wacom report

Annual Report2010

Creating harmonybetween peopleand technology

We looked inside ourselvesto find the thought that definesand drives everything we do.

An idea that helps us open upto experience the world in a new way.

An idea to drive us forward.

Open up. Sense more.An idea. A dream. An inspiration.

2

3

The key to our success

Business model

Our milestones Our businesses

Board of directors/Corporate governance Financial section Corporate dataInvestor information

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17184142

89

5To our shareholders

Where are we now?

11Our global model 15

DISCLAIMER

Contents

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2,146

21,033

25,152

29,221

25,631

(Millions of yen) (Millions of yen) (Millions of yen)(Millions of yen)

Wacom Co., Ltd. and Its Subsidiaries Years ended March 31

For the year: Net sales Gross profit Operating income Net income

At year end: Total assets Total net assets

Per share (yen and U.S. dollars): Net income

Primary Diluted

Cash dividends applicable to the year

¥32,044,57815,668,147

3,127,8221,968,406

18,269,590

¥ 4,899.574,888.563,000.00

$344,417168,402

33,61821,157

$303,089196,363

$ 52.6652.54

¥33,809,13816,761,1644,311,3782,579,025

¥25,631,05717,796,487

¥ 6,213.936,197.78

3,000.00

Thousands of yenThousands ofU.S. dollars*

*Note 1: U.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥93.04=U.S.$1, the approximate exchange rate prevailing on March 31, 2010.

’06 ’07 ’08 ’09

36,73933,809

32,045

’10 ’06 ’07 ’08 ’09 ’10 ’06 ’07 ’08 ’09 ’10 ’06 ’07 ’08 ’09 ’10

Net sales Net income Total assets Total net assets

13,288

16,320

Financial Highlights

17,79618,270

2,853

The key to our success

18,517

23,992

28,787

¥28,199,429

Our corporate vision is “creating harmony between people and technology.” How do we do this? By providing technologically-sophisticated tools that are natural to use and people-friendly. Anyone can use them.

In the 1980s we pioneered the development of cordless and battery-free pen tablets – a brand new way of working that opened up fresh, creative possibilities. Graphic artists around the world immediately prized the tablet’ s user-friendly interface and versatility. To this day, the tablet is an absolute must-have in the world of graphics.

We did not stop there. We thought, “What if you could draw directly on to a computer screen?” Our interactive pen displays enable users to do just that. These products are now hugely popular in many business sectors, including medical firms, educational institutions, financial companies and those enterprises that need more natural and inter-active ways to use computers.

We then looked at how we could make life better for mobile users such as traveling executives, doctors and finan-cial analysts. We incorporated pen-sensor and multi-touch sensor components into laptop PCs so that handwriting and finger touch operations are available during meetings and web communications. These technologies make people able to enjoy not only creating but also consuming content more naturally and intuitively than ever before.

Our tablets continue to be adopted into new application areas, and we are committed to the ongoing development of exciting new technologies. Our aim is to revolutionize both the workplace and the home with our natural user interface technology. We’re looking forward to seeing where this takes us. It’s going to be an exciting journey.

Forward-looking statements regarding future events and performance contained in this annual report are based on currently available information and involve risks and uncertainties, including macroeconomic conditions, trends of the industry in which the company is engaged, and progress in technologies. Please note that actual results could materially differ from those expressed or implied by the forward-looking statements in this annual report due to these risks and uncertainties.

2009 2010 2010

32.24

28,199

Vasileios M

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key driver

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core value

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Innovation

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Role of Design,

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Key driver, role of design

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Aim

4

Jun. 1988

Sep.1998

Jun. 1999

Nov.1999

Mar. 2000

Sep. 2001

Apr. 2003

Nov. 2003

Apr. 2004

Feb. 2005

Apr. 2005

Dec. 2005

Apr. 2006

May 2006

Feb. 2007

Jan. 2008

Oct. 2007

May 2007

Sep. 2007

Aug.1991

Jul. 1983

New Hewlett-Packard Company (HP) notebook PC for the consumermarket adopts Wacom Penabled DualTouch technology

Launch of Cintiq 12WX interactive pen display as a mobile companion,and as a secondary monitor in multi-monitor environments

Celebrated 25th anniversary, and announced new growth vision and new brand concept “Open up. Sense more.” for the future

Bamboo, with “Certified for Windows Vista” compatibility, islaunched for general consumer and business PC users

Received the first “Disclosure Newcomer Award” from the TokyoStock Exchange

Wacom Singapore (a fully owned subsidiary) is established inSingapore as a sales base for the South and Southeast Asian marketsWacom Hong Kong (a fully owned subsidiary) is establishedin Hong Kong as a sales base in the South China

Penabled DualPad is developed as a new pen and touch input devicefor mobile information products

Our stock is listed on the First Section of the Tokyo Stock Exchange

Wacom Australia (a fully owned subsidiary) is established in Australia,as a sales base for the Oceania market

Cintiq 21UX launched, setting a new standard for digital pen-basedimaging

Wacom Digital Solutions (presently Wacom Korea a fully ownedsubsidiary) is established in Seoul as a sales base in South Korea

HP Tablet PC adopts Wacom’s Penabled pen sensor component

Listed on the JASDAQ market

Launch of Cintiq, a line of interactive pen displays

Wacom China (a fully owned subsidiary) is established in Beijing asa sales base in China

Launch of Graphire/FAVO, a line of consumer pen tablets

Launch ECAD/dio, a CAD system for electrical engineering

Launch of Intuos, a line of professional pen tablets

Wacom Technology (a fully owned subsidiary) is established inVancouver, Washington, as a marketing and sales base in the Americas

Wacom Computer Systems (presently Wacom Europe a fully ownedsubsidiary) is established in Neuss, Germany, as a marketing and salesbase in Europe

Operation of tablet product and CAD system for electricalengineering begins

Wacom Co., Ltd. is established in Ageo City, Saitama, Japan, withcommon stock of 48 million yen

Our Milestones

Launch of Intuos4 professional pentabletsApr. 2009

Mass production and shipment of a new sensor system supporting themulti-touch functions of Windows 7 to PC manufacturers

Launch of new Bamboo series that merges multi-touch functionswith pen technology for consumersIntroduction of a new technology brand for user interface solutions,Wacom feel IT technologies

Oct. 2009

Spanish Savings Banks, CECA adopts LCD signature tablet for digitalsignature system

Feb. 2010

Launch of interactive pen displays of 21.5” and15.6” wide LCD model tostrengthen vertical markets

Jan. 2010

Aug. 2009

Launch of a new professional DJ system, NextbeatECAD/dio Ver. 10.0 released

Sep. 2009

Launch of mobile LCD tablet STU-300 for digital signatureMar. 2010

Oct. 2008 Announce of development of a high performance multi-touch sensorcomponentWacom Taiwan Information (a fully owned subsidiary) is establishedin Taiwan as a marketing and customer service base for Taiwan market

Vasileios M

Innovation adopted by others

Vasileios M

new technology

Vasileios M

technology adopted

We are pleased to present Wacom’s Annual Report for our 27th fiscal year, representing the results from April 1, 2009 through March 31, 2010.

Our corporate vision is “creating harmony between people and technology.” We strive to achieve this by providing tools and inspiration to help make our world a more creative place. Our user interface solutions are designed to be natural and intuitive to use, and people-friendly. We are proud that our tablet products are used by a wide range of users around the world in creating 3D films and animations, car designs, fashion designs, medical, etc., as well as for home and hobby graphics use. Our component products are also used in advanced Tablet PCs and e-Books.

As digital technology becomes an integral part of our lives, we know that intuitive and natural-to-use interface solutions will play a crucial role. We want to take a fresh look at this brave new world and create solutions to enrich your life – supporting you to enjoy life with creativity.

