Amortization of transitional obligation…
Recognized actuarial loss……………
Additional retirement payments and others…
Net periodic benefit costs……………
2010 2009 2010
￥975
213
(103)
638
301
793
￥2,817
＄8,065
2,473
(959)
6,500
3,993
2,083
＄22,155
￥750
230
(89)
604
371
194
￥2,060
2010 2009
Discount rate……………………………………
Expected rate of return on plan assets ………
Amortization period of prior service cost………
Recognition period of actuarial gain/loss………
Amortization period of transitional obligation…
2.0%
2.5%
1 year
10 years
10 years
2.0%
2.5%
1 year
10 years
10 years
Millions of YenThousands ofU.S. Dollars
Investment securities……………………………
Land………………………………………………
Buildings-net of accumulated depreciation……
Machinery-net of accumulated depreciation …
TOTAL……………………………………………
＄15,511
60,499
184,511
8,081
＄268,602
￥1,442
5,626
17,160
752
￥24,980
2010 2009 2010Use Type of Assets
Millions of Yen
Idle real estate and othersIdle real estate
Idle real estate
Investment property Idle facilities and others
Total………………………………………………
Land and others
Land, buildings and structuresLand, buildings and structuresLand
Machinery and equipment, furniture and fixtures
Miyagi Prefecture and others…………Hiroshima Prefecture…………Fukushima Prefecture…………Tochigi Prefecture……
Tochigi Prefecture and others…………
Location
￥905
59
15
￥979
￥76
4
45
￥125
Thousands ofU.S. Dollars
＄819
43
481
＄1,343
Millions of YenThousands ofU.S. Dollars
1.08% to 1.21% unsecured
bonds, due 2010-2014……………
1.23% to 7.2% loans from banks,
due 2010-2019……………………
1.65% loans from insurance
companies…………………………
Obligations under finance leases……
TOTAL……………………………
Current portion………………………
Long-term debt, less current portion…
2010 2009 2010
＄7,098
328,870
1,505
11,565
349,038
(103,569)
＄245,469
￥700
16,556
180
431
17,867
(7,356)
￥10,511
￥660
30,585
140
1,076
32,461
(9,632)
￥22,829
Millions of Yen
April 1, 2009
￥3,351 ￥377 ￥3,728 ￥6,309
Carrying Amount
Increase/Decrease March 31, 2010
Fair Value
March 31, 2010
Thousands of U.S. Dollars
April 1, 2009
＄36,036 ＄4,048 ＄40,084 ＄67,837
Carrying Amount
Increase/Decrease March 31, 2010
Fair Value
March 31, 2010
Millions of YenThousands ofU.S. Dollars
Deferred tax assets:
Unrealized profit on inventories…
Loss on disposals of inventories……
Unrealized gains on sales of property……
Accrued bonuses……………………
Enterprise tax…………………………
Allowance for doubtful accounts……
Liability for severance payments……
Loss on devaluations of investment
securities……………………………
Tax loss carryforwards………………
Net unrealized loss on available-for-
sale securities………………………
Other…………………………………
Less valuation allowance……………
TOTAL………………………………
Offset with deferred tax liabilities……
Net deferred tax assets………………
Deferred tax liabilities:
Undistributed earnings of associated
companies…………………………
Net unrealized gain on available-
for-sale securities…………………
Other…………………………………
TOTAL………………………………
Offset with deferred tax assets………
Net deferred tax liabilities……………
2010 2009 2010
￥343
70
732
256
41
426
2,451
67
11,871
1,095
(10,278)
7,074
(178)
￥6,896
￥142
28
21
191
(178)
￥13
￥1,175
50
732
327
24
391
2,421
54
7,462
53
1,240
(7,500)
6,429
(216)
￥6,213
￥193
97
290
(216)
￥74
＄3,685
748
7,867
2,751
444
4,581
26,349
716
127,647
11,795
(110,518)
76,065
(1,913)
＄74,152
＄1,524
304
223
2,051
(1,913)
＄138
2010 2009
Normal effective statutory tax rate…………………
Non-deductible items………………………………
Difference of statutory tax rates between Japan
and foreign countries……………………………
Lower income tax rates applicable to income
in certain foreign countries………………………
Reversal of dividend income in consolidated
subsidiaries………………………………………
Deficit of consolidated subsidiaries………………
Unrealized profits without recognition of deferred tax……
Change in valuation allowance……………………
Reversal of loss on devaluations of
investments in consolidated subsidiaries………
Effect of tax deduction………………………………
Other-net……………………………………………
Actual effective tax rate……………………………
40.7%
(8.5)
(2.6)
(0.3)
(11.5)
5.0
(20.9)
2.3
(0.6)
3.6%
40.7%
10.9
(1.9)
(18.1)
(6.9)
(28.9)
3.2
5.3
0.5
4.8%
Millions of YenThousands ofU.S. DollarsYear Ending March 31
2011………………………………………………�
2012………………………………………………�
2013………………………………………………
2014………………………………………………
2015 and thereafter………………………………
TOTAL……………………………………………
￥21
43
190
233
10,109
￥10,596
＄230
459
2,045
2,511
108,695
＄113,940
Due within one year………………………………
Due after one year………………………………
TOTAL……………………………………………
￥282
794
￥1,076
＄3,034
8,531
＄11,565
Millions of YenThousands ofU.S. Dollars
2010 2010
Millions of YenThousands ofU.S. Dollars
Sales to related parties………………
Purchases from related parties…………
Trade notes and accounts receivable…
Trade notes and accounts payable……
2010 2009 2010
￥673
198
561
6
￥406
238
753
＄4,366
2,557
8,095
Millions of Yen
Acquisition cost…………………………………………………
Accumulated depreciation………………………………………
Net leased property……………………………………………
TotalSoftwareFurniture and
FixturesMachinery and
Equipment
2010 2009Thousands of U.S. Dollars
TotalSoftwareFurniture and
FixturesMachinery and
Equipment
￥1,110
619
￥491
￥938
591
￥347
￥787
473
￥314
￥2,835
1,683
￥1,152
￥848
539
￥309
￥528
422
￥106
￥693
534
￥159
￥2,069
1,495
￥574
Acquisition cost…………………………………………………
Accumulated depreciation……………………………………
Net leased property……………………………………………
Thousands of U.S. Dollars
TotalSoftwareFurniture and
FixturesMachinery and
Equipment
2010
＄9,122
5,800
＄3,322
＄5,683
4,537
＄1,146
＄7,447
5,743
＄1,704
＄22,252
16,080
＄6,172
Millions of YenThousands ofU.S. Dollars
Due within one year………………………………………………………
Due after one year…………………………………………………………
TOTAL……………………………………………………………………
2010 2009 2010
￥325
290
￥615
￥535
677
￥1,212
＄3,495
3,123
＄6,618
02 Financial Section 02Financial Section
18 19
02 Financial Section
20 21
02Financial Section
02 Financial Section 02Financial Section
22 23
Notes to Consolidated Financial StatementsJUKI CORPORATION and Consolidated Subsidiaries, Years Ended March 31, 2010 and 2009
02 Financial Section
24
02Financial Section
25
02 Financial Section
26
02Financial Section
27
BASIS OF PRESENTINGCONSOLIDATEDFINANCIAL STATEMENTS
The accompanying consolidated financial statements of
JUKI CORPORATION (the "Company") and its
consolidated subsidiaries (together, the "Group") have been
prepared in 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 in Japan
("Japanese GAAP"), which are different in certain respects
as to 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 a form which is
more familiar to readers outside Japan. In addition, certain
reclassifications have been made in the 2009 consolidated
financial statements to conform to classifications and
presentations used in 2010.
The consolidated financial statements are stated in
Japanese yen, the currency of the country in which the
Company is incorporated and operates. The translations of
Japanese yen amounts into U.S. dollar amounts are
included solely for the convenience of readers outside
Japan and have been made at the rate of ￥93 to ＄1, the
approximate rate of exchange at March 31, 2010. Such
translations should not be construed as representations
that the Japanese yen amounts could be converted into
U.S. dollars at that or any other rate.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a ) Consolidation
The consolidated financial statements as of March 31, 2010
include the accounts of the Company and its 34 significant
(36 in 2009) subsidiaries.
Under the control or influence concept, those companies
in which the Company, directly or indirectly, is able to
exercise control over operations are fully consolidated, and
those companies over which the Group has the ability to
exercise significant influence are accounted for by the
equity method.
Investments in 5 (5 in 2009) unconsolidated subsidiaries
and 4 (5 in 2009) associated companies are stated at cost.
If the equity method of accounting had been applied to the
investments in these companies, the effect on the
accompanying consolidated financial statements would not
be material.
Consolidation goodwill is the difference between the cost
and underlying net equity of investments in consolidated
subsidiaries and associated companies at acquisition and is
amortized on a straight-line basis over five years.
Consolidation goodwill is impaired if the expectation of its
future value is determined to be less than the value
estimated when it was acquired.
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.
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 (1) the accounting policies and procedures
applied to a parent company and its subsidiaries for similar
transactions and events under similar circumstances should
in principle be unified for the preparation of the
consolidated financial statements, (2) financial statements
prepared 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 unless
they are not material: (a) amortization of goodwill; (b)
scheduled amortization of actuarial gain or loss of pensions
that has been directly recorded in the equity; (c) expensing
capitalized development costs of R&D; (d) cancellation of
the fair value model accounting for property, plant and
equipment and investment properties and incorporation of
the cost model accounting; (e) recording the prior years'
effects of changes in accounting policies in the income
statement 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 for fiscal years beginning on or after April
1, 2008 with early adoption permitted.
The Company applied this accounting standard effective
April 1, 2008. In addition, the Company adjusted the
beginning balance of retained earnings at April 1, 2008 as if
this accounting standard had been retrospectively applied.
c ) Cash Equivalents
Cash equivalents are short-term investments that are
readily convertible into cash and that are exposed to
insignificant risk of changes in value.
Cash equivalents include time deposits, certificate of
deposits, commercial paper and mutual funds investing in
bonds that represent short-term investments, all of which
mature or become due within three months of the date of
acquisition.
d ) Inventories
Inventories are stated at the lower of cost, principally
determined by the average method or the first-in, first-out
method for merchandise, finished products, work in
process, raw materials and supplies, or net selling value.
e ) Marketable and Investment Securities
Marketable and investment securities are classified as
available-for-sale securities and are reported at fair value,
with unrealized gains and losses, net of applicable taxes,
reported in a separate component of equity. 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.
f ) Property, Plant and Equipment
Property, plant and equipment are stated at cost.
Depreciation of property, plant and equipment of the
Company and its consolidated domestic subsidiaries is
computed substantially by the declining-balance method
based on the estimated useful lives of the assets. However,
the straight-line method is applied to buildings acquired
after April 1, 1998 and lease assets by the Company and its
domestic subsidiaries, and to all property, plant and
equipment of consolidated foreign subsidiaries. The range
of useful lives is principally from 5 to 50 years for buildings
and structures, from 2 to 12 years for machinery and
equipment and from 2 to 15 years for furniture and fixtures.
The useful lives for lease assets are the terms of the
respective leases.
g ) Long-lived Assets
The Group reviews its long-lived assets for impairment
whenever events or changes in circumstance indicate the
carrying amount of an asset or asset group may not be
recoverable. An impairment loss would be recognized if the
carrying amount of an asset or asset group exceeds the
sum of 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 be
measured 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 the asset or the net selling price
at disposition.
h ) Allowance for Doubtful Accounts
The allowance for doubtful accounts is stated in amounts
considered to be appropriate based on the past credit loss
experience and an evaluation of potential losses in the
receivables outstanding.
i ) Liability for Retirement Benefits and Pension Plans
The Company has retirement benefits and pension plans
for employees. Employees terminating at the mandatory
retirement age are entitled to pension payments under the
funded pension plan.
The transitional obligation, determined as of April
1, 2000, is being amortized over 10 years.
Actuarial gains and losses are amortized using the
straight-line method over 10 years as a certain period within
the remaining years of service of employees from the next
year after they arise.
Prior service cost is charged to income as incurred.
On July 31, 2008, the ASBJ has issued an accounting
standard-ASBJ Statement No. 19 "Partial Amendments to
Accounting Standard for Retirement Benefits (Part 3)."
The Group has adopted this statement from the
beginning of this fiscal year. There is no effect of this in the
2010 consolidated statement of operations.
Retirement benefits to directors and corporate auditors of
five consolidated domestic subsidiaries are provided at
100% of the amount which would be paid if they all retired
at the balance sheet date.
Effective June 28, 2007, the Company terminated its
unfunded retirement allowance plan for all directors and
corporate auditors. The outstanding balance of retirement
allowances for directors and corporate auditors as of March
31, 2010 has been classified as the liability for retirement
benefits.
j ) Research and Development Costs
Research and development costs are charged to income as
incurred.
k ) Leases
In March 2007, the ASBJ issued ASBJ Statement No. 13,
"Accounting Standard for Lease Transactions," which
revised the previous accounting standard for lease
transactions issued in June 1993. The revised accounting
standard for lease transactions was effective for fiscal years
beginning on or after April 1, 2008.
Under the previous accounting standard, finance leases
that were deemed to transfer ownership of the leased
property to the lessee were capitalized. However, other
finance leases were permitted to be accounted for as
operating lease transactions if certain "as if capitalized"
information was disclosed in the note to the lessee's
financial statements. The revised accounting standard
requires that all finance lease transactions be capitalized to
recognize lease assets and lease obligations in the balance
sheet. In addition, the accounting standard permits leases
which existed at the transition date and do not transfer
ownership of the leased property to the lessee to continue
to be accounted for as operating lease transactions.
The Company applied the revised accounting standard
effective April 1, 2008. In addition, the Company continues
to account for leases which existed at the transition date
and do not transfer ownership of the leased property to the
lessee as operating lease transactions.
All other leases are accounted for as operating leases.
l ) Income Taxes
The provision for income taxes is computed based on the
pretax income included in the consolidated statements of
operations. The asset and liability approach is used to
recognize deferred tax assets and liabilities for the
expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets
and liabilities. Deferred taxes are measured by applying
currently enacted tax laws to the temporary differences.
m ) Foreign Currency Transactions
All short-term and long-term monetary 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 consolidated statements of
operations to the extent that they are not hedged by
forward exchange contracts.
n ) Foreign Currency Financial Statements
The balance sheet accounts of the consolidated foreign
subsidiaries are translated into Japanese yen at 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 are shown as "Foreign
currency translation adjustments" in a separate component
of equity.
Revenue and expense accounts of consolidated foreign
subsidiaries are translated into yen at the average
exchange rate.
o ) Derivatives and Hedging Activities
The Group uses derivative financial instruments
("derivatives") to manage its exposures to fluctuations in
foreign exchange and interest rates. Foreign exchange
forward contracts, currency swaps, currency options and
interest rate swaps are utilized by the Group to reduce
foreign currency exchange and interest rate risks. The
Group does not enter into derivatives for trading or
speculative purposes.
Derivative financial instruments and foreign currency
transactions are classified and accounted for as follows: (a)
all derivatives are recognized as either assets or liabilities
and measured at fair value, and gains or losses on
derivative transactions are recognized in the consolidated
statements of operations and (b) for derivatives used for
hedging purposes, if derivatives qualify for hedge
accounting because of high correlation and effectiveness
between the hedging instruments and the hedged items,
gains or losses on derivatives are deferred until maturity of
the hedged transactions.
The foreign exchange forward contracts, currency swaps
and currency options utilized to hedge foreign exchange
exposures for export sales are measured at the fair value
and the unrealized gains/losses are recognized in income.
Forward contracts applied for forecasted (or committed)
transactions are also measured at the fair value but the
unrealized gains/losses are deferred until the underlying
transactions are completed.
The interest rate swaps which qualify for hedge
accounting and meet specific matching criteria are not
remeasured at market value but the differential paid or
received under the swap agreements are recognized and
included in interest expenses or income.
p ) Per Share Information
Basic net loss per share is computed by dividing net loss
available to common shareholders by the weighted-average
number of common shares outstanding for the period.
Diluted net income per share is not disclosed because
the Company had no dilutive securities outstanding at
March 31, 2010 and 2009.
Cash dividends per share presented in the
accompanying consolidated statements of operations are
dividends applicable to the respective years including
dividends to be paid after the end of the year.
q ) New Accounting Pronouncements
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
Accounting Standard 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 the acquisition,
construction, development and the normal operation of a
tangible fixed asset and is associated with the retirement of
such tangible fixed asset.
The asset retirement obligation is recognized as the sum
of the discounted cash flows required for the future asset
retirement and is recorded in the period in which the
obligation is incurred if a reasonable estimate can be made.
If a reasonable estimate of the asset retirement obligation
cannot be made in the period the asset retirement
obligation is incurred, the liability should be recognized
when 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 the
asset. Over time, the liability is accreted to its present value
each period. Any subsequent revisions to the timing or the
amount of the original estimate of undiscounted cash flows
are reflected as an increase or a decrease in the carrying
amount of the liability and the capitalized amount of the
related asset retirement cost. This standard is effective for
fiscal years beginning on or after April 1, 2010 with early
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 and Error
Corrections." Accounting treatments under this standard
and guidance are as follows:
(1) Changes in accounting policies
When a new accounting policy is applied with revision of
accounting standards, a new policy is applied
retrospectively unless the revised accounting standards
include specific transitional provisions. When the
revised accounting standards include specific
transitional provisions, an entity shall comply with the
specific transitional provisions.
(2) Changes in presentations
When the presentation of financial statements is
changed, prior period financial statements are
reclassified in accordance with the new 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 is accounted for prospectively if the change
affects both the period of 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 to accounting 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 "Guidance on
Accounting Standard for Segment Information Disclosures."
Under the standard and guidance, an entity is required to
report financial and descriptive information about its
reportable segments. Reportable segments are operating
segments or aggregations of operating segments that meet
specified criteria. Operating segments are components of
an entity about which separate financial information is
available and such information is evaluated regularly by the
chief operating decision maker in deciding how to allocate
resources and in assessing performance. Generally,
segment information is required to be reported on the same
basis as is used internally 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.
MARKETABLE AND INVESTMENT SECURITIES
Marketable and investment securities as of March 31, 2010
and 2009, consisted of the following:
The costs and aggregate fair values of marketable and
investment securities as of March 31, 2010 and 2009 were
as follows:
Available-for-sale securities and bonds and other securities
whose fair value is not readily determinable as of March 31,
2009 were as follows. The similar information for 2010 is
disclosed in Note 15.
Proceeds from sales of available-for-sale securities for the
year ended March 31, 2009 were ￥0 million. Gross
realized gains and losses on these sales, computed on the
moving average cost basis, were nil for the year ended
March 31, 2009.
The impairment losses on available-for-sale equity
securities for the years ended March 31, 2010 and 2009
were ￥93 million (＄998 thousand) and ￥408 million,
respectively.
SHORT-TERM INVESTMENTS
Short-term investments as of March 31, 2010 and 2009,
consisted of time deposits with an original maturity over
three months.
INVENTORIES
Inventories as of March 31, 2010 and 2009, consisted of
the following:
LONG-LIVED ASSETS
For the years ended March 31, 2010 and 2009, the
Company and its consolidated domestic subsidiaries
recognized losses on impairment for the following assets:
For purposes of evaluating and measuring impairment,
assets used for business are considered to constitute a
group by each industry segment of the Company and each
of the consolidated subsidiaries, while idle assets and
investment property are individually considered.
Carrying amounts of certain idle real estate and
investment property were devalued to their recoverable
amounts, due to substantial declines in fair market value.
The breakdown of the impairment losses was as follows:
The recoverable amount of the idle real estate and others
was measured by its net selling price based on appraisal of
real estate price.
The recoverable amount of investment property was
measured at their value in use and the discount rate used
for computation of present value of future cash flows was
6.8% for the year ended March 31, 2010.
The recoverable amounts of idle facilities and others
were determined to be zero.
INVESTMENT PROPERTY
On November 28, 2008, the ASBJ issued ASBJ Statement
No. 20 "Accounting Standard for Investment Property and
Related Disclosures" and issued ASBJ Guidance No. 23
"Guidance on Accounting Standard for Investment Property
and Related Disclosures." This accounting standard and the
guidance are applicable to investment property and related
disclosures at the end of the fiscal years ending on or after
March 31, 2010. The Group applied the new accounting
standard and guidance effective March 31, 2010.
The Group holds some rental properties such as office
buildings and land in Tokyo and other areas. Net loss of
rental income and operating expenses for those rental
properties was ￥43 million (＄463 thousand) and
impairment losses were ￥51 million (＄553 thousand) for
the fiscal year ended March 31, 2010.
In addition, the carrying amounts, changes in such
balances and market prices of such properties are as
follows:
Notes: 1. Carrying amount recognized in balance sheet is
net of accumulated depreciation and
accumulated impairment losses, if any.
2. Increase during the fiscal year ended March 31,
2010 primarily represents change in the manner
in which an asset is used of ￥507 million (＄
5,456 thousand), and decrease primarily
represents the recognition of depreciation of ￥79
million (＄855 thousand).
3. Fair value of properties as of March 31, 2010 is
principally measured by the Group in accordance
with its Japanese Real-estate Appraisal
Standard.
SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Short-term borrowings as of March 31, 2010 and 2009,
consisted of notes to banks and bank overdrafts. The
annual interest rates applicable to the short-term
borrowings ranged from 0.85% to 5.31% and 0.88% to
7.61% at March 31, 2010 and 2009, respectively.
Long-term debt as of March 31, 2010 and 2009, consisted
of the following:
The Company had agreements of commitment lines with
four banks in 2010 and six banks in 2009, and the
aggregate amount of unused line of credit was as follows:
Annual maturities of long-term debt, excluding finance
leases (see Note 14), as of March 31, 2010, for the next
five years and thereafter were as follows:
As of March 31, 2010, the following assets were pledged to
secure long-term debt aggregating ￥20,440 million (＄
219,791 thousand), and certain short-term borrowings and
current portion of long-term debt aggregating ￥23,237
million (＄249,856 thousand):
In addition, certain short-term borrowings and long-term
debt outstanding as of March 31, 2010, ￥25,290 million (＄
271,935 thousand) are subject to debt covenant terms
concerning the condition of total equity and ordinary income
(loss) as of March 31, 2010.
RETIREMENT AND PENSION PLANS
The Company and most of its domestic consolidated
subsidiaries have severance payments and pension plans
covering substantially all employees. The amounts of the
severance and pension payments are, in general,
determined on the basis of length of service and current
basic salary at the time of termination of service. If the
termination is involuntary, the employee is entitled to
greater payments than in the case of voluntary retirement.
Certain foreign consolidated subsidiaries have a defined
contribution pension plan. Retirement allowances for
directors and corporate auditors of domestic consolidated
subsidiaries are paid subject to approval of the
shareholders in accordance with the Companies Act of
Japan ("Companies Act"). Liability for retirement benefits at
March 31, 2010 and 2009, included those for directors and
corporate auditors in the amount of ￥387 million (＄4,161
thousand) and ￥393 million, respectively.
The liability for employees' retirement benefits at March
31, 2010 and 2009, consisted of the following:
The components of net periodic benefit costs for the years
ended March 31, 2010 and 2009 are as follows:
Assumptions used for the years ended March 31, 2010 and
2009 are set forth as follows:
EQUITY
Japanese companies are subject to 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 meet certain criteria such as; (1) having the
Board of Directors, (2) having independent auditors, (3)
having the 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, the Board of Directors may declare dividends
(except for dividends in kind) at any time during the fiscal
year if the company has prescribed so in its articles of
incorporation. However, the Company cannot do so
because it does not meet all the above criteria.
The Companies Act permits companies to distribute
dividends-in-kind (non-cash assets) to shareholders subject
to a certain limitation and additional requirements.
Semiannual interim dividends may also be paid once a
year upon resolution by the Board of Directors if the articles
of incorporation of the company so stipulate. The
Companies Act provides certain limitations on the amounts
available for dividends or the purchase of treasury 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 of retained earnings) or as additional paid-in
capital (a component of capital surplus) depending on the
equity account charged upon the payment of such
dividends until the total of aggregate amount of legal
reserve and additional paid-in capital equals 25% of the
common stock. Under the Companies Act, the total amount
of additional 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 Board of Directors. The amount of
treasury stock purchased cannot exceed the amount
available for distribution to the shareholders which is
determined by specific formula. Under the Companies Act,
stock acquisition rights are presented as a separate
component of equity. The Companies Act also provides that
companies can purchase both treasury stock acquisition
rights and treasury stock. Such treasury stock acquisition
rights are presented as a separate component of equity or
deducted directly from stock acquisition rights.
INCOME TAXES
The Company and its consolidated domestic subsidiaries
are subject to Japanese national and local income taxes
which, in the aggregate, resulted in a normal effective
statutory tax rate of approximately 40.7% 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:
A reconciliation between the normal effective statutory tax
rates and the actual effective tax rates reflected in the
accompanying consolidated statements of operations for
the years ended March 31, 2010 and 2009 is as follows:
At March 31, 2010, certain consolidated subsidiaries have
tax loss carryforwards aggregating approximately ￥10,596
million (＄113,940 thousand) which are available to be
offset against taxable income of such subsidiaries in future
years. These tax loss carryforwards, if not utilized, will
expire as follows:
RELATED PARTY TRANSACTIONS
Transactions of the Group with unconsolidated subsidiaries
and associated companies for the years ended March 31,
2010 and 2009, were as follows:
RESEARCH AND DEVELOPMENT COSTS
Research and development costs charged to income were
￥5,355 million (＄57,576 thousand) and ￥7,411 million for
the years ended March 31, 2010 and 2009, respectively.
LEASES
The Group leases certain furniture and fixture, machinery, computer equipment and other assets.
Total rental expenses including lease payments under finance leases for the years ended March 31, 2010 and 2009 were
￥777 million (＄8,252 thousand) and ￥801 million, respectively.
Obligations under finance leases were as follows:
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 be
capitalized to recognize lease assets and lease obligations in the balance sheet. However, the 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 note 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 on an "as if capitalized" basis was as follows:
Obligations under finance leases:
1
2
3
4
5
67
10
11
9
8
12
13
14
Merchandise…………………………
Finished goods………………………
Work-in-process……………………
Raw materials………………………
Supplies………………………………
TOTAL…………………………………
Millions of YenThousands ofU.S. Dollars
2010 2009 2010
＄8,044
207,709
50,800
45,649
2,829
＄315,031
￥1,375
25,912
3,644
4,925
215
￥36,071
￥748
19,317
4,725
4,245
263
￥29,298
Millions of YenThousands ofU.S. Dollars
The total amount of commitment
lines…………………………………
Used line of credit…………………
Unused line of credit…………………
2010 2009 2010
＄79,570
67,635
＄11,935
￥9,000
9,000
￥7,400
6,290
￥1,110
Millions of YenThousands ofU.S. Dollars
Current-Government and
corporate bonds……………………
Non-current:
Marketable equity securities………
Other…………………………………
TOTAL…………………………………
2010 2009 2010
＄69
＄16,526
4,913
＄21,439
￥44
￥1,390
524
￥1,914
￥6
￥1,537
457
￥1,994
Millions of YenThousands ofU.S. Dollars
Land……………………………………
Buildings and structures……………
Machinery and equipment…………
Furniture and fixtures………………
Others…………………………………
Total……………………………………
2010 2009 2010
＄553
215
266
309
＄1,343
￥914
50
15
￥979
￥51
20
25
29
￥125
Millions of Yen
March 31, 2010
Available-for-sale:
Equity securities………
Other……………………
Fair ValueUnrealized
LossesUnrealized
GainsCost
￥1,484
238
￥220
8
￥167
16
￥1,537
230
Millions of Yen
Fair ValueUnrealized
LossesUnrealized
GainsCostMarch 31, 2009
Available-for-sale:
Equity securities………
Other……………………
￥1,493
242
￥37 ￥140
28
￥1,390
214
Thousands of U.S. Dollars
Fair ValueUnrealized
LossesUnrealized
GainsCostMarch 31, 2010
Available-for-sale:
Equity securities………
Other……………………
＄15,958
2,556
＄2,365
92
＄1,797
176
＄16,526
2,472
Carrying Amount
Millions of YenMarch 31, 2009
Available-for-sale:Equity securities……………………
Bonds and other securities………………………………
TOTAL………………………………………………………
￥306
48
￥354
Millions of YenThousands ofU.S. DollarsYear Ending March 31
2011………………………………………………
2012………………………………………………
2013………………………………………………
2014………………………………………………
2015………………………………………………
2016 and thereafter……………………………
TOTAL……………………………………………
＄100,534
88,812
70,184
37,438
30,805
9,700
＄337,473
￥9,350
8,259
6,527
3,482
2,865
902
￥31,385
Millions of YenThousands ofU.S. Dollars
Projected benefit obligation…………
Fair value of plan assets……………
Unrecognized actuarial loss ………
Unrecognized transitional obligation…
Net liability……………………………
2010 2009 2010
￥13,224
(4,373)
(1,940)
(605)
￥6,306
＄128,898
(46,192)
(12,364)
＄70,342
￥11,988
(4,296)
(1,150)
￥6,542
Millions of YenThousands ofU.S. Dollars
Service cost……………………………
Interest cost……………………………
Expected return on plan assets ……
Amortization of transitional obligation…
Recognized actuarial loss……………
Additional retirement payments and others…
Net periodic benefit costs……………
2010 2009 2010
￥975
213
(103)
638
301
793
￥2,817
＄8,065
2,473
(959)
6,500
3,993
2,083
＄22,155
￥750
230
(89)
604
371
194
￥2,060
2010 2009
Discount rate……………………………………
Expected rate of return on plan assets ………
Amortization period of prior service cost………
Recognition period of actuarial gain/loss………
Amortization period of transitional obligation…
2.0%
2.5%
1 year
10 years
10 years
2.0%
2.5%
1 year
10 years
10 years
Millions of YenThousands ofU.S. Dollars
Investment securities……………………………
Land………………………………………………
Buildings-net of accumulated depreciation……
Machinery-net of accumulated depreciation …
TOTAL……………………………………………
＄15,511
60,499
184,511
8,081
＄268,602
￥1,442
5,626
17,160
752
￥24,980
2010 2009 2010Use Type of Assets
Millions of Yen
Idle real estate and othersIdle real estate
Idle real estate
Investment property Idle facilities and others
Total………………………………………………
Land and others
Land, buildings and structuresLand, buildings and structuresLand
Machinery and equipment, furniture and fixtures
Miyagi Prefecture and others…………Hiroshima Prefecture…………Fukushima Prefecture…………Tochigi Prefecture……
Tochigi Prefecture and others…………
Location
￥905
59
15
￥979
￥76
4
45
￥125
Thousands ofU.S. Dollars
＄819
43
481
＄1,343
Millions of YenThousands ofU.S. Dollars
1.08% to 1.21% unsecured
bonds, due 2010-2014……………
1.23% to 7.2% loans from banks,
due 2010-2019……………………
1.65% loans from insurance
companies…………………………
Obligations under finance leases……
TOTAL……………………………
Current portion………………………
Long-term debt, less current portion…
2010 2009 2010
＄7,098
328,870
1,505
11,565
349,038
(103,569)
＄245,469
￥700
16,556
180
431
17,867
(7,356)
￥10,511
￥660
30,585
140
1,076
32,461
(9,632)
￥22,829
Millions of Yen
April 1, 2009
￥3,351 ￥377 ￥3,728 ￥6,309
Carrying Amount
Increase/Decrease March 31, 2010
Fair Value
March 31, 2010
Thousands of U.S. Dollars
April 1, 2009
＄36,036 ＄4,048 ＄40,084 ＄67,837
Carrying Amount
Increase/Decrease March 31, 2010
Fair Value
March 31, 2010
Millions of YenThousands ofU.S. Dollars
Deferred tax assets:
Unrealized profit on inventories…
Loss on disposals of inventories……
Unrealized gains on sales of property……
Accrued bonuses……………………
Enterprise tax…………………………
Allowance for doubtful accounts……
Liability for severance payments……
Loss on devaluations of investment
securities……………………………
Tax loss carryforwards………………
Net unrealized loss on available-for-
sale securities………………………
Other…………………………………
Less valuation allowance……………
TOTAL………………………………
Offset with deferred tax liabilities……
Net deferred tax assets………………
Deferred tax liabilities:
Undistributed earnings of associated
companies…………………………
Net unrealized gain on available-
for-sale securities…………………
Other…………………………………
TOTAL………………………………
Offset with deferred tax assets………
Net deferred tax liabilities……………
2010 2009 2010
￥343
70
732
256
41
426
2,451
67
11,871
1,095
(10,278)
7,074
(178)
￥6,896
￥142
28
21
191
(178)
￥13
￥1,175
50
732
327
24
391
2,421
54
7,462
53
1,240
(7,500)
6,429
(216)
￥6,213
￥193
97
290
(216)
￥74
＄3,685
748
7,867
2,751
444
4,581
26,349
716
127,647
11,795
(110,518)
76,065
(1,913)
＄74,152
＄1,524
304
223
2,051
(1,913)
＄138
2010 2009
Normal effective statutory tax rate…………………
Non-deductible items………………………………
Difference of statutory tax rates between Japan
and foreign countries……………………………
Lower income tax rates applicable to income
in certain foreign countries………………………
Reversal of dividend income in consolidated
subsidiaries………………………………………
Deficit of consolidated subsidiaries………………
Unrealized profits without recognition of deferred tax……
Change in valuation allowance……………………
Reversal of loss on devaluations of
investments in consolidated subsidiaries………
Effect of tax deduction………………………………
Other-net……………………………………………
Actual effective tax rate……………………………
40.7%
(8.5)
(2.6)
(0.3)
(11.5)
5.0
(20.9)
2.3
(0.6)
3.6%
40.7%
10.9
(1.9)
(18.1)
(6.9)
(28.9)
3.2
5.3
0.5
4.8%
Millions of YenThousands ofU.S. DollarsYear Ending March 31
2011………………………………………………�
2012………………………………………………�
2013………………………………………………
2014………………………………………………
2015 and thereafter………………………………
TOTAL……………………………………………
￥21
43
190
233
10,109
￥10,596
＄230
459
2,045
2,511
108,695
＄113,940
Due within one year………………………………
Due after one year………………………………
TOTAL……………………………………………
￥282
794
￥1,076
＄3,034
8,531
＄11,565
Millions of YenThousands ofU.S. Dollars
2010 2010
Millions of YenThousands ofU.S. Dollars
Sales to related parties………………
Purchases from related parties…………
Trade notes and accounts receivable…
Trade notes and accounts payable……
2010 2009 2010
￥673
198
561
6
￥406
238
753
＄4,366
2,557
8,095
Millions of Yen
Acquisition cost…………………………………………………
Accumulated depreciation………………………………………
Net leased property……………………………………………
TotalSoftwareFurniture and
FixturesMachinery and
Equipment
2010 2009Thousands of U.S. Dollars
TotalSoftwareFurniture and
FixturesMachinery and
Equipment
￥1,110
619
￥491
￥938
591
￥347
￥787
473
￥314
￥2,835
1,683
￥1,152
￥848
539
￥309
￥528
422
￥106
￥693
534
￥159
￥2,069
1,495
￥574
Acquisition cost…………………………………………………
Accumulated depreciation……………………………………
Net leased property……………………………………………
Thousands of U.S. Dollars
TotalSoftwareFurniture and
FixturesMachinery and
Equipment
2010
＄9,122
5,800
＄3,322
＄5,683
4,537
＄1,146
＄7,447
5,743
＄1,704
＄22,252
16,080
＄6,172
Millions of YenThousands ofU.S. Dollars
Due within one year………………………………………………………
Due after one year…………………………………………………………
TOTAL……………………………………………………………………
2010 2009 2010
￥325
290
￥615
￥535
677
￥1,212
＄3,495
3,123
＄6,618
02 Financial Section 02Financial Section
18 19
02 Financial Section
20 21
02Financial Section
02 Financial Section 02Financial Section
22 23
Notes to Consolidated Financial StatementsJUKI CORPORATION and Consolidated Subsidiaries, Years Ended March 31, 2010 and 2009
02 Financial Section
24
02Financial Section
25
02 Financial Section
26
02Financial Section
27
BASIS OF PRESENTINGCONSOLIDATEDFINANCIAL STATEMENTS
The accompanying consolidated financial statements of
JUKI CORPORATION (the "Company") and its
consolidated subsidiaries (together, the "Group") have been
prepared in 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 in Japan
("Japanese GAAP"), which are different in certain respects
as to 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 a form which is
more familiar to readers outside Japan. In addition, certain
reclassifications have been made in the 2009 consolidated
financial statements to conform to classifications and
presentations used in 2010.
The consolidated financial statements are stated in
Japanese yen, the currency of the country in which the
Company is incorporated and operates. The translations of
Japanese yen amounts into U.S. dollar amounts are
included solely for the convenience of readers outside
Japan and have been made at the rate of ￥93 to ＄1, the
approximate rate of exchange at March 31, 2010. Such
translations should not be construed as representations
that the Japanese yen amounts could be converted into
U.S. dollars at that or any other rate.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a ) Consolidation
The consolidated financial statements as of March 31, 2010
include the accounts of the Company and its 34 significant
(36 in 2009) subsidiaries.
Under the control or influence concept, those companies
in which the Company, directly or indirectly, is able to
exercise control over operations are fully consolidated, and
those companies over which the Group has the ability to
exercise significant influence are accounted for by the
equity method.
Investments in 5 (5 in 2009) unconsolidated subsidiaries
and 4 (5 in 2009) associated companies are stated at cost.
If the equity method of accounting had been applied to the
investments in these companies, the effect on the
accompanying consolidated financial statements would not
be material.
Consolidation goodwill is the difference between the cost
and underlying net equity of investments in consolidated
subsidiaries and associated companies at acquisition and is
amortized on a straight-line basis over five years.
Consolidation goodwill is impaired if the expectation of its
future value is determined to be less than the value
estimated when it was acquired.
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.
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 (1) the accounting policies and procedures
applied to a parent company and its subsidiaries for similar
transactions and events under similar circumstances should
in principle be unified for the preparation of the
consolidated financial statements, (2) financial statements
prepared 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 unless
they are not material: (a) amortization of goodwill; (b)
scheduled amortization of actuarial gain or loss of pensions
that has been directly recorded in the equity; (c) expensing
capitalized development costs of R&D; (d) cancellation of
the fair value model accounting for property, plant and
equipment and investment properties and incorporation of
the cost model accounting; (e) recording the prior years'
effects of changes in accounting policies in the income
statement 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 for fiscal years beginning on or after April
1, 2008 with early adoption permitted.
The Company applied this accounting standard effective
April 1, 2008. In addition, the Company adjusted the
beginning balance of retained earnings at April 1, 2008 as if
this accounting standard had been retrospectively applied.
c ) Cash Equivalents
Cash equivalents are short-term investments that are
readily convertible into cash and that are exposed to
insignificant risk of changes in value.
Cash equivalents include time deposits, certificate of
deposits, commercial paper and mutual funds investing in
bonds that represent short-term investments, all of which
mature or become due within three months of the date of
acquisition.
d ) Inventories
Inventories are stated at the lower of cost, principally
determined by the average method or the first-in, first-out
method for merchandise, finished products, work in
process, raw materials and supplies, or net selling value.
e ) Marketable and Investment Securities
Marketable and investment securities are classified as
available-for-sale securities and are reported at fair value,
with unrealized gains and losses, net of applicable taxes,
reported in a separate component of equity. 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.
f ) Property, Plant and Equipment
Property, plant and equipment are stated at cost.
Depreciation of property, plant and equipment of the
Company and its consolidated domestic subsidiaries is
computed substantially by the declining-balance method
based on the estimated useful lives of the assets. However,
the straight-line method is applied to buildings acquired
after April 1, 1998 and lease assets by the Company and its
domestic subsidiaries, and to all property, plant and
equipment of consolidated foreign subsidiaries. The range
of useful lives is principally from 5 to 50 years for buildings
and structures, from 2 to 12 years for machinery and
equipment and from 2 to 15 years for furniture and fixtures.
The useful lives for lease assets are the terms of the
respective leases.
g ) Long-lived Assets
The Group reviews its long-lived assets for impairment
whenever events or changes in circumstance indicate the
carrying amount of an asset or asset group may not be
recoverable. An impairment loss would be recognized if the
carrying amount of an asset or asset group exceeds the
sum of 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 be
measured 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 the asset or the net selling price
at disposition.
h ) Allowance for Doubtful Accounts
The allowance for doubtful accounts is stated in amounts
considered to be appropriate based on the past credit loss
experience and an evaluation of potential losses in the
receivables outstanding.
i ) Liability for Retirement Benefits and Pension Plans
The Company has retirement benefits and pension plans
for employees. Employees terminating at the mandatory
retirement age are entitled to pension payments under the
funded pension plan.
The transitional obligation, determined as of April
1, 2000, is being amortized over 10 years.
Actuarial gains and losses are amortized using the
straight-line method over 10 years as a certain period within
the remaining years of service of employees from the next
year after they arise.
Prior service cost is charged to income as incurred.
On July 31, 2008, the ASBJ has issued an accounting
standard-ASBJ Statement No. 19 "Partial Amendments to
Accounting Standard for Retirement Benefits (Part 3)."
The Group has adopted this statement from the
beginning of this fiscal year. There is no effect of this in the
2010 consolidated statement of operations.
Retirement benefits to directors and corporate auditors of
five consolidated domestic subsidiaries are provided at
100% of the amount which would be paid if they all retired
at the balance sheet date.
Effective June 28, 2007, the Company terminated its
unfunded retirement allowance plan for all directors and
corporate auditors. The outstanding balance of retirement
allowances for directors and corporate auditors as of March
31, 2010 has been classified as the liability for retirement
benefits.
j ) Research and Development Costs
Research and development costs are charged to income as
incurred.
k ) Leases
In March 2007, the ASBJ issued ASBJ Statement No. 13,
"Accounting Standard for Lease Transactions," which
revised the previous accounting standard for lease
transactions issued in June 1993. The revised accounting
standard for lease transactions was effective for fiscal years
beginning on or after April 1, 2008.
Under the previous accounting standard, finance leases
that were deemed to transfer ownership of the leased
property to the lessee were capitalized. However, other
finance leases were permitted to be accounted for as
operating lease transactions if certain "as if capitalized"
information was disclosed in the note to the lessee's
financial statements. The revised accounting standard
requires that all finance lease transactions be capitalized to
recognize lease assets and lease obligations in the balance
sheet. In addition, the accounting standard permits leases
which existed at the transition date and do not transfer
ownership of the leased property to the lessee to continue
to be accounted for as operating lease transactions.
The Company applied the revised accounting standard
effective April 1, 2008. In addition, the Company continues
to account for leases which existed at the transition date
and do not transfer ownership of the leased property to the
lessee as operating lease transactions.
All other leases are accounted for as operating leases.
l ) Income Taxes
The provision for income taxes is computed based on the
pretax income included in the consolidated statements of
operations. The asset and liability approach is used to
recognize deferred tax assets and liabilities for the
expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets
and liabilities. Deferred taxes are measured by applying
currently enacted tax laws to the temporary differences.
m ) Foreign Currency Transactions
All short-term and long-term monetary 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 consolidated statements of
operations to the extent that they are not hedged by
forward exchange contracts.
n ) Foreign Currency Financial Statements
The balance sheet accounts of the consolidated foreign
subsidiaries are translated into Japanese yen at 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 are shown as "Foreign
currency translation adjustments" in a separate component
of equity.
Revenue and expense accounts of consolidated foreign
subsidiaries are translated into yen at the average
exchange rate.
o ) Derivatives and Hedging Activities
The Group uses derivative financial instruments
("derivatives") to manage its exposures to fluctuations in
foreign exchange and interest rates. Foreign exchange
forward contracts, currency swaps, currency options and
interest rate swaps are utilized by the Group to reduce
foreign currency exchange and interest rate risks. The
Group does not enter into derivatives for trading or
speculative purposes.
Derivative financial instruments and foreign currency
transactions are classified and accounted for as follows: (a)
all derivatives are recognized as either assets or liabilities
and measured at fair value, and gains or losses on
derivative transactions are recognized in the consolidated
statements of operations and (b) for derivatives used for
hedging purposes, if derivatives qualify for hedge
accounting because of high correlation and effectiveness
between the hedging instruments and the hedged items,
gains or losses on derivatives are deferred until maturity of
the hedged transactions.
The foreign exchange forward contracts, currency swaps
and currency options utilized to hedge foreign exchange
exposures for export sales are measured at the fair value
and the unrealized gains/losses are recognized in income.
Forward contracts applied for forecasted (or committed)
transactions are also measured at the fair value but the
unrealized gains/losses are deferred until the underlying
transactions are completed.
The interest rate swaps which qualify for hedge
accounting and meet specific matching criteria are not
remeasured at market value but the differential paid or
received under the swap agreements are recognized and
included in interest expenses or income.
p ) Per Share Information
Basic net loss per share is computed by dividing net loss
available to common shareholders by the weighted-average
number of common shares outstanding for the period.
Diluted net income per share is not disclosed because
the Company had no dilutive securities outstanding at
March 31, 2010 and 2009.
Cash dividends per share presented in the
accompanying consolidated statements of operations are
dividends applicable to the respective years including
dividends to be paid after the end of the year.
q ) New Accounting Pronouncements
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
Accounting Standard 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 the acquisition,
construction, development and the normal operation of a
tangible fixed asset and is associated with the retirement of
such tangible fixed asset.
The asset retirement obligation is recognized as the sum
of the discounted cash flows required for the future asset
retirement and is recorded in the period in which the
obligation is incurred if a reasonable estimate can be made.
If a reasonable estimate of the asset retirement obligation
cannot be made in the period the asset retirement
obligation is incurred, the liability should be recognized
when 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 the
asset. Over time, the liability is accreted to its present value
each period. Any subsequent revisions to the timing or the
amount of the original estimate of undiscounted cash flows
are reflected as an increase or a decrease in the carrying
amount of the liability and the capitalized amount of the
related asset retirement cost. This standard is effective for
fiscal years beginning on or after April 1, 2010 with early
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 and Error
Corrections." Accounting treatments under this standard
and guidance are as follows:
(1) Changes in accounting policies
When a new accounting policy is applied with revision of
accounting standards, a new policy is applied
retrospectively unless the revised accounting standards
include specific transitional provisions. When the
revised accounting standards include specific
transitional provisions, an entity shall comply with the
specific transitional provisions.