5

To Our Shareholders

Masahiko YamadaPresident & CEO

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6

The world’s first tablet operated by cordless

electronic pen developed.

Core technology established with electronic pen.

Growth strategyInput

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Pen sensorcomponents

Interactivepen displays

Tablets forconsumer use

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use

・Strengthening of the leadership in tablet business・Expansion of components business・Improvement and global development of branding・New business development, R&D

Pen input

Development and Sales

Touch sencercomponents

Digitizerand software

7

How did we do in our 27th year?The 27th fiscal year started in the midst of a global economic crisis, full of uncertainty. Up to Q2, our business suffered from weak demand for tablets and a slowdown in our component business. In Q3 the tablet business began to recover, along with the global economic recovery, just in time for the launch of our new products. On the other hand, the component shipments for Windows 7 PCs did not reach our original expectations. Further impacted by appreciation of the Japanese yen against other key currencies, we closed the fiscal year with negative growth in both revenue and profit.

In the area of technology and product development, we made significant progress and launched many new products. Intuos4 - wireless model, the new Bamboo series with pen and multi-finger touch functions, the new interactive pen display models and the Nextbeat digital DJ device, are among those launched during the f iscal year. We also successfully star ted volume production of multi-finger touch sensors for major PC manufacturers.

As a result, for the fiscal year ending March 31, 2010, we recorded net sales of ¥32,045 million (down 5.2%), operating income of ¥3,128 million (down 27.5%), ordinary income of ¥3,156 million (down 24.5%), and net income of ¥1,968 million (down 23.7%).

Where are we heading in our 28th year?For the 28th fiscal year, we expect to see continued recovery of the global economy and some acceleration driven by emerging markets in the second half. In addi-tion to the growth of professional markets, we expect interactive pen display markets to grow in medical, education, and security segments. For the component business, new product categories such as Slate type PCs and e-Books will emerge as new customer seg-ments.

Taking into account our business outlook and neces-sary investments for the future, we project net sales of ¥37,800 million (up 18.0%), operating income of ¥3,820 million (up 22.1%), ordinary income of ¥3,780 million (up 19.8%), and net income of ¥2,370 mill ion (up 20.4%) for the fiscal year ending March 31, 2011.

We also announced the new mid-term business plan WP-1015 that targets net sales of ¥100 billion and oper-ating income over 15% by the fiscal year ending March 31, 2014.During the mid-term period, we expect to see strong expansion of digital content industries in emerging regions and growth of our consumer business following the growth of the digital content industry globally. Fur-thermore, continued IT investments in medical and educational fields, including investments in digital gov-

WP1015

100,000

80,000

60,000

40,000

20,000

02010 2011 2012 2013 2014

Net sales　 Operating income

For the year ended March 31

(Millions of yen)

ernment, and improved digital security, will increase our business opportunities. We expect to grow our compo-nent business beyond traditional PC segments, serving new segments such as Slate PCs, e-Books and other new mobile platforms.

While we will continue to enhance our global leadership in natural user interface solutions, we will invest in development of emerging markets such as China, India, and South America. Building solid business founda-tions and global brand leadership for the future is our focus for emerging markets and to leverage our com-ponent business, continuing to strive in delivering natu-ral and intuitive user interface technologies for a wide range of IT platforms.

Your dividendTo thank you for your support and in reflecting the financial result for the fiscal year, we offered an ordi-nary dividend of ¥3,000 per share to our shareholders as of March 31, 2010. While we will manage the finan-cial base carefully, we intend to continue stable divi-dend payouts and take other investor return measures as we see fit.

Our message to youWe are committed to enhancing our corporate value through the ongoing development of exciting new tech-nologies, investment in talented people and develop-ment of our business infrastructure. We will accelerate our business growth, improve efficiency and profitabil-ity. We take our social responsibility seriously and con-tinue to improve our corporate governance and compli-ance.

Your support is invaluable and is essential to our con-tinuing success. We thank you very much for your unchanging support.

8

Business Model

Customers

Tablet business

Management Platform

R & DMarketing &

Sales

Supply ChainManagement

ProductManagement

Partnerships

User Needs

• Professional tablets• Consumer tablets• Interactive displays

Other businesses

• Software of CAD systemsfor electrical and mechani-cal engineering

• Professional DJ device

• Graphic Design film, animation, comics, games, automotive,advertising, broadcasting, etc

• Medical hospitals, dental clinics, medical offices, etc.

• Education universities, schools, prep schools, e-learning, etc.

• Business office systems, shop systems, call centers, signature verification, etc.

• Administraion national and local government

• Pen Sensor Technology PCs, mobile phones, PDAs, games, ePaper, etc.

• Touch Sensor Technology PCs, mobile phone, games, ePaper, POS terminal, digital signage, game console, TV, etc.

• Control Panel Industry

• Electrical Machinery Industry

• Machine Assembling Industry

• Automotive Industry

• Food Industry

• Medical Equipment Industry

• Operating Systems (OS) vendor• Application vendor

• Display vendor• Stationary goods / vendor

Componentbusiness

• Pen sensor components• Touch sensor components

9

Where are we now?New generation Bamboo,the first interactive pen tablet combiningmulti-touch and pen input offered an intuitive way.

The professional pen tablet, Intuos 4 gained a high reputation all around the worldand showed outstanding success in 3D film production.

In October 2009, Wacom unveiled globally a new consumer tablet, Bamboo, which merges multi-touch functionality of two fingers with existing pen tablet technologies. It’ s aimed at a wide range of fields, not only for digital photo retouching, illustration, animation and blogging but also for hobby use in digital scrap-booking, popular in the U.S. and Europe and generally as an alter-native to a mouse device. The new gesture control, by using two fingers enables a more intuitive interaction with computer inter-face functions such as scrolling through a web site, zooming in and out of text, etc. In addition, as a strategy to acquire new users, Wacom has started offering online, small software applica-tions like games, tools, etc that are fun and useful for using with a pen tablet. As a result, the new generation Bamboo recorded the best ever sales quarter for a consumer model from October to December in 2009. The Company aims for further sales expan-sion in the next fiscal year.

In April, 2009 Wacom released Intuos 4 which is used for high-quality digital content creation such as film and TV, web design, and industrial design. Since its launch, a number of prizes including "TIPA Award", "Plus X Award", "Red Dot Award" in Europe and "Good Design Award" in Japan were awarded, further promoting its high reputation all around the world. Intuos4 has increased sales in emerging countries such as China and India following a global growth in digital content creation and publishing. Intuos series pen tablets are used for creating advanced computer graphics in the latest 3D film productions including "Avatar” which has widened the business field.

‘AVATAR’ ©2009 Twentieth Century Fox. All rights reserved.

In October 2009, Wacom intro-duced a new brand "Wacom feel IT technologies" for the compo-nent business, which provides natural and intuitive user experi-ence technology. In accordance with the release of Windows 7, Wacom developed an original multi-touch sensor system and began to sh ip touch panels

commercially to HP, Lenovo, Toshiba, Fujitsu and other major PC manufacturers along with pen components. Wacom also provided pen components commercially to e-Book manufacturers such as enTourage, Onyx etc., which incorporate a hand writing function in their e-Books. Wacom has developed a new IC controller which has the strength to drive both pen and touch sensor at high speed with high accuracy and with low power assumption. This summer, the company will start to mass produce the IC controller which also enables a touch panel to recognize an unlimited number of fingers at the same time, further strengthening Wacom’s position as a global leader in Natural User Interface development and production.

The use of Wacom pen tablets for digital signature security has increased lately. In a successful case with IT security solutions, CECA in Spain adopted about 10,000 tablets for account appli-cation agreements, and this case was awarded the "TeleTrusT Inno-vation Award" in Germany. Mitsui Sumitomo Insurance in Japan

has also adopted pen tablets for signing both automobile insurance and fire insurance contracts. Wacom’ s pen tablets help to contribute in saving paper resources and improving security solutions for such cases as, a digital notary document system in France and the introduction of digital signatures instead of abolishing certificate of a seal impression in Korea. In March 2010, a mobile interactive pen tablet "STU-300" was launched, expanding the product line for digital signature security even further.

CECA in Spain and other global financialinstitutions decided to deploy pen tabletsto enable digital signature security.

10

Major PC manufacturers have adopted the Wacom multi-touch sensor systemand are set to mass produce.

11

Our Businesses

TabletsWe have various types of tablets; all models open up a world of possibilities and help our customers to experi-ence more. Our high-performance, professional range is for specialists and skilled amateurs. Our consumer tablets are for more general users who use computers as part of their digital lifestyle to communicate, share and create content. Our interactive pen displays enable users to write, draw, sketch and scribble directly onto the screen due to the pen sensor being incorporated into the LCD display.Our successful and varied product line-up makes us the clear leader in the tablet market. We command an impressive 85 percent (our estimate approximately) of the global market and 93.8 percent of the Japanese market (BCN research 2010). It will not stop there as Wacom expects the market to accelerate substantially.

Our company is made up of three business sectors in the fiscal year ending March 31, 2011 – Tablet, Components and Other businesses. Tablet business develops and manufactures pen tablets and interactive pen displays, combining pen technologies and/or multi-touch functions. Component business develops and manufactures pen sensor compo-nents as well as solutions with a multi-touch sensor system. Other businesses consists of CAD-based software pack-ages for the manufacturing industry and a DJ interface device for professional use.

ComponentsMajor PC manufacturers worldwide have adopted our pen and multi-touch sensor components. Our compo-nents allow laptop PCs and Tablet/Slate devices to be operated naturally with a digital pen and even with the touch of fingers with our original IC controller. Our multi-touch sensor system realizes high-speed and high-precision position sensing of multiple fingers. We have now introduced the above solution with a new brand name called "Wacom feel IT technologies".

OthersOur CAD system for electrical engineering and mechani-cal engineering firms specializes in the design of electri-cal appliances and control equipment. Our DJ interface device enables a whole new performance style for professional users.

Working in the film and concept design field since 1997 there hasn't been a working day gone by where Ryan Church hasn’t been using his Wacom tablet. At the Skywalker Ranch during Episode 2 & 3 of Star Wars he worked with his trusty light gray professional tablet, on the production of James Cameron’s Avatar he used a fashionable purple Intuos2 and on Star Trek he upgraded to the slick graphite gray Intuos3. “Wacom tablets are used in all stages of the production of 3D/Live action feature films, from initial concepts to photorealistic illustration and on to creation, painting, texturing and lighting of these assets. I see this trend increasing, there are a lot of existing software packages I can see being improved with a tablet interface” says Church.

12

Tablet Product LinesOur professional tablets – Intuos4Throughout the world, our professional range is unrivalled and acknowledged to be an industry standard with our unique technology, high performance and quality. It has also been highly acclaimed by our customers: those profes-sionals who create inspirational movies, animation, digital art, advertisements and web designs. The Intuos4, enjoys a high reputation for delivering new product design techniques, incorporating universal design and ergonomics, as well as for being a design tool that offers high productivity to professional users.

Our consumer tablets - BambooBamboo, our consumer family of tablets, provides a natural-to-use tool for expressing creative ideas and communicating with friends, colleagues, and family through social networks in a personal way. Wacom has used all of our pen-based skill and experience from our professional products to create Bamboo, additionally expanded models combining pen and touch technol-ogy. Bamboo can be used and enjoyed on Mac OS, Windows XP, Vista, and 7, and not only enables users to intuitively draw, paint, sketch, and retouch digital photographs, but also simplifies for everyone navigating around the computer and the Internet. To sum it up, Bamboo is a new and fun way of working with a computer.

Our interactive displays – Cintiq & DT/PLProviding the freedom to work with the pen directly on screen, our interactive pen displays come in two ranges: the Cintiq, which is designed for profes-sional graphic artists, and the DT/PL Series, which is for more general users. Cintiq interactive pen displays include high performance and functionality and are used by many professionals from photographers to car designers. Not just for the graphics market, these pen tablets are also invaluable for a variety of additional tasks such as medical recording, educational systems, digital signatures, and order processing.

Ryan ChurchArt director and concept designer of Avatar major works

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Wacom Solutions

Medical care

Education

Business

Meetings and presentations

Not only are they essential tools for graphics professionals; our pen tablets are also garnering praise in other fields,such as healthcare, education and business. Our technologies are changing lives by affording natural user interface solutionswith the advanced pen and multi-touch functionality incorporated in digital products.

Did you know that our interactive displays, LCD screen tablets have become popular in a variety of medical areas, including electronic medical charts, pathological reports, endo-scopic diagnostic systems, nursing support, diagnostic imaging and bedside terminals? For example, by using digital medical charts instead of conventional paper-based records, medical information can be shared more easily within different hospital departments. Handwritten data and sketches are also being input digitally during interviews and surgical operations, crucially saving time and effort. These charts also significantly reduce the storage space required for medical data and enable easy access to important information.

Presenting educational materials on a screen using a PC and a pro-jector has become common practice in educational institutions from primary and secondary schools, colleges and universities to professional schools, training centers and private e-learning pro-grams. With interactive displays, teachers and lecturers can write notes or draw diagrams on the LCD screen, which are then dis-played instantly on a large screen for all to see. In addition, the use of TV phones and web-based whiteboards help with remote instruction and the online correction of student work.

The use of interactive displays is increasingly common among busi-ness people in order centers, call centers, cosmetic and beauty salons, corporate and governmental office reception areas and in industrial design environments. The digital pen can be used to cap-ture information during face-to-face meetings with customers, where data in a corporate style can be entered using a handwriting interface. This is simply not possible with a keyboard. Conse-quently, our pen technology is opening up fresh opportunities in the business arena.

Using an interactive pen display can bring meetings and presenta-tions to life. During discussions, digital data can be viewed on an LCD screen and notes and amendments added and stored sponta-neously during the meeting. Not only can the use of such a product help speed up decision-making and communication, but it can also prevent the need for large volumes of photocopying. Using a digital pen to highlight information in real time makes the message stron-ger, more immediate and easier to comprehend.

ECAD/dio

Others

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Our CAD system –ECAD/dio

Our DJ interface device –Nextbeat

ECAD/dio, Japan’ s leading CAD system for electrical design, streamlines overall operations by helping users to create electrical system design dia-grams, while synchronizing design data with control equipment and periph-eral devices.

ComponentsOur pen sensor componentsNot only are our pen sensor components incorporated into our own high-quality products, but many other companies use them. Our superior pen sensor technologies are incorporated in almost every Tablet PC as well as e-Books of OEMs (Original Equipment Manufacturers) which recognize pen functionality for IT devices.

Our touch sensor componentsSupporting the multi-touch function of PCs, our touch sensor components were developed and adopted by major PC manufacturers. Our multi-touch sensor system allows users to intuitively control a PC by touching the LCD display. In addition, it can be incorporated together with our pen sensor system which provides for handwritten input and image-editing by pen.

Nextbeat, our professional DJ device is an optimized interface for producing music and to perform in clubs. Essentially, our original touch sensor technol-ogy enables high speed and accurate detection of finger movements to con-vert the DJs’ feelings into music. The wireless function allows performers to move closer to the audience.

15

Our Global Model

Our market is global, and therefore it is vital to our success that we continue to enhance our global organi-zations and optimize our business models to offer leading technology, and the most competitive products in terms of features, quality and value across the globe.