(2) Changes in presentations
When the presentation of financial statements is
changed, prior period financial statements are
reclassified in accordance with the new 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 is accounted for prospectively if the change
affects both the period of 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 to accounting 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 "Guidance on
Accounting Standard for Segment Information Disclosures."
Under the standard and guidance, an entity is required to
report financial and descriptive information about its
reportable segments. Reportable segments are operating
segments or aggregations of operating segments that meet
specified criteria. Operating segments are components of
an entity about which separate financial information is
available and such information is evaluated regularly by the
chief operating decision maker in deciding how to allocate
resources and in assessing performance. Generally,
segment information is required to be reported on the same
basis as is used internally 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.
MARKETABLE AND INVESTMENT SECURITIES
Marketable and investment securities as of March 31, 2010
and 2009, consisted of the following:
The costs and aggregate fair values of marketable and
investment securities as of March 31, 2010 and 2009 were
as follows:
Available-for-sale securities and bonds and other securities
whose fair value is not readily determinable as of March 31,
2009 were as follows. The similar information for 2010 is
disclosed in Note 15.
Proceeds from sales of available-for-sale securities for the
year ended March 31, 2009 were ￥0 million. Gross
realized gains and losses on these sales, computed on the
moving average cost basis, were nil for the year ended
March 31, 2009.
The impairment losses on available-for-sale equity
securities for the years ended March 31, 2010 and 2009
were ￥93 million (＄998 thousand) and ￥408 million,
respectively.
SHORT-TERM INVESTMENTS
Short-term investments as of March 31, 2010 and 2009,
consisted of time deposits with an original maturity over
three months.
INVENTORIES
Inventories as of March 31, 2010 and 2009, consisted of
the following:
LONG-LIVED ASSETS
For the years ended March 31, 2010 and 2009, the
Company and its consolidated domestic subsidiaries
recognized losses on impairment for the following assets:
For purposes of evaluating and measuring impairment,
assets used for business are considered to constitute a
group by each industry segment of the Company and each
of the consolidated subsidiaries, while idle assets and
investment property are individually considered.
Carrying amounts of certain idle real estate and
investment property were devalued to their recoverable
amounts, due to substantial declines in fair market value.
The breakdown of the impairment losses was as follows:
The recoverable amount of the idle real estate and others
was measured by its net selling price based on appraisal of
real estate price.
The recoverable amount of investment property was
measured at their value in use and the discount rate used
for computation of present value of future cash flows was
6.8% for the year ended March 31, 2010.
The recoverable amounts of idle facilities and others
were determined to be zero.
INVESTMENT PROPERTY
On November 28, 2008, the ASBJ issued ASBJ Statement
No. 20 "Accounting Standard for Investment Property and
Related Disclosures" and issued ASBJ Guidance No. 23
"Guidance on Accounting Standard for Investment Property
and Related Disclosures." This accounting standard and the
guidance are applicable to investment property and related
disclosures at the end of the fiscal years ending on or after
March 31, 2010. The Group applied the new accounting
standard and guidance effective March 31, 2010.
The Group holds some rental properties such as office
buildings and land in Tokyo and other areas. Net loss of
rental income and operating expenses for those rental
properties was ￥43 million (＄463 thousand) and
impairment losses were ￥51 million (＄553 thousand) for
the fiscal year ended March 31, 2010.
In addition, the carrying amounts, changes in such
balances and market prices of such properties are as
follows:
Notes: 1. Carrying amount recognized in balance sheet is
net of accumulated depreciation and
accumulated impairment losses, if any.
2. Increase during the fiscal year ended March 31,
2010 primarily represents change in the manner
in which an asset is used of ￥507 million (＄
5,456 thousand), and decrease primarily
represents the recognition of depreciation of ￥79
million (＄855 thousand).
3. Fair value of properties as of March 31, 2010 is
principally measured by the Group in accordance
with its Japanese Real-estate Appraisal
Standard.
SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Short-term borrowings as of March 31, 2010 and 2009,
consisted of notes to banks and bank overdrafts. The
annual interest rates applicable to the short-term
borrowings ranged from 0.85% to 5.31% and 0.88% to
7.61% at March 31, 2010 and 2009, respectively.
Long-term debt as of March 31, 2010 and 2009, consisted
of the following:
The Company had agreements of commitment lines with
four banks in 2010 and six banks in 2009, and the
aggregate amount of unused line of credit was as follows:
Annual maturities of long-term debt, excluding finance
leases (see Note 14), as of March 31, 2010, for the next
five years and thereafter were as follows:
As of March 31, 2010, the following assets were pledged to
secure long-term debt aggregating ￥20,440 million (＄
219,791 thousand), and certain short-term borrowings and
current portion of long-term debt aggregating ￥23,237
million (＄249,856 thousand):
In addition, certain short-term borrowings and long-term
debt outstanding as of March 31, 2010, ￥25,290 million (＄
271,935 thousand) are subject to debt covenant terms
concerning the condition of total equity and ordinary income
(loss) as of March 31, 2010.
RETIREMENT AND PENSION PLANS
The Company and most of its domestic consolidated
subsidiaries have severance payments and pension plans
covering substantially all employees. The amounts of the
severance and pension payments are, in general,
determined on the basis of length of service and current
basic salary at the time of termination of service. If the
termination is involuntary, the employee is entitled to
greater payments than in the case of voluntary retirement.
Certain foreign consolidated subsidiaries have a defined
contribution pension plan. Retirement allowances for
directors and corporate auditors of domestic consolidated
subsidiaries are paid subject to approval of the
shareholders in accordance with the Companies Act of
Japan ("Companies Act"). Liability for retirement benefits at
March 31, 2010 and 2009, included those for directors and
corporate auditors in the amount of ￥387 million (＄4,161
thousand) and ￥393 million, respectively.
The liability for employees' retirement benefits at March
31, 2010 and 2009, consisted of the following:
The components of net periodic benefit costs for the years
ended March 31, 2010 and 2009 are as follows:
Assumptions used for the years ended March 31, 2010 and
2009 are set forth as follows:
EQUITY
Japanese companies are subject to 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 meet certain criteria such as; (1) having the
Board of Directors, (2) having independent auditors, (3)
having the 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, the Board of Directors may declare dividends
(except for dividends in kind) at any time during the fiscal
year if the company has prescribed so in its articles of
incorporation. However, the Company cannot do so
because it does not meet all the above criteria.
The Companies Act permits companies to distribute
dividends-in-kind (non-cash assets) to shareholders subject
to a certain limitation and additional requirements.
Semiannual interim dividends may also be paid once a
year upon resolution by the Board of Directors if the articles
of incorporation of the company so stipulate. The
Companies Act provides certain limitations on the amounts
available for dividends or the purchase of treasury 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 of retained earnings) or as additional paid-in
capital (a component of capital surplus) depending on the
equity account charged upon the payment of such
dividends until the total of aggregate amount of legal
reserve and additional paid-in capital equals 25% of the
common stock. Under the Companies Act, the total amount
of additional 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 Board of Directors. The amount of
treasury stock purchased cannot exceed the amount
available for distribution to the shareholders which is
determined by specific formula. Under the Companies Act,
stock acquisition rights are presented as a separate
component of equity. The Companies Act also provides that
companies can purchase both treasury stock acquisition
rights and treasury stock. Such treasury stock acquisition
rights are presented as a separate component of equity or
deducted directly from stock acquisition rights.
INCOME TAXES
The Company and its consolidated domestic subsidiaries
are subject to Japanese national and local income taxes
which, in the aggregate, resulted in a normal effective
statutory tax rate of approximately 40.7% 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:
A reconciliation between the normal effective statutory tax
rates and the actual effective tax rates reflected in the
accompanying consolidated statements of operations for
the years ended March 31, 2010 and 2009 is as follows:
At March 31, 2010, certain consolidated subsidiaries have
tax loss carryforwards aggregating approximately ￥10,596
million (＄113,940 thousand) which are available to be
offset against taxable income of such subsidiaries in future
years. These tax loss carryforwards, if not utilized, will
expire as follows:
RELATED PARTY TRANSACTIONS
Transactions of the Group with unconsolidated subsidiaries
and associated companies for the years ended March 31,
2010 and 2009, were as follows:
RESEARCH AND DEVELOPMENT COSTS
Research and development costs charged to income were
￥5,355 million (＄57,576 thousand) and ￥7,411 million for
the years ended March 31, 2010 and 2009, respectively.
LEASES
The Group leases certain furniture and fixture, machinery, computer equipment and other assets.
Total rental expenses including lease payments under finance leases for the years ended March 31, 2010 and 2009 were
￥777 million (＄8,252 thousand) and ￥801 million, respectively.
Obligations under finance leases were as follows:
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 be
capitalized to recognize lease assets and lease obligations in the balance sheet. However, the 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 note 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 on an "as if capitalized" basis was as follows:
Obligations under finance leases:
1
2
3
4
5
67
10
11
9
8
12
13
14
Merchandise…………………………
Finished goods………………………
Work-in-process……………………
Raw materials………………………
Supplies………………………………
TOTAL…………………………………
Millions of YenThousands ofU.S. Dollars
2010 2009 2010
＄8,044
207,709
50,800
45,649
2,829
＄315,031
￥1,375
25,912
3,644
4,925
215
￥36,071
￥748
19,317
4,725
4,245
263
￥29,298
Millions of YenThousands ofU.S. Dollars
The total amount of commitment
lines…………………………………
Used line of credit…………………
Unused line of credit…………………
2010 2009 2010
＄79,570
67,635
＄11,935
￥9,000
9,000
￥7,400
6,290
￥1,110
Millions of YenThousands ofU.S. Dollars
Current-Government and
corporate bonds……………………
Non-current:
Marketable equity securities………
Other…………………………………
TOTAL…………………………………
2010 2009 2010
＄69
＄16,526
4,913
＄21,439
￥44
￥1,390
524
￥1,914
￥6
￥1,537
457
￥1,994
Millions of YenThousands ofU.S. Dollars
Land……………………………………
Buildings and structures……………
Machinery and equipment…………
Furniture and fixtures………………
Others…………………………………
Total……………………………………
2010 2009 2010
＄553
215
266
309
＄1,343
￥914
50
15
￥979
￥51
20
25
29
￥125
Millions of Yen
March 31, 2010
Available-for-sale:
Equity securities………
Other……………………
Fair ValueUnrealized
LossesUnrealized
GainsCost
￥1,484
238
￥220
8
￥167
16
￥1,537
230
Millions of Yen
Fair ValueUnrealized
LossesUnrealized
GainsCostMarch 31, 2009
Available-for-sale:
Equity securities………
Other……………………
￥1,493
242
￥37 ￥140
28
￥1,390
214
Thousands of U.S. Dollars
Fair ValueUnrealized
LossesUnrealized
GainsCostMarch 31, 2010
Available-for-sale:
Equity securities………
Other……………………
＄15,958
2,556
＄2,365
92
＄1,797
176
＄16,526
2,472
Carrying Amount
Millions of YenMarch 31, 2009
Available-for-sale:Equity securities……………………
Bonds and other securities………………………………
TOTAL………………………………………………………
￥306
48
￥354
Millions of YenThousands ofU.S. DollarsYear Ending March 31
2011………………………………………………
2012………………………………………………
2013………………………………………………
2014………………………………………………
2015………………………………………………
2016 and thereafter……………………………
TOTAL……………………………………………
＄100,534
88,812
70,184
37,438
30,805
9,700
＄337,473
￥9,350
8,259
6,527
3,482
2,865
902
￥31,385
Millions of YenThousands ofU.S. Dollars
Projected benefit obligation…………
Fair value of plan assets……………
Unrecognized actuarial loss ………
Unrecognized transitional obligation…
Net liability……………………………
2010 2009 2010
￥13,224
(4,373)
(1,940)
(605)
￥6,306
＄128,898
(46,192)
(12,364)
＄70,342
￥11,988
(4,296)
(1,150)
￥6,542
Millions of YenThousands ofU.S. Dollars
Service cost……………………………
Interest cost……………………………
Expected return on plan assets ……
Amortization of transitional obligation…
Recognized actuarial loss……………
Additional retirement payments and others…
Net periodic benefit costs……………
2010 2009 2010
￥975
213
(103)
638
301
793
￥2,817
＄8,065
2,473
(959)
6,500
3,993
2,083
＄22,155
￥750
230
(89)
604
371
194
￥2,060
2010 2009
Discount rate……………………………………
Expected rate of return on plan assets ………
Amortization period of prior service cost………
Recognition period of actuarial gain/loss………
Amortization period of transitional obligation…
2.0%
2.5%
1 year
10 years
10 years
2.0%
2.5%
1 year
10 years
10 years
Millions of YenThousands ofU.S. Dollars
Investment securities……………………………
Land………………………………………………
Buildings-net of accumulated depreciation……
Machinery-net of accumulated depreciation …
TOTAL……………………………………………
＄15,511
60,499
184,511
8,081
＄268,602
￥1,442
5,626
17,160
752
￥24,980
2010 2009 2010Use Type of Assets
Millions of Yen
Idle real estate and othersIdle real estate
Idle real estate
Investment property Idle facilities and others
Total………………………………………………
Land and others
Land, buildings and structuresLand, buildings and structuresLand
Machinery and equipment, furniture and fixtures
Miyagi Prefecture and others…………Hiroshima Prefecture…………Fukushima Prefecture…………Tochigi Prefecture……
Tochigi Prefecture and others…………
Location
￥905
59
15
￥979
￥76
4
45
￥125
Thousands ofU.S. Dollars
＄819
43
481
＄1,343
Millions of YenThousands ofU.S. Dollars
1.08% to 1.21% unsecured
bonds, due 2010-2014……………
1.23% to 7.2% loans from banks,
due 2010-2019……………………
1.65% loans from insurance
companies…………………………
Obligations under finance leases……
TOTAL……………………………
Current portion………………………
Long-term debt, less current portion…
2010 2009 2010
＄7,098
328,870
1,505
11,565
349,038
(103,569)
＄245,469
￥700
16,556
180
431
17,867
(7,356)
￥10,511
￥660
30,585
140
1,076
32,461
(9,632)
￥22,829
Millions of Yen
April 1, 2009
￥3,351 ￥377 ￥3,728 ￥6,309
Carrying Amount
Increase/Decrease March 31, 2010
Fair Value
March 31, 2010
Thousands of U.S. Dollars
April 1, 2009
＄36,036 ＄4,048 ＄40,084 ＄67,837
Carrying Amount
Increase/Decrease March 31, 2010
Fair Value
March 31, 2010
Millions of YenThousands ofU.S. Dollars
Deferred tax assets:
Unrealized profit on inventories…
Loss on disposals of inventories……
Unrealized gains on sales of property……
Accrued bonuses……………………
Enterprise tax…………………………
Allowance for doubtful accounts……
Liability for severance payments……
Loss on devaluations of investment
securities……………………………
Tax loss carryforwards………………
Net unrealized loss on available-for-
sale securities………………………
Other…………………………………
Less valuation allowance……………
TOTAL………………………………
Offset with deferred tax liabilities……
Net deferred tax assets………………
Deferred tax liabilities:
Undistributed earnings of associated
companies…………………………
Net unrealized gain on available-
for-sale securities…………………
Other…………………………………
TOTAL………………………………
Offset with deferred tax assets………
Net deferred tax liabilities……………
2010 2009 2010
￥343
70
732
256
41
426
2,451
67
11,871
1,095
(10,278)
7,074
(178)
￥6,896
￥142
28
21
191
(178)
￥13
￥1,175
50
732
327
24
391
2,421
54
7,462
53
1,240
(7,500)
6,429
(216)
￥6,213
￥193
97
290
(216)
￥74
＄3,685
748
7,867
2,751
444
4,581
26,349
716
127,647
11,795
(110,518)
76,065
(1,913)
＄74,152
＄1,524
304
223
2,051
(1,913)
＄138
2010 2009
Normal effective statutory tax rate…………………
Non-deductible items………………………………
Difference of statutory tax rates between Japan
and foreign countries……………………………
Lower income tax rates applicable to income
in certain foreign countries………………………
Reversal of dividend income in consolidated
subsidiaries………………………………………
Deficit of consolidated subsidiaries………………
Unrealized profits without recognition of deferred tax……
Change in valuation allowance……………………
Reversal of loss on devaluations of
investments in consolidated subsidiaries………
Effect of tax deduction………………………………
Other-net……………………………………………
Actual effective tax rate……………………………
40.7%
(8.5)
(2.6)
(0.3)
(11.5)
5.0
(20.9)
2.3
(0.6)
3.6%
40.7%
10.9
(1.9)
(18.1)
(6.9)
(28.9)
3.2
5.3
0.5
4.8%
Millions of YenThousands ofU.S. DollarsYear Ending March 31
2011………………………………………………�
2012………………………………………………�
2013………………………………………………
2014………………………………………………
2015 and thereafter………………………………
TOTAL……………………………………………
￥21
43
190
233
10,109
￥10,596
＄230
459
2,045
2,511
108,695
＄113,940
Due within one year………………………………
Due after one year………………………………
TOTAL……………………………………………
￥282
794
￥1,076
＄3,034
8,531
＄11,565
Millions of YenThousands ofU.S. Dollars
2010 2010
Millions of YenThousands ofU.S. Dollars
Sales to related parties………………
Purchases from related parties…………
Trade notes and accounts receivable…
Trade notes and accounts payable……
2010 2009 2010
￥673
198
561
6
￥406
238
753
＄4,366
2,557
8,095
Millions of Yen
Acquisition cost…………………………………………………
Accumulated depreciation………………………………………
Net leased property……………………………………………
TotalSoftwareFurniture and
FixturesMachinery and
Equipment
2010 2009Thousands of U.S. Dollars
TotalSoftwareFurniture and
FixturesMachinery and
Equipment
￥1,110
619
￥491
￥938
591
￥347
￥787
473
￥314
￥2,835
1,683
￥1,152
￥848
539
￥309
￥528
422
￥106
￥693
534
￥159
￥2,069
1,495
￥574
Acquisition cost…………………………………………………
Accumulated depreciation……………………………………
Net leased property……………………………………………
Thousands of U.S. Dollars
TotalSoftwareFurniture and
FixturesMachinery and
Equipment
2010
＄9,122
5,800
＄3,322
＄5,683
4,537
＄1,146
＄7,447
5,743
＄1,704
＄22,252
16,080
＄6,172
Millions of YenThousands ofU.S. Dollars
Due within one year………………………………………………………
Due after one year…………………………………………………………
TOTAL……………………………………………………………………
2010 2009 2010
￥325
290
￥615
￥535
677
￥1,212
＄3,495
3,123
＄6,618
02 Financial Section 02Financial Section
18 19
02 Financial Section
20 21
02Financial Section
02 Financial Section 02Financial Section
22 23
Notes to Consolidated Financial StatementsJUKI CORPORATION and Consolidated Subsidiaries, Years Ended March 31, 2010 and 2009
02 Financial Section
24
02Financial Section
25
02 Financial Section
26
02Financial Section
27
BASIS OF PRESENTINGCONSOLIDATEDFINANCIAL STATEMENTS
The accompanying consolidated financial statements of
JUKI CORPORATION (the "Company") and its
consolidated subsidiaries (together, the "Group") have been
prepared in 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 in Japan
("Japanese GAAP"), which are different in certain respects
as to 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 a form which is
more familiar to readers outside Japan. In addition, certain
reclassifications have been made in the 2009 consolidated
financial statements to conform to classifications and
presentations used in 2010.
The consolidated financial statements are stated in
Japanese yen, the currency of the country in which the
Company is incorporated and operates. The translations of
Japanese yen amounts into U.S. dollar amounts are
included solely for the convenience of readers outside
Japan and have been made at the rate of ￥93 to ＄1, the
approximate rate of exchange at March 31, 2010. Such
translations should not be construed as representations that
the Japanese yen amounts could be converted into U.S.
dollars at that or any other rate.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a ) Consolidation
The consolidated financial statements as of March 31, 2010
include the accounts of the Company and its 34 significant
(36 in 2009) subsidiaries.
Under the control or influence concept, those companies
in which the Company, directly or indirectly, is able to
exercise control over operations are fully consolidated, and
those companies over which the Group has the ability to
exercise significant influence are accounted for by the
equity method.
Investments in 5 (5 in 2009) unconsolidated subsidiaries
and 4 (5 in 2009) associated companies are stated at cost.
If the equity method of accounting had been applied to the
investments in these companies, the effect on the
accompanying consolidated financial statements would not
be material.
Consolidation goodwill is the difference between the cost
and underlying net equity of investments in consolidated
subsidiaries and associated companies at acquisition and is
amortized on a straight-line basis over five years.
Consolidation goodwill is impaired if the expectation of its
future value is determined to be less than the value
estimated when it was acquired.
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.
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 (1) the accounting policies and procedures
applied to a parent company and its subsidiaries for similar
transactions and events under similar circumstances should
in principle be unified for the preparation of the
consolidated financial statements, (2) financial statements
prepared 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 unless
they are not material: (a) amortization of goodwill; (b)
scheduled amortization of actuarial gain or loss of pensions
that has been directly recorded in the equity; (c) expensing
capitalized development costs of R&D; (d) cancellation of
the fair value model accounting for property, plant and
equipment and investment properties and incorporation of
the cost model accounting; (e) recording the prior years'
effects of changes in accounting policies in the income
statement 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 for fiscal years beginning on or after April
1, 2008 with early adoption permitted.
The Company applied this accounting standard effective
April 1, 2008. In addition, the Company adjusted the
beginning balance of retained earnings at April 1, 2008 as if
this accounting standard had been retrospectively applied.
c ) Cash Equivalents
Cash equivalents are short-term investments that are
readily convertible into cash and that are exposed to
insignificant risk of changes in value.
Cash equivalents include time deposits, certificate of
deposits, commercial paper and mutual funds investing in
bonds that represent short-term investments, all of which
mature or become due within three months of the date of
acquisition.
d ) Inventories
Inventories are stated at the lower of cost, principally
determined by the average method or the first-in, first-out
method for merchandise, finished products, work in
process, raw materials and supplies, or net selling value.
e ) Marketable and Investment Securities
Marketable and investment securities are classified as
available-for-sale securities and are reported at fair value,
with unrealized gains and losses, net of applicable taxes,
reported in a separate component of equity. 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.
f ) Property, Plant and Equipment
Property, plant and equipment are stated at cost.
Depreciation of property, plant and equipment of the
Company and its consolidated domestic subsidiaries is
computed substantially by the declining-balance method
based on the estimated useful lives of the assets. However,
the straight-line method is applied to buildings acquired
after April 1, 1998 and lease assets by the Company and its
domestic subsidiaries, and to all property, plant and
equipment of consolidated foreign subsidiaries. The range
of useful lives is principally from 5 to 50 years for buildings
and structures, from 2 to 12 years for machinery and
equipment and from 2 to 15 years for furniture and fixtures.
The useful lives for lease assets are the terms of the
respective leases.
g ) Long-lived Assets
The Group reviews its long-lived assets for impairment
whenever events or changes in circumstance indicate the
carrying amount of an asset or asset group may not be
recoverable. An impairment loss would be recognized if the
carrying amount of an asset or asset group exceeds the
sum of 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 be
measured 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 the asset or the net selling price
at disposition.
h ) Allowance for Doubtful Accounts
The allowance for doubtful accounts is stated in amounts
considered to be appropriate based on the past credit loss
experience and an evaluation of potential losses in the
receivables outstanding.
i ) Liability for Retirement Benefits and Pension Plans
The Company has retirement benefits and pension plans
for employees. Employees terminating at the mandatory
retirement age are entitled to pension payments under the
funded pension plan.
The transitional obligation, determined as of April
1, 2000, is being amortized over 10 years.
Actuarial gains and losses are amortized using the
straight-line method over 10 years as a certain period within
the remaining years of service of employees from the next
year after they arise.
Prior service cost is charged to income as incurred.
On July 31, 2008, the ASBJ has issued an accounting
standard-ASBJ Statement No. 19 "Partial Amendments to
Accounting Standard for Retirement Benefits (Part 3)."
The Group has adopted this statement from the
beginning of this fiscal year. There is no effect of this in the
2010 consolidated statement of operations.
Retirement benefits to directors and corporate auditors of
five consolidated domestic subsidiaries are provided at
100% of the amount which would be paid if they all retired
at the balance sheet date.
Effective June 28, 2007, the Company terminated its
unfunded retirement allowance plan for all directors and
corporate auditors. The outstanding balance of retirement
allowances for directors and corporate auditors as of March
31, 2010 has been classified as the liability for retirement
benefits.
j ) Research and Development Costs
Research and development costs are charged to income as
incurred.
k ) Leases
In March 2007, the ASBJ issued ASBJ Statement No. 13,
"Accounting Standard for Lease Transactions," which
revised the previous accounting standard for lease
transactions issued in June 1993. The revised accounting
standard for lease transactions was effective for fiscal years
beginning on or after April 1, 2008.
Under the previous accounting standard, finance leases
that were deemed to transfer ownership of the leased
property to the lessee were capitalized. However, other
finance leases were permitted to be accounted for as
operating lease transactions if certain "as if capitalized"
information was disclosed in the note to the lessee's
financial statements. The revised accounting standard
requires that all finance lease transactions be capitalized to
recognize lease assets and lease obligations in the balance
sheet. In addition, the accounting standard permits leases
which existed at the transition date and do not transfer
ownership of the leased property to the lessee to continue
to be accounted for as operating lease transactions.
The Company applied the revised accounting standard
effective April 1, 2008. In addition, the Company continues
to account for leases which existed at the transition date
and do not transfer ownership of the leased property to the
lessee as operating lease transactions.
All other leases are accounted for as operating leases.
l ) Income Taxes
The provision for income taxes is computed based on the
pretax income included in the consolidated statements of
operations. The asset and liability approach is used to
recognize deferred tax assets and liabilities for the
expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets
and liabilities. Deferred taxes are measured by applying
currently enacted tax laws to the temporary differences.
m ) Foreign Currency Transactions
All short-term and long-term monetary 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 consolidated statements of
operations to the extent that they are not hedged by
forward exchange contracts.
n ) Foreign Currency Financial Statements
The balance sheet accounts of the consolidated foreign
subsidiaries are translated into Japanese yen at 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 are shown as "Foreign
currency translation adjustments" in a separate component
of equity.
Revenue and expense accounts of consolidated foreign
subsidiaries are translated into yen at the average
exchange rate.
o ) Derivatives and Hedging Activities
The Group uses derivative financial instruments
("derivatives") to manage its exposures to fluctuations in
foreign exchange and interest rates. Foreign exchange
forward contracts, currency swaps, currency options and
interest rate swaps are utilized by the Group to reduce
foreign currency exchange and interest rate risks. The
Group does not enter into derivatives for trading or
speculative purposes.
Derivative financial instruments and foreign currency
transactions are classified and accounted for as follows: (a)
all derivatives are recognized as either assets or liabilities
and measured at fair value, and gains or losses on
derivative transactions are recognized in the consolidated
statements of operations and (b) for derivatives used for
hedging purposes, if derivatives qualify for hedge
accounting because of high correlation and effectiveness
between the hedging instruments and the hedged items,
gains or losses on derivatives are deferred until maturity of
the hedged transactions.
The foreign exchange forward contracts, currency swaps
and currency options utilized to hedge foreign exchange
exposures for export sales are measured at the fair value
and the unrealized gains/losses are recognized in income.
Forward contracts applied for forecasted (or committed)
transactions are also measured at the fair value but the
unrealized gains/losses are deferred until the underlying
transactions are completed.
The interest rate swaps which qualify for hedge
accounting and meet specific matching criteria are not
remeasured at market value but the differential paid or
received under the swap agreements are recognized and
included in interest expenses or income.
p ) Per Share Information
Basic net loss per share is computed by dividing net loss
available to common shareholders by the weighted-average
number of common shares outstanding for the period.
Diluted net income per share is not disclosed because
the Company had no dilutive securities outstanding at
March 31, 2010 and 2009.
Cash dividends per share presented in the
accompanying consolidated statements of operations are
dividends applicable to the respective years including
dividends to be paid after the end of the year.
q ) New Accounting Pronouncements
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
Accounting Standard 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 the acquisition,
construction, development and the normal operation of a
tangible fixed asset and is associated with the retirement of
such tangible fixed asset.
The asset retirement obligation is recognized as the sum
of the discounted cash flows required for the future asset
retirement and is recorded in the period in which the
obligation is incurred if a reasonable estimate can be made.
If a reasonable estimate of the asset retirement obligation
cannot be made in the period the asset retirement
obligation is incurred, the liability should be recognized
when 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 the
asset. Over time, the liability is accreted to its present value
each period. Any subsequent revisions to the timing or the
amount of the original estimate of undiscounted cash flows
are reflected as an increase or a decrease in the carrying
amount of the liability and the capitalized amount of the
related asset retirement cost. This standard is effective for
fiscal years beginning on or after April 1, 2010 with early
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 and Error
Corrections." Accounting treatments under this standard
and guidance are as follows:
(1) Changes in accounting policies
When a new accounting policy is applied with revision of
accounting standards, a new policy is applied
retrospectively unless the revised accounting standards
include specific transitional provisions. When the
revised accounting standards include specific
transitional provisions, an entity shall comply with the
specific transitional provisions.
(2) Changes in presentations
When the presentation of financial statements is
changed, prior period financial statements are
reclassified in accordance with the new 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 is accounted for prospectively if the change
affects both the period of 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 to accounting 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 "Guidance on
Accounting Standard for Segment Information Disclosures."
Under the standard and guidance, an entity is required to
report financial and descriptive information about its
reportable segments. Reportable segments are operating
segments or aggregations of operating segments that meet
specified criteria. Operating segments are components of
an entity about which separate financial information is
available and such information is evaluated regularly by the
chief operating decision maker in deciding how to allocate
resources and in assessing performance. Generally,
segment information is required to be reported on the same
basis as is used internally 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.
MARKETABLE AND INVESTMENT SECURITIES
Marketable and investment securities as of March 31, 2010
and 2009, consisted of the following:
The costs and aggregate fair values of marketable and
investment securities as of March 31, 2010 and 2009 were
as follows:
Available-for-sale securities and bonds and other securities
whose fair value is not readily determinable as of March 31,
2009 were as follows. The similar information for 2010 is
disclosed in Note 15.
Proceeds from sales of available-for-sale securities for the
year ended March 31, 2009 were ￥0 million. Gross
realized gains and losses on these sales, computed on the
moving average cost basis, were nil for the year ended
March 31, 2009.
The impairment losses on available-for-sale equity
securities for the years ended March 31, 2010 and 2009
were ￥93 million (＄998 thousand) and ￥408 million,
respectively.
SHORT-TERM INVESTMENTS
Short-term investments as of March 31, 2010 and 2009,
consisted of time deposits with an original maturity over
three months.
INVENTORIES
Inventories as of March 31, 2010 and 2009, consisted of
the following:
LONG-LIVED ASSETS
For the years ended March 31, 2010 and 2009, the
Company and its consolidated domestic subsidiaries
recognized losses on impairment for the following assets:
For purposes of evaluating and measuring impairment,
assets used for business are considered to constitute a
group by each industry segment of the Company and each
of the consolidated subsidiaries, while idle assets and
investment property are individually considered.
Carrying amounts of certain idle real estate and
investment property were devalued to their recoverable
amounts, due to substantial declines in fair market value.
The breakdown of the impairment losses was as follows:
The recoverable amount of the idle real estate and others
was measured by its net selling price based on appraisal of
real estate price.
The recoverable amount of investment property was
measured at their value in use and the discount rate used
for computation of present value of future cash flows was
6.8% for the year ended March 31, 2010.
The recoverable amounts of idle facilities and others
were determined to be zero.
INVESTMENT PROPERTY
On November 28, 2008, the ASBJ issued ASBJ Statement
No. 20 "Accounting Standard for Investment Property and
Related Disclosures" and issued ASBJ Guidance No. 23
"Guidance on Accounting Standard for Investment Property
and Related Disclosures." This accounting standard and the
guidance are applicable to investment property and related
disclosures at the end of the fiscal years ending on or after
March 31, 2010. The Group applied the new accounting
standard and guidance effective March 31, 2010.
The Group holds some rental properties such as office
buildings and land in Tokyo and other areas. Net loss of
rental income and operating expenses for those rental
properties was ￥43 million (＄463 thousand) and
impairment losses were ￥51 million (＄553 thousand) for
the fiscal year ended March 31, 2010.
In addition, the carrying amounts, changes in such
balances and market prices of such properties are as
follows:
Notes: 1. Carrying amount recognized in balance sheet is
net of accumulated depreciation and
accumulated impairment losses, if any.
2. Increase during the fiscal year ended March 31,
2010 primarily represents change in the manner
in which an asset is used of ￥507 million (＄
5,456 thousand), and decrease primarily
represents the recognition of depreciation of ￥79
million (＄855 thousand).
3. Fair value of properties as of March 31, 2010 is
principally measured by the Group in accordance
with its Japanese Real-estate Appraisal
Standard.
SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Short-term borrowings as of March 31, 2010 and 2009,
consisted of notes to banks and bank overdrafts. The
annual interest rates applicable to the short-term
borrowings ranged from 0.85% to 5.31% and 0.88% to
7.61% at March 31, 2010 and 2009, respectively.
Long-term debt as of March 31, 2010 and 2009, consisted
of the following:
The Company had agreements of commitment lines with
four banks in 2010 and six banks in 2009, and the
aggregate amount of unused line of credit was as follows:
Annual maturities of long-term debt, excluding finance
leases (see Note 14), as of March 31, 2010, for the next
five years and thereafter were as follows:
As of March 31, 2010, the following assets were pledged to
secure long-term debt aggregating ￥20,440 million (＄
219,791 thousand), and certain short-term borrowings and
current portion of long-term debt aggregating ￥23,237
million (＄249,856 thousand):
In addition, certain short-term borrowings and long-term
debt outstanding as of March 31, 2010, ￥25,290 million (＄
271,935 thousand) are subject to debt covenant terms
concerning the condition of total equity and ordinary income
(loss) as of March 31, 2010.
RETIREMENT AND PENSION PLANS
The Company and most of its domestic consolidated
subsidiaries have severance payments and pension plans
covering substantially all employees. The amounts of the
severance and pension payments are, in general,
determined on the basis of length of service and current
basic salary at the time of termination of service. If the
termination is involuntary, the employee is entitled to
greater payments than in the case of voluntary retirement.
Certain foreign consolidated subsidiaries have a defined
contribution pension plan. Retirement allowances for
directors and corporate auditors of domestic consolidated
subsidiaries are paid subject to approval of the
shareholders in accordance with the Companies Act of
Japan ("Companies Act"). Liability for retirement benefits at
March 31, 2010 and 2009, included those for directors and
corporate auditors in the amount of ￥387 million (＄4,161
thousand) and ￥393 million, respectively.
The liability for employees' retirement benefits at March
31, 2010 and 2009, consisted of the following:
The components of net periodic benefit costs for the years
ended March 31, 2010 and 2009 are as follows:
Assumptions used for the years ended March 31, 2010 and
2009 are set forth as follows:
EQUITY
Japanese companies are subject to 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 meet certain criteria such as; (1) having the
Board of Directors, (2) having independent auditors, (3)
having the 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, the Board of Directors may declare dividends
(except for dividends in kind) at any time during the fiscal
year if the company has prescribed so in its articles of
incorporation. However, the Company cannot do so
because it does not meet all the above criteria.
The Companies Act permits companies to distribute
dividends-in-kind (non-cash assets) to shareholders subject
to a certain limitation and additional requirements.
Semiannual interim dividends may also be paid once a
year upon resolution by the Board of Directors if the articles
of incorporation of the company so stipulate. The
Companies Act provides certain limitations on the amounts
available for dividends or the purchase of treasury 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 of retained earnings) or as additional paid-in
capital (a component of capital surplus) depending on the
equity account charged upon the payment of such
dividends until the total of aggregate amount of legal
reserve and additional paid-in capital equals 25% of the
common stock. Under the Companies Act, the total amount
of additional 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 Board of Directors. The amount of
treasury stock purchased cannot exceed the amount
available for distribution to the shareholders which is
determined by specific formula. Under the Companies Act,
stock acquisition rights are presented as a separate
component of equity. The Companies Act also provides that
companies can purchase both treasury stock acquisition
rights and treasury stock. Such treasury stock acquisition
rights are presented as a separate component of equity or
deducted directly from stock acquisition rights.
INCOME TAXES
The Company and its consolidated domestic subsidiaries
are subject to Japanese national and local income taxes
which, in the aggregate, resulted in a normal effective
statutory tax rate of approximately 40.7% 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:
A reconciliation between the normal effective statutory tax
rates and the actual effective tax rates reflected in the
accompanying consolidated statements of operations for
the years ended March 31, 2010 and 2009 is as follows:
At March 31, 2010, certain consolidated subsidiaries have
tax loss carryforwards aggregating approximately ￥10,596
million (＄113,940 thousand) which are available to be
offset against taxable income of such subsidiaries in future
years. These tax loss carryforwards, if not utilized, will
expire as follows:
RELATED PARTY TRANSACTIONS
Transactions of the Group with unconsolidated subsidiaries
and associated companies for the years ended March 31,
2010 and 2009, were as follows:
RESEARCH AND DEVELOPMENT COSTS
Research and development costs charged to income were
￥5,355 million (＄57,576 thousand) and ￥7,411 million for
the years ended March 31, 2010 and 2009, respectively.
LEASES
The Group leases certain furniture and fixture, machinery, computer equipment and other assets.
Total rental expenses including lease payments under finance leases for the years ended March 31, 2010 and 2009 were
￥777 million (＄8,252 thousand) and ￥801 million, respectively.
Obligations under finance leases were as follows:
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 be
capitalized to recognize lease assets and lease obligations in the balance sheet. However, the 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 note 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 on an "as if capitalized" basis was as follows:
Obligations under finance leases:
1
2
3
4
5
67
10
11
9
8
12
13
14
Merchandise…………………………
Finished goods………………………
Work-in-process……………………
Raw materials………………………
Supplies………………………………
TOTAL…………………………………
Millions of YenThousands ofU.S. Dollars
2010 2009 2010
＄8,044
207,709
50,800
45,649
2,829
＄315,031
￥1,375
25,912
3,644
4,925
215
￥36,071
￥748
19,317
4,725
4,245
263
￥29,298
Millions of YenThousands ofU.S. Dollars
The total amount of commitment
lines…………………………………
Used line of credit…………………
Unused line of credit…………………
2010 2009 2010
＄79,570
67,635
＄11,935
￥9,000
9,000
￥7,400
6,290
￥1,110
Millions of YenThousands ofU.S. Dollars
Current-Government and
corporate bonds……………………
Non-current:
Marketable equity securities………
Other…………………………………
TOTAL…………………………………
2010 2009 2010
＄69
＄16,526
4,913
＄21,439
￥44
￥1,390
524
￥1,914
￥6
￥1,537
457
￥1,994
Millions of YenThousands ofU.S. Dollars
Land……………………………………
Buildings and structures……………
Machinery and equipment…………
Furniture and fixtures………………
Others…………………………………
Total……………………………………
2010 2009 2010
＄553
215
266
309
＄1,343
￥914
50
15
￥979
￥51
20
25
29
￥125
Millions of Yen
March 31, 2010
Available-for-sale:
Equity securities………
Other……………………
Fair ValueUnrealized
LossesUnrealized
GainsCost
￥1,484
238
￥220
8
￥167
16
￥1,537
230
Millions of Yen
Fair ValueUnrealized
LossesUnrealized
GainsCostMarch 31, 2009
Available-for-sale:
Equity securities………
Other……………………
￥1,493
242
￥37 ￥140
28
￥1,390
214
Thousands of U.S. Dollars
Fair ValueUnrealized
LossesUnrealized
GainsCostMarch 31, 2010
Available-for-sale:
Equity securities………
Other……………………
＄15,958
2,556
＄2,365
92
＄1,797
176
＄16,526
2,472
Carrying Amount
Millions of YenMarch 31, 2009
Available-for-sale:Equity securities……………………
Bonds and other securities………………………………
TOTAL………………………………………………………
￥306
48
￥354
Millions of YenThousands ofU.S. DollarsYear Ending March 31
2011………………………………………………
2012………………………………………………
2013………………………………………………
2014………………………………………………
2015………………………………………………
2016 and thereafter……………………………
TOTAL……………………………………………
＄100,534
88,812
70,184
37,438
30,805
9,700
＄337,473
￥9,350
8,259
6,527
3,482
2,865
902
￥31,385
Millions of YenThousands ofU.S. Dollars
Projected benefit obligation…………
Fair value of plan assets……………
Unrecognized actuarial loss ………
Unrecognized transitional obligation…
Net liability……………………………
2010 2009 2010
￥13,224
(4,373)
(1,940)
(605)
￥6,306
＄128,898
(46,192)
(12,364)
＄70,342
￥11,988
(4,296)
(1,150)
￥6,542
Millions of YenThousands ofU.S. Dollars
Service cost……………………………
Interest cost……………………………
Expected return on plan assets ……
Amortization of transitional obligation…
Recognized actuarial loss……………
Additional retirement payments and others…
Net periodic benefit costs……………
2010 2009 2010
￥975
213
(103)
638
301
793
￥2,817
＄8,065
2,473
(959)
6,500
3,993
2,083
＄22,155
￥750
230
(89)
604
371
194
￥2,060
2010 2009
Discount rate……………………………………
Expected rate of return on plan assets ………
Amortization period of prior service cost………
Recognition period of actuarial gain/loss………
Amortization period of transitional obligation…
2.0%
2.5%
1 year
10 years
10 years
2.0%
2.5%
1 year
10 years
10 years
Millions of YenThousands ofU.S. Dollars
Investment securities……………………………
Land………………………………………………
Buildings-net of accumulated depreciation……
Machinery-net of accumulated depreciation …
TOTAL……………………………………………
＄15,511
60,499
184,511
8,081
＄268,602
￥1,442
5,626
17,160
752
￥24,980
2010 2009 2010Use Type of Assets
Millions of Yen
Idle real estate and othersIdle real estate
Idle real estate
Investment property Idle facilities and others
Total………………………………………………
Land and others
Land, buildings and structuresLand, buildings and structuresLand
Machinery and equipment, furniture and fixtures
Miyagi Prefecture and others…………Hiroshima Prefecture…………Fukushima Prefecture…………Tochigi Prefecture……
Tochigi Prefecture and others…………
Location
￥905
59
15
￥979
￥76
4
45
￥125
Thousands ofU.S. Dollars
＄819
43
481
＄1,343
Millions of YenThousands ofU.S. Dollars
1.08% to 1.21% unsecured
bonds, due 2010-2014……………
1.23% to 7.2% loans from banks,
due 2010-2019……………………
1.65% loans from insurance
companies…………………………
Obligations under finance leases……
TOTAL……………………………
Current portion………………………
Long-term debt, less current portion…
2010 2009 2010
＄7,098
328,870
1,505
11,565
349,038
(103,569)
＄245,469
￥700
16,556
180
431
17,867
(7,356)
￥10,511
￥660
30,585
140
1,076
32,461
(9,632)
￥22,829
Millions of Yen
April 1, 2009
￥3,351 ￥377 ￥3,728 ￥6,309
Carrying Amount
Increase/Decrease March 31, 2010
Fair Value
March 31, 2010
Thousands of U.S. Dollars
April 1, 2009
＄36,036 ＄4,048 ＄40,084 ＄67,837
Carrying Amount
Increase/Decrease March 31, 2010
Fair Value
March 31, 2010
Millions of YenThousands ofU.S. Dollars
Deferred tax assets:
Unrealized profit on inventories…
Loss on disposals of inventories……
Unrealized gains on sales of property……
Accrued bonuses……………………
Enterprise tax…………………………
Allowance for doubtful accounts……
Liability for severance payments……
Loss on devaluations of investment
securities……………………………
Tax loss carryforwards………………
Net unrealized loss on available-for-
sale securities………………………
Other…………………………………
Less valuation allowance……………
TOTAL………………………………
Offset with deferred tax liabilities……
Net deferred tax assets………………
Deferred tax liabilities:
Undistributed earnings of associated
companies…………………………
Net unrealized gain on available-
for-sale securities…………………
Other…………………………………
TOTAL………………………………
Offset with deferred tax assets………
Net deferred tax liabilities……………
2010 2009 2010
￥343
70
732
256
41
426
2,451
67
11,871
1,095
(10,278)
7,074
(178)
￥6,896
￥142
28
21
191
(178)
￥13
￥1,175
50
732
327
24
391
2,421
54
7,462
53
1,240
(7,500)
6,429
(216)
￥6,213
￥193
97
290
(216)
￥74
＄3,685
748
7,867
2,751
444
4,581
26,349
716
127,647
11,795
(110,518)
76,065
(1,913)
＄74,152
＄1,524
304
223
2,051
(1,913)
＄138
2010 2009
Normal effective statutory tax rate…………………
Non-deductible items………………………………
Difference of statutory tax rates between Japan
and foreign countries……………………………
Lower income tax rates applicable to income
in certain foreign countries………………………
Reversal of dividend income in consolidated
subsidiaries………………………………………
Deficit of consolidated subsidiaries………………
Unrealized profits without recognition of deferred tax……
Change in valuation allowance……………………
Reversal of loss on devaluations of
investments in consolidated subsidiaries………
Effect of tax deduction………………………………
Other-net……………………………………………
Actual effective tax rate……………………………
40.7%
(8.5)
(2.6)
(0.3)
(11.5)
5.0
(20.9)
2.3
(0.6)
3.6%
40.7%
10.9
(1.9)
(18.1)
(6.9)
(28.9)
3.2
5.3
0.5
4.8%
Millions of YenThousands ofU.S. DollarsYear Ending March 31
2011………………………………………………�
2012………………………………………………�
2013………………………………………………
2014………………………………………………
2015 and thereafter………………………………
TOTAL……………………………………………
￥21
43
190
233
10,109
￥10,596
＄230
459
2,045
2,511
108,695
＄113,940
Due within one year………………………………
Due after one year………………………………
TOTAL……………………………………………
￥282
794
￥1,076
＄3,034
8,531
＄11,565
Millions of YenThousands ofU.S. Dollars
2010 2010
Millions of YenThousands ofU.S. Dollars
Sales to related parties………………
Purchases from related parties…………
Trade notes and accounts receivable…
Trade notes and accounts payable……
2010 2009 2010
￥673
198
561
6
￥406
238
753
＄4,366
2,557
8,095
Millions of Yen
Acquisition cost…………………………………………………
Accumulated depreciation………………………………………
Net leased property……………………………………………
TotalSoftwareFurniture and
FixturesMachinery and
Equipment
2010 2009Thousands of U.S. Dollars
TotalSoftwareFurniture and
FixturesMachinery and
Equipment
￥1,110
619
￥491
￥938
591
￥347
￥787
473
￥314
￥2,835
1,683
￥1,152
￥848
539
￥309
￥528
422
￥106
￥693
534
￥159
￥2,069
1,495
￥574
Acquisition cost…………………………………………………
Accumulated depreciation……………………………………
Net leased property……………………………………………
Thousands of U.S. Dollars
TotalSoftwareFurniture and
FixturesMachinery and
Equipment
2010
＄9,122
5,800
＄3,322
＄5,683
4,537
＄1,146
＄7,447
5,743
＄1,704
＄22,252
16,080
＄6,172
Millions of YenThousands ofU.S. Dollars
Due within one year………………………………………………………
Due after one year…………………………………………………………
TOTAL……………………………………………………………………
2010 2009 2010
￥325
290
￥615
￥535
677
￥1,212
＄3,495
3,123
＄6,618
02 Financial Section 02Financial Section
18 19
02 Financial Section
20 21
02Financial Section
02 Financial Section 02Financial Section
22 23
Notes to Consolidated Financial StatementsJUKI CORPORATION and Consolidated Subsidiaries, Years Ended March 31, 2010 and 2009
02 Financial Section
24
02Financial Section
25
02 Financial Section
26
02Financial Section
27
BASIS OF PRESENTINGCONSOLIDATEDFINANCIAL STATEMENTS
The accompanying consolidated financial statements of
JUKI CORPORATION (the "Company") and its
consolidated subsidiaries (together, the "Group") have been
prepared in 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 in Japan
("Japanese GAAP"), which are different in certain respects
as to 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 a form which is
more familiar to readers outside Japan. In addition, certain
reclassifications have been made in the 2009 consolidated
financial statements to conform to classifications and
presentations used in 2010.
The consolidated financial statements are stated in
Japanese yen, the currency of the country in which the
Company is incorporated and operates. The translations of
Japanese yen amounts into U.S. dollar amounts are
included solely for the convenience of readers outside
Japan and have been made at the rate of ￥93 to ＄1, the
approximate rate of exchange at March 31, 2010. Such
translations should not be construed as representations
that the Japanese yen amounts could be converted into
U.S. dollars at that or any other rate.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a ) Consolidation
The consolidated financial statements as of March 31, 2010
include the accounts of the Company and its 34 significant
(36 in 2009) subsidiaries.
Under the control or influence concept, those companies
in which the Company, directly or indirectly, is able to
exercise control over operations are fully consolidated, and
those companies over which the Group has the ability to
exercise significant influence are accounted for by the
equity method.
Investments in 5 (5 in 2009) unconsolidated subsidiaries
and 4 (5 in 2009) associated companies are stated at cost.
If the equity method of accounting had been applied to the
investments in these companies, the effect on the
accompanying consolidated financial statements would not
be material.
Consolidation goodwill is the difference between the cost
and underlying net equity of investments in consolidated
subsidiaries and associated companies at acquisition and is
amortized on a straight-line basis over five years.
Consolidation goodwill is impaired if the expectation of its
future value is determined to be less than the value
estimated when it was acquired.
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.
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 (1) the accounting policies and procedures
applied to a parent company and its subsidiaries for similar
transactions and events under similar circumstances should
in principle be unified for the preparation of the
consolidated financial statements, (2) financial statements
prepared 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 unless
they are not material: (a) amortization of goodwill; (b)
scheduled amortization of actuarial gain or loss of pensions
that has been directly recorded in the equity; (c) expensing
capitalized development costs of R&D; (d) cancellation of
the fair value model accounting for property, plant and
equipment and investment properties and incorporation of
the cost model accounting; (e) recording the prior years'
effects of changes in accounting policies in the income
statement 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 for fiscal years beginning on or after April
1, 2008 with early adoption permitted.
The Company applied this accounting standard effective
April 1, 2008. In addition, the Company adjusted the
beginning balance of retained earnings at April 1, 2008 as if
this accounting standard had been retrospectively applied.
c ) Cash Equivalents
Cash equivalents are short-term investments that are
readily convertible into cash and that are exposed to
insignificant risk of changes in value.
Cash equivalents include time deposits, certificate of
deposits, commercial paper and mutual funds investing in
bonds that represent short-term investments, all of which
mature or become due within three months of the date of
acquisition.
d ) Inventories
Inventories are stated at the lower of cost, principally
determined by the average method or the first-in, first-out
method for merchandise, finished products, work in
process, raw materials and supplies, or net selling value.
e ) Marketable and Investment Securities
Marketable and investment securities are classified as
available-for-sale securities and are reported at fair value,
with unrealized gains and losses, net of applicable taxes,
reported in a separate component of equity. 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.
f ) Property, Plant and Equipment
Property, plant and equipment are stated at cost.
Depreciation of property, plant and equipment of the
Company and its consolidated domestic subsidiaries is
computed substantially by the declining-balance method
based on the estimated useful lives of the assets. However,
the straight-line method is applied to buildings acquired
after April 1, 1998 and lease assets by the Company and its
domestic subsidiaries, and to all property, plant and
equipment of consolidated foreign subsidiaries. The range
of useful lives is principally from 5 to 50 years for buildings
and structures, from 2 to 12 years for machinery and
equipment and from 2 to 15 years for furniture and fixtures.
The useful lives for lease assets are the terms of the
respective leases.
g ) Long-lived Assets
The Group reviews its long-lived assets for impairment
whenever events or changes in circumstance indicate the
carrying amount of an asset or asset group may not be
recoverable. An impairment loss would be recognized if the
carrying amount of an asset or asset group exceeds the
sum of 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 be
measured 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 the asset or the net selling price
at disposition.
h ) Allowance for Doubtful Accounts
The allowance for doubtful accounts is stated in amounts
considered to be appropriate based on the past credit loss
experience and an evaluation of potential losses in the
receivables outstanding.
i ) Liability for Retirement Benefits and Pension Plans
The Company has retirement benefits and pension plans
for employees. Employees terminating at the mandatory
retirement age are entitled to pension payments under the
funded pension plan.
The transitional obligation, determined as of April
1, 2000, is being amortized over 10 years.
Actuarial gains and losses are amortized using the
straight-line method over 10 years as a certain period within
the remaining years of service of employees from the next
year after they arise.
Prior service cost is charged to income as incurred.
On July 31, 2008, the ASBJ has issued an accounting
standard-ASBJ Statement No. 19 "Partial Amendments to
Accounting Standard for Retirement Benefits (Part 3)."
The Group has adopted this statement from the
beginning of this fiscal year. There is no effect of this in the
2010 consolidated statement of operations.
Retirement benefits to directors and corporate auditors of
five consolidated domestic subsidiaries are provided at
100% of the amount which would be paid if they all retired
at the balance sheet date.
Effective June 28, 2007, the Company terminated its
unfunded retirement allowance plan for all directors and
corporate auditors. The outstanding balance of retirement
allowances for directors and corporate auditors as of March
31, 2010 has been classified as the liability for retirement
benefits.
j ) Research and Development Costs
Research and development costs are charged to income as
incurred.
k ) Leases
In March 2007, the ASBJ issued ASBJ Statement No. 13,
"Accounting Standard for Lease Transactions," which
revised the previous accounting standard for lease
transactions issued in June 1993. The revised accounting
standard for lease transactions was effective for fiscal years
beginning on or after April 1, 2008.
Under the previous accounting standard, finance leases
that were deemed to transfer ownership of the leased
property to the lessee were capitalized. However, other
finance leases were permitted to be accounted for as
operating lease transactions if certain "as if capitalized"
information was disclosed in the note to the lessee's
financial statements. The revised accounting standard
requires that all finance lease transactions be capitalized to
recognize lease assets and lease obligations in the balance
sheet. In addition, the accounting standard permits leases
which existed at the transition date and do not transfer
ownership of the leased property to the lessee to continue
to be accounted for as operating lease transactions.
The Company applied the revised accounting standard
effective April 1, 2008. In addition, the Company continues
to account for leases which existed at the transition date
and do not transfer ownership of the leased property to the
lessee as operating lease transactions.
All other leases are accounted for as operating leases.
l ) Income Taxes
The provision for income taxes is computed based on the
pretax income included in the consolidated statements of
operations. The asset and liability approach is used to
recognize deferred tax assets and liabilities for the
expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets
and liabilities. Deferred taxes are measured by applying
currently enacted tax laws to the temporary differences.
m ) Foreign Currency Transactions
All short-term and long-term monetary 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 consolidated statements of
operations to the extent that they are not hedged by
forward exchange contracts.
n ) Foreign Currency Financial Statements
The balance sheet accounts of the consolidated foreign
subsidiaries are translated into Japanese yen at 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 are shown as "Foreign
currency translation adjustments" in a separate component
of equity.
Revenue and expense accounts of consolidated foreign
subsidiaries are translated into yen at the average
exchange rate.
o ) Derivatives and Hedging Activities
The Group uses derivative financial instruments
("derivatives") to manage its exposures to fluctuations in
foreign exchange and interest rates. Foreign exchange
forward contracts, currency swaps, currency options and
interest rate swaps are utilized by the Group to reduce
foreign currency exchange and interest rate risks. The
Group does not enter into derivatives for trading or
speculative purposes.
Derivative financial instruments and foreign currency
transactions are classified and accounted for as follows: (a)
all derivatives are recognized as either assets or liabilities
and measured at fair value, and gains or losses on
derivative transactions are recognized in the consolidated
statements of operations and (b) for derivatives used for
hedging purposes, if derivatives qualify for hedge
accounting because of high correlation and effectiveness
between the hedging instruments and the hedged items,
gains or losses on derivatives are deferred until maturity of
the hedged transactions.
The foreign exchange forward contracts, currency swaps
and currency options utilized to hedge foreign exchange
exposures for export sales are measured at the fair value
and the unrealized gains/losses are recognized in income.
Forward contracts applied for forecasted (or committed)
transactions are also measured at the fair value but the
unrealized gains/losses are deferred until the underlying
transactions are completed.
The interest rate swaps which qualify for hedge
accounting and meet specific matching criteria are not
remeasured at market value but the differential paid or
received under the swap agreements are recognized and
included in interest expenses or income.
p ) Per Share Information
Basic net loss per share is computed by dividing net loss
available to common shareholders by the weighted-average
number of common shares outstanding for the period.
Diluted net income per share is not disclosed because
the Company had no dilutive securities outstanding at
March 31, 2010 and 2009.
Cash dividends per share presented in the
accompanying consolidated statements of operations are
dividends applicable to the respective years including
dividends to be paid after the end of the year.
q ) New Accounting Pronouncements
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
Accounting Standard 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 the acquisition,
construction, development and the normal operation of a
tangible fixed asset and is associated with the retirement of
such tangible fixed asset.
The asset retirement obligation is recognized as the sum
of the discounted cash flows required for the future asset
retirement and is recorded in the period in which the
obligation is incurred if a reasonable estimate can be made.
If a reasonable estimate of the asset retirement obligation
cannot be made in the period the asset retirement
obligation is incurred, the liability should be recognized
when 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 the
asset. Over time, the liability is accreted to its present value
each period. Any subsequent revisions to the timing or the
amount of the original estimate of undiscounted cash flows
are reflected as an increase or a decrease in the carrying
amount of the liability and the capitalized amount of the
related asset retirement cost. This standard is effective for
fiscal years beginning on or after April 1, 2010 with early
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 and Error
Corrections." Accounting treatments under this standard
and guidance are as follows:
(1) Changes in accounting policies
When a new accounting policy is applied with revision of
accounting standards, a new policy is applied
retrospectively unless the revised accounting standards
include specific transitional provisions. When the
revised accounting standards include specific
transitional provisions, an entity shall comply with the
specific transitional provisions.
(2) Changes in presentations
When the presentation of financial statements is
changed, prior period financial statements are
reclassified in accordance with the new 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 is accounted for prospectively if the change
affects both the period of 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 to accounting 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 "Guidance on
Accounting Standard for Segment Information Disclosures."
Under the standard and guidance, an entity is required to
report financial and descriptive information about its
reportable segments. Reportable segments are operating
segments or aggregations of operating segments that meet
specified criteria. Operating segments are components of
an entity about which separate financial information is
available and such information is evaluated regularly by the
chief operating decision maker in deciding how to allocate
resources and in assessing performance. Generally,
segment information is required to be reported on the same
basis as is used internally 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.
MARKETABLE AND INVESTMENT SECURITIES
Marketable and investment securities as of March 31, 2010
and 2009, consisted of the following:
The costs and aggregate fair values of marketable and
investment securities as of March 31, 2010 and 2009 were
as follows:
Available-for-sale securities and bonds and other securities
whose fair value is not readily determinable as of March 31,
2009 were as follows. The similar information for 2010 is
disclosed in Note 15.
Proceeds from sales of available-for-sale securities for the
year ended March 31, 2009 were ￥0 million. Gross
realized gains and losses on these sales, computed on the
moving average cost basis, were nil for the year ended
March 31, 2009.
The impairment losses on available-for-sale equity
securities for the years ended March 31, 2010 and 2009
were ￥93 million (＄998 thousand) and ￥408 million,
respectively.
SHORT-TERM INVESTMENTS
Short-term investments as of March 31, 2010 and 2009,
consisted of time deposits with an original maturity over
three months.
INVENTORIES
Inventories as of March 31, 2010 and 2009, consisted of
the following:
LONG-LIVED ASSETS
For the years ended March 31, 2010 and 2009, the
Company and its consolidated domestic subsidiaries
recognized losses on impairment for the following assets:
For purposes of evaluating and measuring impairment,
assets used for business are considered to constitute a
group by each industry segment of the Company and each
of the consolidated subsidiaries, while idle assets and
investment property are individually considered.
Carrying amounts of certain idle real estate and
investment property were devalued to their recoverable
amounts, due to substantial declines in fair market value.
The breakdown of the impairment losses was as follows:
The recoverable amount of the idle real estate and others
was measured by its net selling price based on appraisal of
real estate price.
The recoverable amount of investment property was
measured at their value in use and the discount rate used
for computation of present value of future cash flows was
6.8% for the year ended March 31, 2010.
The recoverable amounts of idle facilities and others
were determined to be zero.
INVESTMENT PROPERTY
On November 28, 2008, the ASBJ issued ASBJ Statement
No. 20 "Accounting Standard for Investment Property and
Related Disclosures" and issued ASBJ Guidance No. 23
"Guidance on Accounting Standard for Investment Property
and Related Disclosures." This accounting standard and the
guidance are applicable to investment property and related
disclosures at the end of the fiscal years ending on or after
March 31, 2010. The Group applied the new accounting
standard and guidance effective March 31, 2010.
The Group holds some rental properties such as office
buildings and land in Tokyo and other areas. Net loss of
rental income and operating expenses for those rental
properties was ￥43 million (＄463 thousand) and
impairment losses were ￥51 million (＄553 thousand) for
the fiscal year ended March 31, 2010.
In addition, the carrying amounts, changes in such
balances and market prices of such properties are as
follows:
Notes: 1. Carrying amount recognized in balance sheet is
net of accumulated depreciation and
accumulated impairment losses, if any.
2. Increase during the fiscal year ended March 31,
2010 primarily represents change in the manner
in which an asset is used of ￥507 million (＄
5,456 thousand), and decrease primarily
represents the recognition of depreciation of ￥79
million (＄855 thousand).
3. Fair value of properties as of March 31, 2010 is
principally measured by the Group in accordance
with its Japanese Real-estate Appraisal
Standard.
SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Short-term borrowings as of March 31, 2010 and 2009,
consisted of notes to banks and bank overdrafts. The
annual interest rates applicable to the short-term
borrowings ranged from 0.85% to 5.31% and 0.88% to
7.61% at March 31, 2010 and 2009, respectively.
Long-term debt as of March 31, 2010 and 2009, consisted
of the following:
The Company had agreements of commitment lines with
four banks in 2010 and six banks in 2009, and the
aggregate amount of unused line of credit was as follows:
Annual maturities of long-term debt, excluding finance
leases (see Note 14), as of March 31, 2010, for the next
five years and thereafter were as follows:
As of March 31, 2010, the following assets were pledged to
secure long-term debt aggregating ￥20,440 million (＄
219,791 thousand), and certain short-term borrowings and
current portion of long-term debt aggregating ￥23,237
million (＄249,856 thousand):
In addition, certain short-term borrowings and long-term
debt outstanding as of March 31, 2010, ￥25,290 million (＄
271,935 thousand) are subject to debt covenant terms
concerning the condition of total equity and ordinary income
(loss) as of March 31, 2010.
RETIREMENT AND PENSION PLANS
The Company and most of its domestic consolidated
subsidiaries have severance payments and pension plans
covering substantially all employees. The amounts of the
severance and pension payments are, in general,
determined on the basis of length of service and current
basic salary at the time of termination of service. If the
termination is involuntary, the employee is entitled to
greater payments than in the case of voluntary retirement.
Certain foreign consolidated subsidiaries have a defined
contribution pension plan. Retirement allowances for
directors and corporate auditors of domestic consolidated
subsidiaries are paid subject to approval of the
shareholders in accordance with the Companies Act of
Japan ("Companies Act"). Liability for retirement benefits at
March 31, 2010 and 2009, included those for directors and
corporate auditors in the amount of ￥387 million (＄4,161
thousand) and ￥393 million, respectively.
The liability for employees' retirement benefits at March
31, 2010 and 2009, consisted of the following:
The components of net periodic benefit costs for the years
ended March 31, 2010 and 2009 are as follows:
Assumptions used for the years ended March 31, 2010 and
2009 are set forth as follows:
EQUITY
Japanese companies are subject to 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 meet certain criteria such as; (1) having the
Board of Directors, (2) having independent auditors, (3)
having the 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, the Board of Directors may declare dividends
(except for dividends in kind) at any time during the fiscal
year if the company has prescribed so in its articles of
incorporation. However, the Company cannot do so
because it does not meet all the above criteria.
The Companies Act permits companies to distribute
dividends-in-kind (non-cash assets) to shareholders subject
to a certain limitation and additional requirements.
Semiannual interim dividends may also be paid once a
year upon resolution by the Board of Directors if the articles
of incorporation of the company so stipulate. The
Companies Act provides certain limitations on the amounts
available for dividends or the purchase of treasury 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 of retained earnings) or as additional paid-in
capital (a component of capital surplus) depending on the
equity account charged upon the payment of such
dividends until the total of aggregate amount of legal
reserve and additional paid-in capital equals 25% of the
common stock. Under the Companies Act, the total amount
of additional 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 Board of Directors. The amount of
treasury stock purchased cannot exceed the amount
available for distribution to the shareholders which is
determined by specific formula. Under the Companies Act,
stock acquisition rights are presented as a separate
component of equity. The Companies Act also provides that
companies can purchase both treasury stock acquisition
rights and treasury stock. Such treasury stock acquisition
rights are presented as a separate component of equity or
deducted directly from stock acquisition rights.
INCOME TAXES
The Company and its consolidated domestic subsidiaries
are subject to Japanese national and local income taxes
which, in the aggregate, resulted in a normal effective
statutory tax rate of approximately 40.7% 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:
A reconciliation between the normal effective statutory tax
rates and the actual effective tax rates reflected in the
accompanying consolidated statements of operations for
the years ended March 31, 2010 and 2009 is as follows:
At March 31, 2010, certain consolidated subsidiaries have
tax loss carryforwards aggregating approximately ￥10,596
million (＄113,940 thousand) which are available to be
offset against taxable income of such subsidiaries in future
years. These tax loss carryforwards, if not utilized, will
expire as follows:
RELATED PARTY TRANSACTIONS
Transactions of the Group with unconsolidated subsidiaries
and associated companies for the years ended March 31,
2010 and 2009, were as follows:
RESEARCH AND DEVELOPMENT COSTS
Research and development costs charged to income were
￥5,355 million (＄57,576 thousand) and ￥7,411 million for
the years ended March 31, 2010 and 2009, respectively.
LEASES
The Group leases certain furniture and fixture, machinery, computer equipment and other assets.
Total rental expenses including lease payments under finance leases for the years ended March 31, 2010 and 2009 were
￥777 million (＄8,252 thousand) and ￥801 million, respectively.
Obligations under finance leases were as follows:
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 be
capitalized to recognize lease assets and lease obligations in the balance sheet. However, the 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 note 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 on an "as if capitalized" basis was as follows:
Obligations under finance leases:
1
2
3
4
5
67
10
11
9
8
12
13
14
Merchandise…………………………
Finished goods………………………
Work-in-process……………………
Raw materials………………………
Supplies………………………………
TOTAL…………………………………
Millions of YenThousands ofU.S. Dollars
2010 2009 2010
＄8,044
207,709
50,800
45,649
2,829
＄315,031
￥1,375
25,912
3,644
4,925
215
￥36,071
￥748
19,317
4,725
4,245
263
￥29,298
Millions of YenThousands ofU.S. Dollars
The total amount of commitment
lines…………………………………
Used line of credit…………………
Unused line of credit…………………
2010 2009 2010
＄79,570
67,635
＄11,935
￥9,000
9,000
￥7,400
6,290
￥1,110
Millions of YenThousands ofU.S. Dollars
Current-Government and
corporate bonds……………………
Non-current:
Marketable equity securities………
Other…………………………………
TOTAL…………………………………
2010 2009 2010
＄69
＄16,526
4,913
＄21,439
￥44
￥1,390
524
￥1,914
￥6
￥1,537
457
￥1,994
Millions of YenThousands ofU.S. Dollars
Land……………………………………
Buildings and structures……………
Machinery and equipment…………
Furniture and fixtures………………
Others…………………………………
Total……………………………………
2010 2009 2010
＄553
215
266
309
＄1,343
￥914
50
15
￥979
￥51
20
25
29
￥125
Millions of Yen
March 31, 2010
Available-for-sale:
Equity securities………
Other……………………
Fair ValueUnrealized
LossesUnrealized
GainsCost
￥1,484
238
￥220
8
￥167
16
￥1,537
230
Millions of Yen
Fair ValueUnrealized
LossesUnrealized
GainsCostMarch 31, 2009
Available-for-sale:
Equity securities………
Other……………………
￥1,493
242
￥37 ￥140
28
￥1,390
214
Thousands of U.S. Dollars
Fair ValueUnrealized
LossesUnrealized
GainsCostMarch 31, 2010
Available-for-sale:
Equity securities………
Other……………………
＄15,958
2,556
＄2,365
92
＄1,797
176
＄16,526
2,472
Carrying Amount
Millions of YenMarch 31, 2009
Available-for-sale:Equity securities……………………
Bonds and other securities………………………………
TOTAL………………………………………………………
￥306
48
￥354
Millions of YenThousands ofU.S. DollarsYear Ending March 31
2011………………………………………………
2012………………………………………………
2013………………………………………………
2014………………………………………………
2015………………………………………………
2016 and thereafter……………………………
TOTAL……………………………………………
＄100,534
88,812
70,184
37,438
30,805
9,700
＄337,473
￥9,350
8,259
6,527
3,482
2,865
902
￥31,385
Millions of YenThousands ofU.S. Dollars
Projected benefit obligation…………
Fair value of plan assets……………
Unrecognized actuarial loss ………
Unrecognized transitional obligation…
Net liability……………………………
2010 2009 2010
￥13,224
(4,373)
(1,940)
(605)
￥6,306
＄128,898
(46,192)
(12,364)
＄70,342
￥11,988
(4,296)
(1,150)
￥6,542
Millions of YenThousands ofU.S. Dollars
Service cost……………………………
Interest cost……………………………
Expected return on plan assets ……
Amortization of transitional obligation…
Recognized actuarial loss……………
Additional retirement payments and others…
Net periodic benefit costs……………
2010 2009 2010
￥975
213
(103)
638
301
793
￥2,817
＄8,065
2,473
(959)
6,500
3,993
2,083
＄22,155
￥750
230
(89)
604
371
194
￥2,060
2010 2009
Discount rate……………………………………
Expected rate of return on plan assets ………
Amortization period of prior service cost………
Recognition period of actuarial gain/loss………
Amortization period of transitional obligation…
2.0%
2.5%
1 year
10 years
10 years
2.0%
2.5%
1 year
10 years
10 years
Millions of YenThousands ofU.S. Dollars
Investment securities……………………………
Land………………………………………………
Buildings-net of accumulated depreciation……
Machinery-net of accumulated depreciation …
TOTAL……………………………………………
＄15,511
60,499
184,511
8,081
＄268,602
￥1,442
5,626
17,160
752
￥24,980
2010 2009 2010Use Type of Assets
Millions of Yen
Idle real estate and othersIdle real estate
Idle real estate
Investment property Idle facilities and others
Total………………………………………………
Land and others
Land, buildings and structuresLand, buildings and structuresLand
Machinery and equipment, furniture and fixtures
Miyagi Prefecture and others…………Hiroshima Prefecture…………Fukushima Prefecture…………Tochigi Prefecture……
Tochigi Prefecture and others…………
Location
￥905
59
15
￥979
￥76
4
45
￥125
Thousands ofU.S. Dollars
＄819
43
481
＄1,343
Millions of YenThousands ofU.S. Dollars
1.08% to 1.21% unsecured
bonds, due 2010-2014……………
1.23% to 7.2% loans from banks,
due 2010-2019……………………
1.65% loans from insurance
companies…………………………
Obligations under finance leases……
TOTAL……………………………
Current portion………………………
Long-term debt, less current portion…
2010 2009 2010
＄7,098
328,870
1,505
11,565
349,038
(103,569)
＄245,469
￥700
16,556
180
431
17,867
(7,356)
￥10,511
￥660
30,585
140
1,076
32,461
(9,632)
￥22,829
Millions of Yen
April 1, 2009
￥3,351 ￥377 ￥3,728 ￥6,309
Carrying Amount
Increase/Decrease March 31, 2010
Fair Value
March 31, 2010
Thousands of U.S. Dollars
April 1, 2009
＄36,036 ＄4,048 ＄40,084 ＄67,837
Carrying Amount
Increase/Decrease March 31, 2010
Fair Value
March 31, 2010
Millions of YenThousands ofU.S. Dollars
Deferred tax assets:
Unrealized profit on inventories…
Loss on disposals of inventories……
Unrealized gains on sales of property……
Accrued bonuses……………………
Enterprise tax…………………………
Allowance for doubtful accounts……
Liability for severance payments……
Loss on devaluations of investment
securities……………………………
Tax loss carryforwards………………
Net unrealized loss on available-for-
sale securities………………………
Other…………………………………
Less valuation allowance……………
TOTAL………………………………
Offset with deferred tax liabilities……
Net deferred tax assets………………
Deferred tax liabilities:
Undistributed earnings of associated
companies…………………………
Net unrealized gain on available-
for-sale securities…………………
Other…………………………………
TOTAL………………………………
Offset with deferred tax assets………
Net deferred tax liabilities……………
2010 2009 2010
￥343
70
732
256
41
426
2,451
67
11,871
1,095
(10,278)
7,074
(178)
￥6,896
￥142
28
21
191
(178)
￥13
￥1,175
50
732
327
24
391
2,421
54
7,462
53
1,240
(7,500)
6,429
(216)
￥6,213
￥193
97
290
(216)
￥74
＄3,685
748
7,867
2,751
444
4,581
26,349
716
127,647
11,795
(110,518)
76,065
(1,913)
＄74,152
＄1,524
304
223
2,051
(1,913)
＄138
2010 2009
Normal effective statutory tax rate…………………
Non-deductible items………………………………
Difference of statutory tax rates between Japan
and foreign countries……………………………
Lower income tax rates applicable to income
in certain foreign countries………………………
Reversal of dividend income in consolidated
subsidiaries………………………………………
Deficit of consolidated subsidiaries………………
Unrealized profits without recognition of deferred tax……
Change in valuation allowance……………………
Reversal of loss on devaluations of
investments in consolidated subsidiaries………
Effect of tax deduction………………………………
Other-net……………………………………………
Actual effective tax rate……………………………
40.7%
(8.5)
(2.6)
(0.3)
(11.5)
5.0
(20.9)
2.3
(0.6)
3.6%
40.7%
10.9
(1.9)
(18.1)
(6.9)
(28.9)
3.2
5.3
0.5
4.8%
Millions of YenThousands ofU.S. DollarsYear Ending March 31
2011………………………………………………�
2012………………………………………………�
2013………………………………………………
2014………………………………………………
2015 and thereafter………………………………
TOTAL……………………………………………
￥21
43
190
233
10,109
￥10,596
＄230
459
2,045
2,511
108,695
＄113,940
Due within one year………………………………
Due after one year………………………………
TOTAL……………………………………………
￥282
794
￥1,076
＄3,034
8,531
＄11,565
Millions of YenThousands ofU.S. Dollars
2010 2010
Millions of YenThousands ofU.S. Dollars
Sales to related parties………………
Purchases from related parties…………
Trade notes and accounts receivable…
Trade notes and accounts payable……
2010 2009 2010
￥673
198
561
6
￥406
238
753
＄4,366
2,557
8,095
Millions of Yen
Acquisition cost…………………………………………………
Accumulated depreciation………………………………………
Net leased property……………………………………………
TotalSoftwareFurniture and
FixturesMachinery and
Equipment
2010 2009Thousands of U.S. Dollars
TotalSoftwareFurniture and
FixturesMachinery and
Equipment
￥1,110
619
￥491
￥938
591
￥347
￥787
473
￥314
￥2,835
1,683
￥1,152
￥848
539
￥309
￥528
422
￥106
￥693
534
￥159
￥2,069
1,495
￥574
Acquisition cost…………………………………………………
Accumulated depreciation……………………………………
Net leased property……………………………………………
Thousands of U.S. Dollars
TotalSoftwareFurniture and
FixturesMachinery and
Equipment
2010
＄9,122
5,800
＄3,322
＄5,683
4,537
＄1,146
＄7,447
5,743
＄1,704
＄22,252
16,080
＄6,172
Millions of YenThousands ofU.S. Dollars
Due within one year………………………………………………………
Due after one year…………………………………………………………
TOTAL……………………………………………………………………
2010 2009 2010
￥325
290
￥615
￥535
677
￥1,212
＄3,495
3,123
＄6,618
02 Financial Section 02Financial Section
18 19
02 Financial Section
20 21
02Financial Section
02 Financial Section 02Financial Section
22 23
Notes to Consolidated Financial StatementsJUKI CORPORATION and Consolidated Subsidiaries, Years Ended March 31, 2010 and 2009
02 Financial Section
24
02Financial Section
25
02 Financial Section
26
02Financial Section
27
BASIS OF PRESENTINGCONSOLIDATEDFINANCIAL STATEMENTS
The accompanying consolidated financial statements of
JUKI CORPORATION (the "Company") and its
consolidated subsidiaries (together, the "Group") have been
prepared in 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 in Japan
("Japanese GAAP"), which are different in certain respects
as to 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 a form which is
more familiar to readers outside Japan. In addition, certain
reclassifications have been made in the 2009 consolidated
financial statements to conform to classifications and
presentations used in 2010.
The consolidated financial statements are stated in
Japanese yen, the currency of the country in which the
Company is incorporated and operates. The translations of
Japanese yen amounts into U.S. dollar amounts are
included solely for the convenience of readers outside
Japan and have been made at the rate of ￥93 to ＄1, the
approximate rate of exchange at March 31, 2010. Such
translations should not be construed as representations that
the Japanese yen amounts could be converted into U.S.
dollars at that or any other rate.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a ) Consolidation
The consolidated financial statements as of March 31, 2010
include the accounts of the Company and its 34 significant
(36 in 2009) subsidiaries.
Under the control or influence concept, those companies
in which the Company, directly or indirectly, is able to
exercise control over operations are fully consolidated, and
those companies over which the Group has the ability to
exercise significant influence are accounted for by the
equity method.
Investments in 5 (5 in 2009) unconsolidated subsidiaries
and 4 (5 in 2009) associated companies are stated at cost.
If the equity method of accounting had been applied to the
investments in these companies, the effect on the
accompanying consolidated financial statements would not
be material.
Consolidation goodwill is the difference between the cost
and underlying net equity of investments in consolidated
subsidiaries and associated companies at acquisition and is
amortized on a straight-line basis over five years.
Consolidation goodwill is impaired if the expectation of its
future value is determined to be less than the value
estimated when it was acquired.
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.
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 (1) the accounting policies and procedures
applied to a parent company and its subsidiaries for similar
transactions and events under similar circumstances should
in principle be unified for the preparation of the
consolidated financial statements, (2) financial statements
prepared 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 unless
they are not material: (a) amortization of goodwill; (b)
scheduled amortization of actuarial gain or loss of pensions
that has been directly recorded in the equity; (c) expensing
capitalized development costs of R&D; (d) cancellation of
the fair value model accounting for property, plant and
equipment and investment properties and incorporation of
the cost model accounting; (e) recording the prior years'
effects of changes in accounting policies in the income
statement 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 for fiscal years beginning on or after April
1, 2008 with early adoption permitted.
The Company applied this accounting standard effective
April 1, 2008. In addition, the Company adjusted the
beginning balance of retained earnings at April 1, 2008 as if
this accounting standard had been retrospectively applied.
c ) Cash Equivalents
Cash equivalents are short-term investments that are
readily convertible into cash and that are exposed to
insignificant risk of changes in value.
Cash equivalents include time deposits, certificate of
deposits, commercial paper and mutual funds investing in
bonds that represent short-term investments, all of which
mature or become due within three months of the date of
acquisition.
d ) Inventories
Inventories are stated at the lower of cost, principally
determined by the average method or the first-in, first-out
method for merchandise, finished products, work in
process, raw materials and supplies, or net selling value.
e ) Marketable and Investment Securities
Marketable and investment securities are classified as
available-for-sale securities and are reported at fair value,
with unrealized gains and losses, net of applicable taxes,
reported in a separate component of equity. 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.
f ) Property, Plant and Equipment
Property, plant and equipment are stated at cost.
Depreciation of property, plant and equipment of the
Company and its consolidated domestic subsidiaries is
computed substantially by the declining-balance method
based on the estimated useful lives of the assets. However,
the straight-line method is applied to buildings acquired
after April 1, 1998 and lease assets by the Company and its
domestic subsidiaries, and to all property, plant and
equipment of consolidated foreign subsidiaries. The range
of useful lives is principally from 5 to 50 years for buildings
and structures, from 2 to 12 years for machinery and
equipment and from 2 to 15 years for furniture and fixtures.
The useful lives for lease assets are the terms of the
respective leases.
g ) Long-lived Assets
The Group reviews its long-lived assets for impairment
whenever events or changes in circumstance indicate the
carrying amount of an asset or asset group may not be
recoverable. An impairment loss would be recognized if the
carrying amount of an asset or asset group exceeds the
sum of 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 be
measured 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 the asset or the net selling price
at disposition.
h ) Allowance for Doubtful Accounts
The allowance for doubtful accounts is stated in amounts
considered to be appropriate based on the past credit loss
experience and an evaluation of potential losses in the
receivables outstanding.
i ) Liability for Retirement Benefits and Pension Plans
The Company has retirement benefits and pension plans
for employees. Employees terminating at the mandatory
retirement age are entitled to pension payments under the
funded pension plan.
The transitional obligation, determined as of April
1, 2000, is being amortized over 10 years.
Actuarial gains and losses are amortized using the
straight-line method over 10 years as a certain period within
the remaining years of service of employees from the next
year after they arise.
Prior service cost is charged to income as incurred.
On July 31, 2008, the ASBJ has issued an accounting
standard-ASBJ Statement No. 19 "Partial Amendments to
Accounting Standard for Retirement Benefits (Part 3)."
The Group has adopted this statement from the
beginning of this fiscal year. There is no effect of this in the
2010 consolidated statement of operations.
Retirement benefits to directors and corporate auditors of
five consolidated domestic subsidiaries are provided at
100% of the amount which would be paid if they all retired
at the balance sheet date.
Effective June 28, 2007, the Company terminated its
unfunded retirement allowance plan for all directors and
corporate auditors. The outstanding balance of retirement
allowances for directors and corporate auditors as of March
31, 2010 has been classified as the liability for retirement
benefits.
j ) Research and Development Costs
Research and development costs are charged to income as
incurred.
k ) Leases
In March 2007, the ASBJ issued ASBJ Statement No. 13,
"Accounting Standard for Lease Transactions," which
revised the previous accounting standard for lease
transactions issued in June 1993. The revised accounting
standard for lease transactions was effective for fiscal years
beginning on or after April 1, 2008.
Under the previous accounting standard, finance leases
that were deemed to transfer ownership of the leased
property to the lessee were capitalized. However, other
finance leases were permitted to be accounted for as
operating lease transactions if certain "as if capitalized"
information was disclosed in the note to the lessee's
financial statements. The revised accounting standard
requires that all finance lease transactions be capitalized to
recognize lease assets and lease obligations in the balance
sheet. In addition, the accounting standard permits leases
which existed at the transition date and do not transfer
ownership of the leased property to the lessee to continue
to be accounted for as operating lease transactions.
The Company applied the revised accounting standard
effective April 1, 2008. In addition, the Company continues
to account for leases which existed at the transition date
and do not transfer ownership of the leased property to the
lessee as operating lease transactions.
All other leases are accounted for as operating leases.
l ) Income Taxes
The provision for income taxes is computed based on the
pretax income included in the consolidated statements of
operations. The asset and liability approach is used to
recognize deferred tax assets and liabilities for the
expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets
and liabilities. Deferred taxes are measured by applying
currently enacted tax laws to the temporary differences.
m ) Foreign Currency Transactions
All short-term and long-term monetary 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 consolidated statements of
operations to the extent that they are not hedged by
forward exchange contracts.
n ) Foreign Currency Financial Statements
The balance sheet accounts of the consolidated foreign
subsidiaries are translated into Japanese yen at 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 are shown as "Foreign
currency translation adjustments" in a separate component
of equity.
Revenue and expense accounts of consolidated foreign
subsidiaries are translated into yen at the average
exchange rate.
o ) Derivatives and Hedging Activities
The Group uses derivative financial instruments
("derivatives") to manage its exposures to fluctuations in
foreign exchange and interest rates. Foreign exchange
forward contracts, currency swaps, currency options and
interest rate swaps are utilized by the Group to reduce
foreign currency exchange and interest rate risks. The
Group does not enter into derivatives for trading or
speculative purposes.
Derivative financial instruments and foreign currency
transactions are classified and accounted for as follows: (a)
all derivatives are recognized as either assets or liabilities
and measured at fair value, and gains or losses on
derivative transactions are recognized in the consolidated
statements of operations and (b) for derivatives used for
hedging purposes, if derivatives qualify for hedge
accounting because of high correlation and effectiveness
between the hedging instruments and the hedged items,
gains or losses on derivatives are deferred until maturity of
the hedged transactions.
The foreign exchange forward contracts, currency swaps
and currency options utilized to hedge foreign exchange
exposures for export sales are measured at the fair value
and the unrealized gains/losses are recognized in income.
Forward contracts applied for forecasted (or committed)
transactions are also measured at the fair value but the
unrealized gains/losses are deferred until the underlying
transactions are completed.
The interest rate swaps which qualify for hedge
accounting and meet specific matching criteria are not
remeasured at market value but the differential paid or
received under the swap agreements are recognized and
included in interest expenses or income.
p ) Per Share Information
Basic net loss per share is computed by dividing net loss
available to common shareholders by the weighted-average
number of common shares outstanding for the period.
Diluted net income per share is not disclosed because
the Company had no dilutive securities outstanding at
March 31, 2010 and 2009.
Cash dividends per share presented in the
accompanying consolidated statements of operations are
dividends applicable to the respective years including
dividends to be paid after the end of the year.
q ) New Accounting Pronouncements
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
Accounting Standard 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 the acquisition,
construction, development and the normal operation of a
tangible fixed asset and is associated with the retirement of
such tangible fixed asset.
The asset retirement obligation is recognized as the sum
of the discounted cash flows required for the future asset
retirement and is recorded in the period in which the
obligation is incurred if a reasonable estimate can be made.
If a reasonable estimate of the asset retirement obligation
cannot be made in the period the asset retirement
obligation is incurred, the liability should be recognized
when 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 the
asset. Over time, the liability is accreted to its present value
each period. Any subsequent revisions to the timing or the
amount of the original estimate of undiscounted cash flows
are reflected as an increase or a decrease in the carrying
amount of the liability and the capitalized amount of the
related asset retirement cost. This standard is effective for
fiscal years beginning on or after April 1, 2010 with early
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 and Error
Corrections." Accounting treatments under this standard
and guidance are as follows:
(1) Changes in accounting policies
When a new accounting policy is applied with revision of
accounting standards, a new policy is applied
retrospectively unless the revised accounting standards
include specific transitional provisions. When the
revised accounting standards include specific
transitional provisions, an entity shall comply with the
specific transitional provisions.
(2) Changes in presentations
When the presentation of financial statements is
changed, prior period financial statements are
reclassified in accordance with the new 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 is accounted for prospectively if the change
affects both the period of 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 to accounting 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 "Guidance on
Accounting Standard for Segment Information Disclosures."
Under the standard and guidance, an entity is required to
report financial and descriptive information about its
reportable segments. Reportable segments are operating
segments or aggregations of operating segments that meet
specified criteria. Operating segments are components of
an entity about which separate financial information is
available and such information is evaluated regularly by the
chief operating decision maker in deciding how to allocate
resources and in assessing performance. Generally,
segment information is required to be reported on the same
basis as is used internally 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.
MARKETABLE AND INVESTMENT SECURITIES
Marketable and investment securities as of March 31, 2010
and 2009, consisted of the following:
The costs and aggregate fair values of marketable and
investment securities as of March 31, 2010 and 2009 were
as follows:
Available-for-sale securities and bonds and other securities
whose fair value is not readily determinable as of March 31,
2009 were as follows. The similar information for 2010 is
disclosed in Note 15.
Proceeds from sales of available-for-sale securities for the
year ended March 31, 2009 were ￥0 million. Gross
realized gains and losses on these sales, computed on the
moving average cost basis, were nil for the year ended
March 31, 2009.
The impairment losses on available-for-sale equity
securities for the years ended March 31, 2010 and 2009
were ￥93 million (＄998 thousand) and ￥408 million,
respectively.
SHORT-TERM INVESTMENTS
Short-term investments as of March 31, 2010 and 2009,
consisted of time deposits with an original maturity over
three months.
INVENTORIES
Inventories as of March 31, 2010 and 2009, consisted of
the following:
LONG-LIVED ASSETS
For the years ended March 31, 2010 and 2009, the
Company and its consolidated domestic subsidiaries
recognized losses on impairment for the following assets:
For purposes of evaluating and measuring impairment,
assets used for business are considered to constitute a
group by each industry segment of the Company and each
of the consolidated subsidiaries, while idle assets and
investment property are individually considered.
Carrying amounts of certain idle real estate and
investment property were devalued to their recoverable
amounts, due to substantial declines in fair market value.
The breakdown of the impairment losses was as follows:
The recoverable amount of the idle real estate and others
was measured by its net selling price based on appraisal of
real estate price.
The recoverable amount of investment property was
measured at their value in use and the discount rate used
for computation of present value of future cash flows was
6.8% for the year ended March 31, 2010.
The recoverable amounts of idle facilities and others
were determined to be zero.
INVESTMENT PROPERTY
On November 28, 2008, the ASBJ issued ASBJ Statement
No. 20 "Accounting Standard for Investment Property and
Related Disclosures" and issued ASBJ Guidance No. 23
"Guidance on Accounting Standard for Investment Property
and Related Disclosures." This accounting standard and the
guidance are applicable to investment property and related
disclosures at the end of the fiscal years ending on or after
March 31, 2010. The Group applied the new accounting
standard and guidance effective March 31, 2010.
The Group holds some rental properties such as office
buildings and land in Tokyo and other areas. Net loss of
rental income and operating expenses for those rental
properties was ￥43 million (＄463 thousand) and
impairment losses were ￥51 million (＄553 thousand) for
the fiscal year ended March 31, 2010.
In addition, the carrying amounts, changes in such
balances and market prices of such properties are as
follows:
Notes: 1. Carrying amount recognized in balance sheet is
net of accumulated depreciation and
accumulated impairment losses, if any.
2. Increase during the fiscal year ended March 31,
2010 primarily represents change in the manner
in which an asset is used of ￥507 million (＄
5,456 thousand), and decrease primarily
represents the recognition of depreciation of ￥79
million (＄855 thousand).
3. Fair value of properties as of March 31, 2010 is
principally measured by the Group in accordance
with its Japanese Real-estate Appraisal
Standard.
SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Short-term borrowings as of March 31, 2010 and 2009,
consisted of notes to banks and bank overdrafts. The
annual interest rates applicable to the short-term
borrowings ranged from 0.85% to 5.31% and 0.88% to
7.61% at March 31, 2010 and 2009, respectively.
Long-term debt as of March 31, 2010 and 2009, consisted
of the following:
The Company had agreements of commitment lines with
four banks in 2010 and six banks in 2009, and the
aggregate amount of unused line of credit was as follows:
Annual maturities of long-term debt, excluding finance
leases (see Note 14), as of March 31, 2010, for the next
five years and thereafter were as follows:
As of March 31, 2010, the following assets were pledged to
secure long-term debt aggregating ￥20,440 million (＄
219,791 thousand), and certain short-term borrowings and
current portion of long-term debt aggregating ￥23,237
million (＄249,856 thousand):
In addition, certain short-term borrowings and long-term
debt outstanding as of March 31, 2010, ￥25,290 million (＄
271,935 thousand) are subject to debt covenant terms
concerning the condition of total equity and ordinary income
(loss) as of March 31, 2010.
RETIREMENT AND PENSION PLANS
The Company and most of its domestic consolidated
subsidiaries have severance payments and pension plans
covering substantially all employees. The amounts of the
severance and pension payments are, in general,
determined on the basis of length of service and current
basic salary at the time of termination of service. If the
termination is involuntary, the employee is entitled to
greater payments than in the case of voluntary retirement.