Marketing and product managementThe United States is home to the world’s most advanced computer graphics market, so naturally this is where we concentrate on building new partnerships and planning new professional products. The focus for our consumer products is different however. For our consumer products, we focus on not only the United States but also Europe, which covers the widest range of use patterns and is the most competitive market, and Japan, where consumers are keen for new trends and demand highly sophisticated products. Asia/Oceania, typical of an emerging region, shows very strong demand in the corpo-rate sector. Therefore, our current emphasis in this region is on business products along with Japan and Europe.

Product developmentJapan and Taiwan are where we develop most of our technology and design hardware products. This is due to the country’s strong infrastructure for technological development, as well as its geographic location being

close to our main manufacturing bases in China and Taiwan. The development of our driver software is performed in the United States. Here, we are close to all the global OS developers, such as Microsoft, Apple and Google, as well as leading software application developers. This proximity allows us to work in close partnership with these companies in developing emerging OS and application standards.

ManufacturingWe focus on developing optimal manufacturing models for cost, scalability and product quality leader-ship. To achieve this, all critical components continue to be made by Wacom, and all high-volume manufac-turing is done by partners in China and Taiwan. These manufacturing partners are under the guidance of our QA division to ensure the highest and most consistent product quality. We also have a supply chain manage-ment (SCM) base in China.

We regularly organize global executive conferences for strategic planning, business updates and knowledge-sharing. These conferences provide a platform for us to build and promote our corporate vision and business strategies, and reinforce our company’s global position as the industry leader.

Back in the 1980s, we set up our corporate headquarters in Japan. We extended our global operations to the United States and Germany, and then expanded to China, Korea, Australia, Singapore, Hong Kong and Taiwan. In addition to these subsidiaries, we also have sales bases in Shanghai and Moscow. Each of our regional subsidiaries performs multiple functions. These functions are locally administered with local staff to help forge close regional ties. We believe that this balanced approach between global strategy and localized execution maximizes our strength as a global company and helps us to continually offer dynamic products and services that exceed customer expectations. This has been proven by the fact that the percentage of our overseas sales was 78.2% in our 27th fiscal year.

16

Wacom

Asia/Oceania

Asia/Oceania

Sales Breakdown by RegionDomestic Market ShareGlobal Market Share

Japan

Japan

America

For the year ended March 31

(Millions of yen)

America

Others Others

Europe

Europe

Source: Wacom’s estimateSource: BCN research

85%

11.2%

25.7% 34.1%

29.0%

’08 ’09 ’10 ’08 ’09 ’10 ’08 ’09 ’10 ’08 ’09 ’10

Wacom93.8%

Wacom Technology CorporationWacom Technology Corporation was established in 1991 in Vancou-ver, Washington, in the United States. The company is not only responsible for sales and customer support in North and Latin America, but also plays a central role in global marketing and product planning for professional pen tablets, and the development of driver software.

Wacom Europe GmbHWacom Europe GmbH was established in 1988 in Neuss, Germany, and was subsequently moved to Krefeld. The company is responsible for sales and customer support in the European, Middle Eastern, and African markets and also plays a key role in global marketing and product planning for consumer pen tablets. The company provides market support in eight languages.

Wacom China CorporationWacom China Corporation was established in 2000 in Beijing. The company established and implemented a unique sales strategy for low-price tablets in the Chinese market. Its Shanghai Office is responsible for sales in the southern region of China as well as the component business nationwide.

Wacom Korea Co., Ltd. Wacom Korea Co., Ltd. was established in 2004 in Seoul, South Korea as Wacom Digital Solutions in order to enhance sales in the South Korean market.South Korea is the most advanced country in the world in Internet usage and the market is expected to grow further.

Wacom Australia Pty. Ltd. Wacom Australia Pty. Ltd. was established in April 2005 in North Ryde, NSW, Australia, as a sales base for the Oceania market.

Wacom Singapore Pte Ltd. Wacom Singapore Pte Ltd. was established in May 2006 in Singapore as a sales base for South and Southeast Asia.

Wacom Hong Kong Ltd. (Hong Kong)Wacom Hong Kong Ltd. was established in May 2006 in Wanchai, Hong Kong, as a sales base for Hong Kong market.

Wacom Taiwan Information Co., Ltd. (Taiwan)Wacom Taiwan Information Co., Ltd. was established in October 2008 in Taipei, Taiwan, as a marketing and customer service base of tablet and component business for Taiwan market.

8,449

7,995

52,19

1

55,35

88,2

41

63,08

93,6

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243,5

92

13,57

0

12,77

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10,93

1

11,03

0

9,816

96,64

4

97,55

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81

99,74

9

17

Our Team – The Board of Directors, Corporate Auditors and Executive Officers / Corporate Governance

Corporate Governance

Corporate AuditorsHaruo Mizuno (Full-time), Takeshi Ebitani, Takashi Kamura

Executive OfficersMasahiko Yamada CEO, Shigeki Komiyama Japan-Asia Pacific Region, Wataru Hasegawa Chief Financial Officer,Sadao Yamamoto R&D Office, Takeshi Oki General Affairs Division, Hidetoshi Kamoto Component Business Division,Masahiro Oba Tablet Business Unit SCM Division, Koji Shimoda Tablet Business Unit Product Development Division,Joseph Deal Wacom Technology, Han Stoffels Wacom Europe

Board of Directors

Execution of Operations, Audit, and Internal Control Systems as of July 1, 2010

General Meeting of Shareholders

Internal Audit Office

Chief Executive Officer

Corporate Management Meeting(10 Executive Officers)

Board of Corporate Auditors(3 Auditors)

Risk Management Committee

Accounting AuditorsAccounting audit

Cooperation

Cooperation

Election/dismissal

Operating audit

Accounting audit

Election/dismissal

Board of Directors(6 Directors)

Risk Hotline

Election/dismissal Report

(From the left)Sadao Yamamoto, Masahiko Yamada, Yasuyuki Fujishima, Shigeki Komiyama, Takeshi Oki, Wataru Hasegawa

The Board of Directors and Board of Corporate Auditors are responsible for corporate governance at Wacom. We currently have six directors, including one non-executive director. We have three independent corporate auditors and one full-time corporate auditor. In addition, to ensure the smooth running of our business, we have introduced a corporate executive officer team with clearly-defined responsibilities. The Corporate Management Meetings, comprising the executive officers and chief general managers, are held twice a month to supervise the imple-mentation of the business plan, control the budget and

review agreed-upon actions. The Internal Audit Office, overseen by the Chief Executive Officer, is responsible for auditing the compliance of each of our companies with regard to laws, regulations and social values, together with ensuring adherence to the Company’s rules. In addition, the Risk Management Committee is responsible for the internal control of compliance, information security, risk manage-ment and elimination of anti-social activity. Furthermore, we have established a risk hotline system, operated by an independent organization, to monitor and minimize potential damage associated with compliance risks.

Five-Year Summary

Overview of Business Performance

Consolidated Balance Sheets

Consolidated Statements of Income

Consolidated Statements of Changes in Net Assets

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Report of Independent Auditors

19

20

23

25

26

27

28

40

Corporate data41

Investor Information42

Contents

Financial Section

18

4,311

16,761

15,668

’06 ’07 ’08 ’09

(Millions of yen)

0

5,000

10,000

15,000

20,000

25,000

35,000

40,000

30,000

’10 ’06 ’07 ’08 ’09 ’10 ’06 ’07 ’08 ’09

(Millions of yen) (%) (Millions of yen) (%)

0

5,000

10,000

15,000

20,000

35

40

45

50

55

0

1,000

2,000

3,000

4,000

6,000

5,000

0

5

10

15

20

30

25

’10

(For the year’s ended March 31) (For the year’s ended March 31) (For the year’s ended March 31)

Five-Year Summary

Net sales Operating income/Operating marginGross profit/Gross profit margin

For the year:Net salesGross profit Operating incomeIncome before income taxes

Net incomeAt year end:

Cash and cash equivalents

Total net assetsTotal assets

Net income per share(yen and U.S. dollars):**

BasicDiluted

Equity ratio(%)***Return on equity (%)Number of employees

¥23,992,20611,970,7623,424,3653,400,6782,145,821

10,342,64313,287,90421,032,863

5,420.515,283.96

63.221.5465

¥33,809,13816,761,1644,311,3784,179,6612,579,025

11,014,11417,796,48725,631,057

¥36,739,19618,640,355

5,538,8715,564,0823,501,360

13,577,19418,516,74229,221,330

8,348.748,304.38

63.520.1584

$344,417168,402

33,61833,54421,157

132,740196,363303,089

¥28,787,06615,027,6414,564,5934,738,2192,853,274

12,707,15316,320,08125,152,191

6,886.196,784.24

64.919.3511

Thousands of yenThousands ofU.S. dollars*

Year ended March 31Year endedMarch 31

Five-Year Summary

Wacom Co., Ltd. and Its Subsidiaries

23,992

28,787

36,739

33,80932,045

11,971

15,028

18,640

49.9

50.7

52.2

3,424

4,565

14.3

15.9

5,539

15.1

12.8

9.8

3,128

19

49.648.9

¥6,213.93¥6,197.78

69.414.2637

$52.66$52.54

*Note 1: U.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥93.04=U.S.$1, the approximate exchange rate prevailing on March 31, 2010.**Note 2: 20,000 shares were repurchesed as treasury stock for 1.85BJPY in 2009.3 F.Y..

2006 2009 2010

¥32,044,57815,668,147

3,127,8223,120,8671,968,406

12,350,11318,269,59028,199,429

¥4,899.57¥4,888.56

64.810.9702

201020082007

0

2,000

4,000

6,000

8,000

10,000

0

5

10

15

20

25

30

40

50

60

70

80

(Millions of yen)

(%)

(%)

’06 ’07 ’08 ’09 ’10

’06 ’07 ’08 ’09 ’10

’06 ’07 ’08 ’09 ’10

(For the year’s ended March 31)



Overview of Business Performance

How did the global economy affectour business in our 27th year?

(ROE)

(ROA)

Note: Common shares were split on a four-for-one basis on November　　 18,2005. Per share data before 2005.3.F.Y.term reflect the above　　 share splits.

Wacom Co., Ltd. and Its Subsidiaries

Net income per share (basic)

ROE/ROA

Equity ratio

5,421

6,886

8,349

6,214

4,900

21.5

19.320.1

12.2 12.4 12.9

14.2

10.9

7.3

9.4

63.264.9 63.5

69.4

64.8

Note 1: ROA equals net income/average total assets.Note 2: During its 23rd fiscal year, the Group procured through a

public offering approximately 4.2 billion yen in capital funds by allocating new shares to a third party.

20

Our business environment for fiscal 2009, the year ended March 31, 2010 has remained severe throughout the fiscal year, due to a decrease of corporate investment in plant and equipment and sluggish consumer consumption. Yet on the other hand, the global economic situation is showing signs of mild recovery, thanks to the economic stimulus measures by each government. In the foreign exchange market, the U.S. dollar and Euro showed a significant depreciation against the Japanese yen compared to the previous fiscal year.

The Japanese economy has not attained the full-scale recovery of corporate capital investment and employment though domes-tic production activities and consumer consumption of automo-biles and flat panel TVs showed gradual recovery owing to eco-nomic stimulus measures and export expansion to Asian coun-tries. In the US., the financial crisis was averted and consumer consumption went out of the worst period owing to the exten-sion of home buyer tax credit and the federal “Cash for Clunk-ers” program. However, the full-scale recovery of corporate capital investment and consumer assumption is considered to require more time due to an on-going high unemployment rate and continuous inventory adjustment. The EU economy shows a pickup owing to the economic stimulus measures by each gov-ernment. However, each country wasn’ t on a track to recovery due to the decrease in corporate capital investment, the slug-gish consumer consumption caused by worsening employment conditions, and the deep-seated credit crunch for financial insti-tutions demonstrated by Dubai debt crisis and Greece's fiscal problems. The economy in the Asia-Oceania countries in gen-eral shows a steady recovery trend. The Chinese economy is making a favorable recovery led by domestic demand as well as export expansion, which also gives South Korea and Taiwan ripple effects of production expansion.

Under the above conditions, Wacom aggressively devoted its efforts to developing new technologies, and developing, manu-facturing, and selling new products as well as efficient cost con-trol. The professional tablet, “Intuos4” released at the end of the previous fiscal year enjoyed a high reputation and the latest 3D filmmaking also expanded the use of tablets. In September, the Company announced a new user interface strategy by adding multi-touch, and at the same time, released a new series of con-sumer tablets, “Bamboo” . The Company also began to mass-produce and provide a new multi-touch component that sup-ports the functions of Windows 7 to major PC manufacturers, strengthening its leadership in the user interface field. Addition-ally in the music device field as a new entry, Wacom commer-cialized a professional DJ device “nextbeat” and promoted it in Europe mainly. LCD tablets strengthened the product line and released new "Cintiq21UX" which adopted the advanced pen technology of "Intuos4" in March as well as wide-size LCD models and a portable model for digital signature. The Company set up to promote the IT infrastructure such as an ERP system and a global SCM system which increases its productivity and supports its future growth.

As a result, the consolidated business results ended in sales of ¥32.04bn (-5.2% YoY), OP ¥3.13bn (-27.5% YoY),ordinary profit ¥3.16bn (-24.5% YoY), and net profit ¥1.97bn (-23.7% YoY).




Overview of Business Performance Wacom Co., Ltd. and Its Subsidiaries

Our results by business sector

’10 31,634

’09 33,058

(Millions of yen)

(Millions of yen)

Sales

Operatingincome

ESD Business

DOWN 4.3%

DOWN 21.4%

4,880’10

6,211’09

2010

¥32,045

Sales Breakdown by Business

ECS Business 2.2%

411’10

751’09

(Millions of yen)

Sales

Operatingincome

ECS Business

DOWN 45.3%

△109’10

49’09

ESD Business 97.8%2009

¥33,809

ECS Business 1.3%

ESD Business 98.7%

21

Electronic Systems and Devices (ESD)businessGlobal sales of our tablet business maintained the same level as the previous year in the harsh conditions such as a decrease of corporate investment in plant and equip-ment and a　sluggish consumer consumption despite the fact that the Company took the measure of developing new products to drive up consumer demand. In the pro-fessional segment, the sales of “Intuos4” released at the end of the previous fiscal year and “Intuos4 Wireless” released in February showed steady growth. On the con-sumer tablet side, “Bamboo” series recovered from a sales drop of the previous product in 1H and slightly exceeded the sales level of the previous year owing to “Bamboo” new series adding multi-touch function launched in September. As for LCD tablets, the sales decreased due to struggle of high-priced models such as “Cintiq” series for professional graphics fields influenced by the reduction of corporate investment in plant and equipment, despite the favorable sales growth of “Sign-Pad” for the security field in Europe.

With regard to the components business, the multi touch sensor system for Windows 7 was mass-produced and its shipment began in August. However, sales recorded a remarkable decrease because the acknowledgment of the touch function by ordinary users has not advanced enough from initial assumptions and sales to major cus-tomers of the components business were also sluggish. As for a professional DJ device, “nextbeat” as a new entry in the music device field, the new business faced severe results, due to taking more time to change the playing style of professional DJs and to develop a distri-bution channel than was the initial assumption.

As a result, the ESD business sales ended at ¥31.63bn (-4.3% YoY), and operating profit ¥4.88bn (-21.4% YoY).