Certain foreign consolidated subsidiaries have a defined
contribution pension plan. Retirement allowances for
directors and corporate auditors of domestic consolidated
subsidiaries are paid subject to approval of the
shareholders in accordance with the Companies Act of
Japan ("Companies Act"). Liability for retirement benefits at
March 31, 2010 and 2009, included those for directors and
corporate auditors in the amount of ￥387 million (＄4,161
thousand) and ￥393 million, respectively.
The liability for employees' retirement benefits at March
31, 2010 and 2009, consisted of the following:
The components of net periodic benefit costs for the years
ended March 31, 2010 and 2009 are as follows:
Assumptions used for the years ended March 31, 2010 and
2009 are set forth as follows:
EQUITY
Japanese companies are subject to 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 meet certain criteria such as; (1) having the
Board of Directors, (2) having independent auditors, (3)
having the 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, the Board of Directors may declare dividends
(except for dividends in kind) at any time during the fiscal
year if the company has prescribed so in its articles of
incorporation. However, the Company cannot do so
because it does not meet all the above criteria.
The Companies Act permits companies to distribute
dividends-in-kind (non-cash assets) to shareholders subject
to a certain limitation and additional requirements.
Semiannual interim dividends may also be paid once a
year upon resolution by the Board of Directors if the articles
of incorporation of the company so stipulate. The
Companies Act provides certain limitations on the amounts
available for dividends or the purchase of treasury 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 of retained earnings) or as additional paid-in
capital (a component of capital surplus) depending on the
equity account charged upon the payment of such
dividends until the total of aggregate amount of legal
reserve and additional paid-in capital equals 25% of the
common stock. Under the Companies Act, the total amount
of additional 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 Board of Directors. The amount of
treasury stock purchased cannot exceed the amount
available for distribution to the shareholders which is
determined by specific formula. Under the Companies Act,
stock acquisition rights are presented as a separate
component of equity. The Companies Act also provides that
companies can purchase both treasury stock acquisition
rights and treasury stock. Such treasury stock acquisition
rights are presented as a separate component of equity or
deducted directly from stock acquisition rights.
INCOME TAXES
The Company and its consolidated domestic subsidiaries
are subject to Japanese national and local income taxes
which, in the aggregate, resulted in a normal effective
statutory tax rate of approximately 40.7% 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:
A reconciliation between the normal effective statutory tax
rates and the actual effective tax rates reflected in the
accompanying consolidated statements of operations for
the years ended March 31, 2010 and 2009 is as follows:
At March 31, 2010, certain consolidated subsidiaries have
tax loss carryforwards aggregating approximately ￥10,596
million (＄113,940 thousand) which are available to be
offset against taxable income of such subsidiaries in future
years. These tax loss carryforwards, if not utilized, will
expire as follows:
RELATED PARTY TRANSACTIONS
Transactions of the Group with unconsolidated subsidiaries
and associated companies for the years ended March 31,
2010 and 2009, were as follows:
RESEARCH AND DEVELOPMENT COSTS
Research and development costs charged to income were
￥5,355 million (＄57,576 thousand) and ￥7,411 million for
the years ended March 31, 2010 and 2009, respectively.
LEASES
The Group leases certain furniture and fixture, machinery, computer equipment and other assets.
Total rental expenses including lease payments under finance leases for the years ended March 31, 2010 and 2009 were
￥777 million (＄8,252 thousand) and ￥801 million, respectively.
Obligations under finance leases were as follows:
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 be
capitalized to recognize lease assets and lease obligations in the balance sheet. However, the 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 note 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 on an "as if capitalized" basis was as follows:
Obligations under finance leases:
1
2
3
4
5
67
10
11
9
8
12
13
14
Merchandise…………………………
Finished goods………………………
Work-in-process……………………
Raw materials………………………
Supplies………………………………
TOTAL…………………………………
Millions of YenThousands ofU.S. Dollars
2010 2009 2010
＄8,044
207,709
50,800
45,649
2,829
＄315,031
￥1,375
25,912
3,644
4,925
215
￥36,071
￥748
19,317
4,725
4,245
263
￥29,298
Millions of YenThousands ofU.S. Dollars
The total amount of commitment
lines…………………………………
Used line of credit…………………
Unused line of credit…………………
2010 2009 2010
＄79,570
67,635
＄11,935
￥9,000
9,000
￥7,400
6,290
￥1,110
Millions of YenThousands ofU.S. Dollars
Current-Government and
corporate bonds……………………
Non-current:
Marketable equity securities………
Other…………………………………
TOTAL…………………………………
2010 2009 2010
＄69
＄16,526
4,913
＄21,439
￥44
￥1,390
524
￥1,914
￥6
￥1,537
457
￥1,994
Millions of YenThousands ofU.S. Dollars
Land……………………………………
Buildings and structures……………
Machinery and equipment…………
Furniture and fixtures………………
Others…………………………………
Total……………………………………
2010 2009 2010
＄553
215
266
309
＄1,343
￥914
50
15
￥979
￥51
20
25
29
￥125
Millions of Yen
March 31, 2010
Available-for-sale:
Equity securities………
Other……………………
Fair ValueUnrealized
LossesUnrealized
GainsCost
￥1,484
238
￥220
8
￥167
16
￥1,537
230
Millions of Yen
Fair ValueUnrealized
LossesUnrealized
GainsCostMarch 31, 2009
Available-for-sale:
Equity securities………
Other……………………
￥1,493
242
￥37 ￥140
28
￥1,390
214
Thousands of U.S. Dollars
Fair ValueUnrealized
LossesUnrealized
GainsCostMarch 31, 2010
Available-for-sale:
Equity securities………
Other……………………
＄15,958
2,556
＄2,365
92
＄1,797
176
＄16,526
2,472
Carrying Amount
Millions of YenMarch 31, 2009
Available-for-sale:Equity securities……………………
Bonds and other securities………………………………
TOTAL………………………………………………………
￥306
48
￥354
Millions of YenThousands ofU.S. DollarsYear Ending March 31
2011………………………………………………
2012………………………………………………
2013………………………………………………
2014………………………………………………
2015………………………………………………
2016 and thereafter……………………………
TOTAL……………………………………………
＄100,534
88,812
70,184
37,438
30,805
9,700
＄337,473
￥9,350
8,259
6,527
3,482
2,865
902
￥31,385
Millions of YenThousands ofU.S. Dollars
Projected benefit obligation…………
Fair value of plan assets……………
Unrecognized actuarial loss ………
Unrecognized transitional obligation…
Net liability……………………………
2010 2009 2010
￥13,224
(4,373)
(1,940)
(605)
￥6,306
＄128,898
(46,192)
(12,364)
＄70,342
￥11,988
(4,296)
(1,150)
￥6,542
Millions of YenThousands ofU.S. Dollars
Service cost……………………………
Interest cost……………………………
Expected return on plan assets ……
Amortization of transitional obligation…
Recognized actuarial loss……………
Additional retirement payments and others…
Net periodic benefit costs……………
2010 2009 2010
￥975
213
(103)
638
301
793
￥2,817
＄8,065
2,473
(959)
6,500
3,993
2,083
＄22,155
￥750
230
(89)
604
371
194
￥2,060
2010 2009
Discount rate……………………………………
Expected rate of return on plan assets ………
Amortization period of prior service cost………
Recognition period of actuarial gain/loss………
Amortization period of transitional obligation…
2.0%
2.5%
1 year
10 years
10 years
2.0%
2.5%
1 year
10 years
10 years
Millions of YenThousands ofU.S. Dollars
Investment securities……………………………
Land………………………………………………
Buildings-net of accumulated depreciation……
Machinery-net of accumulated depreciation …
TOTAL……………………………………………
＄15,511
60,499
184,511
8,081
＄268,602
￥1,442
5,626
17,160
752
￥24,980
2010 2009 2010Use Type of Assets
Millions of Yen
Idle real estate and othersIdle real estate
Idle real estate
Investment property Idle facilities and others
Total………………………………………………
Land and others
Land, buildings and structuresLand, buildings and structuresLand
Machinery and equipment, furniture and fixtures
Miyagi Prefecture and others…………Hiroshima Prefecture…………Fukushima Prefecture…………Tochigi Prefecture……
Tochigi Prefecture and others…………
Location
￥905
59
15
￥979
￥76
4
45
￥125
Thousands ofU.S. Dollars
＄819
43
481
＄1,343
Millions of YenThousands ofU.S. Dollars
1.08% to 1.21% unsecured
bonds, due 2010-2014……………
1.23% to 7.2% loans from banks,
due 2010-2019……………………
1.65% loans from insurance
companies…………………………
Obligations under finance leases……
TOTAL……………………………
Current portion………………………
Long-term debt, less current portion…
2010 2009 2010
＄7,098
328,870
1,505
11,565
349,038
(103,569)
＄245,469
￥700
16,556
180
431
17,867
(7,356)
￥10,511
￥660
30,585
140
1,076
32,461
(9,632)
￥22,829
Millions of Yen
April 1, 2009
￥3,351 ￥377 ￥3,728 ￥6,309
Carrying Amount
Increase/Decrease March 31, 2010
Fair Value
March 31, 2010
Thousands of U.S. Dollars
April 1, 2009
＄36,036 ＄4,048 ＄40,084 ＄67,837
Carrying Amount
Increase/Decrease March 31, 2010
Fair Value
March 31, 2010
Millions of YenThousands ofU.S. Dollars
Deferred tax assets:
Unrealized profit on inventories…
Loss on disposals of inventories……
Unrealized gains on sales of property……
Accrued bonuses……………………
Enterprise tax…………………………
Allowance for doubtful accounts……
Liability for severance payments……
Loss on devaluations of investment
securities……………………………
Tax loss carryforwards………………
Net unrealized loss on available-for-
sale securities………………………
Other…………………………………
Less valuation allowance……………
TOTAL………………………………
Offset with deferred tax liabilities……
Net deferred tax assets………………
Deferred tax liabilities:
Undistributed earnings of associated
companies…………………………
Net unrealized gain on available-
for-sale securities…………………
Other…………………………………
TOTAL………………………………
Offset with deferred tax assets………
Net deferred tax liabilities……………
2010 2009 2010
￥343
70
732
256
41
426
2,451
67
11,871
1,095
(10,278)
7,074
(178)
￥6,896
￥142
28
21
191
(178)
￥13
￥1,175
50
732
327
24
391
2,421
54
7,462
53
1,240
(7,500)
6,429
(216)
￥6,213
￥193
97
290
(216)
￥74
＄3,685
748
7,867
2,751
444
4,581
26,349
716
127,647
11,795
(110,518)
76,065
(1,913)
＄74,152
＄1,524
304
223
2,051
(1,913)
＄138
2010 2009
Normal effective statutory tax rate…………………
Non-deductible items………………………………
Difference of statutory tax rates between Japan
and foreign countries……………………………
Lower income tax rates applicable to income
in certain foreign countries………………………
Reversal of dividend income in consolidated
subsidiaries………………………………………
Deficit of consolidated subsidiaries………………
Unrealized profits without recognition of deferred tax……
Change in valuation allowance……………………
Reversal of loss on devaluations of
investments in consolidated subsidiaries………
Effect of tax deduction………………………………
Other-net……………………………………………
Actual effective tax rate……………………………
40.7%
(8.5)
(2.6)
(0.3)
(11.5)
5.0
(20.9)
2.3
(0.6)
3.6%
40.7%
10.9
(1.9)
(18.1)
(6.9)
(28.9)
3.2
5.3
0.5
4.8%
Millions of YenThousands ofU.S. DollarsYear Ending March 31
2011………………………………………………�
2012………………………………………………�
2013………………………………………………
2014………………………………………………
2015 and thereafter………………………………
TOTAL……………………………………………
￥21
43
190
233
10,109
￥10,596
＄230
459
2,045
2,511
108,695
＄113,940
Due within one year………………………………
Due after one year………………………………
TOTAL……………………………………………
￥282
794
￥1,076
＄3,034
8,531
＄11,565
Millions of YenThousands ofU.S. Dollars
2010 2010
Millions of YenThousands ofU.S. Dollars
Sales to related parties………………
Purchases from related parties…………
Trade notes and accounts receivable…
Trade notes and accounts payable……
2010 2009 2010
￥673
198
561
6
￥406
238
753
＄4,366
2,557
8,095
Millions of Yen
Acquisition cost…………………………………………………
Accumulated depreciation………………………………………
Net leased property……………………………………………
TotalSoftwareFurniture and
FixturesMachinery and
Equipment
2010 2009Thousands of U.S. Dollars
TotalSoftwareFurniture and
FixturesMachinery and
Equipment
￥1,110
619
￥491
￥938
591
￥347
￥787
473
￥314
￥2,835
1,683
￥1,152
￥848
539
￥309
￥528
422
￥106
￥693
534
￥159
￥2,069
1,495
￥574
Acquisition cost…………………………………………………
Accumulated depreciation……………………………………
Net leased property……………………………………………
Thousands of U.S. Dollars
TotalSoftwareFurniture and
FixturesMachinery and
Equipment
2010
＄9,122
5,800
＄3,322
＄5,683
4,537
＄1,146
＄7,447
5,743
＄1,704
＄22,252
16,080
＄6,172
Millions of YenThousands ofU.S. Dollars
Due within one year………………………………………………………
Due after one year…………………………………………………………
TOTAL……………………………………………………………………
2010 2009 2010
￥325
290
￥615
￥535
677
￥1,212
＄3,495
3,123
＄6,618
15
16
17
18
20
19
02 Financial Section
28
02Financial Section
29
02 Financial Section
30
02Financial Section
31
02 Financial Section
32
02Financial Section
33
02 Financial Section
34
02Financial Section
35
Depreciation expense, interest expense and other information under finance leases:
Depreciation expense and interest expense, which are not reflected in the accompanying consolidated statements of
operations, are computed by the straight-line method and the interest method, respectively.
The minimum rental commitments under noncancelable operating leases at March 31, 2010 and 2009, were as follows:
FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
On 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 the guidance are applicable to financial instruments and related disclosures at the end of the fiscal
years ending on or after March 31, 2010 with early 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, mainly long-term debt including bank loans based on its capital financing 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 of interest and foreign currency rates.
(2) Nature and Extent of Risks Arising from Financial Instruments and Risk Management for Financial Instruments
(a) Receivables such as trade notes and trade accounts are exposed to customer credit risk. The Group manages its
credit risk from receivables on the basis of internal guidelines, which include monitoring of payment term and
balances of major customers by each business administration department to identify the default risk of customers in
early stage.
(b) Marketable and investment securities, mainly shares, are exposed to the risk of market price fluctuations. Marketable
and investment securities are managed by monitoring market values on a quarterly basis.
(c) Payment terms of payables, such as trade notes and trade accounts, are less than one year.
(d) Bank loans are used for operating capital (mainly short-term) and business investment capital (long-term). Interest-
rate risks in relation to a part of long-term debt are mitigated by using derivative of interest-rate swaps transactions.
(e) Derivative transactions entered into by the Company have been made in accordance with internal policies which
regulate the authorization and limit for transactions.
Credit risk of those derivatives are mitigated by using to major international financial institutions highly rated.
(f) Payables and bank loans are exposed to the liquidity risk. The Company has managed it by monitoring monthly
financial planning by each business administration department.
(3) Supplementation to Quantitative Information
The contract or notional amounts of derivatives which are shown in Note 16 do not represent the amounts exchanged by
the parties and do not measure the Company's exposure to credit or market risk.
(4) Fair Values of Financial Instruments
Fair values of financial instruments are based on quoted prices in active markets. If quoted price is not available, other
rational valuation techniques are used instead. Also please see Note 16 for the detail of fair value for derivatives.
(a) Fair value of financial instruments
＊1 Allowance for doubtful accounts is deducted from trade notes and accounts receivable.
＊2 Includes current portion of long-term debt and excludes obligation under finance leases and unsecured bonds.
＊3 Net receivables and payables derived as the result of derivative transactions are presented.
Values in parentheses represent net liabilities.
Cash and Cash Equivalents and Trade Notes and Accounts Receivable
The carrying values of cash and cash equivalents and trade notes and accounts receivable approximate fair value
because of their short maturities.
Marketable and Investment Securities
The fair values of marketable and investment securities are measured at the quoted market price on the stock
exchange for the equity instruments. The information of the fair value for the marketable and investment securities by
classification is included in Note 3.
Payables and Short-Term Borrowings
The carrying values of payables and short-term borrowings approximate fair value because of their short maturities.
Long-Term Debt
Long-term debt is determined by discounting the cash flows related to the debt at the corporate borrowing rates that
would presumably apply if similar borrowing were currently made.
A part of floating-rate long-term debt is entered into interest rate swap as a means of managing their interest rate
exposure. This debt is determined by discounting the cash flows including principal and interest related to the debt at the
corporate borrowing rates that would presumably apply if similar borrowing were currently made.
Derivatives
The information of the fair value for derivatives is included in Note 16.
(b) Financial instruments whose fair value cannot be reliably determined
(5) Maturity Analysis for Financial Assets and Securities with Contractual Maturities
Please see Note 8 for annual maturities of long-term debt and Note 14 for obligations under finance leases, respectively.
DERIVATIVES
The Group enters into derivatives including foreign exchange forward contracts, currency swaps, currency options and
interest rate swaps. The Group enters into derivatives in the normal course of business to reduce the exposure to
fluctuations in foreign exchange rates and interest rates. The Group does not hold derivatives for speculation.
Derivatives are subject to market risk and credit risk. Market risk is the exposure created by potential fluctuations in market
conditions, including interest or foreign exchange rates. Since most of the Group's derivative transactions are related to
qualified hedges of underlying business exposures, market risk in the derivative instruments is basically offset by opposite
movements in the value of the hedged assets or liabilities. Because the counterparties to those derivatives are limited to
major international financial institutions, the Group does not anticipate any losses arising from credit risk.
The basic policies for the use of derivatives are approved by the Board of Directors and the execution and control of
derivatives are controlled by the Finance Department. Each derivative transaction is periodically reported to the Board of
Directors, where evaluation and analysis of derivatives are made.
As noted in Note 15, 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 the end of the fiscal years
ending on or after March 31, 2010; therefore, the required information is disclosed only for 2010.
Derivative Transactions to Which Hedge Accounting Is Not Applied at March 31, 2010
Derivative Transactions to Which Hedge Accounting Is Applied at March 31, 2010
a. Derivative transactions qualifying for general accounting policies, deferral hedge accounting
b. Interest rate swap derivative transactions qualifying for exceptional accounting
The above interest rate swaps which qualify for hedge accounting and meet specific matching criteria are not remeasured at
market value but the differential paid or received under the swap agreements are recognized and included in interest
expense or income. In addition, the fair value of such interest rate swaps in Note 15 is included in that of hedged items (i.e.
long-term debt).
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.
Derivatives which qualify for hedge accounting for the year ended March 31, 2009 is excluded from the disclosure of market
value information.
The fair value of derivative transactions is measured at the quoted price obtained from the financial institution.
The contract or notional amounts of derivatives which are shown in the above table do not represent the amounts
exchanged by the parties and do not measure the Group's exposure to credit or market risk.
CONTINGENT LIABILITIES
Contingent liabilities at March 31, 2010 were as follows:
LOSS ON RESTRUCTURING DIVISIONS
Losses of ￥2,516 million for the year ended March 31, 2009 mainly resulted from extraordinary loss of closing plants with
disposal of their inventory and property, and extraordinary payments of employee's retirement benefits in conjunction with
restructuring divisions of industrial sewing machines, household sewing machines and others.
EXPENDITURES FOR RESTRUCTURING DIVISIONS
Expenditures For Restructuring Divisions mainly resulted from payment of restructuring costs of industrial sewing machines
and others.
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
a ) Sales and Operating Income (Loss)
b ) Assets, Depreciation, Impairment Loss and Capital Expenditures
a ) Sales and Operating Income (Loss)
b ) Assets, Depreciation, Impairment Loss and Capital Expenditures
a ) Sales and Operating Income (Loss)
b ) Assets, Depreciation, Impairment Loss and Capital Expenditures
(2) Geographical Segments
The geographical segments of the Group for the years ended March 31, 2010 and 2009, are summarized as follows:
(3) Sales to Foreign Customers
Sales to foreign customers for the years ended March 31, 2010 and 2009, amounted to ￥43,499 million (＄467,730
thousand) and ￥55,694 million, respectively.
02 Financial Section
36
02Memo
37
Deloitte Touche Tohmatsu LLCMS Shibaura Building4-13-23, ShibauraMinato-ku, Tokyo 108-8530Japan
Tel : + 81 (3) 3457-7321Fax: + 81 (3) 3457-1694www.deloitte.com/jp
June 25, 2010
Member of
Deloitte Touche Tohmatsu
DeloitteINDEPENDENT AUDITORS' REPORT
To the Board of Directors ofJUKI CORPORATION:
We have audited the accompanying consolidated balance sheets of JUKI CORPORATION (the "Company") and
consolidated subsidiaries as of March 31, 2010 and 2009, and the related consolidated statements of operations, changes in
equity, and cash flows for the years then ended, all expressed in Japanese yen. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
consolidated financial position of JUKI CORPORATION and consolidated subsidiaries as of March 31, 2010 and 2009, and
the consolidated results of their operations and their cash flows for the years then ended in conformity with accounting
principles generally accepted in Japan.
Our audits also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, such
translation has been made in conformity with the basis stated in Note 1. Such U.S. dollar amounts are presented solely for
the convenience of readers outside Japan.
Millions of YenThousands ofU.S. Dollars
Trade notes discounted with banks………………………………………………… ￥166 ＄1,785
Millions of YenThousands ofU.S. Dollars
Depreciation expense……………………………………………………
Interest expense…………………………………………………………
TOTAL……………………………………………………………………
Lease payments…………………………………………………………
2010 2009 2010
￥496
20
￥516
￥534
￥689
35
￥724
￥739
＄5,335
215
＄5,550
＄5,737
Millions of Yen
As Lessee
As Lessor
Thousands ofU.S. Dollars
Due within one year………………………………………………………
Due after one year…………………………………………………………
TOTAL……………………………………………………………………
Due within one year………………………………………………………
Due after one year…………………………………………………………
TOTAL……………………………………………………………………
2010 2009 2010
￥148
105
￥253
￥26
67
￥93
￥173
105
￥278
￥25
92
￥117
＄1,597
1,128
＄2,725
＄276
724
＄1,000
Millions of Yen
Contract Amount Due afterOne Year
ContractAmountMarch 31, 2010
Foreign currency forward contracts:
Selling U.S.＄…………………………………………………………
Selling EUR……………………………………………………………
Currency swaps…………………………………………………………
￥11,589
1,365
169
UnrealizedGain/LossFair Value
￥(169)
85
￥(169)
85
March 31, 2010
Foreign currency forward contracts:
Selling U.S.＄………………………………………………………
Selling EUR…………………………………………………………
Currency swaps…………………………………………………………
＄124,617
14,676
1,818
Thousands of U.S. Dollars
Contract Amount Due afterOne Year
ContractAmount
UnrealizedGain/LossFair Value
＄(1,814)
913
(1)
＄(1,814)
913
(1)
Millions of Yen
Contract Amount Hedged ItemMarch 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… Long-term debt ￥13,110
Fair Value
Contract Amount Due afterOne Year
￥13,075 ￥(168)
Long-term debt
March 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… ＄140,968
Thousands of U.S. Dollars
Contract Amount Hedged Item Fair Value
Contract Amount Due afterOne Year
＄140,591 ＄(1,803)
Millions of Yen
Contract AmountHedged ItemMarch 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… Long-term debt ￥75
Fair Value
Contract Amount Due afterOne Year
￥75
Contract Amount
Long-term debt
March 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… ＄806
Thousands of U.S. Dollars
Hedged Item Fair Value
Contract Amount Due afterOne Year
＄806
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable＊1 ……………………………
Marketable and investment securities………………………………
TOTAL……………………………………………………………………
Short-term borrowings…………………………………………………
Payables…………………………………………………………………
Long-term debt＊2 ………………………………………………………
TOTAL……………………………………………………………………
Derivatives＊3 ……………………………………………………………
Millions of Yen
UnrealizedGain/Loss
FairValue
CarrynngAmount
￥8,349
12,061
1,767
￥22,177
￥(33,388)
(11,003)
(30,725)
￥(75,116)
￥(252)
￥8,349
12,061
1,767
￥22,177
￥(33,388)
(11,003)
(30,703)
￥(75,094)
￥(252)
￥(22)
￥(22)
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable＊1 ……………………………
Marketable and investment securities………………………………
TOTAL……………………………………………………………………
Short-term borrowings…………………………………………………
Payables…………………………………………………………………
Long-term debt＊2 ………………………………………………………
TOTAL……………………………………………………………………
Derivatives＊3 ……………………………………………………………
Thousands of U.S. Dollars
UnrealizedGain/Loss
FairValue
CarrynngAmount
＄89,770
129,694
18,998
＄238,462
＄(359,008)
(118,313)
(330,375)
＄(807,696)
＄(2,705)
＄89,770
129,694
18,998
＄238,462
＄(359,008)
(118,313)
(330,139)
＄(807,460)
＄(2,705)
＄(236)
＄(236)
March 31, 2010
Investments in equity instruments that do not
have a quoted market price in an active market………………
Carrynng Amount
Thousands ofU.S. Dollars
Millionsof Yen
￥233 ＄2,510
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable…………………………………
Marketable and investment securities―
Available-for-sale securities with contractual maturities………
TOTAL……………………………………………………………………
Millions of Yen
Due afterOne Year through
Five Years
Due in One Year
or Less
￥8,349
13,153
6
￥21,508
�
￥4
￥4
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable…………………………………
Marketable and investment securities―
Available-for-sale securities with contractual maturities………
TOTAL……………………………………………………………………
Thousands of U.S. Dollars
Due afterOne Year through
Five Years
Due in One Year
or Less
＄89,770
141,434
69
＄231,273
＄42
＄42
ConsolidatedEliminations/
CorporateOther
Millions of Yen
2009
Assets…………………………………………
Depreciation and amortization………………
Impairment loss………………………………
Capital expenditures…………………………
Industrial SewingMachines
Household SewingMachines
SMTSystems
Electronic Equipmentand Computer Peripherals
￥44,364
1,618
6
1,370
￥965
75
912
4
￥21,291
907
1,322
￥3,616
140
61
79
￥1,573
47
73
￥28,585
445
6,383
￥103,655
3,463
979
9,471
Precision Casting
￥3,261
231
240
Millions of Yen
AsiaNorth
AmericaJapan
2009
ConsolidatedEliminations /
CorporateEurope
Sales to customers……………………………………………
Intersegment sales……………………………………………
Total sales…………………………………………………
Operating expenses…………………………………………
Operating income (loss)………………………………………
Assets…………………………………………………………
￥25,695
37,180
62,875
67,562
￥(4,687)
￥45,949
￥8,184
53
8,237
8,181
￥56
￥7,894
￥34,780
9,904
44,684
45,654
￥(970)
￥30,072
￥9,173
67
9,240
9,045
￥195
￥6,753
￥(47,204)
(47,204)
(47,635)
￥431
￥12,987
￥77,832
77,832
82,807
￥(4,975)
￥103,655
Thousands of U.S. Dollars
AsiaNorth
AmericaJapan
2010
ConsolidatedEliminations /
CorporateEurope
Sales to customers……………………………………………
Intersegment sales……………………………………………
Total sales…………………………………………………
Operating expenses…………………………………………
Operating loss…………………………………………………
Assets…………………………………………………………
＄166,175
259,864
426,039
532,409
＄(106,370)
＄579,512
＄54,384
1,712
56,096
58,212
＄(2,116)
＄72,570
＄336,946
61,488
398,434
406,512
＄(8,078)
＄290,747
＄55,083
1,272
56,355
58,801
＄(2,446)
＄45,234
＄(324,336)
(324,336)
(323,052)
＄(1,284)
＄98,832
＄612,588
612,588
732,882
＄(120,294)
＄1,086,895
Millions of Yen
Sales to customers……………………………
Intersegment sales……………………………
Total sales…………………………………
Operating expenses…………………………
Operating income (loss)………………………
Industrial SewingMachines
2009
ConsolidatedEliminations/
CorporateOtherHousehold Sewing
MachinesSMT
SystemsElectronic Equipment
and Computer Peripherals
￥44,585
623
45,208
45,467
￥(259)
￥3,755
83
3,838
3,739
￥99
￥2,356
341
2,697
4,234
￥(1,537)
￥19,961
304
20,265
22,058
￥(1,793)
￥5,340
719
6,059
5,644
￥415
￥1,835
351
2,186
2,470
￥(284)
￥(2,421)
(2,421)
(805)
￥(1,616)
￥77,832
77,832
82,807
￥(4,975)
Precision Casting
ConsolidatedEliminations/
CorporateOther
Millions of Yen
2010
Assets…………………………………………
Depreciation and amortization………………
Impairment loss………………………………
Capital expenditures…………………………
Industrial SewingMachines
Household SewingMachines
SMTSystems
Electronic Equipmentand Computer Peripherals
￥44,333
1,404
18
795
￥543
48
3
￥22,775
846
547
￥2,663
90
16
￥1,705
63
55
19
￥26,083
881
52
6,505
￥101,081
3,535
125
8,031
Precision Casting
￥2,979
203
146
Millions of Yen
Sales to customers……………………………
Intersegment sales……………………………
Total sales…………………………………
Operating expenses…………………………
Operating income (loss)………………………
Industrial SewingMachines
2010
ConsolidatedEliminations/
CorporateOtherHousehold Sewing
MachinesSMT
SystemsElectronic Equipment
and Computer Peripherals
￥36,092
415
36,507
41,788
￥(5,281)
￥2,745
51
2,796
2,930
￥(134)
￥2,425
467
2,892
3,211
￥(319)
￥12,040
253
12,293
15,863
￥(3,570)
￥2,381
99
2,480
2,455
￥25
￥1,288
362
1,650
1,686
￥(36)
￥(1,647)
(1,647)
225
￥(1,872)
￥56,971
56,971
68,158
￥(11,187)
Precision Casting
ConsolidatedEliminations/
CorporateOther
Thousands of U.S. Dollars
2010
Assets…………………………………………
Depreciation and amortization………………
Impairment loss………………………………
Capital expenditures…………………………
Industrial SewingMachines
Household SewingMachines
SMTSystems
Electronic Equipmentand Computer Peripherals
＄476,696
15,099
196
8,548
＄5,838
519
36
＄244,897
9,092
5,883
＄28,631
969
170
＄18,339
680
594
206
＄280,464
9,469
553
69,940
＄1,086,895
38,006
1,343
86,351
Precision Casting
＄32,030
2,178
1,568
Thousands of U.S. Dollars
Sales to customers……………………………
Intersegment sales……………………………
Total sales…………………………………
Operating expenses…………………………
Operating income (loss)………………………
Industrial SewingMachines
2010
ConsolidatedEliminations/
CorporateOtherHousehold Sewing
MachinesSMT
SystemsElectronic Equipment
and Computer Peripherals
＄388,088
4,463
392,551
449,336
＄(56,785)
＄29,520
549
30,069
31,507
＄(1,438)
＄26,069
5,022
31,091
34,525
＄(3,434)
＄129,465
2,716
132,181
170,570
＄(38,389)
＄25,603
1,066
26,669
26,398
＄271
＄13,843
3,897
17,740
18,128
＄(388)
＄(17,713)
(17,713)
2,418
＄(20,131)
＄612,588
612,588
732,882
＄(120,294)
Precision Casting
Millions of Yen
AsiaNorth
AmericaJapan
2010
Sales to customers……………………………………………
Intersegment sales……………………………………………
Total sales…………………………………………………
Operating expenses…………………………………………
Operating loss…………………………………………………
Assets…………………………………………………………
ConsolidatedEliminations /
CorporateEurope
￥15,454
24,168
39,622
49,514
￥(9,892)
￥53,895
￥5,058
159
5,217
5,414
￥(197)
￥6,749
￥31,336
5,718
37,054
37,805
￥(751)
￥27,039
￥5,123
118
5,241
5,469
￥(228)
￥4,207
￥(30,163)
(30,163)
(30,044)
￥(119)
￥9,191
￥56,971
56,971
68,158
￥(11,187)
￥101,081
March 31, 2009
Foreign currency forward contracts:
Buying U.S.＄………………………………………………………
Selling EUR…………………………………………………………
Currency swaps…………………………………………………………
Millions of Yen
UnrealizedGain/LossFair Value
ContractAmount
￥8,581
1,757
169
￥8,724
1,825
￥(143)
(68)
15
16
17
18
20
19
02 Financial Section
28
02Financial Section
29
02 Financial Section
30
02Financial Section
31
02 Financial Section
32
02Financial Section
33
02 Financial Section
34
02Financial Section
35
Depreciation expense, interest expense and other information under finance leases:
Depreciation expense and interest expense, which are not reflected in the accompanying consolidated statements of
operations, are computed by the straight-line method and the interest method, respectively.
The minimum rental commitments under noncancelable operating leases at March 31, 2010 and 2009, were as follows:
FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
On 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 the guidance are applicable to financial instruments and related disclosures at the end of the fiscal
years ending on or after March 31, 2010 with early 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, mainly long-term debt including bank loans based on its capital financing 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 of interest and foreign currency rates.
(2) Nature and Extent of Risks Arising from Financial Instruments and Risk Management for Financial Instruments
(a) Receivables such as trade notes and trade accounts are exposed to customer credit risk. The Group manages its
credit risk from receivables on the basis of internal guidelines, which include monitoring of payment term and
balances of major customers by each business administration department to identify the default risk of customers in
early stage.
(b) Marketable and investment securities, mainly shares, are exposed to the risk of market price fluctuations. Marketable
and investment securities are managed by monitoring market values on a quarterly basis.
(c) Payment terms of payables, such as trade notes and trade accounts, are less than one year.
(d) Bank loans are used for operating capital (mainly short-term) and business investment capital (long-term). Interest-
rate risks in relation to a part of long-term debt are mitigated by using derivative of interest-rate swaps transactions.
(e) Derivative transactions entered into by the Company have been made in accordance with internal policies which
regulate the authorization and limit for transactions.
Credit risk of those derivatives are mitigated by using to major international financial institutions highly rated.
(f) Payables and bank loans are exposed to the liquidity risk. The Company has managed it by monitoring monthly
financial planning by each business administration department.
(3) Supplementation to Quantitative Information
The contract or notional amounts of derivatives which are shown in Note 16 do not represent the amounts exchanged by
the parties and do not measure the Company's exposure to credit or market risk.
(4) Fair Values of Financial Instruments
Fair values of financial instruments are based on quoted prices in active markets. If quoted price is not available, other
rational valuation techniques are used instead. Also please see Note 16 for the detail of fair value for derivatives.
(a) Fair value of financial instruments
＊1 Allowance for doubtful accounts is deducted from trade notes and accounts receivable.
＊2 Includes current portion of long-term debt and excludes obligation under finance leases and unsecured bonds.
＊3 Net receivables and payables derived as the result of derivative transactions are presented.
Values in parentheses represent net liabilities.
Cash and Cash Equivalents and Trade Notes and Accounts Receivable
The carrying values of cash and cash equivalents and trade notes and accounts receivable approximate fair value
because of their short maturities.
Marketable and Investment Securities
The fair values of marketable and investment securities are measured at the quoted market price on the stock
exchange for the equity instruments. The information of the fair value for the marketable and investment securities by
classification is included in Note 3.
Payables and Short-Term Borrowings
The carrying values of payables and short-term borrowings approximate fair value because of their short maturities.
Long-Term Debt
Long-term debt is determined by discounting the cash flows related to the debt at the corporate borrowing rates that
would presumably apply if similar borrowing were currently made.
A part of floating-rate long-term debt is entered into interest rate swap as a means of managing their interest rate
exposure. This debt is determined by discounting the cash flows including principal and interest related to the debt at the
corporate borrowing rates that would presumably apply if similar borrowing were currently made.
Derivatives
The information of the fair value for derivatives is included in Note 16.
(b) Financial instruments whose fair value cannot be reliably determined
(5) Maturity Analysis for Financial Assets and Securities with Contractual Maturities
Please see Note 8 for annual maturities of long-term debt and Note 14 for obligations under finance leases, respectively.
DERIVATIVES
The Group enters into derivatives including foreign exchange forward contracts, currency swaps, currency options and
interest rate swaps. The Group enters into derivatives in the normal course of business to reduce the exposure to
fluctuations in foreign exchange rates and interest rates. The Group does not hold derivatives for speculation.
Derivatives are subject to market risk and credit risk. Market risk is the exposure created by potential fluctuations in market
conditions, including interest or foreign exchange rates. Since most of the Group's derivative transactions are related to
qualified hedges of underlying business exposures, market risk in the derivative instruments is basically offset by opposite
movements in the value of the hedged assets or liabilities. Because the counterparties to those derivatives are limited to
major international financial institutions, the Group does not anticipate any losses arising from credit risk.
The basic policies for the use of derivatives are approved by the Board of Directors and the execution and control of
derivatives are controlled by the Finance Department. Each derivative transaction is periodically reported to the Board of
Directors, where evaluation and analysis of derivatives are made.
As noted in Note 15, 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 the end of the fiscal years
ending on or after March 31, 2010; therefore, the required information is disclosed only for 2010.
Derivative Transactions to Which Hedge Accounting Is Not Applied at March 31, 2010
Derivative Transactions to Which Hedge Accounting Is Applied at March 31, 2010
a. Derivative transactions qualifying for general accounting policies, deferral hedge accounting
b. Interest rate swap derivative transactions qualifying for exceptional accounting
The above interest rate swaps which qualify for hedge accounting and meet specific matching criteria are not remeasured at
market value but the differential paid or received under the swap agreements are recognized and included in interest
expense or income. In addition, the fair value of such interest rate swaps in Note 15 is included in that of hedged items (i.e.
long-term debt).
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.
Derivatives which qualify for hedge accounting for the year ended March 31, 2009 is excluded from the disclosure of market
value information.
The fair value of derivative transactions is measured at the quoted price obtained from the financial institution.
The contract or notional amounts of derivatives which are shown in the above table do not represent the amounts
exchanged by the parties and do not measure the Group's exposure to credit or market risk.
CONTINGENT LIABILITIES
Contingent liabilities at March 31, 2010 were as follows:
LOSS ON RESTRUCTURING DIVISIONS
Losses of ￥2,516 million for the year ended March 31, 2009 mainly resulted from extraordinary loss of closing plants with
disposal of their inventory and property, and extraordinary payments of employee's retirement benefits in conjunction with
restructuring divisions of industrial sewing machines, household sewing machines and others.
EXPENDITURES FOR RESTRUCTURING DIVISIONS
Expenditures For Restructuring Divisions mainly resulted from payment of restructuring costs of industrial sewing machines
and others.
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
a ) Sales and Operating Income (Loss)
b ) Assets, Depreciation, Impairment Loss and Capital Expenditures
a ) Sales and Operating Income (Loss)
b ) Assets, Depreciation, Impairment Loss and Capital Expenditures
a ) Sales and Operating Income (Loss)
b ) Assets, Depreciation, Impairment Loss and Capital Expenditures
(2) Geographical Segments
The geographical segments of the Group for the years ended March 31, 2010 and 2009, are summarized as follows:
(3) Sales to Foreign Customers
Sales to foreign customers for the years ended March 31, 2010 and 2009, amounted to ￥43,499 million (＄467,730
thousand) and ￥55,694 million, respectively.
02 Financial Section
36
02Memo
37
Deloitte Touche Tohmatsu LLCMS Shibaura Building4-13-23, ShibauraMinato-ku, Tokyo 108-8530Japan
Tel : + 81 (3) 3457-7321Fax: + 81 (3) 3457-1694www.deloitte.com/jp
June 25, 2010
Member of
Deloitte Touche Tohmatsu
DeloitteINDEPENDENT AUDITORS' REPORT
To the Board of Directors ofJUKI CORPORATION:
We have audited the accompanying consolidated balance sheets of JUKI CORPORATION (the "Company") and
consolidated subsidiaries as of March 31, 2010 and 2009, and the related consolidated statements of operations, changes in
equity, and cash flows for the years then ended, all expressed in Japanese yen. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
consolidated financial position of JUKI CORPORATION and consolidated subsidiaries as of March 31, 2010 and 2009, and
the consolidated results of their operations and their cash flows for the years then ended in conformity with accounting
principles generally accepted in Japan.
Our audits also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, such
translation has been made in conformity with the basis stated in Note 1. Such U.S. dollar amounts are presented solely for
the convenience of readers outside Japan.
Millions of YenThousands ofU.S. Dollars
Trade notes discounted with banks………………………………………………… ￥166 ＄1,785
Millions of YenThousands ofU.S. Dollars
Depreciation expense……………………………………………………
Interest expense…………………………………………………………
TOTAL……………………………………………………………………
Lease payments…………………………………………………………
2010 2009 2010
￥496
20
￥516
￥534
￥689
35
￥724
￥739
＄5,335
215
＄5,550
＄5,737
Millions of Yen
As Lessee
As Lessor
Thousands ofU.S. Dollars
Due within one year………………………………………………………
Due after one year…………………………………………………………
TOTAL……………………………………………………………………
Due within one year………………………………………………………
Due after one year…………………………………………………………
TOTAL……………………………………………………………………
2010 2009 2010
￥148
105
￥253
￥26
67
￥93
￥173
105
￥278
￥25
92
￥117
＄1,597
1,128
＄2,725
＄276
724
＄1,000
Millions of Yen
Contract Amount Due afterOne Year
ContractAmountMarch 31, 2010
Foreign currency forward contracts:
Selling U.S.＄…………………………………………………………
Selling EUR……………………………………………………………
Currency swaps…………………………………………………………
￥11,589
1,365
169
UnrealizedGain/LossFair Value
￥(169)
85
￥(169)
85
March 31, 2010
Foreign currency forward contracts:
Selling U.S.＄………………………………………………………
Selling EUR…………………………………………………………
Currency swaps…………………………………………………………
＄124,617
14,676
1,818
Thousands of U.S. Dollars
Contract Amount Due afterOne Year
ContractAmount
UnrealizedGain/LossFair Value
＄(1,814)
913
(1)
＄(1,814)
913
(1)
Millions of Yen
Contract Amount Hedged ItemMarch 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… Long-term debt ￥13,110
Fair Value
Contract Amount Due afterOne Year
￥13,075 ￥(168)
Long-term debt
March 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… ＄140,968
Thousands of U.S. Dollars
Contract Amount Hedged Item Fair Value
Contract Amount Due afterOne Year
＄140,591 ＄(1,803)
Millions of Yen
Contract AmountHedged ItemMarch 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… Long-term debt ￥75
Fair Value
Contract Amount Due afterOne Year
￥75
Contract Amount
Long-term debt
March 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… ＄806
Thousands of U.S. Dollars
Hedged Item Fair Value
Contract Amount Due afterOne Year
＄806
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable＊1 ……………………………
Marketable and investment securities………………………………
TOTAL……………………………………………………………………
Short-term borrowings…………………………………………………
Payables…………………………………………………………………
Long-term debt＊2 ………………………………………………………
TOTAL……………………………………………………………………
Derivatives＊3 ……………………………………………………………
Millions of Yen
UnrealizedGain/Loss
FairValue
CarrynngAmount
￥8,349
12,061
1,767
￥22,177
￥(33,388)
(11,003)
(30,725)
￥(75,116)
￥(252)
￥8,349
12,061
1,767
￥22,177
￥(33,388)
(11,003)
(30,703)
￥(75,094)
￥(252)
￥(22)
￥(22)
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable＊1 ……………………………
Marketable and investment securities………………………………
TOTAL……………………………………………………………………
Short-term borrowings…………………………………………………
Payables…………………………………………………………………
Long-term debt＊2 ………………………………………………………
TOTAL……………………………………………………………………
Derivatives＊3 ……………………………………………………………
Thousands of U.S. Dollars
UnrealizedGain/Loss
FairValue
CarrynngAmount
＄89,770
129,694
18,998
＄238,462
＄(359,008)
(118,313)
(330,375)
＄(807,696)
＄(2,705)
＄89,770
129,694
18,998
＄238,462
＄(359,008)
(118,313)
(330,139)
＄(807,460)
＄(2,705)
＄(236)
＄(236)
March 31, 2010
Investments in equity instruments that do not
have a quoted market price in an active market………………
Carrynng Amount
Thousands ofU.S. Dollars
Millionsof Yen
￥233 ＄2,510
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable…………………………………
Marketable and investment securities―
Available-for-sale securities with contractual maturities………
TOTAL……………………………………………………………………
Millions of Yen
Due afterOne Year through
Five Years
Due in One Year
or Less
￥8,349
13,153
6
￥21,508
�
￥4
￥4
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable…………………………………
Marketable and investment securities―
Available-for-sale securities with contractual maturities………
TOTAL……………………………………………………………………
Thousands of U.S. Dollars
Due afterOne Year through
Five Years
Due in One Year
or Less
＄89,770
141,434
69
＄231,273
＄42
＄42
ConsolidatedEliminations/
CorporateOther
Millions of Yen
2009
Assets…………………………………………
Depreciation and amortization………………
Impairment loss………………………………
Capital expenditures…………………………
Industrial SewingMachines
Household SewingMachines
SMTSystems
Electronic Equipmentand Computer Peripherals
￥44,364
1,618
6
1,370
￥965
75
912
4
￥21,291
907
1,322
￥3,616
140
61
79
￥1,573
47
73
￥28,585
445
6,383
￥103,655
3,463
979
9,471
Precision Casting
￥3,261
231
240
Millions of Yen
AsiaNorth
AmericaJapan
2009
ConsolidatedEliminations /
CorporateEurope
Sales to customers……………………………………………
Intersegment sales……………………………………………
Total sales…………………………………………………
Operating expenses…………………………………………
Operating income (loss)………………………………………
Assets…………………………………………………………
￥25,695
37,180
62,875
67,562
￥(4,687)
￥45,949
￥8,184
53
8,237
8,181
￥56
￥7,894
￥34,780
9,904
44,684
45,654
￥(970)
￥30,072
￥9,173
67
9,240
9,045
￥195
￥6,753
￥(47,204)
(47,204)
(47,635)
￥431
￥12,987
￥77,832
77,832
82,807
￥(4,975)
￥103,655
Thousands of U.S. Dollars
AsiaNorth
AmericaJapan
2010
ConsolidatedEliminations /
CorporateEurope
Sales to customers……………………………………………
Intersegment sales……………………………………………
Total sales…………………………………………………
Operating expenses…………………………………………
Operating loss…………………………………………………
Assets…………………………………………………………
＄166,175
259,864
426,039
532,409
＄(106,370)
＄579,512
＄54,384
1,712
56,096
58,212
＄(2,116)
＄72,570
＄336,946
61,488
398,434
406,512
＄(8,078)
＄290,747
＄55,083
1,272
56,355
58,801
＄(2,446)
＄45,234
＄(324,336)
(324,336)
(323,052)
＄(1,284)
＄98,832
＄612,588
612,588
732,882
＄(120,294)
＄1,086,895
Millions of Yen
Sales to customers……………………………
Intersegment sales……………………………
Total sales…………………………………
Operating expenses…………………………
Operating income (loss)………………………
Industrial SewingMachines
2009
ConsolidatedEliminations/
CorporateOtherHousehold Sewing
MachinesSMT
SystemsElectronic Equipment
and Computer Peripherals
￥44,585
623
45,208
45,467
￥(259)
￥3,755
83
3,838
3,739
￥99
￥2,356
341
2,697
4,234
￥(1,537)
￥19,961
304
20,265
22,058
￥(1,793)
￥5,340
719
6,059
5,644
￥415
￥1,835
351
2,186
2,470
￥(284)
￥(2,421)
(2,421)
(805)
￥(1,616)
￥77,832
77,832
82,807
￥(4,975)
Precision Casting
ConsolidatedEliminations/
CorporateOther
Millions of Yen
2010
Assets…………………………………………
Depreciation and amortization………………
Impairment loss………………………………
Capital expenditures…………………………
Industrial SewingMachines
Household SewingMachines
SMTSystems
Electronic Equipmentand Computer Peripherals
￥44,333
1,404
18
795
￥543
48
3
￥22,775
846
547
￥2,663
90
16
￥1,705
63
55
19
￥26,083
881
52
6,505
￥101,081
3,535
125
8,031
Precision Casting
￥2,979
203
146
Millions of Yen
Sales to customers……………………………
Intersegment sales……………………………
Total sales…………………………………
Operating expenses…………………………
Operating income (loss)………………………
Industrial SewingMachines
2010
ConsolidatedEliminations/
CorporateOtherHousehold Sewing
MachinesSMT
SystemsElectronic Equipment
and Computer Peripherals
￥36,092
415
36,507
41,788
￥(5,281)
￥2,745
51
2,796
2,930
￥(134)
￥2,425
467
2,892
3,211
￥(319)
￥12,040
253
12,293
15,863
￥(3,570)
￥2,381
99
2,480
2,455
￥25
￥1,288
362
1,650
1,686
￥(36)
￥(1,647)
(1,647)
225
￥(1,872)
￥56,971
56,971
68,158
￥(11,187)
Precision Casting
ConsolidatedEliminations/
CorporateOther
Thousands of U.S. Dollars
2010
Assets…………………………………………
Depreciation and amortization………………
Impairment loss………………………………
Capital expenditures…………………………
Industrial SewingMachines
Household SewingMachines
SMTSystems
Electronic Equipmentand Computer Peripherals
＄476,696
15,099
196
8,548
＄5,838
519
36
＄244,897
9,092
5,883
＄28,631
969
170
＄18,339
680
594
206
＄280,464
9,469
553
69,940
＄1,086,895
38,006
1,343
86,351
Precision Casting
＄32,030
2,178
1,568
Thousands of U.S. Dollars
Sales to customers……………………………
Intersegment sales……………………………
Total sales…………………………………
Operating expenses…………………………
Operating income (loss)………………………
Industrial SewingMachines
2010
ConsolidatedEliminations/
CorporateOtherHousehold Sewing
MachinesSMT
SystemsElectronic Equipment
and Computer Peripherals
＄388,088
4,463
392,551
449,336
＄(56,785)
＄29,520
549
30,069
31,507
＄(1,438)
＄26,069
5,022
31,091
34,525
＄(3,434)
＄129,465
2,716
132,181
170,570
＄(38,389)
＄25,603
1,066
26,669
26,398
＄271
＄13,843
3,897
17,740
18,128
＄(388)
＄(17,713)
(17,713)
2,418
＄(20,131)
＄612,588
612,588
732,882
＄(120,294)
Precision Casting
Millions of Yen
AsiaNorth
AmericaJapan
2010
Sales to customers……………………………………………
Intersegment sales……………………………………………
Total sales…………………………………………………
Operating expenses…………………………………………
Operating loss…………………………………………………
Assets…………………………………………………………
ConsolidatedEliminations /
CorporateEurope
￥15,454
24,168
39,622
49,514
￥(9,892)
￥53,895
￥5,058
159
5,217
5,414
￥(197)
￥6,749
￥31,336
5,718
37,054
37,805
￥(751)
￥27,039
￥5,123
118
5,241
5,469
￥(228)
￥4,207
￥(30,163)
(30,163)
(30,044)
￥(119)
￥9,191
￥56,971
56,971
68,158
￥(11,187)
￥101,081
March 31, 2009
Foreign currency forward contracts:
Buying U.S.＄………………………………………………………
Selling EUR…………………………………………………………
Currency swaps…………………………………………………………
Millions of Yen
UnrealizedGain/LossFair Value
ContractAmount
￥8,581
1,757
169
￥8,724
1,825
￥(143)
(68)
15
16
17
18
20
19
02 Financial Section
28
02Financial Section
29
02 Financial Section
30
02Financial Section
31
02 Financial Section
32
02Financial Section
33
02 Financial Section
34
02Financial Section
35
Depreciation expense, interest expense and other information under finance leases:
Depreciation expense and interest expense, which are not reflected in the accompanying consolidated statements of
operations, are computed by the straight-line method and the interest method, respectively.