Engineering Collaborative Solutions (ECS) businessECS business suffered from the severe business environ-ment. Its sales remained at a lower level due to the decrease of manufacturer’ s investment in plant and equipment. In the above-mentioned situation, the ECS business provided incentives for existing users to upgrade, and for other CAD product users to replace their existing software by launching the latest product, “ECAD / dio” Ver. 10.0, an electronic designing CAD solution in September. The business also made efforts to promote sales activities by refurbishing the website and participat-ing in domestic exhibitions and focused on the acquisi-tion and renewal of annual maintenance contracts.

As a result, ECS business sales ended at ¥410mn(-45.3% YoY) and operating loss ¥109mn (OP ¥49mn in previous fiscal year).

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000(Millions of yen)

(Millions of yen)

’06 ’07 ’08 ’09

’06 ’07 ’08-1600

-1500

-1000

-400

-300

-200

-100

0

’09

’06 ’07 ’08 ’09 ’10

’10

(For the year’s ended March 31) (For the year’s ended March 31)



Cash f lows from operating activities

Cash f lows from investing activities

(Millions of yen)

-3,000

-2,000

-1,000

0

1,000

2,000

3,000

4,000

Cash f lows from f inancing activities

-2,676

-1,199

3,720

-1,229

-511

-1,174

’10

-805

-93

-323

-1,539

1,478

3,606

2,270

3,7583,461

0

1,000

2,000

Cash Dividends per Share / Payout Raito

’06 ’08 ’09 ’10’07

Cash Dividends per share(yen)Pay out Raito(%)

22

Our financial positionTotal assets increased by ¥2.57bn to ¥28.20bn compared with the end of the previous fiscal year. The main reasons were a ¥0.80bn increase in notes and accounts receiv-able and a ¥1.02bn increase in other current assets due to the increase of materials supplied to manufacturers at cost for launching new products, and a ¥0.76bn increase in intangible fixed assets due to the acquisition of intel-lectual property for maintaining the competitiveness and the structuring of the next enterprise resource planning systems.Total liabilities increased by ¥2.10bn to ¥9.93bn com-pared with the end of the previous fiscal year. The main reasons for the increase were a ¥1.09bn in notes and accounts payable mainly due to the increase in the pur-chase of materials for the launching of new products and a ¥399mn in accrued income tax.Total net assets increased by ¥0.47bn to ¥18.27bn. The main reason for the increase was a ¥1.97bn increase in retained earnings, despite a ¥1.21bn payment of share-holders’ dividends and a ¥0.29bn decrease in foreign cur-rency translation adjustments due to the appreciation of the Japanese yen.Consolidated cash & cash equivalents increased by ¥1.34bn (+¥2.56bn YOY) to ¥12.35bn, compared with the end of the previous fiscal year.(Cash Flow from Operating Activities)Earned operating cash flow for was ¥3.61bn (¥1.48bn gained in the previous fiscal year). The main reasons for the increase were a ¥3.12bn in the sum of NPBT, a ¥0.76n in depreciation, and a ¥1.13bn increase in accounts pay-able, despite a ¥1.49bn increase in account receivable.(Cash Flow from Investing Activities)Investing cash flow was ¥0.81bn. (¥1.17bn expended in the previous fiscal year) The main reasons were the pur-chases of mold, intellectual property, and the next enter-prise resource planning systems of ¥1.31bn in fixed assets and a proceed from redemption of held-to-maturity securities of ¥0.5bn.(Cash Flow from Financing Activities)Financing cash flow for was ¥1.20bn. (¥2.68bn expended in the previous fiscal year) The main reason was a pay-ment of shareholders’ dividends of ¥1.20bn.

18.4

1,000

21.8

1,500

29.9

48.3

2,500

3,000

61.2

3,000

60

50

40

30

20

10

3,000

23

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

Consolidated Balance SheetsWacom Co., Ltd. and Its Subsidiaries

Assets:

¥12,350,113 4,701,126

- 2,123,002

149,084 683,440

1,920,657 542,650 393,620 (39,753)

22,823,939

3,522,014 (1,782,297)1,739,717

203,923 (113,866)

90,057 1,691,499

(1,229,892)461,607

1,446,994 -

3,738,375

84,097 1,323,391 1,407,488

35,077 16,515

178,035 -

229,627 5,375,490

¥28,199,429

¥9,994,114 3,897,615 1,520,000 2,164,512

162,442 747,434

- 734,755

1,623,022 (35,689)

20,808,205

3,553,377 (1,685,860)

1,867,517 180,529 (93,585)86,944

1,728,011 (1,190,212)

537,799 1,452,507

25,390 3,970,157

110,098 538,427 648,525

35,277 4,480

166,331 (1,918)

204,170 4,822,852

¥25,631,057

$132,740 50,528

- 22,818 1,602 7,346

20,643 5,832 4,231

(427)245,313

37,855 (19,156)18,699

2,192 (1,224)

968 18,180

(13,219)4,961

15,552 -

40,180

904 14,224 15,128

377 178

1,913 -

2,468 57,776

$303,089

March 31 March 31Thousands of yen

Thousands ofU.S. dollars

(Note 1)

2010 20102009

Current assets -Cash and deposits (Notes 8 and 10)Notes and accounts receivable-trade (Note 10)Short-term investment securities (Notes 2 and 11)Merchandise and finished goods (Notes 2 and 4)Work in process (Notes 2 and 4)Raw materials and supplies (Notes 2 and 4)Accounts receivable-other (Notes 4 and 10)Deferred tax assets (Note 15)Others Allowance for doubtful accounts (Note 2)

Total current assets

Noncurrent assets - Property, plant and equipment: (Note 2)Buildings and structuresAccumulated depreciationBuildings and structures, netMachinery, equipment and vehiclesAccumulated depreciationMachinery, equipment and vehicles, netTools, furniture and fixtures (Note 4)Accumulated depreciationTools, furniture and fixtures, netLandConstruction in progressTotal property, plant and equipmentIntangible assets:Goodwill (Note 2)Others

Total intangible assetsInvestments and other assets:Investment securities (Notes 2 and 11)Deferred tax assets (Note 15)OthersAllowance for doubtful accounts (Note 2)

Total investments and other assets Total noncurrent assets

Total assets

Liabilities:Current liabilities - Notes and accounts payable-trade (Note 10) Short-term loans payable (Notes 10 and 19) Income taxes payable Provision for bonuses (Note 2) Provision for directors' and statutory corporate auditors' bonuses (Note 2) Others Total current liabilities

Noncurrent liabilities - Deferred tax liabilities (Note 15) Provision for retirement benefits (Notes 2 and 13) Provision for directors' and statutory corporate auditors’ retirement benefits (Note 2) Others Total noncurrent liabilities Total liabilities

Net Assets:Shareholders' equity - (Note 7) Capital stock Capital surplus Retained earnings Treasury stock Total shareholders' equityValuation and translation adjustments - Foreign currency translation adjustment (Note 2) Total valuation and translation adjustments Total net assets

Total liabilities and net assets

¥4,983,535 600,000 813,874 314,192 32,357

2,137,885 8,881,843

102,386 438,024 459,085 48,501

1,047,996 9,929,839

4,196,405 4,037,819

13,060,831 (1,848,486)

19,446,569

(1,176,979)(1,176,979)

18,269,590

¥28,199,429


¥3,895,717 600,000 414,881 343,537

- 1,613,275 6,867,410

115,334 420,151 429,227

2,448 967,160

7,834,570

4,195,345 4,036,759

12,297,513 (1,848,486)

18,681,131

(884,644)(884,644)

17,796,487

¥25,631,057

$53,563 $6,449 $8,748 $3,377

$348 $22,978 $95,463

$0 $0

$1,100 $4,708 $4,934

$521 $11,263

$106,726 $0 $0 $0

$45,103 $43,399

$140,379 ($19,868)

$209,013 $0

($12,650)($12,650)

$196,363 $0

$303,089

24

March 31 March 31Thousands of yen


(Note 1)

2010 20102009

25


Consolidated Statements of IncomeWacom Co., Ltd. and Its Subsidiaries

¥32,044,578 16,376,431 15,668,147 12,540,325 3,127,822

21,510 28,687 50,197

14,131 4,210 3,514

21,855

3,156,164

- -

-

1,243 34,054 35,297

3,120,867

986,438 166,023

1,152,461

¥1,968,406

$344,417 176,015 168,402 134,784 33,618

231 308 539

152 45 37

234

33,923

- - -

13 366 379

33,544

10,602 1,785

12,387

$21,157

Year ended March 31 Year ended March 31Thousands of yen


(Note 1)

2010 20102009

Net salesCost of sales (Notes 6 and 16) Gross profitSelling, general and administrative expenses (Notes 6 and 16) Operating income

Non-operating income: Interest and dividends income Others Total non-operating income

Non-operating expenses: Interest expenses Foreign exchange losses Others Total non-operating expenses

Ordinary income

Extraordinary income: Gain on sales of noncurrent assets (Note 6) Settlement received Total extraordinary income

Extraordinary loss: Loss on sales of noncurrent assets (Note 6) Loss on retirement of noncurrent assets (Note 6) Total extraordinary losses

Income before income taxes

Income taxes-current Income taxes-deferred Total income taxes

Net income

¥33,809,138 17,047,974 16,761,164 12,449,786 4,311,378

85,102 27,638

112,740

12,375 204,410 28,264

245,049

4,179,069

155 14,217 14,372

446 13,334 13,780

4,179,661

1,528,131 72,505

1,600,636

¥2,579,025


Consolidated Statements of Changes in Net AssetsWacom Co., Ltd. and Its Subsidiaries

Shareholders' equity: Capital stock - Balance at the end of previous period Changes of items during the period: Issuance of new shares Total changes of items during the period Balance at the end of current period Capital surplus - Balance at the end of previous period Changes of items during the period: Issuance of new shares Total changes of items during the period Balance at the end of current period Retained earnings - Balance at the end of previous period Effect of changes in accounting policies applied to foreign subsidiaries Changes of items during the period: Dividends from surplus Net income Change of scope of consolidation Total changes of items during the period Balance at the end of current period Treasury stock - Balance at the end of previous period Changes of items during the period: Purchase of treasury stock Total changes of items during the period Balance at the end of current period Total shareholders' equity - Balance at the end of previous period Effect of changes in accounting policies applied to foreign subsidiaries Changes of items during the period: Issuance of new shares Dividends from surplus Net income Change of scope of consolidation Purchase of treasury stock Total changes of items during the period Balance at the end of current period Valuation and translation adjustments Foreign currency translation adjustment - Balance at the end of previous period Changes of items during the period: Net changes of items other than shareholders' equity Total changes of items during the period Balance at the end of current period Total valuation and translation adjustments - Balance at the end of previous period Changes of items during the period: Net changes of items other than shareholders' equity Total changes of items during the period Balance at the end of current period Total net assets - Balance at the end of previous period Effect of changes in accounting policies applied to foreign subsidiaries Changes of items during the period: Issuance of new shares Dividends from surplus Net income Change of scope of consolidation Purchase of treasury stock Net changes of items other than shareholders' equity Total changes of items during the period

Balance at the end of current period

¥4,195,345

1,060 1,060

4,196,405

4,036,759

1,060 1,060

4,037,819

12,297,513 -

(1,205,088)1,968,406

- 763,318

13,060,831

(1,848,486)

- -

(1,848,486)

18,681,131 -

2,120 (1,205,088)1,968,406

- -

765,438 19,446,569

(884,644)

(292,335)(292,335)

(1,176,979)

(884,644)

(292,335)(292,335)

(1,176,979)

17,796,487 -

2,120 (1,205,088)1,968,406

- -

(292,335)473,103

¥18,269,590

¥4,082,842

112,503 112,503

4,195,345

3,924,258

112,501 112,501

4,036,759

10,853,924 (29,344)

(1,050,390)2,579,025

(55,702)1,472,933

12,297,513

-

(1,848,486)(1,848,486)(1,848,486)

18,861,024 (29,344)

225,004 (1,050,390)2,579,025

(55,702)(1,848,486)

(150,549)18,681,131

(299,282)

(585,362)(585,362)(884,644)

(299,282)

(585,362)(585,362)(884,644)

18,561,742 (29,344)

225,004 (1,050,390)2,579,025

(55,702)(1,848,486)

(585,362)(735,911)

¥17,796,487

$45,092

11 11

45,103

43,387

12 12

43,399

132,174 -

(12,952)21,157

- 8,205

140,379

(19,868)

- -

(19,868)

200,785 -

23 (12,952)21,157

- -

8,228 209,013

(9,508)

(3,142)(3,142)

(12,650)

(9,508)

(3,142)(3,142)

(12,650)

191,277 -

23 (12,952)21,157

- -

(3,142)5,086

$196,363



(Note 1)

26

2010 20102009

27


Consolitated Statements of Cash FlowsWacom Co., Ltd. and Its Subsidiaries

Net cash provided by (used in) operating activities : Income before income taxes

Depreciation and amortizationIncrease (decrease) in allowance for doubtful accountsIncrease (decrease) in provision for bonusesIncrease (decrease) in provision for directors' bonusesIncrease (decrease) in provision for retirement benefitsIncrease (decrease) in provision for directors' retirement benefitsInterest and dividends incomeInterest expensesForeign exchange losses (gains)Loss (gain) on sales and retirement of noncurrent assetsDecrease (increase) in notes and accounts receivable-tradeDecrease (increase) in inventoriesIncrease (decrease) in notes and accounts payable-tradeOthers, net

Sub totalInterest and dividends income receivedInterest expenses paidIncome taxes paid

Net cash provided by (used in) operating activitiesNet cash provided by (used in) investing activities:

Purchase of property, plant and equipment Purchase of intangible assetsPurchase of softwareProceeds from sales of noncurrent assetsProceeds from redemption of securitiesPayments for lease and guarantee depositsProceeds from collection of lease and guarantee depositsOthers, net

Net cash provided by (used in) investing activitiesNet cash provided by (used in) financing activities:

Proceeds from issuance of common stockPurchase of treasury stockCash dividends paid

Net cash provided by (used in) financing activitiesEffect of exchange rate change on cash and cash equivalentsNet increase (decrease) in cash and cash equivalentsCash and cash equivalents at beginning of year

Cash and cash equivalents at end of year (Note 8)

¥3,120,867 757,167

3,247 (27,704)32,943 14,058 34,024 (21,510)14,131

160,114 35,297

(1,492,802)31,497

1,131,963 534,994

4,328,286 34,676 (14,213)

(742,442)3,606,307

(375,920)(192,361)(739,787)

11,353 500,000

- -

(8,372)(805,087)

2,092 -

(1,201,459)(1,199,367)

(265,854)1,335,999

11,014,114

¥12,350,113

¥4,179,661 664,439 14,254

(125,070)(23,695)48,912 57,382 (85,102)12,375 (78,350)13,625

737,805 (36,483)

(1,623,667)(84,487)

3,671,599 79,379 (12,424)

(2,260,908)1,477,646

(955,752)(200)

(197,934)7,479

- (50,325)23,022

- (1,173,710)

222,293 (1,852,061)(1,046,500)(2,676,268)

(190,748)(2,563,080)

13,577,194

¥11,014,114

$33,544 8,138

35 (298)354 151 366 (231)152

1,721 379

(16,045)339

12,166 5,750

46,521 373 (153)

(7,980)38,761

(4,040)(2,068)(7,951)

122 5,374

- -

(90)(8,653)

22 -

(12,913)(12,891)(2,857)

14,360 118,380

$132,740



(Note 1)

2010 20102009

Notes to Consolidated Financial StatementsWacom Co., Ltd. and Its Subsidiaries

28

1. Basis of presenting consolidated financial statements:

The accompanying consolidated financial statements have been prepared from the consolidated financial statements of Wacom Co., Ltd. (the “Company”) and its subsidiaries filed with the Director of the Kanto Local Finance Bureau in accordance with the Finan-cial Instruments and Exchange Law of Japan and its related accounting regulations, and in conformity with accounting principles and practices generally accepted in Japan, which are different in certain respects from the application and disclosure require-ments of International Financial Reporting Standards.