The minimum rental commitments under noncancelable operating leases at March 31, 2010 and 2009, were as follows:
FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
On 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 the guidance are applicable to financial instruments and related disclosures at the end of the fiscal
years ending on or after March 31, 2010 with early 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, mainly long-term debt including bank loans based on its capital financing 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 of interest and foreign currency rates.
(2) Nature and Extent of Risks Arising from Financial Instruments and Risk Management for Financial Instruments
(a) Receivables such as trade notes and trade accounts are exposed to customer credit risk. The Group manages its
credit risk from receivables on the basis of internal guidelines, which include monitoring of payment term and
balances of major customers by each business administration department to identify the default risk of customers in
early stage.
(b) Marketable and investment securities, mainly shares, are exposed to the risk of market price fluctuations. Marketable
and investment securities are managed by monitoring market values on a quarterly basis.
(c) Payment terms of payables, such as trade notes and trade accounts, are less than one year.
(d) Bank loans are used for operating capital (mainly short-term) and business investment capital (long-term). Interest-
rate risks in relation to a part of long-term debt are mitigated by using derivative of interest-rate swaps transactions.
(e) Derivative transactions entered into by the Company have been made in accordance with internal policies which
regulate the authorization and limit for transactions.
Credit risk of those derivatives are mitigated by using to major international financial institutions highly rated.
(f) Payables and bank loans are exposed to the liquidity risk. The Company has managed it by monitoring monthly
financial planning by each business administration department.
(3) Supplementation to Quantitative Information
The contract or notional amounts of derivatives which are shown in Note 16 do not represent the amounts exchanged by
the parties and do not measure the Company's exposure to credit or market risk.
(4) Fair Values of Financial Instruments
Fair values of financial instruments are based on quoted prices in active markets. If quoted price is not available, other
rational valuation techniques are used instead. Also please see Note 16 for the detail of fair value for derivatives.
(a) Fair value of financial instruments
＊1 Allowance for doubtful accounts is deducted from trade notes and accounts receivable.
＊2 Includes current portion of long-term debt and excludes obligation under finance leases and unsecured bonds.
＊3 Net receivables and payables derived as the result of derivative transactions are presented.
Values in parentheses represent net liabilities.
Cash and Cash Equivalents and Trade Notes and Accounts Receivable
The carrying values of cash and cash equivalents and trade notes and accounts receivable approximate fair value
because of their short maturities.
Marketable and Investment Securities
The fair values of marketable and investment securities are measured at the quoted market price on the stock
exchange for the equity instruments. The information of the fair value for the marketable and investment securities by
classification is included in Note 3.
Payables and Short-Term Borrowings
The carrying values of payables and short-term borrowings approximate fair value because of their short maturities.
Long-Term Debt
Long-term debt is determined by discounting the cash flows related to the debt at the corporate borrowing rates that
would presumably apply if similar borrowing were currently made.
A part of floating-rate long-term debt is entered into interest rate swap as a means of managing their interest rate
exposure. This debt is determined by discounting the cash flows including principal and interest related to the debt at the
corporate borrowing rates that would presumably apply if similar borrowing were currently made.
Derivatives
The information of the fair value for derivatives is included in Note 16.
(b) Financial instruments whose fair value cannot be reliably determined
(5) Maturity Analysis for Financial Assets and Securities with Contractual Maturities
Please see Note 8 for annual maturities of long-term debt and Note 14 for obligations under finance leases, respectively.
DERIVATIVES
The Group enters into derivatives including foreign exchange forward contracts, currency swaps, currency options and
interest rate swaps. The Group enters into derivatives in the normal course of business to reduce the exposure to
fluctuations in foreign exchange rates and interest rates. The Group does not hold derivatives for speculation.
Derivatives are subject to market risk and credit risk. Market risk is the exposure created by potential fluctuations in market
conditions, including interest or foreign exchange rates. Since most of the Group's derivative transactions are related to
qualified hedges of underlying business exposures, market risk in the derivative instruments is basically offset by opposite
movements in the value of the hedged assets or liabilities. Because the counterparties to those derivatives are limited to
major international financial institutions, the Group does not anticipate any losses arising from credit risk.
The basic policies for the use of derivatives are approved by the Board of Directors and the execution and control of
derivatives are controlled by the Finance Department. Each derivative transaction is periodically reported to the Board of
Directors, where evaluation and analysis of derivatives are made.
As noted in Note 15, 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 the end of the fiscal years
ending on or after March 31, 2010; therefore, the required information is disclosed only for 2010.
Derivative Transactions to Which Hedge Accounting Is Not Applied at March 31, 2010
Derivative Transactions to Which Hedge Accounting Is Applied at March 31, 2010
a. Derivative transactions qualifying for general accounting policies, deferral hedge accounting
b. Interest rate swap derivative transactions qualifying for exceptional accounting
The above interest rate swaps which qualify for hedge accounting and meet specific matching criteria are not remeasured at
market value but the differential paid or received under the swap agreements are recognized and included in interest
expense or income. In addition, the fair value of such interest rate swaps in Note 15 is included in that of hedged items (i.e.
long-term debt).
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.
Derivatives which qualify for hedge accounting for the year ended March 31, 2009 is excluded from the disclosure of market
value information.
The fair value of derivative transactions is measured at the quoted price obtained from the financial institution.
The contract or notional amounts of derivatives which are shown in the above table do not represent the amounts
exchanged by the parties and do not measure the Group's exposure to credit or market risk.
CONTINGENT LIABILITIES
Contingent liabilities at March 31, 2010 were as follows:
LOSS ON RESTRUCTURING DIVISIONS
Losses of ￥2,516 million for the year ended March 31, 2009 mainly resulted from extraordinary loss of closing plants with
disposal of their inventory and property, and extraordinary payments of employee's retirement benefits in conjunction with
restructuring divisions of industrial sewing machines, household sewing machines and others.
EXPENDITURES FOR RESTRUCTURING DIVISIONS
Expenditures For Restructuring Divisions mainly resulted from payment of restructuring costs of industrial sewing machines
and others.
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
a ) Sales and Operating Income (Loss)
b ) Assets, Depreciation, Impairment Loss and Capital Expenditures
a ) Sales and Operating Income (Loss)
b ) Assets, Depreciation, Impairment Loss and Capital Expenditures
a ) Sales and Operating Income (Loss)
b ) Assets, Depreciation, Impairment Loss and Capital Expenditures
(2) Geographical Segments
The geographical segments of the Group for the years ended March 31, 2010 and 2009, are summarized as follows:
(3) Sales to Foreign Customers
Sales to foreign customers for the years ended March 31, 2010 and 2009, amounted to ￥43,499 million (＄467,730
thousand) and ￥55,694 million, respectively.
02 Financial Section
36
02Memo
37
Deloitte Touche Tohmatsu LLCMS Shibaura Building4-13-23, ShibauraMinato-ku, Tokyo 108-8530Japan
Tel : + 81 (3) 3457-7321Fax: + 81 (3) 3457-1694www.deloitte.com/jp
June 25, 2010
Member of
Deloitte Touche Tohmatsu
DeloitteINDEPENDENT AUDITORS' REPORT
To the Board of Directors ofJUKI CORPORATION:
We have audited the accompanying consolidated balance sheets of JUKI CORPORATION (the "Company") and
consolidated subsidiaries as of March 31, 2010 and 2009, and the related consolidated statements of operations, changes in
equity, and cash flows for the years then ended, all expressed in Japanese yen. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
consolidated financial position of JUKI CORPORATION and consolidated subsidiaries as of March 31, 2010 and 2009, and
the consolidated results of their operations and their cash flows for the years then ended in conformity with accounting
principles generally accepted in Japan.
Our audits also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, such
translation has been made in conformity with the basis stated in Note 1. Such U.S. dollar amounts are presented solely for
the convenience of readers outside Japan.
Millions of YenThousands ofU.S. Dollars
Trade notes discounted with banks………………………………………………… ￥166 ＄1,785
Millions of YenThousands ofU.S. Dollars
Depreciation expense……………………………………………………
Interest expense…………………………………………………………
TOTAL……………………………………………………………………
Lease payments…………………………………………………………
2010 2009 2010
￥496
20
￥516
￥534
￥689
35
￥724
￥739
＄5,335
215
＄5,550
＄5,737
Millions of Yen
As Lessee
As Lessor
Thousands ofU.S. Dollars
Due within one year………………………………………………………
Due after one year…………………………………………………………
TOTAL……………………………………………………………………
Due within one year………………………………………………………
Due after one year…………………………………………………………
TOTAL……………………………………………………………………
2010 2009 2010
￥148
105
￥253
￥26
67
￥93
￥173
105
￥278
￥25
92
￥117
＄1,597
1,128
＄2,725
＄276
724
＄1,000
Millions of Yen
Contract Amount Due afterOne Year
ContractAmountMarch 31, 2010
Foreign currency forward contracts:
Selling U.S.＄…………………………………………………………
Selling EUR……………………………………………………………
Currency swaps…………………………………………………………
￥11,589
1,365
169
UnrealizedGain/LossFair Value
￥(169)
85
￥(169)
85
March 31, 2010
Foreign currency forward contracts:
Selling U.S.＄………………………………………………………
Selling EUR…………………………………………………………
Currency swaps…………………………………………………………
＄124,617
14,676
1,818
Thousands of U.S. Dollars
Contract Amount Due afterOne Year
ContractAmount
UnrealizedGain/LossFair Value
＄(1,814)
913
(1)
＄(1,814)
913
(1)
Millions of Yen
Contract Amount Hedged ItemMarch 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… Long-term debt ￥13,110
Fair Value
Contract Amount Due afterOne Year
￥13,075 ￥(168)
Long-term debt
March 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… ＄140,968
Thousands of U.S. Dollars
Contract Amount Hedged Item Fair Value
Contract Amount Due afterOne Year
＄140,591 ＄(1,803)
Millions of Yen
Contract AmountHedged ItemMarch 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… Long-term debt ￥75
Fair Value
Contract Amount Due afterOne Year
￥75
Contract Amount
Long-term debt
March 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… ＄806
Thousands of U.S. Dollars
Hedged Item Fair Value
Contract Amount Due afterOne Year
＄806
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable＊1 ……………………………
Marketable and investment securities………………………………
TOTAL……………………………………………………………………
Short-term borrowings…………………………………………………
Payables…………………………………………………………………
Long-term debt＊2 ………………………………………………………
TOTAL……………………………………………………………………
Derivatives＊3 ……………………………………………………………
Millions of Yen
UnrealizedGain/Loss
FairValue
CarrynngAmount
￥8,349
12,061
1,767
￥22,177
￥(33,388)
(11,003)
(30,725)
￥(75,116)
￥(252)
￥8,349
12,061
1,767
￥22,177
￥(33,388)
(11,003)
(30,703)
￥(75,094)
￥(252)
￥(22)
￥(22)
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable＊1 ……………………………
Marketable and investment securities………………………………
TOTAL……………………………………………………………………
Short-term borrowings…………………………………………………
Payables…………………………………………………………………
Long-term debt＊2 ………………………………………………………
TOTAL……………………………………………………………………
Derivatives＊3 ……………………………………………………………
Thousands of U.S. Dollars
UnrealizedGain/Loss
FairValue
CarrynngAmount
＄89,770
129,694
18,998
＄238,462
＄(359,008)
(118,313)
(330,375)
＄(807,696)
＄(2,705)
＄89,770
129,694
18,998
＄238,462
＄(359,008)
(118,313)
(330,139)
＄(807,460)
＄(2,705)
＄(236)
＄(236)
March 31, 2010
Investments in equity instruments that do not
have a quoted market price in an active market………………
Carrynng Amount
Thousands ofU.S. Dollars
Millionsof Yen
￥233 ＄2,510
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable…………………………………
Marketable and investment securities―
Available-for-sale securities with contractual maturities………
TOTAL……………………………………………………………………
Millions of Yen
Due afterOne Year through
Five Years
Due in One Year
or Less
￥8,349
13,153
6
￥21,508
�
￥4
￥4
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable…………………………………
Marketable and investment securities―
Available-for-sale securities with contractual maturities………
TOTAL……………………………………………………………………
Thousands of U.S. Dollars
Due afterOne Year through
Five Years
Due in One Year
or Less
＄89,770
141,434
69
＄231,273
＄42
＄42
ConsolidatedEliminations/
CorporateOther
Millions of Yen
2009
Assets…………………………………………
Depreciation and amortization………………
Impairment loss………………………………
Capital expenditures…………………………
Industrial SewingMachines
Household SewingMachines
SMTSystems
Electronic Equipmentand Computer Peripherals
￥44,364
1,618
6
1,370
￥965
75
912
4
￥21,291
907
1,322
￥3,616
140
61
79
￥1,573
47
73
￥28,585
445
6,383
￥103,655
3,463
979
9,471
Precision Casting
￥3,261
231
240
Millions of Yen
AsiaNorth
AmericaJapan
2009
ConsolidatedEliminations /
CorporateEurope
Sales to customers……………………………………………
Intersegment sales……………………………………………
Total sales…………………………………………………
Operating expenses…………………………………………
Operating income (loss)………………………………………
Assets…………………………………………………………
￥25,695
37,180
62,875
67,562
￥(4,687)
￥45,949
￥8,184
53
8,237
8,181
￥56
￥7,894
￥34,780
9,904
44,684
45,654
￥(970)
￥30,072
￥9,173
67
9,240
9,045
￥195
￥6,753
￥(47,204)
(47,204)
(47,635)
￥431
￥12,987
￥77,832
77,832
82,807
￥(4,975)
￥103,655
Thousands of U.S. Dollars
AsiaNorth
AmericaJapan
2010
ConsolidatedEliminations /
CorporateEurope
Sales to customers……………………………………………
Intersegment sales……………………………………………
Total sales…………………………………………………
Operating expenses…………………………………………
Operating loss…………………………………………………
Assets…………………………………………………………
＄166,175
259,864
426,039
532,409
＄(106,370)
＄579,512
＄54,384
1,712
56,096
58,212
＄(2,116)
＄72,570
＄336,946
61,488
398,434
406,512
＄(8,078)
＄290,747
＄55,083
1,272
56,355
58,801
＄(2,446)
＄45,234
＄(324,336)
(324,336)
(323,052)
＄(1,284)
＄98,832
＄612,588
612,588
732,882
＄(120,294)
＄1,086,895
Millions of Yen
Sales to customers……………………………
Intersegment sales……………………………
Total sales…………………………………
Operating expenses…………………………
Operating income (loss)………………………
Industrial SewingMachines
2009
ConsolidatedEliminations/
CorporateOtherHousehold Sewing
MachinesSMT
SystemsElectronic Equipment
and Computer Peripherals
￥44,585
623
45,208
45,467
￥(259)
￥3,755
83
3,838
3,739
￥99
￥2,356
341
2,697
4,234
￥(1,537)
￥19,961
304
20,265
22,058
￥(1,793)
￥5,340
719
6,059
5,644
￥415
￥1,835
351
2,186
2,470
￥(284)
￥(2,421)
(2,421)
(805)
￥(1,616)
￥77,832
77,832
82,807
￥(4,975)
Precision Casting
ConsolidatedEliminations/
CorporateOther
Millions of Yen
2010
Assets…………………………………………
Depreciation and amortization………………
Impairment loss………………………………
Capital expenditures…………………………
Industrial SewingMachines
Household SewingMachines
SMTSystems
Electronic Equipmentand Computer Peripherals
￥44,333
1,404
18
795
￥543
48
3
￥22,775
846
547
￥2,663
90
16
￥1,705
63
55
19
￥26,083
881
52
6,505
￥101,081
3,535
125
8,031
Precision Casting
￥2,979
203
146
Millions of Yen
Sales to customers……………………………
Intersegment sales……………………………
Total sales…………………………………
Operating expenses…………………………
Operating income (loss)………………………
Industrial SewingMachines
2010
ConsolidatedEliminations/
CorporateOtherHousehold Sewing
MachinesSMT
SystemsElectronic Equipment
and Computer Peripherals
￥36,092
415
36,507
41,788
￥(5,281)
￥2,745
51
2,796
2,930
￥(134)
￥2,425
467
2,892
3,211
￥(319)
￥12,040
253
12,293
15,863
￥(3,570)
￥2,381
99
2,480
2,455
￥25
￥1,288
362
1,650
1,686
￥(36)
￥(1,647)
(1,647)
225
￥(1,872)
￥56,971
56,971
68,158
￥(11,187)
Precision Casting
ConsolidatedEliminations/
CorporateOther
Thousands of U.S. Dollars
2010
Assets…………………………………………
Depreciation and amortization………………
Impairment loss………………………………
Capital expenditures…………………………
Industrial SewingMachines
Household SewingMachines
SMTSystems
Electronic Equipmentand Computer Peripherals
＄476,696
15,099
196
8,548
＄5,838
519
36
＄244,897
9,092
5,883
＄28,631
969
170
＄18,339
680
594
206
＄280,464
9,469
553
69,940
＄1,086,895
38,006
1,343
86,351
Precision Casting
＄32,030
2,178
1,568
Thousands of U.S. Dollars
Sales to customers……………………………
Intersegment sales……………………………
Total sales…………………………………
Operating expenses…………………………
Operating income (loss)………………………
Industrial SewingMachines
2010
ConsolidatedEliminations/
CorporateOtherHousehold Sewing
MachinesSMT
SystemsElectronic Equipment
and Computer Peripherals
＄388,088
4,463
392,551
449,336
＄(56,785)
＄29,520
549
30,069
31,507
＄(1,438)
＄26,069
5,022
31,091
34,525
＄(3,434)
＄129,465
2,716
132,181
170,570
＄(38,389)
＄25,603
1,066
26,669
26,398
＄271
＄13,843
3,897
17,740
18,128
＄(388)
＄(17,713)
(17,713)
2,418
＄(20,131)
＄612,588
612,588
732,882
＄(120,294)
Precision Casting
Millions of Yen
AsiaNorth
AmericaJapan
2010
Sales to customers……………………………………………
Intersegment sales……………………………………………
Total sales…………………………………………………
Operating expenses…………………………………………
Operating loss…………………………………………………
Assets…………………………………………………………
ConsolidatedEliminations /
CorporateEurope
￥15,454
24,168
39,622
49,514
￥(9,892)
￥53,895
￥5,058
159
5,217
5,414
￥(197)
￥6,749
￥31,336
5,718
37,054
37,805
￥(751)
￥27,039
￥5,123
118
5,241
5,469
￥(228)
￥4,207
￥(30,163)
(30,163)
(30,044)
￥(119)
￥9,191
￥56,971
56,971
68,158
￥(11,187)
￥101,081
March 31, 2009
Foreign currency forward contracts:
Buying U.S.＄………………………………………………………
Selling EUR…………………………………………………………
Currency swaps…………………………………………………………
Millions of Yen
UnrealizedGain/LossFair Value
ContractAmount
￥8,581
1,757
169
￥8,724
1,825
￥(143)
(68)
15
16
17
18
20
19
02 Financial Section
28
02Financial Section
29
02 Financial Section
30
02Financial Section
31
02 Financial Section
32
02Financial Section
33
02 Financial Section
34
02Financial Section
35
Depreciation expense, interest expense and other information under finance leases:
Depreciation expense and interest expense, which are not reflected in the accompanying consolidated statements of
operations, are computed by the straight-line method and the interest method, respectively.
The minimum rental commitments under noncancelable operating leases at March 31, 2010 and 2009, were as follows:
FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
On 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 the guidance are applicable to financial instruments and related disclosures at the end of the fiscal
years ending on or after March 31, 2010 with early 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, mainly long-term debt including bank loans based on its capital financing 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 of interest and foreign currency rates.
(2) Nature and Extent of Risks Arising from Financial Instruments and Risk Management for Financial Instruments
(a) Receivables such as trade notes and trade accounts are exposed to customer credit risk. The Group manages its
credit risk from receivables on the basis of internal guidelines, which include monitoring of payment term and
balances of major customers by each business administration department to identify the default risk of customers in
early stage.
(b) Marketable and investment securities, mainly shares, are exposed to the risk of market price fluctuations. Marketable
and investment securities are managed by monitoring market values on a quarterly basis.
(c) Payment terms of payables, such as trade notes and trade accounts, are less than one year.
(d) Bank loans are used for operating capital (mainly short-term) and business investment capital (long-term). Interest-
rate risks in relation to a part of long-term debt are mitigated by using derivative of interest-rate swaps transactions.
(e) Derivative transactions entered into by the Company have been made in accordance with internal policies which
regulate the authorization and limit for transactions.
Credit risk of those derivatives are mitigated by using to major international financial institutions highly rated.
(f) Payables and bank loans are exposed to the liquidity risk. The Company has managed it by monitoring monthly
financial planning by each business administration department.
(3) Supplementation to Quantitative Information
The contract or notional amounts of derivatives which are shown in Note 16 do not represent the amounts exchanged by
the parties and do not measure the Company's exposure to credit or market risk.
(4) Fair Values of Financial Instruments
Fair values of financial instruments are based on quoted prices in active markets. If quoted price is not available, other
rational valuation techniques are used instead. Also please see Note 16 for the detail of fair value for derivatives.
(a) Fair value of financial instruments
＊1 Allowance for doubtful accounts is deducted from trade notes and accounts receivable.
＊2 Includes current portion of long-term debt and excludes obligation under finance leases and unsecured bonds.
＊3 Net receivables and payables derived as the result of derivative transactions are presented.
Values in parentheses represent net liabilities.
Cash and Cash Equivalents and Trade Notes and Accounts Receivable
The carrying values of cash and cash equivalents and trade notes and accounts receivable approximate fair value
because of their short maturities.
Marketable and Investment Securities
The fair values of marketable and investment securities are measured at the quoted market price on the stock
exchange for the equity instruments. The information of the fair value for the marketable and investment securities by
classification is included in Note 3.
Payables and Short-Term Borrowings
The carrying values of payables and short-term borrowings approximate fair value because of their short maturities.
Long-Term Debt
Long-term debt is determined by discounting the cash flows related to the debt at the corporate borrowing rates that
would presumably apply if similar borrowing were currently made.
A part of floating-rate long-term debt is entered into interest rate swap as a means of managing their interest rate
exposure. This debt is determined by discounting the cash flows including principal and interest related to the debt at the
corporate borrowing rates that would presumably apply if similar borrowing were currently made.
Derivatives
The information of the fair value for derivatives is included in Note 16.
(b) Financial instruments whose fair value cannot be reliably determined
(5) Maturity Analysis for Financial Assets and Securities with Contractual Maturities
Please see Note 8 for annual maturities of long-term debt and Note 14 for obligations under finance leases, respectively.
DERIVATIVES
The Group enters into derivatives including foreign exchange forward contracts, currency swaps, currency options and
interest rate swaps. The Group enters into derivatives in the normal course of business to reduce the exposure to
fluctuations in foreign exchange rates and interest rates. The Group does not hold derivatives for speculation.
Derivatives are subject to market risk and credit risk. Market risk is the exposure created by potential fluctuations in market
conditions, including interest or foreign exchange rates. Since most of the Group's derivative transactions are related to
qualified hedges of underlying business exposures, market risk in the derivative instruments is basically offset by opposite
movements in the value of the hedged assets or liabilities. Because the counterparties to those derivatives are limited to
major international financial institutions, the Group does not anticipate any losses arising from credit risk.
The basic policies for the use of derivatives are approved by the Board of Directors and the execution and control of
derivatives are controlled by the Finance Department. Each derivative transaction is periodically reported to the Board of
Directors, where evaluation and analysis of derivatives are made.
As noted in Note 15, 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 the end of the fiscal years
ending on or after March 31, 2010; therefore, the required information is disclosed only for 2010.
Derivative Transactions to Which Hedge Accounting Is Not Applied at March 31, 2010
Derivative Transactions to Which Hedge Accounting Is Applied at March 31, 2010
a. Derivative transactions qualifying for general accounting policies, deferral hedge accounting
b. Interest rate swap derivative transactions qualifying for exceptional accounting
The above interest rate swaps which qualify for hedge accounting and meet specific matching criteria are not remeasured at
market value but the differential paid or received under the swap agreements are recognized and included in interest
expense or income. In addition, the fair value of such interest rate swaps in Note 15 is included in that of hedged items (i.e.
long-term debt).
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.
Derivatives which qualify for hedge accounting for the year ended March 31, 2009 is excluded from the disclosure of market
value information.
The fair value of derivative transactions is measured at the quoted price obtained from the financial institution.
The contract or notional amounts of derivatives which are shown in the above table do not represent the amounts
exchanged by the parties and do not measure the Group's exposure to credit or market risk.
CONTINGENT LIABILITIES
Contingent liabilities at March 31, 2010 were as follows:
LOSS ON RESTRUCTURING DIVISIONS
Losses of ￥2,516 million for the year ended March 31, 2009 mainly resulted from extraordinary loss of closing plants with
disposal of their inventory and property, and extraordinary payments of employee's retirement benefits in conjunction with
restructuring divisions of industrial sewing machines, household sewing machines and others.
EXPENDITURES FOR RESTRUCTURING DIVISIONS
Expenditures For Restructuring Divisions mainly resulted from payment of restructuring costs of industrial sewing machines
and others.
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
a ) Sales and Operating Income (Loss)
b ) Assets, Depreciation, Impairment Loss and Capital Expenditures
a ) Sales and Operating Income (Loss)
b ) Assets, Depreciation, Impairment Loss and Capital Expenditures
a ) Sales and Operating Income (Loss)
b ) Assets, Depreciation, Impairment Loss and Capital Expenditures
(2) Geographical Segments
The geographical segments of the Group for the years ended March 31, 2010 and 2009, are summarized as follows:
(3) Sales to Foreign Customers
Sales to foreign customers for the years ended March 31, 2010 and 2009, amounted to ￥43,499 million (＄467,730
thousand) and ￥55,694 million, respectively.
02 Financial Section
36
02Memo
37
Deloitte Touche Tohmatsu LLCMS Shibaura Building4-13-23, ShibauraMinato-ku, Tokyo 108-8530Japan
Tel : + 81 (3) 3457-7321Fax: + 81 (3) 3457-1694www.deloitte.com/jp
June 25, 2010
Member of
Deloitte Touche Tohmatsu
DeloitteINDEPENDENT AUDITORS' REPORT
To the Board of Directors ofJUKI CORPORATION:
We have audited the accompanying consolidated balance sheets of JUKI CORPORATION (the "Company") and
consolidated subsidiaries as of March 31, 2010 and 2009, and the related consolidated statements of operations, changes in
equity, and cash flows for the years then ended, all expressed in Japanese yen. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
consolidated financial position of JUKI CORPORATION and consolidated subsidiaries as of March 31, 2010 and 2009, and
the consolidated results of their operations and their cash flows for the years then ended in conformity with accounting
principles generally accepted in Japan.
Our audits also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, such
translation has been made in conformity with the basis stated in Note 1. Such U.S. dollar amounts are presented solely for
the convenience of readers outside Japan.
Millions of YenThousands ofU.S. Dollars
Trade notes discounted with banks………………………………………………… ￥166 ＄1,785
Millions of YenThousands ofU.S. Dollars
Depreciation expense……………………………………………………
Interest expense…………………………………………………………
TOTAL……………………………………………………………………
Lease payments…………………………………………………………
2010 2009 2010
￥496
20
￥516
￥534
￥689
35
￥724
￥739
＄5,335
215
＄5,550
＄5,737
Millions of Yen
As Lessee
As Lessor
Thousands ofU.S. Dollars
Due within one year………………………………………………………
Due after one year…………………………………………………………
TOTAL……………………………………………………………………
Due within one year………………………………………………………
Due after one year…………………………………………………………
TOTAL……………………………………………………………………
2010 2009 2010
￥148
105
￥253
￥26
67
￥93
￥173
105
￥278
￥25
92
￥117
＄1,597
1,128
＄2,725
＄276
724
＄1,000
Millions of Yen
Contract Amount Due afterOne Year
ContractAmountMarch 31, 2010
Foreign currency forward contracts:
Selling U.S.＄…………………………………………………………
Selling EUR……………………………………………………………
Currency swaps…………………………………………………………
￥11,589
1,365
169
UnrealizedGain/LossFair Value
￥(169)
85
￥(169)
85
March 31, 2010
Foreign currency forward contracts:
Selling U.S.＄………………………………………………………
Selling EUR…………………………………………………………
Currency swaps…………………………………………………………
＄124,617
14,676
1,818
Thousands of U.S. Dollars
Contract Amount Due afterOne Year
ContractAmount
UnrealizedGain/LossFair Value
＄(1,814)
913
(1)
＄(1,814)
913
(1)
Millions of Yen
Contract Amount Hedged ItemMarch 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… Long-term debt ￥13,110
Fair Value
Contract Amount Due afterOne Year
￥13,075 ￥(168)
Long-term debt
March 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… ＄140,968
Thousands of U.S. Dollars
Contract Amount Hedged Item Fair Value
Contract Amount Due afterOne Year
＄140,591 ＄(1,803)
Millions of Yen
Contract AmountHedged ItemMarch 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… Long-term debt ￥75
Fair Value
Contract Amount Due afterOne Year
￥75
Contract Amount
Long-term debt
March 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… ＄806
Thousands of U.S. Dollars
Hedged Item Fair Value
Contract Amount Due afterOne Year
＄806
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable＊1 ……………………………
Marketable and investment securities………………………………
TOTAL……………………………………………………………………
Short-term borrowings…………………………………………………
Payables…………………………………………………………………
Long-term debt＊2 ………………………………………………………
TOTAL……………………………………………………………………
Derivatives＊3 ……………………………………………………………
Millions of Yen
UnrealizedGain/Loss
FairValue
CarrynngAmount
￥8,349
12,061
1,767
￥22,177
￥(33,388)
(11,003)
(30,725)
￥(75,116)
￥(252)
￥8,349
12,061
1,767
￥22,177
￥(33,388)
(11,003)
(30,703)
￥(75,094)
￥(252)
￥(22)
￥(22)
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable＊1 ……………………………
Marketable and investment securities………………………………
TOTAL……………………………………………………………………
Short-term borrowings…………………………………………………
Payables…………………………………………………………………
Long-term debt＊2 ………………………………………………………
TOTAL……………………………………………………………………
Derivatives＊3 ……………………………………………………………
Thousands of U.S. Dollars
UnrealizedGain/Loss
FairValue
CarrynngAmount
＄89,770
129,694
18,998
＄238,462
＄(359,008)
(118,313)
(330,375)
＄(807,696)
＄(2,705)
＄89,770
129,694
18,998
＄238,462
＄(359,008)
(118,313)
(330,139)
＄(807,460)
＄(2,705)
＄(236)
＄(236)
March 31, 2010
Investments in equity instruments that do not
have a quoted market price in an active market………………
Carrynng Amount
Thousands ofU.S. Dollars
Millionsof Yen
￥233 ＄2,510
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable…………………………………
Marketable and investment securities―
Available-for-sale securities with contractual maturities………
TOTAL……………………………………………………………………
Millions of Yen
Due afterOne Year through
Five Years
Due in One Year
or Less
￥8,349
13,153
6
￥21,508
�
￥4
￥4
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable…………………………………
Marketable and investment securities―
Available-for-sale securities with contractual maturities………
TOTAL……………………………………………………………………
Thousands of U.S. Dollars
Due afterOne Year through
Five Years
Due in One Year
or Less
＄89,770
141,434
69
＄231,273
＄42
＄42
ConsolidatedEliminations/
CorporateOther
Millions of Yen
2009
Assets…………………………………………
Depreciation and amortization………………
Impairment loss………………………………
Capital expenditures…………………………
Industrial SewingMachines
Household SewingMachines
SMTSystems
Electronic Equipmentand Computer Peripherals
￥44,364
1,618
6
1,370
￥965
75
912
4
￥21,291
907
1,322
￥3,616
140
61
79
￥1,573
47
73
￥28,585
445
6,383
￥103,655
3,463
979
9,471
Precision Casting
￥3,261
231
240
Millions of Yen
AsiaNorth
AmericaJapan
2009
ConsolidatedEliminations /
CorporateEurope
Sales to customers……………………………………………
Intersegment sales……………………………………………
Total sales…………………………………………………
Operating expenses…………………………………………
Operating income (loss)………………………………………
Assets…………………………………………………………
￥25,695
37,180
62,875
67,562
￥(4,687)
￥45,949
￥8,184
53
8,237
8,181
￥56
￥7,894
￥34,780
9,904
44,684
45,654
￥(970)
￥30,072
￥9,173
67
9,240
9,045
￥195
￥6,753
￥(47,204)
(47,204)
(47,635)
￥431
￥12,987
￥77,832
77,832
82,807
￥(4,975)
￥103,655
Thousands of U.S. Dollars
AsiaNorth
AmericaJapan
2010
ConsolidatedEliminations /
CorporateEurope
Sales to customers……………………………………………
Intersegment sales……………………………………………
Total sales…………………………………………………
Operating expenses…………………………………………
Operating loss…………………………………………………
Assets…………………………………………………………
＄166,175
259,864
426,039
532,409
＄(106,370)
＄579,512
＄54,384
1,712
56,096
58,212
＄(2,116)
＄72,570
＄336,946
61,488
398,434
406,512
＄(8,078)
＄290,747
＄55,083
1,272
56,355
58,801
＄(2,446)
＄45,234
＄(324,336)
(324,336)
(323,052)
＄(1,284)
＄98,832
＄612,588
612,588
732,882
＄(120,294)
＄1,086,895
Millions of Yen
Sales to customers……………………………
Intersegment sales……………………………
Total sales…………………………………
Operating expenses…………………………
Operating income (loss)………………………
Industrial SewingMachines
2009
ConsolidatedEliminations/
CorporateOtherHousehold Sewing
MachinesSMT
SystemsElectronic Equipment
and Computer Peripherals
￥44,585
623
45,208
45,467
￥(259)
￥3,755
83
3,838
3,739
￥99
￥2,356
341
2,697
4,234
￥(1,537)
￥19,961
304
20,265
22,058
￥(1,793)
￥5,340
719
6,059
5,644
￥415
￥1,835
351
2,186
2,470
￥(284)
￥(2,421)
(2,421)
(805)
￥(1,616)
￥77,832
77,832
82,807
￥(4,975)
Precision Casting
ConsolidatedEliminations/
CorporateOther
Millions of Yen
2010
Assets…………………………………………
Depreciation and amortization………………
Impairment loss………………………………
Capital expenditures…………………………
Industrial SewingMachines
Household SewingMachines
SMTSystems
Electronic Equipmentand Computer Peripherals
￥44,333
1,404
18
795
￥543
48
3
￥22,775
846
547
￥2,663
90
16
￥1,705
63
55
19
￥26,083
881
52
6,505
￥101,081
3,535
125
8,031
Precision Casting
￥2,979
203
146
Millions of Yen
Sales to customers……………………………
Intersegment sales……………………………
Total sales…………………………………
Operating expenses…………………………
Operating income (loss)………………………
Industrial SewingMachines
2010
ConsolidatedEliminations/
CorporateOtherHousehold Sewing
MachinesSMT
SystemsElectronic Equipment
and Computer Peripherals
￥36,092
415
36,507
41,788
￥(5,281)
￥2,745
51
2,796
2,930
￥(134)
￥2,425
467
2,892
3,211
￥(319)
￥12,040
253
12,293
15,863
￥(3,570)
￥2,381
99
2,480
2,455
￥25
￥1,288
362
1,650
1,686
￥(36)
￥(1,647)
(1,647)
225
￥(1,872)
￥56,971
56,971
68,158
￥(11,187)
Precision Casting
ConsolidatedEliminations/
CorporateOther
Thousands of U.S. Dollars
2010
Assets…………………………………………
Depreciation and amortization………………
Impairment loss………………………………
Capital expenditures…………………………
Industrial SewingMachines
Household SewingMachines
SMTSystems
Electronic Equipmentand Computer Peripherals
＄476,696
15,099
196
8,548
＄5,838
519
36
＄244,897
9,092
5,883
＄28,631
969
170
＄18,339
680
594
206
＄280,464
9,469
553
69,940
＄1,086,895
38,006
1,343
86,351
Precision Casting
＄32,030
2,178
1,568
Thousands of U.S. Dollars
Sales to customers……………………………
Intersegment sales……………………………
Total sales…………………………………
Operating expenses…………………………
Operating income (loss)………………………
Industrial SewingMachines
2010
ConsolidatedEliminations/
CorporateOtherHousehold Sewing
MachinesSMT
SystemsElectronic Equipment
and Computer Peripherals
＄388,088
4,463
392,551
449,336
＄(56,785)
＄29,520
549
30,069
31,507
＄(1,438)
＄26,069
5,022
31,091
34,525
＄(3,434)
＄129,465
2,716
132,181
170,570
＄(38,389)
＄25,603
1,066
26,669
26,398
＄271
＄13,843
3,897
17,740
18,128
＄(388)
＄(17,713)
(17,713)
2,418
＄(20,131)
＄612,588
612,588
732,882
＄(120,294)
Precision Casting
Millions of Yen
AsiaNorth
AmericaJapan
2010
Sales to customers……………………………………………
Intersegment sales……………………………………………
Total sales…………………………………………………
Operating expenses…………………………………………
Operating loss…………………………………………………
Assets…………………………………………………………
ConsolidatedEliminations /
CorporateEurope
￥15,454
24,168
39,622
49,514
￥(9,892)
￥53,895
￥5,058
159
5,217
5,414
￥(197)
￥6,749
￥31,336
5,718
37,054
37,805
￥(751)
￥27,039
￥5,123
118
5,241
5,469
￥(228)
￥4,207
￥(30,163)
(30,163)
(30,044)
￥(119)
￥9,191
￥56,971
56,971
68,158
￥(11,187)
￥101,081
March 31, 2009
Foreign currency forward contracts:
Buying U.S.＄………………………………………………………
Selling EUR…………………………………………………………
Currency swaps…………………………………………………………
Millions of Yen
UnrealizedGain/LossFair Value
ContractAmount
￥8,581
1,757
169
￥8,724
1,825
￥(143)
(68)
15
16
17
18
20
19
02 Financial Section
28
02Financial Section
29
02 Financial Section
30
02Financial Section
31
02 Financial Section
32
02Financial Section
33
02 Financial Section
34
02Financial Section
35
Depreciation expense, interest expense and other information under finance leases:
Depreciation expense and interest expense, which are not reflected in the accompanying consolidated statements of
operations, are computed by the straight-line method and the interest method, respectively.
The minimum rental commitments under noncancelable operating leases at March 31, 2010 and 2009, were as follows:
FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
On 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 the guidance are applicable to financial instruments and related disclosures at the end of the fiscal
years ending on or after March 31, 2010 with early 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, mainly long-term debt including bank loans based on its capital financing 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 of interest and foreign currency rates.
(2) Nature and Extent of Risks Arising from Financial Instruments and Risk Management for Financial Instruments
(a) Receivables such as trade notes and trade accounts are exposed to customer credit risk. The Group manages its
credit risk from receivables on the basis of internal guidelines, which include monitoring of payment term and
balances of major customers by each business administration department to identify the default risk of customers in
early stage.
(b) Marketable and investment securities, mainly shares, are exposed to the risk of market price fluctuations. Marketable
and investment securities are managed by monitoring market values on a quarterly basis.
(c) Payment terms of payables, such as trade notes and trade accounts, are less than one year.
(d) Bank loans are used for operating capital (mainly short-term) and business investment capital (long-term). Interest-
rate risks in relation to a part of long-term debt are mitigated by using derivative of interest-rate swaps transactions.
(e) Derivative transactions entered into by the Company have been made in accordance with internal policies which
regulate the authorization and limit for transactions.
Credit risk of those derivatives are mitigated by using to major international financial institutions highly rated.
(f) Payables and bank loans are exposed to the liquidity risk. The Company has managed it by monitoring monthly
financial planning by each business administration department.
(3) Supplementation to Quantitative Information
The contract or notional amounts of derivatives which are shown in Note 16 do not represent the amounts exchanged by
the parties and do not measure the Company's exposure to credit or market risk.
(4) Fair Values of Financial Instruments
Fair values of financial instruments are based on quoted prices in active markets. If quoted price is not available, other
rational valuation techniques are used instead. Also please see Note 16 for the detail of fair value for derivatives.
(a) Fair value of financial instruments
＊1 Allowance for doubtful accounts is deducted from trade notes and accounts receivable.
＊2 Includes current portion of long-term debt and excludes obligation under finance leases and unsecured bonds.
＊3 Net receivables and payables derived as the result of derivative transactions are presented.
Values in parentheses represent net liabilities.
Cash and Cash Equivalents and Trade Notes and Accounts Receivable
The carrying values of cash and cash equivalents and trade notes and accounts receivable approximate fair value
because of their short maturities.
Marketable and Investment Securities
The fair values of marketable and investment securities are measured at the quoted market price on the stock
exchange for the equity instruments. The information of the fair value for the marketable and investment securities by
classification is included in Note 3.
Payables and Short-Term Borrowings
The carrying values of payables and short-term borrowings approximate fair value because of their short maturities.
Long-Term Debt
Long-term debt is determined by discounting the cash flows related to the debt at the corporate borrowing rates that
would presumably apply if similar borrowing were currently made.
A part of floating-rate long-term debt is entered into interest rate swap as a means of managing their interest rate
exposure. This debt is determined by discounting the cash flows including principal and interest related to the debt at the
corporate borrowing rates that would presumably apply if similar borrowing were currently made.
Derivatives
The information of the fair value for derivatives is included in Note 16.
(b) Financial instruments whose fair value cannot be reliably determined
(5) Maturity Analysis for Financial Assets and Securities with Contractual Maturities
Please see Note 8 for annual maturities of long-term debt and Note 14 for obligations under finance leases, respectively.
DERIVATIVES
The Group enters into derivatives including foreign exchange forward contracts, currency swaps, currency options and
interest rate swaps. The Group enters into derivatives in the normal course of business to reduce the exposure to
fluctuations in foreign exchange rates and interest rates. The Group does not hold derivatives for speculation.
Derivatives are subject to market risk and credit risk. Market risk is the exposure created by potential fluctuations in market
conditions, including interest or foreign exchange rates. Since most of the Group's derivative transactions are related to
qualified hedges of underlying business exposures, market risk in the derivative instruments is basically offset by opposite
movements in the value of the hedged assets or liabilities. Because the counterparties to those derivatives are limited to
major international financial institutions, the Group does not anticipate any losses arising from credit risk.
The basic policies for the use of derivatives are approved by the Board of Directors and the execution and control of
derivatives are controlled by the Finance Department. Each derivative transaction is periodically reported to the Board of
Directors, where evaluation and analysis of derivatives are made.
As noted in Note 15, 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 the end of the fiscal years
ending on or after March 31, 2010; therefore, the required information is disclosed only for 2010.
Derivative Transactions to Which Hedge Accounting Is Not Applied at March 31, 2010
Derivative Transactions to Which Hedge Accounting Is Applied at March 31, 2010
a. Derivative transactions qualifying for general accounting policies, deferral hedge accounting
b. Interest rate swap derivative transactions qualifying for exceptional accounting
The above interest rate swaps which qualify for hedge accounting and meet specific matching criteria are not remeasured at
market value but the differential paid or received under the swap agreements are recognized and included in interest
expense or income. In addition, the fair value of such interest rate swaps in Note 15 is included in that of hedged items (i.e.
long-term debt).
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.
Derivatives which qualify for hedge accounting for the year ended March 31, 2009 is excluded from the disclosure of market
value information.
The fair value of derivative transactions is measured at the quoted price obtained from the financial institution.
The contract or notional amounts of derivatives which are shown in the above table do not represent the amounts
exchanged by the parties and do not measure the Group's exposure to credit or market risk.
CONTINGENT LIABILITIES
Contingent liabilities at March 31, 2010 were as follows:
LOSS ON RESTRUCTURING DIVISIONS
Losses of ￥2,516 million for the year ended March 31, 2009 mainly resulted from extraordinary loss of closing plants with
disposal of their inventory and property, and extraordinary payments of employee's retirement benefits in conjunction with
restructuring divisions of industrial sewing machines, household sewing machines and others.
EXPENDITURES FOR RESTRUCTURING DIVISIONS
Expenditures For Restructuring Divisions mainly resulted from payment of restructuring costs of industrial sewing machines
and others.
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
a ) Sales and Operating Income (Loss)
b ) Assets, Depreciation, Impairment Loss and Capital Expenditures
a ) Sales and Operating Income (Loss)
b ) Assets, Depreciation, Impairment Loss and Capital Expenditures
a ) Sales and Operating Income (Loss)
b ) Assets, Depreciation, Impairment Loss and Capital Expenditures
(2) Geographical Segments
The geographical segments of the Group for the years ended March 31, 2010 and 2009, are summarized as follows:
(3) Sales to Foreign Customers
Sales to foreign customers for the years ended March 31, 2010 and 2009, amounted to ￥43,499 million (＄467,730
thousand) and ￥55,694 million, respectively.
02 Financial Section
36
02Memo
37
Deloitte Touche Tohmatsu LLCMS Shibaura Building4-13-23, ShibauraMinato-ku, Tokyo 108-8530Japan
Tel : + 81 (3) 3457-7321Fax: + 81 (3) 3457-1694www.deloitte.com/jp
June 25, 2010
Member of
Deloitte Touche Tohmatsu
DeloitteINDEPENDENT AUDITORS' REPORT
To the Board of Directors ofJUKI CORPORATION:
We have audited the accompanying consolidated balance sheets of JUKI CORPORATION (the "Company") and
consolidated subsidiaries as of March 31, 2010 and 2009, and the related consolidated statements of operations, changes in
equity, and cash flows for the years then ended, all expressed in Japanese yen. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
consolidated financial position of JUKI CORPORATION and consolidated subsidiaries as of March 31, 2010 and 2009, and
the consolidated results of their operations and their cash flows for the years then ended in conformity with accounting
principles generally accepted in Japan.
Our audits also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, such
translation has been made in conformity with the basis stated in Note 1. Such U.S. dollar amounts are presented solely for
the convenience of readers outside Japan.
Millions of YenThousands ofU.S. Dollars
Trade notes discounted with banks………………………………………………… ￥166 ＄1,785
Millions of YenThousands ofU.S. Dollars
Depreciation expense……………………………………………………
Interest expense…………………………………………………………
TOTAL……………………………………………………………………
Lease payments…………………………………………………………
2010 2009 2010
￥496
20
￥516
￥534
￥689
35
￥724
￥739
＄5,335
215
＄5,550
＄5,737
Millions of Yen
As Lessee
As Lessor
Thousands ofU.S. Dollars
Due within one year………………………………………………………
Due after one year…………………………………………………………
TOTAL……………………………………………………………………
Due within one year………………………………………………………
Due after one year…………………………………………………………
TOTAL……………………………………………………………………
2010 2009 2010
￥148
105
￥253
￥26
67
￥93
￥173
105
￥278
￥25
92
￥117
＄1,597
1,128
＄2,725
＄276
724
＄1,000
Millions of Yen
Contract Amount Due afterOne Year
ContractAmountMarch 31, 2010
Foreign currency forward contracts:
Selling U.S.＄…………………………………………………………
Selling EUR……………………………………………………………
Currency swaps…………………………………………………………
￥11,589
1,365
169
UnrealizedGain/LossFair Value
￥(169)
85
￥(169)
85
March 31, 2010
Foreign currency forward contracts:
Selling U.S.＄………………………………………………………
Selling EUR…………………………………………………………
Currency swaps…………………………………………………………
＄124,617
14,676
1,818
Thousands of U.S. Dollars
Contract Amount Due afterOne Year
ContractAmount
UnrealizedGain/LossFair Value
＄(1,814)
913
(1)
＄(1,814)
913
(1)
Millions of Yen
Contract Amount Hedged ItemMarch 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… Long-term debt ￥13,110
Fair Value
Contract Amount Due afterOne Year
￥13,075 ￥(168)
Long-term debt
March 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… ＄140,968
Thousands of U.S. Dollars
Contract Amount Hedged Item Fair Value
Contract Amount Due afterOne Year
＄140,591 ＄(1,803)
Millions of Yen
Contract AmountHedged ItemMarch 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… Long-term debt ￥75
Fair Value
Contract Amount Due afterOne Year
￥75
Contract Amount
Long-term debt
March 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… ＄806
Thousands of U.S. Dollars
Hedged Item Fair Value
Contract Amount Due afterOne Year
＄806
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable＊1 ……………………………
Marketable and investment securities………………………………
TOTAL……………………………………………………………………
Short-term borrowings…………………………………………………
Payables…………………………………………………………………
Long-term debt＊2 ………………………………………………………
TOTAL……………………………………………………………………
Derivatives＊3 ……………………………………………………………
Millions of Yen
UnrealizedGain/Loss
FairValue
CarrynngAmount
￥8,349
12,061
1,767
￥22,177
￥(33,388)
(11,003)
(30,725)
￥(75,116)
￥(252)
￥8,349
12,061
1,767
￥22,177
￥(33,388)
(11,003)
(30,703)
￥(75,094)
￥(252)
￥(22)
￥(22)
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable＊1 ……………………………
Marketable and investment securities………………………………
TOTAL……………………………………………………………………
Short-term borrowings…………………………………………………
Payables…………………………………………………………………
Long-term debt＊2 ………………………………………………………
TOTAL……………………………………………………………………
Derivatives＊3 ……………………………………………………………
Thousands of U.S. Dollars
UnrealizedGain/Loss
FairValue
CarrynngAmount
＄89,770
129,694
18,998
＄238,462
＄(359,008)
(118,313)
(330,375)
＄(807,696)
＄(2,705)
＄89,770
129,694
18,998
＄238,462
＄(359,008)
(118,313)
(330,139)
＄(807,460)
＄(2,705)
＄(236)
＄(236)
March 31, 2010
Investments in equity instruments that do not
have a quoted market price in an active market………………
Carrynng Amount
Thousands ofU.S. Dollars
Millionsof Yen
￥233 ＄2,510
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable…………………………………
Marketable and investment securities―
Available-for-sale securities with contractual maturities………
TOTAL……………………………………………………………………
Millions of Yen
Due afterOne Year through
Five Years
Due in One Year
or Less
￥8,349
13,153
6
￥21,508
�
￥4
￥4
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable…………………………………
Marketable and investment securities―
Available-for-sale securities with contractual maturities………
TOTAL……………………………………………………………………
Thousands of U.S. Dollars
Due afterOne Year through
Five Years
Due in One Year
or Less
＄89,770
141,434
69
＄231,273
＄42
＄42
ConsolidatedEliminations/
CorporateOther
Millions of Yen
2009
Assets…………………………………………
Depreciation and amortization………………
Impairment loss………………………………
Capital expenditures…………………………
Industrial SewingMachines
Household SewingMachines
SMTSystems
Electronic Equipmentand Computer Peripherals
￥44,364
1,618
6
1,370
￥965
75
912
4
￥21,291
907
1,322
￥3,616
140
61
79
￥1,573
47
73
￥28,585
445
6,383
￥103,655
3,463
979
9,471
Precision Casting
￥3,261
231
240
Millions of Yen
AsiaNorth
AmericaJapan
2009
ConsolidatedEliminations /
CorporateEurope
Sales to customers……………………………………………
Intersegment sales……………………………………………
Total sales…………………………………………………
Operating expenses…………………………………………
Operating income (loss)………………………………………
Assets…………………………………………………………
￥25,695
37,180
62,875
67,562
￥(4,687)
￥45,949
￥8,184
53
8,237
8,181
￥56
￥7,894
￥34,780
9,904
44,684
45,654
￥(970)
￥30,072
￥9,173
67
9,240
9,045
￥195
￥6,753
￥(47,204)
(47,204)
(47,635)
￥431
￥12,987
￥77,832
77,832
82,807
￥(4,975)
￥103,655
Thousands of U.S. Dollars
AsiaNorth
AmericaJapan
2010
ConsolidatedEliminations /
CorporateEurope
Sales to customers……………………………………………
Intersegment sales……………………………………………
Total sales…………………………………………………
Operating expenses…………………………………………
Operating loss…………………………………………………
Assets…………………………………………………………
＄166,175
259,864
426,039
532,409
＄(106,370)
＄579,512
＄54,384
1,712
56,096
58,212
＄(2,116)
＄72,570
＄336,946
61,488
398,434
406,512
＄(8,078)
＄290,747
＄55,083
1,272
56,355
58,801
＄(2,446)
＄45,234
＄(324,336)
(324,336)
(323,052)
＄(1,284)
＄98,832
＄612,588
612,588
732,882
＄(120,294)
＄1,086,895
Millions of Yen
Sales to customers……………………………
Intersegment sales……………………………
Total sales…………………………………
Operating expenses…………………………
Operating income (loss)………………………
Industrial SewingMachines
2009
ConsolidatedEliminations/
CorporateOtherHousehold Sewing
MachinesSMT
SystemsElectronic Equipment
and Computer Peripherals
￥44,585
623
45,208
45,467
￥(259)
￥3,755
83
3,838
3,739
￥99
￥2,356
341
2,697
4,234
￥(1,537)
￥19,961
304
20,265
22,058
￥(1,793)
￥5,340
719
6,059
5,644
￥415
￥1,835
351
2,186
2,470
￥(284)
￥(2,421)
(2,421)
(805)
￥(1,616)
￥77,832
77,832
82,807
￥(4,975)
Precision Casting
ConsolidatedEliminations/
CorporateOther
Millions of Yen
2010
Assets…………………………………………
Depreciation and amortization………………
Impairment loss………………………………
Capital expenditures…………………………
Industrial SewingMachines
Household SewingMachines
SMTSystems
Electronic Equipmentand Computer Peripherals
￥44,333
1,404
18
795
￥543
48
3
￥22,775
846
547
￥2,663
90
16
￥1,705
63
55
19
￥26,083
881
52
6,505
￥101,081
3,535
125
8,031
Precision Casting
￥2,979
203
146
Millions of Yen
Sales to customers……………………………
Intersegment sales……………………………
Total sales…………………………………
Operating expenses…………………………
Operating income (loss)………………………
Industrial SewingMachines
2010
ConsolidatedEliminations/
CorporateOtherHousehold Sewing
MachinesSMT
SystemsElectronic Equipment
and Computer Peripherals
￥36,092
415
36,507
41,788
￥(5,281)
￥2,745
51
2,796
2,930
￥(134)
￥2,425
467
2,892
3,211
￥(319)
￥12,040
253
12,293
15,863
￥(3,570)
￥2,381
99
2,480
2,455
￥25
￥1,288
362
1,650
1,686
￥(36)
￥(1,647)
(1,647)
225
￥(1,872)
￥56,971
56,971
68,158
￥(11,187)
Precision Casting
ConsolidatedEliminations/
CorporateOther
Thousands of U.S. Dollars
2010
Assets…………………………………………
Depreciation and amortization………………
Impairment loss………………………………
Capital expenditures…………………………
Industrial SewingMachines
Household SewingMachines
SMTSystems
Electronic Equipmentand Computer Peripherals
＄476,696
15,099
196
8,548
＄5,838
519
36
＄244,897
9,092
5,883
＄28,631
969
170
＄18,339
680
594
206
＄280,464
9,469
553
69,940
＄1,086,895
38,006
1,343
86,351
Precision Casting
＄32,030
2,178
1,568
Thousands of U.S. Dollars
Sales to customers……………………………
Intersegment sales……………………………
Total sales…………………………………
Operating expenses…………………………
Operating income (loss)………………………
Industrial SewingMachines
2010
ConsolidatedEliminations/
CorporateOtherHousehold Sewing
MachinesSMT
SystemsElectronic Equipment
and Computer Peripherals
＄388,088
4,463
392,551
449,336
＄(56,785)
＄29,520
549
30,069
31,507
＄(1,438)
＄26,069
5,022
31,091
34,525
＄(3,434)
＄129,465
2,716
132,181
170,570
＄(38,389)
＄25,603
1,066
26,669
26,398
＄271
＄13,843
3,897
17,740
18,128
＄(388)
＄(17,713)
(17,713)
2,418
＄(20,131)
＄612,588
612,588
732,882
＄(120,294)
Precision Casting
Millions of Yen
AsiaNorth
AmericaJapan
2010
Sales to customers……………………………………………
Intersegment sales……………………………………………
Total sales…………………………………………………
Operating expenses…………………………………………
Operating loss…………………………………………………
Assets…………………………………………………………
ConsolidatedEliminations /
CorporateEurope
￥15,454
24,168
39,622
49,514
￥(9,892)
￥53,895
￥5,058
159
5,217
5,414
￥(197)
￥6,749
￥31,336
5,718
37,054
37,805
￥(751)
￥27,039
￥5,123
118
5,241
5,469
￥(228)
￥4,207
￥(30,163)
(30,163)
(30,044)
￥(119)
￥9,191
￥56,971
56,971
68,158
￥(11,187)
￥101,081
March 31, 2009
Foreign currency forward contracts:
Buying U.S.＄………………………………………………………
Selling EUR…………………………………………………………
Currency swaps…………………………………………………………
Millions of Yen
UnrealizedGain/LossFair Value
ContractAmount
￥8,581
1,757
169
￥8,724
1,825
￥(143)
(68)
15
16
17
18
20
19
02 Financial Section
28
02Financial Section
29
02 Financial Section
30
02Financial Section
31
02 Financial Section
32
02Financial Section
33
02 Financial Section
34
02Financial Section
35
Depreciation expense, interest expense and other information under finance leases:
Depreciation expense and interest expense, which are not reflected in the accompanying consolidated statements of
operations, are computed by the straight-line method and the interest method, respectively.
The minimum rental commitments under noncancelable operating leases at March 31, 2010 and 2009, were as follows:
FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
On 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 the guidance are applicable to financial instruments and related disclosures at the end of the fiscal
years ending on or after March 31, 2010 with early 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, mainly long-term debt including bank loans based on its capital financing 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 of interest and foreign currency rates.
(2) Nature and Extent of Risks Arising from Financial Instruments and Risk Management for Financial Instruments
(a) Receivables such as trade notes and trade accounts are exposed to customer credit risk. The Group manages its
credit risk from receivables on the basis of internal guidelines, which include monitoring of payment term and
balances of major customers by each business administration department to identify the default risk of customers in
early stage.
(b) Marketable and investment securities, mainly shares, are exposed to the risk of market price fluctuations. Marketable
and investment securities are managed by monitoring market values on a quarterly basis.
(c) Payment terms of payables, such as trade notes and trade accounts, are less than one year.
(d) Bank loans are used for operating capital (mainly short-term) and business investment capital (long-term). Interest-
rate risks in relation to a part of long-term debt are mitigated by using derivative of interest-rate swaps transactions.
(e) Derivative transactions entered into by the Company have been made in accordance with internal policies which
regulate the authorization and limit for transactions.
Credit risk of those derivatives are mitigated by using to major international financial institutions highly rated.
(f) Payables and bank loans are exposed to the liquidity risk. The Company has managed it by monitoring monthly
financial planning by each business administration department.
(3) Supplementation to Quantitative Information
The contract or notional amounts of derivatives which are shown in Note 16 do not represent the amounts exchanged by
the parties and do not measure the Company's exposure to credit or market risk.
(4) Fair Values of Financial Instruments
Fair values of financial instruments are based on quoted prices in active markets. If quoted price is not available, other
rational valuation techniques are used instead. Also please see Note 16 for the detail of fair value for derivatives.
(a) Fair value of financial instruments
＊1 Allowance for doubtful accounts is deducted from trade notes and accounts receivable.
＊2 Includes current portion of long-term debt and excludes obligation under finance leases and unsecured bonds.
＊3 Net receivables and payables derived as the result of derivative transactions are presented.
Values in parentheses represent net liabilities.
Cash and Cash Equivalents and Trade Notes and Accounts Receivable
The carrying values of cash and cash equivalents and trade notes and accounts receivable approximate fair value
because of their short maturities.
Marketable and Investment Securities
The fair values of marketable and investment securities are measured at the quoted market price on the stock
exchange for the equity instruments. The information of the fair value for the marketable and investment securities by
classification is included in Note 3.
Payables and Short-Term Borrowings
The carrying values of payables and short-term borrowings approximate fair value because of their short maturities.
Long-Term Debt
Long-term debt is determined by discounting the cash flows related to the debt at the corporate borrowing rates that
would presumably apply if similar borrowing were currently made.
A part of floating-rate long-term debt is entered into interest rate swap as a means of managing their interest rate
exposure. This debt is determined by discounting the cash flows including principal and interest related to the debt at the
corporate borrowing rates that would presumably apply if similar borrowing were currently made.
Derivatives
The information of the fair value for derivatives is included in Note 16.
(b) Financial instruments whose fair value cannot be reliably determined
(5) Maturity Analysis for Financial Assets and Securities with Contractual Maturities
Please see Note 8 for annual maturities of long-term debt and Note 14 for obligations under finance leases, respectively.
DERIVATIVES
The Group enters into derivatives including foreign exchange forward contracts, currency swaps, currency options and
interest rate swaps. The Group enters into derivatives in the normal course of business to reduce the exposure to
fluctuations in foreign exchange rates and interest rates. The Group does not hold derivatives for speculation.
Derivatives are subject to market risk and credit risk. Market risk is the exposure created by potential fluctuations in market
conditions, including interest or foreign exchange rates. Since most of the Group's derivative transactions are related to
qualified hedges of underlying business exposures, market risk in the derivative instruments is basically offset by opposite
movements in the value of the hedged assets or liabilities. Because the counterparties to those derivatives are limited to
major international financial institutions, the Group does not anticipate any losses arising from credit risk.
The basic policies for the use of derivatives are approved by the Board of Directors and the execution and control of
derivatives are controlled by the Finance Department. Each derivative transaction is periodically reported to the Board of
Directors, where evaluation and analysis of derivatives are made.
As noted in Note 15, 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 the end of the fiscal years
ending on or after March 31, 2010; therefore, the required information is disclosed only for 2010.
Derivative Transactions to Which Hedge Accounting Is Not Applied at March 31, 2010
Derivative Transactions to Which Hedge Accounting Is Applied at March 31, 2010
a. Derivative transactions qualifying for general accounting policies, deferral hedge accounting
b. Interest rate swap derivative transactions qualifying for exceptional accounting
The above interest rate swaps which qualify for hedge accounting and meet specific matching criteria are not remeasured at
market value but the differential paid or received under the swap agreements are recognized and included in interest
expense or income. In addition, the fair value of such interest rate swaps in Note 15 is included in that of hedged items (i.e.
long-term debt).
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.
Derivatives which qualify for hedge accounting for the year ended March 31, 2009 is excluded from the disclosure of market
value information.
The fair value of derivative transactions is measured at the quoted price obtained from the financial institution.
The contract or notional amounts of derivatives which are shown in the above table do not represent the amounts
exchanged by the parties and do not measure the Group's exposure to credit or market risk.
CONTINGENT LIABILITIES
Contingent liabilities at March 31, 2010 were as follows:
LOSS ON RESTRUCTURING DIVISIONS
Losses of ￥2,516 million for the year ended March 31, 2009 mainly resulted from extraordinary loss of closing plants with
disposal of their inventory and property, and extraordinary payments of employee's retirement benefits in conjunction with
restructuring divisions of industrial sewing machines, household sewing machines and others.
EXPENDITURES FOR RESTRUCTURING DIVISIONS
Expenditures For Restructuring Divisions mainly resulted from payment of restructuring costs of industrial sewing machines
and others.
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
a ) Sales and Operating Income (Loss)
b ) Assets, Depreciation, Impairment Loss and Capital Expenditures
a ) Sales and Operating Income (Loss)
b ) Assets, Depreciation, Impairment Loss and Capital Expenditures
a ) Sales and Operating Income (Loss)
b ) Assets, Depreciation, Impairment Loss and Capital Expenditures
(2) Geographical Segments
The geographical segments of the Group for the years ended March 31, 2010 and 2009, are summarized as follows:
(3) Sales to Foreign Customers
Sales to foreign customers for the years ended March 31, 2010 and 2009, amounted to ￥43,499 million (＄467,730
thousand) and ￥55,694 million, respectively.
02 Financial Section
36
02Memo
37
Deloitte Touche Tohmatsu LLCMS Shibaura Building4-13-23, ShibauraMinato-ku, Tokyo 108-8530Japan
Tel : + 81 (3) 3457-7321Fax: + 81 (3) 3457-1694www.deloitte.com/jp
June 25, 2010
Member of
Deloitte Touche Tohmatsu
DeloitteINDEPENDENT AUDITORS' REPORT
To the Board of Directors ofJUKI CORPORATION:
We have audited the accompanying consolidated balance sheets of JUKI CORPORATION (the "Company") and
consolidated subsidiaries as of March 31, 2010 and 2009, and the related consolidated statements of operations, changes in
equity, and cash flows for the years then ended, all expressed in Japanese yen. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
consolidated financial position of JUKI CORPORATION and consolidated subsidiaries as of March 31, 2010 and 2009, and
the consolidated results of their operations and their cash flows for the years then ended in conformity with accounting
principles generally accepted in Japan.
Our audits also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, such
translation has been made in conformity with the basis stated in Note 1. Such U.S. dollar amounts are presented solely for
the convenience of readers outside Japan.
Millions of YenThousands ofU.S. Dollars
Trade notes discounted with banks………………………………………………… ￥166 ＄1,785
Millions of YenThousands ofU.S. Dollars
Depreciation expense……………………………………………………
Interest expense…………………………………………………………
TOTAL……………………………………………………………………
Lease payments…………………………………………………………
2010 2009 2010
￥496
20
￥516
￥534
￥689
35
￥724
￥739
＄5,335
215
＄5,550
＄5,737
Millions of Yen
As Lessee
As Lessor
Thousands ofU.S. Dollars
Due within one year………………………………………………………
Due after one year…………………………………………………………
TOTAL……………………………………………………………………
Due within one year………………………………………………………
Due after one year…………………………………………………………
TOTAL……………………………………………………………………
2010 2009 2010
￥148
105
￥253
￥26
67
￥93
￥173
105
￥278
￥25
92
￥117
＄1,597
1,128
＄2,725
＄276
724
＄1,000
Millions of Yen
Contract Amount Due afterOne Year
ContractAmountMarch 31, 2010
Foreign currency forward contracts:
Selling U.S.＄…………………………………………………………
Selling EUR……………………………………………………………
Currency swaps…………………………………………………………
￥11,589
1,365
169
UnrealizedGain/LossFair Value
￥(169)
85
￥(169)
85
March 31, 2010
Foreign currency forward contracts:
Selling U.S.＄………………………………………………………
Selling EUR…………………………………………………………
Currency swaps…………………………………………………………
＄124,617
14,676
1,818
Thousands of U.S. Dollars
Contract Amount Due afterOne Year
ContractAmount
UnrealizedGain/LossFair Value
＄(1,814)
913
(1)
＄(1,814)
913
(1)
Millions of Yen
Contract Amount Hedged ItemMarch 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… Long-term debt ￥13,110
Fair Value
Contract Amount Due afterOne Year
￥13,075 ￥(168)
Long-term debt
March 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… ＄140,968
Thousands of U.S. Dollars
Contract Amount Hedged Item Fair Value
Contract Amount Due afterOne Year
＄140,591 ＄(1,803)
Millions of Yen
Contract AmountHedged ItemMarch 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… Long-term debt ￥75
Fair Value
Contract Amount Due afterOne Year
￥75
Contract Amount
Long-term debt
March 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… ＄806
Thousands of U.S. Dollars
Hedged Item Fair Value
Contract Amount Due afterOne Year
＄806
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable＊1 ……………………………
Marketable and investment securities………………………………
TOTAL……………………………………………………………………
Short-term borrowings…………………………………………………
Payables…………………………………………………………………
Long-term debt＊2 ………………………………………………………
TOTAL……………………………………………………………………
Derivatives＊3 ……………………………………………………………
Millions of Yen
UnrealizedGain/Loss
FairValue
CarrynngAmount
￥8,349
12,061
1,767
￥22,177
￥(33,388)
(11,003)
(30,725)
￥(75,116)
￥(252)
￥8,349
12,061
1,767
￥22,177
￥(33,388)
(11,003)
(30,703)
￥(75,094)
￥(252)
￥(22)
￥(22)
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable＊1 ……………………………
Marketable and investment securities………………………………
TOTAL……………………………………………………………………
Short-term borrowings…………………………………………………
Payables…………………………………………………………………
Long-term debt＊2 ………………………………………………………
TOTAL……………………………………………………………………
Derivatives＊3 ……………………………………………………………
Thousands of U.S. Dollars
UnrealizedGain/Loss
FairValue
CarrynngAmount
＄89,770
129,694
18,998
＄238,462
＄(359,008)
(118,313)
(330,375)
＄(807,696)
＄(2,705)
＄89,770
129,694
18,998
＄238,462
＄(359,008)
(118,313)
(330,139)
＄(807,460)
＄(2,705)
＄(236)
＄(236)
March 31, 2010
Investments in equity instruments that do not
have a quoted market price in an active market………………
Carrynng Amount
Thousands ofU.S. Dollars
Millionsof Yen
￥233 ＄2,510
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable…………………………………
Marketable and investment securities―
Available-for-sale securities with contractual maturities………
TOTAL……………………………………………………………………
Millions of Yen
Due afterOne Year through
Five Years
Due in One Year
or Less
￥8,349
13,153
6
￥21,508
�
￥4
￥4
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable…………………………………
Marketable and investment securities―
Available-for-sale securities with contractual maturities………
TOTAL……………………………………………………………………
Thousands of U.S. Dollars
Due afterOne Year through
Five Years
Due in One Year
or Less
＄89,770
141,434
69
＄231,273
＄42
＄42
ConsolidatedEliminations/
CorporateOther
Millions of Yen
2009
Assets…………………………………………
Depreciation and amortization………………
Impairment loss………………………………
Capital expenditures…………………………
Industrial SewingMachines
Household SewingMachines
SMTSystems
Electronic Equipmentand Computer Peripherals
￥44,364
1,618
6
1,370
￥965
75
912
4
￥21,291
907
1,322
￥3,616
140
61
79
￥1,573
47
73
￥28,585
445
6,383
￥103,655
3,463
979
9,471
Precision Casting
￥3,261
231
240
Millions of Yen
AsiaNorth
AmericaJapan
2009
ConsolidatedEliminations /
CorporateEurope
Sales to customers……………………………………………
Intersegment sales……………………………………………
Total sales…………………………………………………
Operating expenses…………………………………………
Operating income (loss)………………………………………
Assets…………………………………………………………
￥25,695
37,180
62,875
67,562
￥(4,687)
￥45,949
￥8,184
53
8,237
8,181
￥56
￥7,894
￥34,780
9,904
44,684
45,654
￥(970)
￥30,072
￥9,173
67
9,240
9,045
￥195
￥6,753
￥(47,204)
(47,204)
(47,635)
￥431
￥12,987
￥77,832
77,832
82,807
￥(4,975)
￥103,655
Thousands of U.S. Dollars
AsiaNorth
AmericaJapan
2010
ConsolidatedEliminations /
CorporateEurope
Sales to customers……………………………………………
Intersegment sales……………………………………………
Total sales…………………………………………………
Operating expenses…………………………………………
Operating loss…………………………………………………
Assets…………………………………………………………
＄166,175
259,864
426,039
532,409
＄(106,370)
＄579,512
＄54,384
1,712
56,096
58,212
＄(2,116)
＄72,570
＄336,946
61,488
398,434
406,512
＄(8,078)
＄290,747
＄55,083
1,272
56,355
58,801
＄(2,446)
＄45,234
＄(324,336)
(324,336)
(323,052)
＄(1,284)
＄98,832
＄612,588
612,588
732,882
＄(120,294)
＄1,086,895
Millions of Yen
Sales to customers……………………………
Intersegment sales……………………………
Total sales…………………………………
Operating expenses…………………………
Operating income (loss)………………………
Industrial SewingMachines
2009
ConsolidatedEliminations/
CorporateOtherHousehold Sewing
MachinesSMT
SystemsElectronic Equipment
and Computer Peripherals
￥44,585
623
45,208
45,467
￥(259)
￥3,755
83
3,838
3,739
￥99
￥2,356
341
2,697
4,234
￥(1,537)
￥19,961
304
20,265
22,058
￥(1,793)
￥5,340
719
6,059
5,644
￥415
￥1,835
351
2,186
2,470
￥(284)
￥(2,421)
(2,421)
(805)
￥(1,616)
￥77,832
77,832
82,807
￥(4,975)
Precision Casting
ConsolidatedEliminations/
CorporateOther
Millions of Yen
2010
Assets…………………………………………
Depreciation and amortization………………
Impairment loss………………………………
Capital expenditures…………………………
Industrial SewingMachines
Household SewingMachines
SMTSystems
Electronic Equipmentand Computer Peripherals
￥44,333
1,404
18
795
￥543
48
3
￥22,775
846
547
￥2,663
90
16
￥1,705
63
55
19
￥26,083
881
52
6,505
￥101,081
3,535
125
8,031
Precision Casting
￥2,979
203
146
Millions of Yen
Sales to customers……………………………
Intersegment sales……………………………
Total sales…………………………………
Operating expenses…………………………
Operating income (loss)………………………
Industrial SewingMachines
2010
ConsolidatedEliminations/
CorporateOtherHousehold Sewing
MachinesSMT
SystemsElectronic Equipment
and Computer Peripherals
￥36,092
415
36,507
41,788
￥(5,281)
￥2,745
51
2,796
2,930
￥(134)
￥2,425
467
2,892
3,211
￥(319)
￥12,040
253
12,293
15,863
￥(3,570)
￥2,381
99
2,480
2,455
￥25
￥1,288
362
1,650
1,686
￥(36)
￥(1,647)
(1,647)
225
￥(1,872)
￥56,971
56,971
68,158
￥(11,187)
Precision Casting
ConsolidatedEliminations/
CorporateOther
Thousands of U.S. Dollars
2010
Assets…………………………………………
Depreciation and amortization………………
Impairment loss………………………………
Capital expenditures…………………………
Industrial SewingMachines
Household SewingMachines
SMTSystems
Electronic Equipmentand Computer Peripherals
＄476,696
15,099
196
8,548
＄5,838
519
36
＄244,897
9,092
5,883
＄28,631
969
170
＄18,339
680
594
206
＄280,464
9,469
553
69,940
＄1,086,895
38,006
1,343
86,351
Precision Casting
＄32,030
2,178
1,568
Thousands of U.S. Dollars
Sales to customers……………………………
Intersegment sales……………………………
Total sales…………………………………
Operating expenses…………………………
Operating income (loss)………………………
Industrial SewingMachines
2010
ConsolidatedEliminations/
CorporateOtherHousehold Sewing
MachinesSMT
SystemsElectronic Equipment
and Computer Peripherals
＄388,088
4,463
392,551
449,336
＄(56,785)
＄29,520
549
30,069
31,507
＄(1,438)
＄26,069
5,022
31,091
34,525
＄(3,434)
＄129,465
2,716
132,181
170,570
＄(38,389)
＄25,603
1,066
26,669
26,398
＄271
＄13,843
3,897
17,740
18,128
＄(388)
＄(17,713)
(17,713)
2,418
＄(20,131)
＄612,588
612,588
732,882
＄(120,294)
Precision Casting
Millions of Yen
AsiaNorth
AmericaJapan
2010
Sales to customers……………………………………………
Intersegment sales……………………………………………
Total sales…………………………………………………
Operating expenses…………………………………………
Operating loss…………………………………………………
Assets…………………………………………………………
ConsolidatedEliminations /
CorporateEurope
￥15,454
24,168
39,622
49,514
￥(9,892)
￥53,895
￥5,058
159
5,217
5,414
￥(197)
￥6,749
￥31,336
5,718
37,054
37,805
￥(751)
￥27,039
￥5,123
118
5,241
5,469
￥(228)
￥4,207
￥(30,163)
(30,163)
(30,044)
￥(119)
￥9,191
￥56,971
56,971
68,158
￥(11,187)
￥101,081
March 31, 2009
Foreign currency forward contracts:
Buying U.S.＄………………………………………………………
Selling EUR…………………………………………………………
Currency swaps…………………………………………………………
Millions of Yen
UnrealizedGain/LossFair Value
ContractAmount
￥8,581
1,757
169
￥8,724
1,825
￥(143)
(68)
15
16
17
18
20
19
02 Financial Section
28
02Financial Section
29
02 Financial Section
30
02Financial Section
31
02 Financial Section
32
02Financial Section
33
02 Financial Section
34
02Financial Section
35
Depreciation expense, interest expense and other information under finance leases:
Depreciation expense and interest expense, which are not reflected in the accompanying consolidated statements of
operations, are computed by the straight-line method and the interest method, respectively.
The minimum rental commitments under noncancelable operating leases at March 31, 2010 and 2009, were as follows:
FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
On 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 the guidance are applicable to financial instruments and related disclosures at the end of the fiscal
years ending on or after March 31, 2010 with early 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, mainly long-term debt including bank loans based on its capital financing 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 of interest and foreign currency rates.
(2) Nature and Extent of Risks Arising from Financial Instruments and Risk Management for Financial Instruments
(a) Receivables such as trade notes and trade accounts are exposed to customer credit risk. The Group manages its
credit risk from receivables on the basis of internal guidelines, which include monitoring of payment term and
balances of major customers by each business administration department to identify the default risk of customers in
early stage.
(b) Marketable and investment securities, mainly shares, are exposed to the risk of market price fluctuations. Marketable
and investment securities are managed by monitoring market values on a quarterly basis.
(c) Payment terms of payables, such as trade notes and trade accounts, are less than one year.
(d) Bank loans are used for operating capital (mainly short-term) and business investment capital (long-term). Interest-
rate risks in relation to a part of long-term debt are mitigated by using derivative of interest-rate swaps transactions.
(e) Derivative transactions entered into by the Company have been made in accordance with internal policies which
regulate the authorization and limit for transactions.
Credit risk of those derivatives are mitigated by using to major international financial institutions highly rated.
(f) Payables and bank loans are exposed to the liquidity risk. The Company has managed it by monitoring monthly
financial planning by each business administration department.
(3) Supplementation to Quantitative Information
The contract or notional amounts of derivatives which are shown in Note 16 do not represent the amounts exchanged by
the parties and do not measure the Company's exposure to credit or market risk.
(4) Fair Values of Financial Instruments
Fair values of financial instruments are based on quoted prices in active markets. If quoted price is not available, other
rational valuation techniques are used instead. Also please see Note 16 for the detail of fair value for derivatives.
(a) Fair value of financial instruments
＊1 Allowance for doubtful accounts is deducted from trade notes and accounts receivable.
＊2 Includes current portion of long-term debt and excludes obligation under finance leases and unsecured bonds.
＊3 Net receivables and payables derived as the result of derivative transactions are presented.
Values in parentheses represent net liabilities.
Cash and Cash Equivalents and Trade Notes and Accounts Receivable
The carrying values of cash and cash equivalents and trade notes and accounts receivable approximate fair value
because of their short maturities.
Marketable and Investment Securities
The fair values of marketable and investment securities are measured at the quoted market price on the stock
exchange for the equity instruments. The information of the fair value for the marketable and investment securities by
classification is included in Note 3.
Payables and Short-Term Borrowings
The carrying values of payables and short-term borrowings approximate fair value because of their short maturities.
Long-Term Debt
Long-term debt is determined by discounting the cash flows related to the debt at the corporate borrowing rates that
would presumably apply if similar borrowing were currently made.
A part of floating-rate long-term debt is entered into interest rate swap as a means of managing their interest rate
exposure. This debt is determined by discounting the cash flows including principal and interest related to the debt at the
corporate borrowing rates that would presumably apply if similar borrowing were currently made.
Derivatives
The information of the fair value for derivatives is included in Note 16.
(b) Financial instruments whose fair value cannot be reliably determined
(5) Maturity Analysis for Financial Assets and Securities with Contractual Maturities
Please see Note 8 for annual maturities of long-term debt and Note 14 for obligations under finance leases, respectively.
DERIVATIVES
The Group enters into derivatives including foreign exchange forward contracts, currency swaps, currency options and
interest rate swaps. The Group enters into derivatives in the normal course of business to reduce the exposure to
fluctuations in foreign exchange rates and interest rates. The Group does not hold derivatives for speculation.
Derivatives are subject to market risk and credit risk. Market risk is the exposure created by potential fluctuations in market
conditions, including interest or foreign exchange rates. Since most of the Group's derivative transactions are related to
qualified hedges of underlying business exposures, market risk in the derivative instruments is basically offset by opposite
movements in the value of the hedged assets or liabilities. Because the counterparties to those derivatives are limited to
major international financial institutions, the Group does not anticipate any losses arising from credit risk.
The basic policies for the use of derivatives are approved by the Board of Directors and the execution and control of
derivatives are controlled by the Finance Department. Each derivative transaction is periodically reported to the Board of
Directors, where evaluation and analysis of derivatives are made.
As noted in Note 15, 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 the end of the fiscal years
ending on or after March 31, 2010; therefore, the required information is disclosed only for 2010.
Derivative Transactions to Which Hedge Accounting Is Not Applied at March 31, 2010
Derivative Transactions to Which Hedge Accounting Is Applied at March 31, 2010
a. Derivative transactions qualifying for general accounting policies, deferral hedge accounting
b. Interest rate swap derivative transactions qualifying for exceptional accounting
The above interest rate swaps which qualify for hedge accounting and meet specific matching criteria are not remeasured at
market value but the differential paid or received under the swap agreements are recognized and included in interest
expense or income. In addition, the fair value of such interest rate swaps in Note 15 is included in that of hedged items (i.e.
long-term debt).
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.
Derivatives which qualify for hedge accounting for the year ended March 31, 2009 is excluded from the disclosure of market
value information.
The fair value of derivative transactions is measured at the quoted price obtained from the financial institution.
The contract or notional amounts of derivatives which are shown in the above table do not represent the amounts
exchanged by the parties and do not measure the Group's exposure to credit or market risk.
CONTINGENT LIABILITIES
Contingent liabilities at March 31, 2010 were as follows:
LOSS ON RESTRUCTURING DIVISIONS
Losses of ￥2,516 million for the year ended March 31, 2009 mainly resulted from extraordinary loss of closing plants with
disposal of their inventory and property, and extraordinary payments of employee's retirement benefits in conjunction with
restructuring divisions of industrial sewing machines, household sewing machines and others.
EXPENDITURES FOR RESTRUCTURING DIVISIONS
Expenditures For Restructuring Divisions mainly resulted from payment of restructuring costs of industrial sewing machines
and others.
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
a ) Sales and Operating Income (Loss)
b ) Assets, Depreciation, Impairment Loss and Capital Expenditures
a ) Sales and Operating Income (Loss)
b ) Assets, Depreciation, Impairment Loss and Capital Expenditures
a ) Sales and Operating Income (Loss)
b ) Assets, Depreciation, Impairment Loss and Capital Expenditures
(2) Geographical Segments
The geographical segments of the Group for the years ended March 31, 2010 and 2009, are summarized as follows:
(3) Sales to Foreign Customers
Sales to foreign customers for the years ended March 31, 2010 and 2009, amounted to ￥43,499 million (＄467,730
thousand) and ￥55,694 million, respectively.
02 Financial Section
36
02Memo
37
Deloitte Touche Tohmatsu LLCMS Shibaura Building4-13-23, ShibauraMinato-ku, Tokyo 108-8530Japan
Tel : + 81 (3) 3457-7321Fax: + 81 (3) 3457-1694www.deloitte.com/jp
June 25, 2010
Member of
Deloitte Touche Tohmatsu
DeloitteINDEPENDENT AUDITORS' REPORT
To the Board of Directors ofJUKI CORPORATION:
We have audited the accompanying consolidated balance sheets of JUKI CORPORATION (the "Company") and
consolidated subsidiaries as of March 31, 2010 and 2009, and the related consolidated statements of operations, changes in
equity, and cash flows for the years then ended, all expressed in Japanese yen. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
consolidated financial position of JUKI CORPORATION and consolidated subsidiaries as of March 31, 2010 and 2009, and
the consolidated results of their operations and their cash flows for the years then ended in conformity with accounting
principles generally accepted in Japan.
Our audits also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, such
translation has been made in conformity with the basis stated in Note 1. Such U.S. dollar amounts are presented solely for
the convenience of readers outside Japan.
Millions of YenThousands ofU.S. Dollars
Trade notes discounted with banks………………………………………………… ￥166 ＄1,785
Millions of YenThousands ofU.S. Dollars
Depreciation expense……………………………………………………
Interest expense…………………………………………………………
TOTAL……………………………………………………………………
Lease payments…………………………………………………………
2010 2009 2010
￥496
20
￥516
￥534
￥689
35
￥724
￥739
＄5,335
215
＄5,550
＄5,737
Millions of Yen
As Lessee
As Lessor
Thousands ofU.S. Dollars
Due within one year………………………………………………………
Due after one year…………………………………………………………
TOTAL……………………………………………………………………
Due within one year………………………………………………………
Due after one year…………………………………………………………
TOTAL……………………………………………………………………
2010 2009 2010
￥148
105
￥253
￥26
67
￥93
￥173
105
￥278
￥25
92
￥117
＄1,597
1,128
＄2,725
＄276
724
＄1,000
Millions of Yen
Contract Amount Due afterOne Year
ContractAmountMarch 31, 2010
Foreign currency forward contracts:
Selling U.S.＄…………………………………………………………
Selling EUR……………………………………………………………
Currency swaps…………………………………………………………
￥11,589
1,365
169
UnrealizedGain/LossFair Value
￥(169)
85
￥(169)
85
March 31, 2010
Foreign currency forward contracts:
Selling U.S.＄………………………………………………………
Selling EUR…………………………………………………………
Currency swaps…………………………………………………………
＄124,617
14,676
1,818
Thousands of U.S. Dollars
Contract Amount Due afterOne Year
ContractAmount
UnrealizedGain/LossFair Value
＄(1,814)
913
(1)
＄(1,814)
913
(1)
Millions of Yen
Contract Amount Hedged ItemMarch 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… Long-term debt ￥13,110
Fair Value
Contract Amount Due afterOne Year
￥13,075 ￥(168)
Long-term debt
March 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… ＄140,968
Thousands of U.S. Dollars
Contract Amount Hedged Item Fair Value
Contract Amount Due afterOne Year
＄140,591 ＄(1,803)
Millions of Yen
Contract AmountHedged ItemMarch 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… Long-term debt ￥75
Fair Value
Contract Amount Due afterOne Year
￥75
Contract Amount
Long-term debt
March 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… ＄806
Thousands of U.S. Dollars
Hedged Item Fair Value
Contract Amount Due afterOne Year
＄806
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable＊1 ……………………………
Marketable and investment securities………………………………
TOTAL……………………………………………………………………
Short-term borrowings…………………………………………………
Payables…………………………………………………………………
Long-term debt＊2 ………………………………………………………
TOTAL……………………………………………………………………
Derivatives＊3 ……………………………………………………………
Millions of Yen
UnrealizedGain/Loss
FairValue
CarrynngAmount
￥8,349
12,061
1,767
￥22,177
￥(33,388)
(11,003)
(30,725)
￥(75,116)
￥(252)
￥8,349
12,061
1,767
￥22,177
￥(33,388)
(11,003)
(30,703)
￥(75,094)
￥(252)
￥(22)
￥(22)
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable＊1 ……………………………
Marketable and investment securities………………………………
TOTAL……………………………………………………………………
Short-term borrowings…………………………………………………
Payables…………………………………………………………………
Long-term debt＊2 ………………………………………………………
TOTAL……………………………………………………………………
Derivatives＊3 ……………………………………………………………
Thousands of U.S. Dollars
UnrealizedGain/Loss
FairValue
CarrynngAmount
＄89,770
129,694
18,998
＄238,462
＄(359,008)
(118,313)
(330,375)
＄(807,696)
＄(2,705)
＄89,770
129,694
18,998
＄238,462
＄(359,008)
(118,313)
(330,139)
＄(807,460)
＄(2,705)
＄(236)
＄(236)
March 31, 2010
Investments in equity instruments that do not
have a quoted market price in an active market………………
Carrynng Amount
Thousands ofU.S. Dollars
Millionsof Yen
￥233 ＄2,510
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable…………………………………
Marketable and investment securities―
Available-for-sale securities with contractual maturities………
TOTAL……………………………………………………………………
Millions of Yen
Due afterOne Year through
Five Years
Due in One Year
or Less
￥8,349
13,153
6
￥21,508
�
￥4
￥4
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable…………………………………
Marketable and investment securities―
Available-for-sale securities with contractual maturities………
TOTAL……………………………………………………………………
Thousands of U.S. Dollars
Due afterOne Year through
Five Years
Due in One Year
or Less
＄89,770
141,434
69
＄231,273
＄42
＄42
ConsolidatedEliminations/
CorporateOther
Millions of Yen
2009
Assets…………………………………………
Depreciation and amortization………………
Impairment loss………………………………
Capital expenditures…………………………
Industrial SewingMachines
Household SewingMachines
SMTSystems
Electronic Equipmentand Computer Peripherals
￥44,364
1,618
6
1,370
￥965
75
912
4
￥21,291
907
1,322
￥3,616
140
61
79
￥1,573
47
73
￥28,585
445
6,383
￥103,655
3,463
979
9,471
Precision Casting
￥3,261
231
240
Millions of Yen
AsiaNorth
AmericaJapan
2009
ConsolidatedEliminations /
CorporateEurope
Sales to customers……………………………………………
Intersegment sales……………………………………………
Total sales…………………………………………………
Operating expenses…………………………………………
Operating income (loss)………………………………………
Assets…………………………………………………………
￥25,695
37,180
62,875
67,562
￥(4,687)
￥45,949
￥8,184
53
8,237
8,181
￥56
￥7,894
￥34,780
9,904
44,684
45,654
￥(970)
￥30,072
￥9,173
67
9,240
9,045
￥195
￥6,753
￥(47,204)
(47,204)
(47,635)
￥431
￥12,987
￥77,832
77,832
82,807
￥(4,975)
￥103,655
Thousands of U.S. Dollars
AsiaNorth
AmericaJapan
2010
ConsolidatedEliminations /
CorporateEurope
Sales to customers……………………………………………
Intersegment sales……………………………………………
Total sales…………………………………………………
Operating expenses…………………………………………
Operating loss…………………………………………………
Assets…………………………………………………………
＄166,175
259,864
426,039
532,409
＄(106,370)
＄579,512
＄54,384
1,712
56,096
58,212
＄(2,116)
＄72,570
＄336,946
61,488
398,434
406,512
＄(8,078)
＄290,747
＄55,083
1,272
56,355
58,801
＄(2,446)
＄45,234
＄(324,336)
(324,336)
(323,052)
＄(1,284)
＄98,832
＄612,588
612,588
732,882
＄(120,294)
＄1,086,895
Millions of Yen
Sales to customers……………………………
Intersegment sales……………………………
Total sales…………………………………
Operating expenses…………………………
Operating income (loss)………………………
Industrial SewingMachines
2009
ConsolidatedEliminations/
CorporateOtherHousehold Sewing
MachinesSMT
SystemsElectronic Equipment
and Computer Peripherals
￥44,585
623
45,208
45,467
￥(259)
￥3,755
83
3,838
3,739
￥99
￥2,356
341
2,697
4,234
￥(1,537)
￥19,961
304
20,265
22,058
￥(1,793)
￥5,340
719
6,059
5,644
￥415
￥1,835
351
2,186
2,470
￥(284)
￥(2,421)
(2,421)
(805)
￥(1,616)
￥77,832
77,832
82,807
￥(4,975)
Precision Casting
ConsolidatedEliminations/
CorporateOther
Millions of Yen
2010
Assets…………………………………………
Depreciation and amortization………………
Impairment loss………………………………
Capital expenditures…………………………
Industrial SewingMachines
Household SewingMachines
SMTSystems
Electronic Equipmentand Computer Peripherals
￥44,333
1,404
18
795
￥543
48
3
￥22,775
846
547
￥2,663
90
16
￥1,705
63
55
19
￥26,083
881
52
6,505
￥101,081
3,535
125
8,031
Precision Casting
￥2,979
203
146
Millions of Yen
Sales to customers……………………………
Intersegment sales……………………………
Total sales…………………………………
Operating expenses…………………………
Operating income (loss)………………………
Industrial SewingMachines
2010
ConsolidatedEliminations/
CorporateOtherHousehold Sewing
MachinesSMT
SystemsElectronic Equipment
and Computer Peripherals
￥36,092
415
36,507
41,788
￥(5,281)
￥2,745
51
2,796
2,930
￥(134)
￥2,425
467
2,892
3,211
￥(319)
￥12,040
253
12,293
15,863
￥(3,570)
￥2,381
99
2,480
2,455
￥25
￥1,288
362
1,650
1,686
￥(36)
￥(1,647)
(1,647)
225
￥(1,872)
￥56,971
56,971
68,158
￥(11,187)
Precision Casting
ConsolidatedEliminations/
CorporateOther
Thousands of U.S. Dollars
2010
Assets…………………………………………
Depreciation and amortization………………
Impairment loss………………………………
Capital expenditures…………………………
Industrial SewingMachines
Household SewingMachines
SMTSystems
Electronic Equipmentand Computer Peripherals
＄476,696
15,099
196
8,548
＄5,838
519
36
＄244,897
9,092
5,883
＄28,631
969
170
＄18,339
680
594
206
＄280,464
9,469
553
69,940
＄1,086,895
38,006
1,343
86,351
Precision Casting
＄32,030
2,178
1,568
Thousands of U.S. Dollars
Sales to customers……………………………
Intersegment sales……………………………
Total sales…………………………………
Operating expenses…………………………
Operating income (loss)………………………
Industrial SewingMachines
2010
ConsolidatedEliminations/
CorporateOtherHousehold Sewing
MachinesSMT
SystemsElectronic Equipment
and Computer Peripherals
＄388,088
4,463
392,551
449,336
＄(56,785)
＄29,520
549
30,069
31,507
＄(1,438)
＄26,069
5,022
31,091
34,525
＄(3,434)
＄129,465
2,716
132,181
170,570
＄(38,389)
＄25,603
1,066
26,669
26,398
＄271
＄13,843
3,897
17,740
18,128
＄(388)
＄(17,713)
(17,713)
2,418
＄(20,131)
＄612,588
612,588
732,882
＄(120,294)
Precision Casting
Millions of Yen
AsiaNorth
AmericaJapan
2010
Sales to customers……………………………………………
Intersegment sales……………………………………………
Total sales…………………………………………………
Operating expenses…………………………………………
Operating loss…………………………………………………
Assets…………………………………………………………
ConsolidatedEliminations /
CorporateEurope
￥15,454
24,168
39,622
49,514
￥(9,892)
￥53,895
￥5,058
159
5,217
5,414
￥(197)
￥6,749
￥31,336
5,718
37,054
37,805
￥(751)
￥27,039
￥5,123
118
5,241
5,469
￥(228)
￥4,207
￥(30,163)
(30,163)
(30,044)
￥(119)
￥9,191
￥56,971
56,971
68,158
￥(11,187)
￥101,081
March 31, 2009
Foreign currency forward contracts:
Buying U.S.＄………………………………………………………
Selling EUR…………………………………………………………
Currency swaps…………………………………………………………
Millions of Yen
UnrealizedGain/LossFair Value
ContractAmount
￥8,581
1,757
169
￥8,724
1,825
￥(143)
(68)
15
16
17
18
20
19
02 Financial Section
28
02Financial Section
29
02 Financial Section
30
02Financial Section
31
02 Financial Section
32
02Financial Section
33
02 Financial Section
34
02Financial Section
35
Depreciation expense, interest expense and other information under finance leases:
Depreciation expense and interest expense, which are not reflected in the accompanying consolidated statements of
operations, are computed by the straight-line method and the interest method, respectively.
The minimum rental commitments under noncancelable operating leases at March 31, 2010 and 2009, were as follows:
FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
On 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 the guidance are applicable to financial instruments and related disclosures at the end of the fiscal
years ending on or after March 31, 2010 with early 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, mainly long-term debt including bank loans based on its capital financing 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 of interest and foreign currency rates.
(2) Nature and Extent of Risks Arising from Financial Instruments and Risk Management for Financial Instruments
(a) Receivables such as trade notes and trade accounts are exposed to customer credit risk. The Group manages its
credit risk from receivables on the basis of internal guidelines, which include monitoring of payment term and
balances of major customers by each business administration department to identify the default risk of customers in
early stage.
(b) Marketable and investment securities, mainly shares, are exposed to the risk of market price fluctuations. Marketable
and investment securities are managed by monitoring market values on a quarterly basis.
(c) Payment terms of payables, such as trade notes and trade accounts, are less than one year.
(d) Bank loans are used for operating capital (mainly short-term) and business investment capital (long-term). Interest-
rate risks in relation to a part of long-term debt are mitigated by using derivative of interest-rate swaps transactions.
(e) Derivative transactions entered into by the Company have been made in accordance with internal policies which
regulate the authorization and limit for transactions.
Credit risk of those derivatives are mitigated by using to major international financial institutions highly rated.
(f) Payables and bank loans are exposed to the liquidity risk. The Company has managed it by monitoring monthly
financial planning by each business administration department.
(3) Supplementation to Quantitative Information
The contract or notional amounts of derivatives which are shown in Note 16 do not represent the amounts exchanged by
the parties and do not measure the Company's exposure to credit or market risk.
(4) Fair Values of Financial Instruments
Fair values of financial instruments are based on quoted prices in active markets. If quoted price is not available, other
rational valuation techniques are used instead. Also please see Note 16 for the detail of fair value for derivatives.
(a) Fair value of financial instruments
＊1 Allowance for doubtful accounts is deducted from trade notes and accounts receivable.
＊2 Includes current portion of long-term debt and excludes obligation under finance leases and unsecured bonds.
＊3 Net receivables and payables derived as the result of derivative transactions are presented.
Values in parentheses represent net liabilities.
Cash and Cash Equivalents and Trade Notes and Accounts Receivable
The carrying values of cash and cash equivalents and trade notes and accounts receivable approximate fair value
because of their short maturities.
Marketable and Investment Securities
The fair values of marketable and investment securities are measured at the quoted market price on the stock
exchange for the equity instruments. The information of the fair value for the marketable and investment securities by
classification is included in Note 3.
Payables and Short-Term Borrowings
The carrying values of payables and short-term borrowings approximate fair value because of their short maturities.
Long-Term Debt
Long-term debt is determined by discounting the cash flows related to the debt at the corporate borrowing rates that
would presumably apply if similar borrowing were currently made.
A part of floating-rate long-term debt is entered into interest rate swap as a means of managing their interest rate
exposure. This debt is determined by discounting the cash flows including principal and interest related to the debt at the
corporate borrowing rates that would presumably apply if similar borrowing were currently made.
Derivatives
The information of the fair value for derivatives is included in Note 16.
(b) Financial instruments whose fair value cannot be reliably determined
(5) Maturity Analysis for Financial Assets and Securities with Contractual Maturities
Please see Note 8 for annual maturities of long-term debt and Note 14 for obligations under finance leases, respectively.
DERIVATIVES
The Group enters into derivatives including foreign exchange forward contracts, currency swaps, currency options and
interest rate swaps. The Group enters into derivatives in the normal course of business to reduce the exposure to
fluctuations in foreign exchange rates and interest rates. The Group does not hold derivatives for speculation.
Derivatives are subject to market risk and credit risk. Market risk is the exposure created by potential fluctuations in market
conditions, including interest or foreign exchange rates. Since most of the Group's derivative transactions are related to
qualified hedges of underlying business exposures, market risk in the derivative instruments is basically offset by opposite
movements in the value of the hedged assets or liabilities. Because the counterparties to those derivatives are limited to
major international financial institutions, the Group does not anticipate any losses arising from credit risk.
The basic policies for the use of derivatives are approved by the Board of Directors and the execution and control of
derivatives are controlled by the Finance Department. Each derivative transaction is periodically reported to the Board of
Directors, where evaluation and analysis of derivatives are made.
As noted in Note 15, 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 the end of the fiscal years
ending on or after March 31, 2010; therefore, the required information is disclosed only for 2010.
Derivative Transactions to Which Hedge Accounting Is Not Applied at March 31, 2010
Derivative Transactions to Which Hedge Accounting Is Applied at March 31, 2010
a. Derivative transactions qualifying for general accounting policies, deferral hedge accounting
b. Interest rate swap derivative transactions qualifying for exceptional accounting
The above interest rate swaps which qualify for hedge accounting and meet specific matching criteria are not remeasured at
market value but the differential paid or received under the swap agreements are recognized and included in interest
expense or income. In addition, the fair value of such interest rate swaps in Note 15 is included in that of hedged items (i.e.
long-term debt).
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.
Derivatives which qualify for hedge accounting for the year ended March 31, 2009 is excluded from the disclosure of market
value information.
The fair value of derivative transactions is measured at the quoted price obtained from the financial institution.
The contract or notional amounts of derivatives which are shown in the above table do not represent the amounts
exchanged by the parties and do not measure the Group's exposure to credit or market risk.
CONTINGENT LIABILITIES
Contingent liabilities at March 31, 2010 were as follows:
LOSS ON RESTRUCTURING DIVISIONS
Losses of ￥2,516 million for the year ended March 31, 2009 mainly resulted from extraordinary loss of closing plants with
disposal of their inventory and property, and extraordinary payments of employee's retirement benefits in conjunction with
restructuring divisions of industrial sewing machines, household sewing machines and others.
EXPENDITURES FOR RESTRUCTURING DIVISIONS
Expenditures For Restructuring Divisions mainly resulted from payment of restructuring costs of industrial sewing machines
and others.
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
a ) Sales and Operating Income (Loss)
b ) Assets, Depreciation, Impairment Loss and Capital Expenditures
a ) Sales and Operating Income (Loss)
b ) Assets, Depreciation, Impairment Loss and Capital Expenditures
a ) Sales and Operating Income (Loss)
b ) Assets, Depreciation, Impairment Loss and Capital Expenditures
(2) Geographical Segments
The geographical segments of the Group for the years ended March 31, 2010 and 2009, are summarized as follows:
(3) Sales to Foreign Customers
Sales to foreign customers for the years ended March 31, 2010 and 2009, amounted to ￥43,499 million (＄467,730
thousand) and ￥55,694 million, respectively.
02 Financial Section
36
02Memo
37
Deloitte Touche Tohmatsu LLCMS Shibaura Building4-13-23, ShibauraMinato-ku, Tokyo 108-8530Japan
Tel : + 81 (3) 3457-7321Fax: + 81 (3) 3457-1694www.deloitte.com/jp
June 25, 2010
Member of
Deloitte Touche Tohmatsu
DeloitteINDEPENDENT AUDITORS' REPORT
To the Board of Directors ofJUKI CORPORATION:
We have audited the accompanying consolidated balance sheets of JUKI CORPORATION (the "Company") and
consolidated subsidiaries as of March 31, 2010 and 2009, and the related consolidated statements of operations, changes in
equity, and cash flows for the years then ended, all expressed in Japanese yen. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
consolidated financial position of JUKI CORPORATION and consolidated subsidiaries as of March 31, 2010 and 2009, and
the consolidated results of their operations and their cash flows for the years then ended in conformity with accounting
principles generally accepted in Japan.
Our audits also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, such
translation has been made in conformity with the basis stated in Note 1. Such U.S. dollar amounts are presented solely for
the convenience of readers outside Japan.
Millions of YenThousands ofU.S. Dollars
Trade notes discounted with banks………………………………………………… ￥166 ＄1,785
Millions of YenThousands ofU.S. Dollars
Depreciation expense……………………………………………………
Interest expense…………………………………………………………
TOTAL……………………………………………………………………
Lease payments…………………………………………………………
2010 2009 2010
￥496
20
￥516
￥534
￥689
35
￥724
￥739
＄5,335
215
＄5,550
＄5,737
Millions of Yen
As Lessee
As Lessor
Thousands ofU.S. Dollars
Due within one year………………………………………………………
Due after one year…………………………………………………………
TOTAL……………………………………………………………………
Due within one year………………………………………………………
Due after one year…………………………………………………………
TOTAL……………………………………………………………………
2010 2009 2010
￥148
105
￥253
￥26
67
￥93
￥173
105
￥278
￥25
92
￥117
＄1,597
1,128
＄2,725
＄276
724
＄1,000
Millions of Yen
Contract Amount Due afterOne Year
ContractAmountMarch 31, 2010
Foreign currency forward contracts:
Selling U.S.＄…………………………………………………………
Selling EUR……………………………………………………………
Currency swaps…………………………………………………………
￥11,589
1,365
169
UnrealizedGain/LossFair Value
￥(169)
85
￥(169)
85
March 31, 2010
Foreign currency forward contracts:
Selling U.S.＄………………………………………………………
Selling EUR…………………………………………………………
Currency swaps…………………………………………………………
＄124,617
14,676
1,818
Thousands of U.S. Dollars
Contract Amount Due afterOne Year
ContractAmount
UnrealizedGain/LossFair Value
＄(1,814)
913
(1)
＄(1,814)
913
(1)
Millions of Yen
Contract Amount Hedged ItemMarch 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… Long-term debt ￥13,110
Fair Value
Contract Amount Due afterOne Year
￥13,075 ￥(168)
Long-term debt
March 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… ＄140,968
Thousands of U.S. Dollars
Contract Amount Hedged Item Fair Value
Contract Amount Due afterOne Year
＄140,591 ＄(1,803)
Millions of Yen
Contract AmountHedged ItemMarch 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… Long-term debt ￥75
Fair Value
Contract Amount Due afterOne Year
￥75
Contract Amount
Long-term debt
March 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… ＄806
Thousands of U.S. Dollars
Hedged Item Fair Value
Contract Amount Due afterOne Year
＄806
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable＊1 ……………………………
Marketable and investment securities………………………………
TOTAL……………………………………………………………………
Short-term borrowings…………………………………………………
Payables…………………………………………………………………
Long-term debt＊2 ………………………………………………………
TOTAL……………………………………………………………………
Derivatives＊3 ……………………………………………………………
Millions of Yen
UnrealizedGain/Loss
FairValue
CarrynngAmount
￥8,349
12,061
1,767
￥22,177
￥(33,388)
(11,003)
(30,725)
￥(75,116)
￥(252)
￥8,349
12,061
1,767
￥22,177
￥(33,388)
(11,003)
(30,703)
￥(75,094)
￥(252)
￥(22)
￥(22)
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable＊1 ……………………………
Marketable and investment securities………………………………
TOTAL……………………………………………………………………
Short-term borrowings…………………………………………………
Payables…………………………………………………………………
Long-term debt＊2 ………………………………………………………
TOTAL……………………………………………………………………
Derivatives＊3 ……………………………………………………………
Thousands of U.S. Dollars
UnrealizedGain/Loss
FairValue
CarrynngAmount
＄89,770
129,694
18,998
＄238,462
＄(359,008)
(118,313)
(330,375)
＄(807,696)
＄(2,705)
＄89,770
129,694
18,998
＄238,462
＄(359,008)
(118,313)
(330,139)
＄(807,460)
＄(2,705)
＄(236)
＄(236)
March 31, 2010
Investments in equity instruments that do not
have a quoted market price in an active market………………
Carrynng Amount
Thousands ofU.S. Dollars
Millionsof Yen
￥233 ＄2,510
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable…………………………………
Marketable and investment securities―
Available-for-sale securities with contractual maturities………
TOTAL……………………………………………………………………
Millions of Yen
Due afterOne Year through
Five Years
Due in One Year
or Less
￥8,349
13,153
6
￥21,508
�
￥4
￥4
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable…………………………………
Marketable and investment securities―
Available-for-sale securities with contractual maturities………
TOTAL……………………………………………………………………
Thousands of U.S. Dollars
Due afterOne Year through
Five Years
Due in One Year
or Less
＄89,770
141,434
69
＄231,273
＄42
＄42
ConsolidatedEliminations/
CorporateOther
Millions of Yen
2009
Assets…………………………………………
Depreciation and amortization………………
Impairment loss………………………………
Capital expenditures…………………………
Industrial SewingMachines
Household SewingMachines
SMTSystems
Electronic Equipmentand Computer Peripherals
￥44,364
1,618
6
1,370
￥965
75
912
4
￥21,291
907
1,322
￥3,616
140
61
79
￥1,573
47
73
￥28,585
445
6,383
￥103,655
3,463
979
9,471
Precision Casting
￥3,261
231
240
Millions of Yen
AsiaNorth
AmericaJapan
2009
ConsolidatedEliminations /
CorporateEurope
Sales to customers……………………………………………
Intersegment sales……………………………………………
Total sales…………………………………………………
Operating expenses…………………………………………
Operating income (loss)………………………………………
Assets…………………………………………………………
￥25,695
37,180
62,875
67,562
￥(4,687)
￥45,949
￥8,184
53
8,237
8,181
￥56
￥7,894
￥34,780
9,904
44,684
45,654
￥(970)
￥30,072
￥9,173
67
9,240
9,045
￥195
￥6,753
￥(47,204)
(47,204)
(47,635)
￥431
￥12,987
￥77,832
77,832
82,807
￥(4,975)
￥103,655
Thousands of U.S. Dollars
AsiaNorth
AmericaJapan
2010
ConsolidatedEliminations /
CorporateEurope
Sales to customers……………………………………………
Intersegment sales……………………………………………
Total sales…………………………………………………
Operating expenses…………………………………………
Operating loss…………………………………………………
Assets…………………………………………………………
＄166,175
259,864
426,039
532,409
＄(106,370)
＄579,512
＄54,384
1,712
56,096
58,212
＄(2,116)
＄72,570
＄336,946
61,488
398,434
406,512
＄(8,078)
＄290,747
＄55,083
1,272
56,355
58,801
＄(2,446)
＄45,234
＄(324,336)
(324,336)
(323,052)
＄(1,284)
＄98,832
＄612,588
612,588
732,882
＄(120,294)
＄1,086,895
Millions of Yen
Sales to customers……………………………
Intersegment sales……………………………
Total sales…………………………………
Operating expenses…………………………
Operating income (loss)………………………
Industrial SewingMachines
2009
ConsolidatedEliminations/
CorporateOtherHousehold Sewing
MachinesSMT
SystemsElectronic Equipment
and Computer Peripherals
￥44,585
623
45,208
45,467
￥(259)
￥3,755
83
3,838
3,739
￥99
￥2,356
341
2,697
4,234
￥(1,537)
￥19,961
304
20,265
22,058
￥(1,793)
￥5,340
719
6,059
5,644
￥415
￥1,835
351
2,186
2,470
￥(284)
￥(2,421)
(2,421)
(805)
￥(1,616)
￥77,832
77,832
82,807
￥(4,975)
Precision Casting
ConsolidatedEliminations/
CorporateOther
Millions of Yen
2010
Assets…………………………………………
Depreciation and amortization………………
Impairment loss………………………………
Capital expenditures…………………………
Industrial SewingMachines
Household SewingMachines
SMTSystems
Electronic Equipmentand Computer Peripherals
￥44,333
1,404
18
795
￥543
48
3
￥22,775
846
547
￥2,663
90
16
￥1,705
63
55
19
￥26,083
881
52
6,505
￥101,081
3,535
125
8,031
Precision Casting
￥2,979
203
146
Millions of Yen
Sales to customers……………………………
Intersegment sales……………………………
Total sales…………………………………
Operating expenses…………………………
Operating income (loss)………………………
Industrial SewingMachines
2010
ConsolidatedEliminations/
CorporateOtherHousehold Sewing
MachinesSMT
SystemsElectronic Equipment
and Computer Peripherals
￥36,092
415
36,507
41,788
￥(5,281)
￥2,745
51
2,796
2,930
￥(134)
￥2,425
467
2,892
3,211
￥(319)
￥12,040
253
12,293
15,863
￥(3,570)
￥2,381
99
2,480
2,455
￥25
￥1,288
362
1,650
1,686
￥(36)
￥(1,647)
(1,647)
225
￥(1,872)
￥56,971
56,971
68,158
￥(11,187)
Precision Casting
ConsolidatedEliminations/
CorporateOther
Thousands of U.S. Dollars
2010
Assets…………………………………………
Depreciation and amortization………………
Impairment loss………………………………
Capital expenditures…………………………
Industrial SewingMachines
Household SewingMachines
SMTSystems
Electronic Equipmentand Computer Peripherals
＄476,696
15,099
196
8,548
＄5,838
519
36
＄244,897
9,092
5,883
＄28,631
969
170
＄18,339
680
594
206
＄280,464
9,469
553
69,940
＄1,086,895
38,006
1,343
86,351
Precision Casting
＄32,030
2,178
1,568
Thousands of U.S. Dollars
Sales to customers……………………………
Intersegment sales……………………………
Total sales…………………………………
Operating expenses…………………………
Operating income (loss)………………………
Industrial SewingMachines
2010
ConsolidatedEliminations/
CorporateOtherHousehold Sewing
MachinesSMT
SystemsElectronic Equipment
and Computer Peripherals
＄388,088
4,463
392,551
449,336
＄(56,785)
＄29,520
549
30,069
31,507
＄(1,438)
＄26,069
5,022
31,091
34,525
＄(3,434)
＄129,465
2,716
132,181
170,570
＄(38,389)
＄25,603
1,066
26,669
26,398
＄271
＄13,843
3,897
17,740
18,128
＄(388)
＄(17,713)
(17,713)
2,418
＄(20,131)
＄612,588
612,588
732,882
＄(120,294)
Precision Casting
Millions of Yen
AsiaNorth
AmericaJapan
2010
Sales to customers……………………………………………
Intersegment sales……………………………………………
Total sales…………………………………………………
Operating expenses…………………………………………
Operating loss…………………………………………………
Assets…………………………………………………………
ConsolidatedEliminations /
CorporateEurope
￥15,454
24,168
39,622
49,514
￥(9,892)
￥53,895
￥5,058
159
5,217
5,414
￥(197)
￥6,749
￥31,336
5,718
37,054
37,805
￥(751)
￥27,039
￥5,123
118
5,241
5,469
￥(228)
￥4,207
￥(30,163)
(30,163)
(30,044)
￥(119)
￥9,191
￥56,971
56,971
68,158
￥(11,187)
￥101,081
March 31, 2009
Foreign currency forward contracts:
Buying U.S.＄………………………………………………………
Selling EUR…………………………………………………………
Currency swaps…………………………………………………………
Millions of Yen
UnrealizedGain/LossFair Value
ContractAmount
￥8,581
1,757
169
￥8,724
1,825
￥(143)
(68)
15
16
17
18
20
19
02 Financial Section
28
02Financial Section
29
02 Financial Section
30
02Financial Section
31
02 Financial Section
32
02Financial Section
33
02 Financial Section
34
02Financial Section
35
Depreciation expense, interest expense and other information under finance leases:
Depreciation expense and interest expense, which are not reflected in the accompanying consolidated statements of
operations, are computed by the straight-line method and the interest method, respectively.
The minimum rental commitments under noncancelable operating leases at March 31, 2010 and 2009, were as follows:
FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
On 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 the guidance are applicable to financial instruments and related disclosures at the end of the fiscal
years ending on or after March 31, 2010 with early 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, mainly long-term debt including bank loans based on its capital financing 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 of interest and foreign currency rates.
(2) Nature and Extent of Risks Arising from Financial Instruments and Risk Management for Financial Instruments
(a) Receivables such as trade notes and trade accounts are exposed to customer credit risk. The Group manages its
credit risk from receivables on the basis of internal guidelines, which include monitoring of payment term and
balances of major customers by each business administration department to identify the default risk of customers in
early stage.
(b) Marketable and investment securities, mainly shares, are exposed to the risk of market price fluctuations. Marketable
and investment securities are managed by monitoring market values on a quarterly basis.
(c) Payment terms of payables, such as trade notes and trade accounts, are less than one year.
(d) Bank loans are used for operating capital (mainly short-term) and business investment capital (long-term). Interest-
rate risks in relation to a part of long-term debt are mitigated by using derivative of interest-rate swaps transactions.
(e) Derivative transactions entered into by the Company have been made in accordance with internal policies which
regulate the authorization and limit for transactions.
Credit risk of those derivatives are mitigated by using to major international financial institutions highly rated.
(f) Payables and bank loans are exposed to the liquidity risk. The Company has managed it by monitoring monthly
financial planning by each business administration department.
(3) Supplementation to Quantitative Information
The contract or notional amounts of derivatives which are shown in Note 16 do not represent the amounts exchanged by
the parties and do not measure the Company's exposure to credit or market risk.
(4) Fair Values of Financial Instruments
Fair values of financial instruments are based on quoted prices in active markets. If quoted price is not available, other
rational valuation techniques are used instead. Also please see Note 16 for the detail of fair value for derivatives.
(a) Fair value of financial instruments
＊1 Allowance for doubtful accounts is deducted from trade notes and accounts receivable.
＊2 Includes current portion of long-term debt and excludes obligation under finance leases and unsecured bonds.
＊3 Net receivables and payables derived as the result of derivative transactions are presented.
Values in parentheses represent net liabilities.
Cash and Cash Equivalents and Trade Notes and Accounts Receivable
The carrying values of cash and cash equivalents and trade notes and accounts receivable approximate fair value
because of their short maturities.
Marketable and Investment Securities
The fair values of marketable and investment securities are measured at the quoted market price on the stock
exchange for the equity instruments. The information of the fair value for the marketable and investment securities by
classification is included in Note 3.
Payables and Short-Term Borrowings
The carrying values of payables and short-term borrowings approximate fair value because of their short maturities.
Long-Term Debt
Long-term debt is determined by discounting the cash flows related to the debt at the corporate borrowing rates that
would presumably apply if similar borrowing were currently made.
A part of floating-rate long-term debt is entered into interest rate swap as a means of managing their interest rate
exposure. This debt is determined by discounting the cash flows including principal and interest related to the debt at the
corporate borrowing rates that would presumably apply if similar borrowing were currently made.
Derivatives
The information of the fair value for derivatives is included in Note 16.
(b) Financial instruments whose fair value cannot be reliably determined
(5) Maturity Analysis for Financial Assets and Securities with Contractual Maturities
Please see Note 8 for annual maturities of long-term debt and Note 14 for obligations under finance leases, respectively.
DERIVATIVES
The Group enters into derivatives including foreign exchange forward contracts, currency swaps, currency options and
interest rate swaps. The Group enters into derivatives in the normal course of business to reduce the exposure to
fluctuations in foreign exchange rates and interest rates. The Group does not hold derivatives for speculation.
Derivatives are subject to market risk and credit risk. Market risk is the exposure created by potential fluctuations in market
conditions, including interest or foreign exchange rates. Since most of the Group's derivative transactions are related to
qualified hedges of underlying business exposures, market risk in the derivative instruments is basically offset by opposite
movements in the value of the hedged assets or liabilities. Because the counterparties to those derivatives are limited to
major international financial institutions, the Group does not anticipate any losses arising from credit risk.
The basic policies for the use of derivatives are approved by the Board of Directors and the execution and control of
derivatives are controlled by the Finance Department. Each derivative transaction is periodically reported to the Board of
Directors, where evaluation and analysis of derivatives are made.
As noted in Note 15, 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 the end of the fiscal years
ending on or after March 31, 2010; therefore, the required information is disclosed only for 2010.
Derivative Transactions to Which Hedge Accounting Is Not Applied at March 31, 2010
Derivative Transactions to Which Hedge Accounting Is Applied at March 31, 2010
a. Derivative transactions qualifying for general accounting policies, deferral hedge accounting
b. Interest rate swap derivative transactions qualifying for exceptional accounting
The above interest rate swaps which qualify for hedge accounting and meet specific matching criteria are not remeasured at
market value but the differential paid or received under the swap agreements are recognized and included in interest
expense or income. In addition, the fair value of such interest rate swaps in Note 15 is included in that of hedged items (i.e.
long-term debt).
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.
Derivatives which qualify for hedge accounting for the year ended March 31, 2009 is excluded from the disclosure of market
value information.
The fair value of derivative transactions is measured at the quoted price obtained from the financial institution.
The contract or notional amounts of derivatives which are shown in the above table do not represent the amounts
exchanged by the parties and do not measure the Group's exposure to credit or market risk.
CONTINGENT LIABILITIES
Contingent liabilities at March 31, 2010 were as follows:
LOSS ON RESTRUCTURING DIVISIONS
Losses of ￥2,516 million for the year ended March 31, 2009 mainly resulted from extraordinary loss of closing plants with
disposal of their inventory and property, and extraordinary payments of employee's retirement benefits in conjunction with
restructuring divisions of industrial sewing machines, household sewing machines and others.
EXPENDITURES FOR RESTRUCTURING DIVISIONS
Expenditures For Restructuring Divisions mainly resulted from payment of restructuring costs of industrial sewing machines
and others.
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
a ) Sales and Operating Income (Loss)
b ) Assets, Depreciation, Impairment Loss and Capital Expenditures
a ) Sales and Operating Income (Loss)
b ) Assets, Depreciation, Impairment Loss and Capital Expenditures
a ) Sales and Operating Income (Loss)
b ) Assets, Depreciation, Impairment Loss and Capital Expenditures
(2) Geographical Segments
The geographical segments of the Group for the years ended March 31, 2010 and 2009, are summarized as follows:
(3) Sales to Foreign Customers
Sales to foreign customers for the years ended March 31, 2010 and 2009, amounted to ￥43,499 million (＄467,730
thousand) and ￥55,694 million, respectively.
02 Financial Section
36
02Memo
37
Deloitte Touche Tohmatsu LLCMS Shibaura Building4-13-23, ShibauraMinato-ku, Tokyo 108-8530Japan
Tel : + 81 (3) 3457-7321Fax: + 81 (3) 3457-1694www.deloitte.com/jp
June 25, 2010
Member of
Deloitte Touche Tohmatsu
DeloitteINDEPENDENT AUDITORS' REPORT
To the Board of Directors ofJUKI CORPORATION:
We have audited the accompanying consolidated balance sheets of JUKI CORPORATION (the "Company") and
consolidated subsidiaries as of March 31, 2010 and 2009, and the related consolidated statements of operations, changes in
equity, and cash flows for the years then ended, all expressed in Japanese yen. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
consolidated financial position of JUKI CORPORATION and consolidated subsidiaries as of March 31, 2010 and 2009, and
the consolidated results of their operations and their cash flows for the years then ended in conformity with accounting
principles generally accepted in Japan.
Our audits also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, such
translation has been made in conformity with the basis stated in Note 1. Such U.S. dollar amounts are presented solely for
the convenience of readers outside Japan.
Millions of YenThousands ofU.S. Dollars
Trade notes discounted with banks………………………………………………… ￥166 ＄1,785
Millions of YenThousands ofU.S. Dollars
Depreciation expense……………………………………………………
Interest expense…………………………………………………………
TOTAL……………………………………………………………………
Lease payments…………………………………………………………
2010 2009 2010
￥496
20
￥516
￥534
￥689
35
￥724
￥739
＄5,335
215
＄5,550
＄5,737
Millions of Yen
As Lessee
As Lessor
Thousands ofU.S. Dollars
Due within one year………………………………………………………
Due after one year…………………………………………………………
TOTAL……………………………………………………………………
Due within one year………………………………………………………
Due after one year…………………………………………………………
TOTAL……………………………………………………………………
2010 2009 2010
￥148
105
￥253
￥26
67
￥93
￥173
105
￥278
￥25
92
￥117
＄1,597
1,128
＄2,725
＄276
724
＄1,000
Millions of Yen
Contract Amount Due afterOne Year
ContractAmountMarch 31, 2010
Foreign currency forward contracts:
Selling U.S.＄…………………………………………………………
Selling EUR……………………………………………………………
Currency swaps…………………………………………………………
￥11,589
1,365
169
UnrealizedGain/LossFair Value
￥(169)
85
￥(169)
85
March 31, 2010
Foreign currency forward contracts:
Selling U.S.＄………………………………………………………
Selling EUR…………………………………………………………
Currency swaps…………………………………………………………
＄124,617
14,676
1,818
Thousands of U.S. Dollars
Contract Amount Due afterOne Year
ContractAmount
UnrealizedGain/LossFair Value
＄(1,814)
913
(1)
＄(1,814)
913
(1)
Millions of Yen
Contract Amount Hedged ItemMarch 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… Long-term debt ￥13,110
Fair Value
Contract Amount Due afterOne Year
￥13,075 ￥(168)
Long-term debt
March 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… ＄140,968
Thousands of U.S. Dollars
Contract Amount Hedged Item Fair Value
Contract Amount Due afterOne Year
＄140,591 ＄(1,803)
Millions of Yen
Contract AmountHedged ItemMarch 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… Long-term debt ￥75
Fair Value
Contract Amount Due afterOne Year
￥75
Contract Amount
Long-term debt
March 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… ＄806
Thousands of U.S. Dollars
Hedged Item Fair Value
Contract Amount Due afterOne Year
＄806
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable＊1 ……………………………
Marketable and investment securities………………………………
TOTAL……………………………………………………………………
Short-term borrowings…………………………………………………
Payables…………………………………………………………………
Long-term debt＊2 ………………………………………………………
TOTAL……………………………………………………………………
Derivatives＊3 ……………………………………………………………
Millions of Yen
UnrealizedGain/Loss
FairValue
CarrynngAmount
￥8,349
12,061
1,767
￥22,177
￥(33,388)
(11,003)
(30,725)
￥(75,116)
￥(252)
￥8,349
12,061
1,767
￥22,177
￥(33,388)
(11,003)
(30,703)
￥(75,094)
￥(252)
￥(22)
￥(22)
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable＊1 ……………………………
Marketable and investment securities………………………………
TOTAL……………………………………………………………………
Short-term borrowings…………………………………………………
Payables…………………………………………………………………
Long-term debt＊2 ………………………………………………………
TOTAL……………………………………………………………………
Derivatives＊3 ……………………………………………………………
Thousands of U.S. Dollars
UnrealizedGain/Loss
FairValue
CarrynngAmount
＄89,770
129,694
18,998
＄238,462
＄(359,008)
(118,313)
(330,375)
＄(807,696)
＄(2,705)
＄89,770
129,694
18,998
＄238,462
＄(359,008)
(118,313)
(330,139)
＄(807,460)
＄(2,705)
＄(236)
＄(236)
March 31, 2010
Investments in equity instruments that do not
have a quoted market price in an active market………………
Carrynng Amount
Thousands ofU.S. Dollars
Millionsof Yen
￥233 ＄2,510
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable…………………………………
Marketable and investment securities―
Available-for-sale securities with contractual maturities………
TOTAL……………………………………………………………………
Millions of Yen
Due afterOne Year through
Five Years
Due in One Year
or Less
￥8,349
13,153
6
￥21,508
�
￥4
￥4
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable…………………………………
Marketable and investment securities―
Available-for-sale securities with contractual maturities………
TOTAL……………………………………………………………………
Thousands of U.S. Dollars
Due afterOne Year through
Five Years
Due in One Year
or Less
＄89,770
141,434
69
＄231,273
＄42
＄42
ConsolidatedEliminations/
CorporateOther
Millions of Yen
2009
Assets…………………………………………
Depreciation and amortization………………
Impairment loss………………………………
Capital expenditures…………………………
Industrial SewingMachines
Household SewingMachines
SMTSystems
Electronic Equipmentand Computer Peripherals
￥44,364
1,618
6
1,370
￥965
75
912
4
￥21,291
907
1,322
￥3,616
140
61
79
￥1,573
47
73
￥28,585
445
6,383
￥103,655
3,463
979
9,471
Precision Casting
￥3,261
231
240
Millions of Yen
AsiaNorth
AmericaJapan
2009
ConsolidatedEliminations /
CorporateEurope
Sales to customers……………………………………………
Intersegment sales……………………………………………
Total sales…………………………………………………
Operating expenses…………………………………………
Operating income (loss)………………………………………
Assets…………………………………………………………
￥25,695
37,180
62,875
67,562
￥(4,687)
￥45,949
￥8,184
53
8,237
8,181
￥56
￥7,894
￥34,780
9,904
44,684
45,654
￥(970)
￥30,072
￥9,173
67
9,240
9,045
￥195
￥6,753
￥(47,204)
(47,204)
(47,635)
￥431
￥12,987
￥77,832
77,832
82,807
￥(4,975)
￥103,655
Thousands of U.S. Dollars
AsiaNorth
AmericaJapan
2010
ConsolidatedEliminations /
CorporateEurope
Sales to customers……………………………………………
Intersegment sales……………………………………………
Total sales…………………………………………………
Operating expenses…………………………………………
Operating loss…………………………………………………
Assets…………………………………………………………
＄166,175
259,864
426,039
532,409
＄(106,370)
＄579,512
＄54,384
1,712
56,096
58,212
＄(2,116)
＄72,570
＄336,946
61,488
398,434
406,512
＄(8,078)
＄290,747
＄55,083
1,272
56,355
58,801
＄(2,446)
＄45,234
＄(324,336)
(324,336)
(323,052)
＄(1,284)
＄98,832
＄612,588
612,588
732,882
＄(120,294)
＄1,086,895
Millions of Yen
Sales to customers……………………………
Intersegment sales……………………………
Total sales…………………………………
Operating expenses…………………………
Operating income (loss)………………………
Industrial SewingMachines
2009
ConsolidatedEliminations/
CorporateOtherHousehold Sewing
MachinesSMT
SystemsElectronic Equipment
and Computer Peripherals
￥44,585
623
45,208
45,467
￥(259)
￥3,755
83
3,838
3,739
￥99
￥2,356
341
2,697
4,234
￥(1,537)
￥19,961
304
20,265
22,058
￥(1,793)
￥5,340
719
6,059
5,644
￥415
￥1,835
351
2,186
2,470
￥(284)
￥(2,421)
(2,421)
(805)
￥(1,616)
￥77,832
77,832
82,807
￥(4,975)
Precision Casting
ConsolidatedEliminations/
CorporateOther
Millions of Yen
2010
Assets…………………………………………
Depreciation and amortization………………
Impairment loss………………………………
Capital expenditures…………………………
Industrial SewingMachines
Household SewingMachines
SMTSystems
Electronic Equipmentand Computer Peripherals
￥44,333
1,404
18
795
￥543
48
3
￥22,775
846
547
￥2,663
90
16
￥1,705
63
55
19
￥26,083
881
52
6,505
￥101,081
3,535
125
8,031
Precision Casting
￥2,979
203
146
Millions of Yen
Sales to customers……………………………
Intersegment sales……………………………
Total sales…………………………………
Operating expenses…………………………
Operating income (loss)………………………
Industrial SewingMachines
2010
ConsolidatedEliminations/
CorporateOtherHousehold Sewing
MachinesSMT
SystemsElectronic Equipment
and Computer Peripherals
￥36,092
415
36,507
41,788
￥(5,281)
￥2,745
51
2,796
2,930
￥(134)
￥2,425
467
2,892
3,211
￥(319)
￥12,040
253
12,293
15,863
￥(3,570)
￥2,381
99
2,480
2,455
￥25
￥1,288
362
1,650
1,686
￥(36)
￥(1,647)
(1,647)
225
￥(1,872)
￥56,971
56,971
68,158
￥(11,187)
Precision Casting
ConsolidatedEliminations/
CorporateOther
Thousands of U.S. Dollars
2010
Assets…………………………………………
Depreciation and amortization………………
Impairment loss………………………………
Capital expenditures…………………………
Industrial SewingMachines
Household SewingMachines
SMTSystems
Electronic Equipmentand Computer Peripherals
＄476,696
15,099
196
8,548
＄5,838
519
36
＄244,897
9,092
5,883
＄28,631
969
170
＄18,339
680
594
206
＄280,464
9,469
553
69,940
＄1,086,895
38,006
1,343
86,351
Precision Casting
＄32,030
2,178
1,568
Thousands of U.S. Dollars
Sales to customers……………………………
Intersegment sales……………………………
Total sales…………………………………
Operating expenses…………………………
Operating income (loss)………………………
Industrial SewingMachines
2010
ConsolidatedEliminations/
CorporateOtherHousehold Sewing
MachinesSMT
SystemsElectronic Equipment
and Computer Peripherals
＄388,088
4,463
392,551
449,336
＄(56,785)
＄29,520
549
30,069
31,507
＄(1,438)
＄26,069
5,022
31,091
34,525
＄(3,434)
＄129,465
2,716
132,181
170,570
＄(38,389)
＄25,603
1,066
26,669
26,398
＄271
＄13,843
3,897
17,740
18,128
＄(388)
＄(17,713)
(17,713)
2,418
＄(20,131)
＄612,588
612,588
732,882
＄(120,294)
Precision Casting
Millions of Yen
AsiaNorth
AmericaJapan
2010
Sales to customers……………………………………………
Intersegment sales……………………………………………
Total sales…………………………………………………
Operating expenses…………………………………………
Operating loss…………………………………………………
Assets…………………………………………………………
ConsolidatedEliminations /
CorporateEurope
￥15,454
24,168
39,622
49,514
￥(9,892)
￥53,895
￥5,058
159
5,217
5,414
￥(197)
￥6,749
￥31,336
5,718
37,054
37,805
￥(751)
￥27,039
￥5,123
118
5,241
5,469
￥(228)
￥4,207
￥(30,163)
(30,163)
(30,044)
￥(119)
￥9,191
￥56,971
56,971
68,158
￥(11,187)
￥101,081
March 31, 2009
Foreign currency forward contracts:
Buying U.S.＄………………………………………………………
Selling EUR…………………………………………………………
Currency swaps…………………………………………………………
Millions of Yen
UnrealizedGain/LossFair Value
ContractAmount
￥8,581
1,757
169
￥8,724
1,825
￥(143)
(68)
15
16
17
18
20
19
02 Financial Section
28
02Financial Section
29
02 Financial Section
30
02Financial Section
31
02 Financial Section
32
02Financial Section
33
02 Financial Section
34
02Financial Section
35
Depreciation expense, interest expense and other information under finance leases:
Depreciation expense and interest expense, which are not reflected in the accompanying consolidated statements of
operations, are computed by the straight-line method and the interest method, respectively.
The minimum rental commitments under noncancelable operating leases at March 31, 2010 and 2009, were as follows:
FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
On 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 the guidance are applicable to financial instruments and related disclosures at the end of the fiscal
years ending on or after March 31, 2010 with early 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, mainly long-term debt including bank loans based on its capital financing 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 of interest and foreign currency rates.
(2) Nature and Extent of Risks Arising from Financial Instruments and Risk Management for Financial Instruments
(a) Receivables such as trade notes and trade accounts are exposed to customer credit risk. The Group manages its
credit risk from receivables on the basis of internal guidelines, which include monitoring of payment term and
balances of major customers by each business administration department to identify the default risk of customers in
early stage.
(b) Marketable and investment securities, mainly shares, are exposed to the risk of market price fluctuations. Marketable
and investment securities are managed by monitoring market values on a quarterly basis.
(c) Payment terms of payables, such as trade notes and trade accounts, are less than one year.
(d) Bank loans are used for operating capital (mainly short-term) and business investment capital (long-term). Interest-
rate risks in relation to a part of long-term debt are mitigated by using derivative of interest-rate swaps transactions.
(e) Derivative transactions entered into by the Company have been made in accordance with internal policies which
regulate the authorization and limit for transactions.
Credit risk of those derivatives are mitigated by using to major international financial institutions highly rated.
(f) Payables and bank loans are exposed to the liquidity risk. The Company has managed it by monitoring monthly
financial planning by each business administration department.
(3) Supplementation to Quantitative Information
The contract or notional amounts of derivatives which are shown in Note 16 do not represent the amounts exchanged by
the parties and do not measure the Company's exposure to credit or market risk.
(4) Fair Values of Financial Instruments
Fair values of financial instruments are based on quoted prices in active markets. If quoted price is not available, other
rational valuation techniques are used instead. Also please see Note 16 for the detail of fair value for derivatives.
(a) Fair value of financial instruments
＊1 Allowance for doubtful accounts is deducted from trade notes and accounts receivable.
＊2 Includes current portion of long-term debt and excludes obligation under finance leases and unsecured bonds.
＊3 Net receivables and payables derived as the result of derivative transactions are presented.
Values in parentheses represent net liabilities.
Cash and Cash Equivalents and Trade Notes and Accounts Receivable
The carrying values of cash and cash equivalents and trade notes and accounts receivable approximate fair value
because of their short maturities.
Marketable and Investment Securities
The fair values of marketable and investment securities are measured at the quoted market price on the stock
exchange for the equity instruments. The information of the fair value for the marketable and investment securities by
classification is included in Note 3.
Payables and Short-Term Borrowings
The carrying values of payables and short-term borrowings approximate fair value because of their short maturities.
Long-Term Debt
Long-term debt is determined by discounting the cash flows related to the debt at the corporate borrowing rates that
would presumably apply if similar borrowing were currently made.
A part of floating-rate long-term debt is entered into interest rate swap as a means of managing their interest rate
exposure. This debt is determined by discounting the cash flows including principal and interest related to the debt at the
corporate borrowing rates that would presumably apply if similar borrowing were currently made.
Derivatives
The information of the fair value for derivatives is included in Note 16.
(b) Financial instruments whose fair value cannot be reliably determined
(5) Maturity Analysis for Financial Assets and Securities with Contractual Maturities
Please see Note 8 for annual maturities of long-term debt and Note 14 for obligations under finance leases, respectively.
DERIVATIVES
The Group enters into derivatives including foreign exchange forward contracts, currency swaps, currency options and
interest rate swaps. The Group enters into derivatives in the normal course of business to reduce the exposure to
fluctuations in foreign exchange rates and interest rates. The Group does not hold derivatives for speculation.
Derivatives are subject to market risk and credit risk. Market risk is the exposure created by potential fluctuations in market
conditions, including interest or foreign exchange rates. Since most of the Group's derivative transactions are related to
qualified hedges of underlying business exposures, market risk in the derivative instruments is basically offset by opposite
movements in the value of the hedged assets or liabilities. Because the counterparties to those derivatives are limited to
major international financial institutions, the Group does not anticipate any losses arising from credit risk.
The basic policies for the use of derivatives are approved by the Board of Directors and the execution and control of
derivatives are controlled by the Finance Department. Each derivative transaction is periodically reported to the Board of
Directors, where evaluation and analysis of derivatives are made.
As noted in Note 15, 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 the end of the fiscal years
ending on or after March 31, 2010; therefore, the required information is disclosed only for 2010.
Derivative Transactions to Which Hedge Accounting Is Not Applied at March 31, 2010
Derivative Transactions to Which Hedge Accounting Is Applied at March 31, 2010
a. Derivative transactions qualifying for general accounting policies, deferral hedge accounting
b. Interest rate swap derivative transactions qualifying for exceptional accounting
The above interest rate swaps which qualify for hedge accounting and meet specific matching criteria are not remeasured at
market value but the differential paid or received under the swap agreements are recognized and included in interest
expense or income. In addition, the fair value of such interest rate swaps in Note 15 is included in that of hedged items (i.e.
long-term debt).
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.
Derivatives which qualify for hedge accounting for the year ended March 31, 2009 is excluded from the disclosure of market
value information.
The fair value of derivative transactions is measured at the quoted price obtained from the financial institution.
The contract or notional amounts of derivatives which are shown in the above table do not represent the amounts
exchanged by the parties and do not measure the Group's exposure to credit or market risk.
CONTINGENT LIABILITIES
Contingent liabilities at March 31, 2010 were as follows:
LOSS ON RESTRUCTURING DIVISIONS
Losses of ￥2,516 million for the year ended March 31, 2009 mainly resulted from extraordinary loss of closing plants with
disposal of their inventory and property, and extraordinary payments of employee's retirement benefits in conjunction with
restructuring divisions of industrial sewing machines, household sewing machines and others.
EXPENDITURES FOR RESTRUCTURING DIVISIONS
Expenditures For Restructuring Divisions mainly resulted from payment of restructuring costs of industrial sewing machines
and others.
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
a ) Sales and Operating Income (Loss)
b ) Assets, Depreciation, Impairment Loss and Capital Expenditures
a ) Sales and Operating Income (Loss)
b ) Assets, Depreciation, Impairment Loss and Capital Expenditures
a ) Sales and Operating Income (Loss)
b ) Assets, Depreciation, Impairment Loss and Capital Expenditures
(2) Geographical Segments
The geographical segments of the Group for the years ended March 31, 2010 and 2009, are summarized as follows:
(3) Sales to Foreign Customers
Sales to foreign customers for the years ended March 31, 2010 and 2009, amounted to ￥43,499 million (＄467,730
thousand) and ￥55,694 million, respectively.
02 Financial Section
36
02Memo
37
Deloitte Touche Tohmatsu LLCMS Shibaura Building4-13-23, ShibauraMinato-ku, Tokyo 108-8530Japan
Tel : + 81 (3) 3457-7321Fax: + 81 (3) 3457-1694www.deloitte.com/jp
June 25, 2010
Member of
Deloitte Touche Tohmatsu
DeloitteINDEPENDENT AUDITORS' REPORT
To the Board of Directors ofJUKI CORPORATION:
We have audited the accompanying consolidated balance sheets of JUKI CORPORATION (the "Company") and
consolidated subsidiaries as of March 31, 2010 and 2009, and the related consolidated statements of operations, changes in
equity, and cash flows for the years then ended, all expressed in Japanese yen. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
consolidated financial position of JUKI CORPORATION and consolidated subsidiaries as of March 31, 2010 and 2009, and
the consolidated results of their operations and their cash flows for the years then ended in conformity with accounting
principles generally accepted in Japan.
Our audits also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, such
translation has been made in conformity with the basis stated in Note 1. Such U.S. dollar amounts are presented solely for
the convenience of readers outside Japan.
Millions of YenThousands ofU.S. Dollars
Trade notes discounted with banks………………………………………………… ￥166 ＄1,785
Millions of YenThousands ofU.S. Dollars
Depreciation expense……………………………………………………
Interest expense…………………………………………………………
TOTAL……………………………………………………………………
Lease payments…………………………………………………………
2010 2009 2010
￥496
20
￥516
￥534
￥689
35
￥724
￥739
＄5,335
215
＄5,550
＄5,737
Millions of Yen
As Lessee
As Lessor
Thousands ofU.S. Dollars
Due within one year………………………………………………………
Due after one year…………………………………………………………
TOTAL……………………………………………………………………
Due within one year………………………………………………………
Due after one year…………………………………………………………
TOTAL……………………………………………………………………
2010 2009 2010
￥148
105
￥253
￥26
67
￥93
￥173
105
￥278
￥25
92
￥117
＄1,597
1,128
＄2,725
＄276
724
＄1,000
Millions of Yen
Contract Amount Due afterOne Year
ContractAmountMarch 31, 2010
Foreign currency forward contracts:
Selling U.S.＄…………………………………………………………
Selling EUR……………………………………………………………
Currency swaps…………………………………………………………
￥11,589
1,365
169
UnrealizedGain/LossFair Value
￥(169)
85
￥(169)
85
March 31, 2010
Foreign currency forward contracts:
Selling U.S.＄………………………………………………………
Selling EUR…………………………………………………………
Currency swaps…………………………………………………………
＄124,617
14,676
1,818
Thousands of U.S. Dollars
Contract Amount Due afterOne Year
ContractAmount
UnrealizedGain/LossFair Value
＄(1,814)
913
(1)
＄(1,814)
913
(1)
Millions of Yen
Contract Amount Hedged ItemMarch 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… Long-term debt ￥13,110
Fair Value
Contract Amount Due afterOne Year
￥13,075 ￥(168)
Long-term debt
March 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… ＄140,968
Thousands of U.S. Dollars
Contract Amount Hedged Item Fair Value
Contract Amount Due afterOne Year
＄140,591 ＄(1,803)
Millions of Yen
Contract AmountHedged ItemMarch 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… Long-term debt ￥75
Fair Value
Contract Amount Due afterOne Year
￥75
Contract Amount
Long-term debt
March 31, 2010
Interest rate swaps (fixed rate
payment, floating rate receipt) …………………………………… ＄806
Thousands of U.S. Dollars
Hedged Item Fair Value
Contract Amount Due afterOne Year
＄806
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable＊1 ……………………………
Marketable and investment securities………………………………
TOTAL……………………………………………………………………
Short-term borrowings…………………………………………………
Payables…………………………………………………………………
Long-term debt＊2 ………………………………………………………
TOTAL……………………………………………………………………
Derivatives＊3 ……………………………………………………………
Millions of Yen
UnrealizedGain/Loss
FairValue
CarrynngAmount
￥8,349
12,061
1,767
￥22,177
￥(33,388)
(11,003)
(30,725)
￥(75,116)
￥(252)
￥8,349
12,061
1,767
￥22,177
￥(33,388)
(11,003)
(30,703)
￥(75,094)
￥(252)
￥(22)
￥(22)
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable＊1 ……………………………
Marketable and investment securities………………………………
TOTAL……………………………………………………………………
Short-term borrowings…………………………………………………
Payables…………………………………………………………………
Long-term debt＊2 ………………………………………………………
TOTAL……………………………………………………………………
Derivatives＊3 ……………………………………………………………
Thousands of U.S. Dollars
UnrealizedGain/Loss
FairValue
CarrynngAmount
＄89,770
129,694
18,998
＄238,462
＄(359,008)
(118,313)
(330,375)
＄(807,696)
＄(2,705)
＄89,770
129,694
18,998
＄238,462
＄(359,008)
(118,313)
(330,139)
＄(807,460)
＄(2,705)
＄(236)
＄(236)
March 31, 2010
Investments in equity instruments that do not
have a quoted market price in an active market………………
Carrynng Amount
Thousands ofU.S. Dollars
Millionsof Yen
￥233 ＄2,510
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable…………………………………
Marketable and investment securities―
Available-for-sale securities with contractual maturities………
TOTAL……………………………………………………………………
Millions of Yen
Due afterOne Year through
Five Years
Due in One Year
or Less
￥8,349
13,153
6
￥21,508
�
￥4
￥4
March 31, 2010
Cash and cash equivalents……………………………………………
Trade notes and accounts receivable…………………………………
Marketable and investment securities―
Available-for-sale securities with contractual maturities………
TOTAL……………………………………………………………………
Thousands of U.S. Dollars
Due afterOne Year through
Five Years
Due in One Year
or Less
＄89,770
141,434
69
＄231,273
＄42
＄42
ConsolidatedEliminations/
CorporateOther
Millions of Yen
2009
Assets…………………………………………
Depreciation and amortization………………
Impairment loss………………………………
Capital expenditures…………………………
Industrial SewingMachines
Household SewingMachines
SMTSystems
Electronic Equipmentand Computer Peripherals
￥44,364
1,618
6
1,370
￥965
75
912
4
￥21,291
907
1,322
￥3,616
140
61
79
￥1,573
47
73
￥28,585
445
6,383
￥103,655
3,463
979
9,471
Precision Casting
￥3,261
231
240
Millions of Yen
AsiaNorth
AmericaJapan
2009
ConsolidatedEliminations /
CorporateEurope
Sales to customers……………………………………………
Intersegment sales……………………………………………
Total sales…………………………………………………
Operating expenses…………………………………………
Operating income (loss)………………………………………
Assets…………………………………………………………
￥25,695
37,180
62,875
67,562
￥(4,687)
￥45,949
￥8,184
53
8,237
8,181
￥56
￥7,894
￥34,780
9,904
44,684
45,654
￥(970)
￥30,072
￥9,173
67
9,240
9,045
￥195
￥6,753
￥(47,204)
(47,204)
(47,635)
￥431
￥12,987
￥77,832
77,832
82,807
￥(4,975)
￥103,655
Thousands of U.S. Dollars
AsiaNorth
AmericaJapan
2010
ConsolidatedEliminations /
CorporateEurope
Sales to customers……………………………………………
Intersegment sales……………………………………………
Total sales…………………………………………………
Operating expenses…………………………………………
Operating loss…………………………………………………
Assets…………………………………………………………
＄166,175
259,864
426,039
532,409
＄(106,370)
＄579,512
＄54,384
1,712
56,096
58,212
＄(2,116)
＄72,570
＄336,946
61,488
398,434
406,512
＄(8,078)
＄290,747
＄55,083
1,272
56,355
58,801
＄(2,446)
＄45,234
＄(324,336)
(324,336)
(323,052)
＄(1,284)
＄98,832
＄612,588
612,588
732,882
＄(120,294)
＄1,086,895
Millions of Yen
Sales to customers……………………………
Intersegment sales……………………………
Total sales…………………………………
Operating expenses…………………………
Operating income (loss)………………………
Industrial SewingMachines
2009
ConsolidatedEliminations/
CorporateOtherHousehold Sewing
MachinesSMT
SystemsElectronic Equipment
and Computer Peripherals
￥44,585
623
45,208
45,467
￥(259)
￥3,755
83
3,838
3,739
￥99
￥2,356
341
2,697
4,234
￥(1,537)
￥19,961
304
20,265
22,058
￥(1,793)
￥5,340
719
6,059
5,644
￥415
￥1,835
351
2,186
2,470
￥(284)
￥(2,421)
(2,421)
(805)
￥(1,616)
￥77,832
77,832
82,807
￥(4,975)
Precision Casting
ConsolidatedEliminations/
CorporateOther
Millions of Yen
2010
Assets…………………………………………
Depreciation and amortization………………
Impairment loss………………………………
Capital expenditures…………………………
Industrial SewingMachines
Household SewingMachines
SMTSystems
Electronic Equipmentand Computer Peripherals
￥44,333
1,404
18
795
￥543
48
3
￥22,775
846
547
￥2,663
90
16
￥1,705
63
55
19
￥26,083
881
52
6,505
￥101,081
3,535
125
8,031
Precision Casting
￥2,979
203
146
Millions of Yen
Sales to customers……………………………
Intersegment sales……………………………
Total sales…………………………………
Operating expenses…………………………
Operating income (loss)………………………
Industrial SewingMachines
2010
ConsolidatedEliminations/
CorporateOtherHousehold Sewing
MachinesSMT
SystemsElectronic Equipment
and Computer Peripherals
￥36,092
415
36,507
41,788
￥(5,281)
￥2,745
51
2,796
2,930
￥(134)
￥2,425
467
2,892
3,211
￥(319)
￥12,040
253
12,293
15,863
￥(3,570)
￥2,381
99
2,480
2,455
￥25
￥1,288
362
1,650
1,686
￥(36)
￥(1,647)
(1,647)
225
￥(1,872)
￥56,971
56,971
68,158
￥(11,187)
Precision Casting
ConsolidatedEliminations/
CorporateOther
Thousands of U.S. Dollars
2010
Assets…………………………………………
Depreciation and amortization………………
Impairment loss………………………………
Capital expenditures…………………………
Industrial SewingMachines
Household SewingMachines
SMTSystems
Electronic Equipmentand Computer Peripherals
＄476,696
15,099
196
8,548
＄5,838
519
36
＄244,897
9,092
5,883
＄28,631
969
170
＄18,339
680
594
206
＄280,464
9,469
553
69,940
＄1,086,895
38,006
1,343
86,351
Precision Casting
＄32,030
2,178
1,568
Thousands of U.S. Dollars
Sales to customers……………………………
Intersegment sales……………………………
Total sales…………………………………
Operating expenses…………………………
Operating income (loss)………………………
Industrial SewingMachines
2010
ConsolidatedEliminations/
CorporateOtherHousehold Sewing
MachinesSMT
SystemsElectronic Equipment
and Computer Peripherals
＄388,088
4,463
392,551
449,336
＄(56,785)
＄29,520
549
30,069
31,507
＄(1,438)
＄26,069
5,022
31,091
34,525
＄(3,434)
＄129,465
2,716
132,181
170,570
＄(38,389)
＄25,603
1,066
26,669
26,398
＄271
＄13,843
3,897
17,740
18,128
＄(388)
＄(17,713)
(17,713)
2,418
＄(20,131)
＄612,588
612,588
732,882
＄(120,294)
Precision Casting
Millions of Yen
AsiaNorth
AmericaJapan
2010
Sales to customers……………………………………………
Intersegment sales……………………………………………
Total sales…………………………………………………
Operating expenses…………………………………………
Operating loss…………………………………………………
Assets…………………………………………………………
ConsolidatedEliminations /
CorporateEurope
￥15,454
24,168
39,622
49,514
￥(9,892)
￥53,895
￥5,058
159
5,217
5,414
￥(197)
￥6,749
￥31,336
5,718
37,054
37,805
￥(751)
￥27,039
￥5,123
118
5,241
5,469
￥(228)
￥4,207
￥(30,163)
(30,163)
(30,044)
￥(119)
￥9,191
￥56,971
56,971
68,158
￥(11,187)
￥101,081
March 31, 2009
Foreign currency forward contracts:
Buying U.S.＄………………………………………………………
Selling EUR…………………………………………………………
Currency swaps…………………………………………………………
Millions of Yen
UnrealizedGain/LossFair Value
ContractAmount
￥8,581
1,757
169
￥8,724
1,825
￥(143)
(68)
Corporate InformationSenior Operating OfficersShuji Yamaoka
Trade NameJUKI CORPORATION
Transfer Agent and RegistrarMizuho Trust and Banking Co., Ltd.1-5-1, Marunouchi, Chiyoda-ku,Tokyo 100-0005, Japan
Independent AuditorDeloitte Touche Tohmatsu MS Shibaura Building 4-13-23, Shibaura, Minato-ku, Tokyo 108-8530, Japan
(As of March 31, 2010)
ChairmanKazuyuki Nakamura
PresidentAkira Kiyohara
Executive vice-presidentTomohisa Miyake
Managing DirectorsShinji YamaguchiHirokazu NagashimaHiroshi Nakamura
DirectorsToshihiko Ozaki
Corporate AuditorsRyoji MurayamaKousuke Inoue
AuditorsMasahiro WatanabeMasako Wakana
All the directors hold the posts of operating officers concurrently.
(As of June 25, 2010)
Operating OfficersYoshihiro OtakeHarunobu OnoTakashi MizunoMasahiro Ishizaka Kimio HonmaMinoru WadaKiyotaka KawanoToshimasa Miura
Toshinobu ShinozukaSatohiro HamaNaotake MiyashitaHirofumi Gotou
(As of July 1, 2010)
Head Office
2-11-1, Tsurumaki, Tama-shi,Tokyo 206-8551, JapanTel : +81-42-357-2211
Ohtawara Plant
1863, Kita-kanemaru, Ohtawara-shi,Tochigi 324-0011, JapanTel : +81-287-23-5111
SHAREHOLDERS' GUIDE
DIRECTORS AND AUDITORS
OPERATING OFFICERS
MAJOR OFFICE AND PLANT
Corporate Data
03 Corporate Information
40
03Corporate Information
41
03Corporate Information
39
Major Group Companies
03
The technical seminar of household sewing machines "Exceed" conducted in Juki America(May through October 2009)
Founded:
15 December 1938 as "Tokyo Juki Manufacturers Association"
Capital:
15,950 million yen (as of the end of March 2010)
Authorized Shares:
400,000,000 shares
Business segments:
Industrial sewing machines,SMT (Surface Mount Technology) systems, Household sewing machines, Precision castings, etc.
Shareholders:
13,756 shareholders
Stock Listing:
Tokyo Stock Exchange (1st Section)
Aggregate number of issued shares:
129,370 thousand shares (as of the end of March 2010)
No. of consolidated subsidiary companies:
34 (as of the end of March 2010)
Headquarter:
2-11-1, Tsurumaki, Tama-shi, Tokyo
No. of consolidated employees:
6,574 (as of the end of March 2010, including 1,196 direct sales staffs)
MECHATRONICS COMPANY THAT LEAPS FORWARD ON THE GLOBAL STAGE WITH ITS HIGH-SPEED,
HIGH-PRECISION, AND HIGH-QUALITY PRODUCTS
Juki Corporate Overview
Domestic Group Companies
Japan
Overseas Group Companies
China
Singapore
India
Vietnam
Thailand
Poland
Italy
Switzerland
U. S. A.
Brasil
JUKI DENSHI KOGYO CORPORATION
JUKI YOSHINO KOGYO CORPORATION
JUKI AKITA SEIMITSU CORPORATION
JUKI AIZU CORPORATION
SUZUTAMI PRECISION INDUSTRY CO., LTD.
JUKI METAL CORPORATION
JUKI HIROSHIMA CORPORATION
JUKI MATSUE CORPORATION
JUKI SALES (JAPAN) CORPORATION
JUKI HOUSEHOLD SEWING MACHINE CORPORATION
JUKI GENERAL SERVICE CORPORATION
JUKI (CHINA) CO., LTD.
JUKI (HONG KONG) LTD.
TOKYO JUKI INTERNATIONAL
TRADE (SHANGHAI) CO., LTD.
JUKI XINXING INDUSTRY CO.,LTD.
JUKI (SHANGHAI) INDUSTRIAL CO., LTD.
SHANGHAI JUKI SEWING MACHINE CO., LTD.
JUKI (NINGBO) PRECISION INDUSTRIAL CO., LTD.
JUKI SINGAPORE PTE. LTD.
JUKI INDIA PVT. LTD.
JUKI (VIETNAM) CO., LTD.
JUKI SMT ASIA CO., LTD.
JUKI CENTRAL EUROPE SP. ZO. O.
JUKI ITALIA S. P. A.
JUKI AUTOMATION SYSTEMS AG.
JUKI AMERICA, INC.
JUKI AUTOMATION SYSTEMS INC.
JUKI DO BRASIL COMERCIO E SERVICOS DE MAQUINAS LTDA.
Name Address Details of Main business
Name Address Details of Main business
Akita
Akita
Akita
Fukushima
Niigata
Mie
Hiroshima
Shimane
Tokyo
Tokyo
Tokyo
Shanghai
Hong Kong
Shanghai
Hebei
Shanghai
Shanghai
Zhejing
Cyberhub
Bangalore
Ho Chi Minh
Chonburi
Warszawa
Milan
Solothurn
Florida
North Carolina
Sao Paulo
Manufacture of SMT systems & electronic equipment, etc.
Manufacture of parts for precision machinery and appliances
Manufacture of steel plate parts and pressed parts
Manufacture of lost-wax and MIM products
Manufacture of parts, etc. for industrial sewing machines
Manufacture of pig-iron and cast metal, etc.
Manufacture of pressed parts
Manufacture of industrial sewing machines, etc.
Sales of industrial sewing machines, etc.
Sales of household sewing machines, etc.
Service of facility management, renovation and printing, etc.
Sales of industrial sewing machines, etc.
Sales of industrial sewing machines, etc.
Sales of SMT systems, etc.
Manufacture of industrial sewing machines
Manufacture of industrial sewing machines
Manufacture of household sewing machines
Manufacture of parts, etc. for industrial sewing machines
Sales of industrial sewing machines, etc.
Sales of industrial sewing machines, etc.
Manufacture of parts, etc. for industrial sewing machines
Sales of SMT systems, etc.
Sales of industrial sewing machines, etc.
Sales of industrial sewing machines, etc.
Sales of SMT systems, etc.
Sales of industrial sewing machines, etc.
Sales of SMT systems, etc.
Sales of SMT systems, industrial sewing machines, etc.
(As of June, 2010)
Industrialsewing
machines64%
SMT systems21%
Others 2%
Household sewing machines 4%
Precision castings 5%
Industrialsewing
machines64%
SMT systems21%
Electronic equipment andcomputer peripherals 4%
57billion yen
Household sewing machines 4%
Precision castings 5%
Sales ratio segment
(as of the end of March 2010) (as of the end of March 2010)
Sales ratio by overseas (76%)
Asia57%
Europe10%
Americas9%
Japan24%
Asia57%
Europe10%
Americas9%
Japan24%
Corporate InformationSenior Operating OfficersShuji Yamaoka
Trade NameJUKI CORPORATION
Transfer Agent and RegistrarMizuho Trust and Banking Co., Ltd.1-5-1, Marunouchi, Chiyoda-ku,Tokyo 100-0005, Japan
Independent AuditorDeloitte Touche Tohmatsu MS Shibaura Building 4-13-23, Shibaura, Minato-ku, Tokyo 108-8530, Japan
(As of March 31, 2010)
ChairmanKazuyuki Nakamura
PresidentAkira Kiyohara
Executive vice-presidentTomohisa Miyake
Managing DirectorsShinji YamaguchiHirokazu NagashimaHiroshi Nakamura
DirectorsToshihiko Ozaki
Corporate AuditorsRyoji MurayamaKousuke Inoue
AuditorsMasahiro WatanabeMasako Wakana
All the directors hold the posts of operating officers concurrently.
(As of June 25, 2010)
Operating OfficersYoshihiro OtakeHarunobu OnoTakashi MizunoMasahiro Ishizaka Kimio HonmaMinoru WadaKiyotaka KawanoToshimasa Miura
Toshinobu ShinozukaSatohiro HamaNaotake MiyashitaHirofumi Gotou
(As of July 1, 2010)
Head Office
2-11-1, Tsurumaki, Tama-shi,Tokyo 206-8551, JapanTel : +81-42-357-2211
Ohtawara Plant
1863, Kita-kanemaru, Ohtawara-shi,Tochigi 324-0011, JapanTel : +81-287-23-5111
SHAREHOLDERS' GUIDE
DIRECTORS AND AUDITORS
OPERATING OFFICERS
MAJOR OFFICE AND PLANT
Corporate Data
03 Corporate Information
40
03Corporate Information
41
03Corporate Information
39
Major Group Companies
03
The technical seminar of household sewing machines "Exceed" conducted in Juki America(May through October 2009)
Founded:
15 December 1938 as "Tokyo Juki Manufacturers Association"
Capital:
15,950 million yen (as of the end of March 2010)
Authorized Shares:
400,000,000 shares
Business segments:
Industrial sewing machines,SMT (Surface Mount Technology) systems, Household sewing machines, Precision castings, etc.
Shareholders:
13,756 shareholders
Stock Listing:
Tokyo Stock Exchange (1st Section)
Aggregate number of issued shares:
129,370 thousand shares (as of the end of March 2010)
No. of consolidated subsidiary companies:
34 (as of the end of March 2010)
Headquarter:
2-11-1, Tsurumaki, Tama-shi, Tokyo
No. of consolidated employees:
6,574 (as of the end of March 2010, including 1,196 direct sales staffs)
MECHATRONICS COMPANY THAT LEAPS FORWARD ON THE GLOBAL STAGE WITH ITS HIGH-SPEED,
HIGH-PRECISION, AND HIGH-QUALITY PRODUCTS
Juki Corporate Overview
Domestic Group Companies
Japan
Overseas Group Companies
China
Singapore
India
Vietnam
Thailand
Poland
Italy
Switzerland
U. S. A.
Brasil
JUKI DENSHI KOGYO CORPORATION
JUKI YOSHINO KOGYO CORPORATION
JUKI AKITA SEIMITSU CORPORATION
JUKI AIZU CORPORATION
SUZUTAMI PRECISION INDUSTRY CO., LTD.
JUKI METAL CORPORATION
JUKI HIROSHIMA CORPORATION
JUKI MATSUE CORPORATION
JUKI SALES (JAPAN) CORPORATION
JUKI HOUSEHOLD SEWING MACHINE CORPORATION
JUKI GENERAL SERVICE CORPORATION
JUKI (CHINA) CO., LTD.
JUKI (HONG KONG) LTD.
TOKYO JUKI INTERNATIONAL
TRADE (SHANGHAI) CO., LTD.
JUKI XINXING INDUSTRY CO.,LTD.
JUKI (SHANGHAI) INDUSTRIAL CO., LTD.
SHANGHAI JUKI SEWING MACHINE CO., LTD.
JUKI (NINGBO) PRECISION INDUSTRIAL CO., LTD.
JUKI SINGAPORE PTE. LTD.
JUKI INDIA PVT. LTD.
JUKI (VIETNAM) CO., LTD.
JUKI SMT ASIA CO., LTD.
JUKI CENTRAL EUROPE SP. ZO. O.
JUKI ITALIA S. P. A.
JUKI AUTOMATION SYSTEMS AG.
JUKI AMERICA, INC.
JUKI AUTOMATION SYSTEMS INC.
JUKI DO BRASIL COMERCIO E SERVICOS DE MAQUINAS LTDA.
Name Address Details of Main business
Name Address Details of Main business
Akita
Akita
Akita
Fukushima
Niigata
Mie
Hiroshima
Shimane
Tokyo
Tokyo
Tokyo
Shanghai
Hong Kong
Shanghai
Hebei
Shanghai
Shanghai
Zhejing
Cyberhub
Bangalore
Ho Chi Minh
Chonburi
Warszawa
Milan
Solothurn
Florida
North Carolina
Sao Paulo
Manufacture of SMT systems & electronic equipment, etc.
Manufacture of parts for precision machinery and appliances
Manufacture of steel plate parts and pressed parts
Manufacture of lost-wax and MIM products
Manufacture of parts, etc. for industrial sewing machines
Manufacture of pig-iron and cast metal, etc.
Manufacture of pressed parts
Manufacture of industrial sewing machines, etc.
Sales of industrial sewing machines, etc.
Sales of household sewing machines, etc.
Service of facility management, renovation and printing, etc.
Sales of industrial sewing machines, etc.
Sales of industrial sewing machines, etc.
Sales of SMT systems, etc.
Manufacture of industrial sewing machines
Manufacture of industrial sewing machines
Manufacture of household sewing machines
Manufacture of parts, etc. for industrial sewing machines
Sales of industrial sewing machines, etc.
Sales of industrial sewing machines, etc.
Manufacture of parts, etc. for industrial sewing machines
Sales of SMT systems, etc.
Sales of industrial sewing machines, etc.
Sales of industrial sewing machines, etc.
Sales of SMT systems, etc.
Sales of industrial sewing machines, etc.
Sales of SMT systems, etc.
Sales of SMT systems, industrial sewing machines, etc.
(As of June, 2010)
Industrialsewing
machines64%
SMT systems21%
Others 2%
Household sewing machines 4%
Precision castings 5%
Industrialsewing
machines64%
SMT systems21%
Electronic equipment andcomputer peripherals 4%
57billion yen
Household sewing machines 4%
Precision castings 5%
Sales ratio segment
(as of the end of March 2010) (as of the end of March 2010)
Sales ratio by overseas (76%)
Asia57%
Europe10%
Americas9%
Japan24%
Asia57%
Europe10%
Americas9%
Japan24%
Corporate InformationSenior Operating OfficersShuji Yamaoka
Trade NameJUKI CORPORATION
Transfer Agent and RegistrarMizuho Trust and Banking Co., Ltd.1-5-1, Marunouchi, Chiyoda-ku,Tokyo 100-0005, Japan
Independent AuditorDeloitte Touche Tohmatsu MS Shibaura Building 4-13-23, Shibaura, Minato-ku, Tokyo 108-8530, Japan
(As of March 31, 2010)
ChairmanKazuyuki Nakamura
PresidentAkira Kiyohara
Executive vice-presidentTomohisa Miyake
Managing DirectorsShinji YamaguchiHirokazu NagashimaHiroshi Nakamura
DirectorsToshihiko Ozaki
Corporate AuditorsRyoji MurayamaKousuke Inoue
AuditorsMasahiro WatanabeMasako Wakana
All the directors hold the posts of operating officers concurrently.
(As of June 25, 2010)
Operating OfficersYoshihiro OtakeHarunobu OnoTakashi MizunoMasahiro Ishizaka Kimio HonmaMinoru WadaKiyotaka KawanoToshimasa Miura
Toshinobu ShinozukaSatohiro HamaNaotake MiyashitaHirofumi Gotou
(As of July 1, 2010)
Head Office
2-11-1, Tsurumaki, Tama-shi,Tokyo 206-8551, JapanTel : +81-42-357-2211
Ohtawara Plant
1863, Kita-kanemaru, Ohtawara-shi,Tochigi 324-0011, JapanTel : +81-287-23-5111
SHAREHOLDERS' GUIDE
DIRECTORS AND AUDITORS
OPERATING OFFICERS
MAJOR OFFICE AND PLANT
Corporate Data
03 Corporate Information
40
03Corporate Information
41
03Corporate Information
39
Major Group Companies
03
The technical seminar of household sewing machines "Exceed" conducted in Juki America(May through October 2009)
Founded:
15 December 1938 as "Tokyo Juki Manufacturers Association"
Capital:
15,950 million yen (as of the end of March 2010)
Authorized Shares:
400,000,000 shares
Business segments:
Industrial sewing machines,SMT (Surface Mount Technology) systems, Household sewing machines, Precision castings, etc.
Shareholders:
13,756 shareholders
Stock Listing:
Tokyo Stock Exchange (1st Section)
Aggregate number of issued shares:
129,370 thousand shares (as of the end of March 2010)
No. of consolidated subsidiary companies:
34 (as of the end of March 2010)
Headquarter:
2-11-1, Tsurumaki, Tama-shi, Tokyo
No. of consolidated employees:
6,574 (as of the end of March 2010, including 1,196 direct sales staffs)
MECHATRONICS COMPANY THAT LEAPS FORWARD ON THE GLOBAL STAGE WITH ITS HIGH-SPEED,
HIGH-PRECISION, AND HIGH-QUALITY PRODUCTS
Juki Corporate Overview
Domestic Group Companies
Japan
Overseas Group Companies
China
Singapore
India
Vietnam
Thailand
Poland
Italy
Switzerland
U. S. A.
Brasil
JUKI DENSHI KOGYO CORPORATION
JUKI YOSHINO KOGYO CORPORATION
JUKI AKITA SEIMITSU CORPORATION
JUKI AIZU CORPORATION
SUZUTAMI PRECISION INDUSTRY CO., LTD.
JUKI METAL CORPORATION
JUKI HIROSHIMA CORPORATION
JUKI MATSUE CORPORATION
JUKI SALES (JAPAN) CORPORATION
JUKI HOUSEHOLD SEWING MACHINE CORPORATION
JUKI GENERAL SERVICE CORPORATION
JUKI (CHINA) CO., LTD.
JUKI (HONG KONG) LTD.
TOKYO JUKI INTERNATIONAL
TRADE (SHANGHAI) CO., LTD.
JUKI XINXING INDUSTRY CO.,LTD.
JUKI (SHANGHAI) INDUSTRIAL CO., LTD.
SHANGHAI JUKI SEWING MACHINE CO., LTD.
JUKI (NINGBO) PRECISION INDUSTRIAL CO., LTD.
JUKI SINGAPORE PTE. LTD.
JUKI INDIA PVT. LTD.
JUKI (VIETNAM) CO., LTD.
JUKI SMT ASIA CO., LTD.
JUKI CENTRAL EUROPE SP. ZO. O.
JUKI ITALIA S. P. A.
JUKI AUTOMATION SYSTEMS AG.
JUKI AMERICA, INC.
JUKI AUTOMATION SYSTEMS INC.
JUKI DO BRASIL COMERCIO E SERVICOS DE MAQUINAS LTDA.
Name Address Details of Main business
Name Address Details of Main business
Akita
Akita
Akita
Fukushima
Niigata
Mie
Hiroshima
Shimane
Tokyo
Tokyo
Tokyo
Shanghai
Hong Kong
Shanghai
Hebei
Shanghai
Shanghai
Zhejing
Cyberhub
Bangalore
Ho Chi Minh
Chonburi
Warszawa
Milan
Solothurn
Florida
North Carolina
Sao Paulo
Manufacture of SMT systems & electronic equipment, etc.
Manufacture of parts for precision machinery and appliances
Manufacture of steel plate parts and pressed parts
Manufacture of lost-wax and MIM products
Manufacture of parts, etc. for industrial sewing machines
Manufacture of pig-iron and cast metal, etc.
Manufacture of pressed parts
Manufacture of industrial sewing machines, etc.
Sales of industrial sewing machines, etc.
Sales of household sewing machines, etc.
Service of facility management, renovation and printing, etc.
Sales of industrial sewing machines, etc.
Sales of industrial sewing machines, etc.
Sales of SMT systems, etc.
Manufacture of industrial sewing machines
Manufacture of industrial sewing machines
Manufacture of household sewing machines
Manufacture of parts, etc. for industrial sewing machines
Sales of industrial sewing machines, etc.
Sales of industrial sewing machines, etc.
Manufacture of parts, etc. for industrial sewing machines
Sales of SMT systems, etc.
Sales of industrial sewing machines, etc.
Sales of industrial sewing machines, etc.
Sales of SMT systems, etc.
Sales of industrial sewing machines, etc.
Sales of SMT systems, etc.
Sales of SMT systems, industrial sewing machines, etc.
(As of June, 2010)
Industrialsewing
machines64%
SMT systems21%
Others 2%
Household sewing machines 4%
Precision castings 5%
Industrialsewing
machines64%
SMT systems21%
Electronic equipment andcomputer peripherals 4%
57billion yen
Household sewing machines 4%
Precision castings 5%
Sales ratio segment
(as of the end of March 2010) (as of the end of March 2010)
Sales ratio by overseas (76%)
Asia57%
Europe10%
Americas9%
Japan24%
Asia57%
Europe10%
Americas9%
Japan24%
Corporate InformationSenior Operating OfficersShuji Yamaoka
Trade NameJUKI CORPORATION
Transfer Agent and RegistrarMizuho Trust and Banking Co., Ltd.1-5-1, Marunouchi, Chiyoda-ku,Tokyo 100-0005, Japan
Independent AuditorDeloitte Touche Tohmatsu MS Shibaura Building 4-13-23, Shibaura, Minato-ku, Tokyo 108-8530, Japan
(As of March 31, 2010)
ChairmanKazuyuki Nakamura
PresidentAkira Kiyohara
Executive vice-presidentTomohisa Miyake
Managing DirectorsShinji YamaguchiHirokazu NagashimaHiroshi Nakamura
DirectorsToshihiko Ozaki
Corporate AuditorsRyoji MurayamaKousuke Inoue
AuditorsMasahiro WatanabeMasako Wakana
All the directors hold the posts of operating officers concurrently.
(As of June 25, 2010)
Operating OfficersYoshihiro OtakeHarunobu OnoTakashi MizunoMasahiro Ishizaka Kimio HonmaMinoru WadaKiyotaka KawanoToshimasa Miura
Toshinobu ShinozukaSatohiro HamaNaotake MiyashitaHirofumi Gotou
(As of July 1, 2010)
Head Office
2-11-1, Tsurumaki, Tama-shi,Tokyo 206-8551, JapanTel : +81-42-357-2211
Ohtawara Plant
1863, Kita-kanemaru, Ohtawara-shi,Tochigi 324-0011, JapanTel : +81-287-23-5111
SHAREHOLDERS' GUIDE
DIRECTORS AND AUDITORS
OPERATING OFFICERS
MAJOR OFFICE AND PLANT
Corporate Data
03 Corporate Information
40
03Corporate Information
41
03Corporate Information
39
Major Group Companies
03
The technical seminar of household sewing machines "Exceed" conducted in Juki America(May through October 2009)
Founded:
15 December 1938 as "Tokyo Juki Manufacturers Association"
Capital:
15,950 million yen (as of the end of March 2010)
Authorized Shares:
400,000,000 shares
Business segments:
Industrial sewing machines,SMT (Surface Mount Technology) systems, Household sewing machines, Precision castings, etc.
Shareholders:
13,756 shareholders
Stock Listing:
Tokyo Stock Exchange (1st Section)
Aggregate number of issued shares:
129,370 thousand shares (as of the end of March 2010)
No. of consolidated subsidiary companies:
34 (as of the end of March 2010)
Headquarter:
2-11-1, Tsurumaki, Tama-shi, Tokyo
No. of consolidated employees:
6,574 (as of the end of March 2010, including 1,196 direct sales staffs)
MECHATRONICS COMPANY THAT LEAPS FORWARD ON THE GLOBAL STAGE WITH ITS HIGH-SPEED,
HIGH-PRECISION, AND HIGH-QUALITY PRODUCTS
Juki Corporate Overview
Domestic Group Companies
Japan
Overseas Group Companies
China
Singapore
India
Vietnam
Thailand
Poland
Italy
Switzerland
U. S. A.
Brasil
JUKI DENSHI KOGYO CORPORATION
JUKI YOSHINO KOGYO CORPORATION
JUKI AKITA SEIMITSU CORPORATION
JUKI AIZU CORPORATION
SUZUTAMI PRECISION INDUSTRY CO., LTD.
JUKI METAL CORPORATION
JUKI HIROSHIMA CORPORATION
JUKI MATSUE CORPORATION
JUKI SALES (JAPAN) CORPORATION
JUKI HOUSEHOLD SEWING MACHINE CORPORATION
JUKI GENERAL SERVICE CORPORATION
JUKI (CHINA) CO., LTD.
JUKI (HONG KONG) LTD.
TOKYO JUKI INTERNATIONAL
TRADE (SHANGHAI) CO., LTD.
JUKI XINXING INDUSTRY CO.,LTD.
JUKI (SHANGHAI) INDUSTRIAL CO., LTD.
SHANGHAI JUKI SEWING MACHINE CO., LTD.
JUKI (NINGBO) PRECISION INDUSTRIAL CO., LTD.
JUKI SINGAPORE PTE. LTD.
JUKI INDIA PVT. LTD.
JUKI (VIETNAM) CO., LTD.
JUKI SMT ASIA CO., LTD.
JUKI CENTRAL EUROPE SP. ZO. O.
JUKI ITALIA S. P. A.
JUKI AUTOMATION SYSTEMS AG.
JUKI AMERICA, INC.
JUKI AUTOMATION SYSTEMS INC.
JUKI DO BRASIL COMERCIO E SERVICOS DE MAQUINAS LTDA.
Name Address Details of Main business
Name Address Details of Main business
Akita
Akita
Akita
Fukushima
Niigata
Mie
Hiroshima
Shimane
Tokyo
Tokyo
Tokyo
Shanghai
Hong Kong
Shanghai
Hebei
Shanghai
Shanghai
Zhejing
Cyberhub
Bangalore
Ho Chi Minh
Chonburi
Warszawa
Milan
Solothurn
Florida
North Carolina
Sao Paulo
Manufacture of SMT systems & electronic equipment, etc.
Manufacture of parts for precision machinery and appliances
Manufacture of steel plate parts and pressed parts
Manufacture of lost-wax and MIM products
Manufacture of parts, etc. for industrial sewing machines
Manufacture of pig-iron and cast metal, etc.
Manufacture of pressed parts
Manufacture of industrial sewing machines, etc.
Sales of industrial sewing machines, etc.
Sales of household sewing machines, etc.
Service of facility management, renovation and printing, etc.
Sales of industrial sewing machines, etc.
Sales of industrial sewing machines, etc.
Sales of SMT systems, etc.
Manufacture of industrial sewing machines
Manufacture of industrial sewing machines
Manufacture of household sewing machines
Manufacture of parts, etc. for industrial sewing machines
Sales of industrial sewing machines, etc.
Sales of industrial sewing machines, etc.
Manufacture of parts, etc. for industrial sewing machines
Sales of SMT systems, etc.
Sales of industrial sewing machines, etc.
Sales of industrial sewing machines, etc.
Sales of SMT systems, etc.
Sales of industrial sewing machines, etc.
Sales of SMT systems, etc.
Sales of SMT systems, industrial sewing machines, etc.
(As of June, 2010)
Industrialsewing
machines64%
SMT systems21%
Others 2%
Household sewing machines 4%
Precision castings 5%
Industrialsewing
machines64%
SMT systems21%
Electronic equipment andcomputer peripherals 4%
57billion yen
Household sewing machines 4%
Precision castings 5%
Sales ratio segment
(as of the end of March 2010) (as of the end of March 2010)
Sales ratio by overseas (76%)
Asia57%
Europe10%
Americas9%
Japan24%
Asia57%
Europe10%
Americas9%
Japan24%
Annual Report2010Year Ended March 31, 2010