The consolidated financial statements are stated in Japanese yen, the currency of the country in which the Company is incorporated and principally operates. The translation of Japanese yen amounts into U.S. dollar amounts is included solely for the convenience of the readers outside Japan and has been calculated at the rate of JP¥93.04 = U.S.$1.00, the approximate rate of exchange on March 31, 2010. Such translations should not be construed as repre-sentations that the Japanese yen amounts could have been or could be converted into U.S. dollars at that or any other rate.

2. Summary of significant accounting policies:

(1) Principles of consolidation -The consolidated financial statements include the accounts of the Company and all of its majority-owned subsidiaries (8 companies) (the “Company”). Majority-owned subsidiaries are as follows;

● Wacom Europe GmbH● Wacom Technology Corporation● Wacom China Corporation● Wacom Korea Co., Ltd.● Wacom Australia Pty. Ltd.● Wacom Hong Kong Ltd.● Wacom Singapore Pte. Ltd.● Wacom Taiwa n Information Co., Ltd.

The Company established Wacom Taiwan Information Co., Ltd. in October 2008. Its results of operations have been included in the company’s consolidated financial statements since that date.

The Company liquidated Wacom Components Europe Ltd. in March 2008. Its results of operations have been excluded from the company’s consolidated financial statements since that date.

Wacom Digital Solutions Co., Ltd. changed its company’s title name to Wacom Korea Co., Ltd. in April 2008.

In this year presented, there are no unconsolidated subsidiaries or affiliates accounted for by the equity method.

The fiscal year end of Wacom China Corporation is December 31. However, for consolidation purposes, the provisional settlement of accounts as of March 31 is utilized.

(2) Valuation methods for major assets -(a)Securities:Securities held by the Company and its subsidiaries are classified as follows:

Held-to-maturity debt securities are stated at cost after accounting for any premium or discount at acquisition, which is amortized over the period to maturity.

Other securities for which market price or quotations are not available are stated at cost based on the moving-average method.

(b)Derivatives:All derivatives are stated at fair value, with changes in fair value included in net profit or loss in the period in which they arise.

(c)Inventories:Inventories held by the Company are stated at the lower of cost or realizable value, cost being deter-mined by the gross average method.

(Accounting changes)“Accounting Standard for Measurement of Invento-ries” (Accounting Standards Board of Japan State-ment No. 9, issued on July 5, 2006) has been adopted effective for the fiscal year ended March 31, 2009. As a result, operating profit, ordinary income and income before income taxes decreased by ¥40,330 thousand compared with what would have been reported under the previous accounting policy that inventories held by the Company had been stated at cost. The impact on segment information is explained in Note 16.

(3)Depreciation and amortization of major assets -(a)Property, plant and equipment:The Company adopted the declining-balance method of depreciation at using rates based on the estimated useful lives of the assets. Depreciation of buildings acquired by the domestic company after April 1, 1998 is computed using the straight-line method of depre-ciation. Depreciation of property, plant and equipment held by at the foreign consolidated subsidiaries is computed using the straight-line method over estimated useful lives.

Useful lives of major classes of property, plant and equipment are as follows:

Buildings and structures 3 to 65 yearsMachinery, equipment and vehicles　3 to 7 yearsTools, furniture and fixtures 2 to 20 years

29

(Additional information)Useful lives of machinery and equipment were changed to conform with the Corporate Tax Law as revised for the fiscal year ended March 31, 2009. The impact to the consolidated statement of income is not significant. (b) Intangible assets:The Company adopted the straight-line method for computing amortization. Software for in-house use is amortized based on the straight-line method over the expected useful economic life of 5 years. Software for sale is amortized based on an estimated volume of sales, with the minimum amortization amount calcu-lated based on a useful life of 3 years. (4) Basis of provision -(a) Allowance for doubtful accounts:An allowance for doubtful accounts is provided in an amount sufficient to cover probable losses on collection of notes and accounts receivable. The allowance for doubtful accounts is computed based a calculated historical bad debt experience ratio for trade receivables, in addition to the estimated irrecoverable amount of doubtful receivables on an individual account basis.

Foreign consolidated subsidiaries mainly compute the allowance for doubtful accounts based on the estimated irrecoverable amount of doubtful receiv-ables on an individual account basis. (b) Provisions for bonuses:The provisions for bonuses to employees are provided based on estimated amounts expected to be paid to employees. (c) Provisions for directors’ and statutory corporate auditors’ bonuses:The provisions for directors’ and statutory corporate auditors’ bonuses are provided based on estimated amounts expected to be paid to directors and statutory corporate auditors. (d) Provision for retirement benefits:The provision for retirement benefits for employees is provided based on the actuarially calculated present value of projected benefit obligations except for, as permitted under the accounting standard for employ-ees’ retirement benefits, the unrecognized actuarial differences. The unrecognized actuarial differences are amortized on a straight-line basis over 5 years beginning in the year after they arise.　An entire amount of the unrecognized actuarial differences are amortized as incurred at a part of the foreign consoli-dated subsidiaries. (Accounting changes)“Partial Amendments to Accounting Standard for Retirement Benefits (Part 3)” (Accounting Standards Board of Japan Statement No. 19, issued on July 31, 2008) has been adopted effective for the fiscal year ended March 31, 2010. The unrecognized actuarial differences will be amortized from the following fiscal

year. Therefore, operating profit, ordinary income and income before income taxes will not be affected for the fiscal year ended March 31, 2010. An unrecog-nized amount of differences for retirement benefits liabilities raised from the adoption of this accounting standard is ¥28,167 thousand ($303 thousand). (e) Provision for directors’ and statutory corporate auditors’ retirement benefits:The Company provides an accrued lump-sum severance indemnity for directors and statutory corporate auditors at the full amount which would be required to be paid if all directors and statutory corporate auditors retired at the balance sheet date based on the Company’s internal regulations. (5) Foreign currency translation -The Company’s functional currency is Japanese yen. The translation of assets and liabilities denominated in foreign currency at the year-end is made at the current exchange rate. Exchange gains and losses resulting from foreign currency transactions and translation of assets and liabilities denominated in foreign currencies are included in the consolidated statements of income. All assets, liabilities, income and expense accounts of foreign subsidiaries are translated using the current exchange rates at the respective balance sheet dates. Foreign currency translation adjustments resulting from such proce-dures are recorded in the consolidated balance sheets as a separate component of net assets. (6) Consumption taxes -The consumption tax withheld upon sale and consumption tax paid by the Companies on their purchases of goods and services is not included in revenue and cost or expense items in the accompany-ing consolidated statements of income. (7) Valuation method for assets and liabilities of subsidiaries -Assets and liabilities of subsidiaries are measured at fair value at the date of acquisition. (8) Amortization of goodwill -Goodwill is amortized straight-line over the remaining useful life.

(9) Cash and cash equivalents -Cash and cash equivalents include all highly liquid investments, generally with original maturities of three months or less, those that are readily convertible to known amounts of cash and, thus, present an insignificant risk of changes in value.

3. Changes in accounting principles and policies:Changes in accounting principles and policies for the year ended March 31, 2009 were as follows.(1) Practical solution on unification of accounting policiesapplied to foreign subsidiaries for the consolidated financial statements -“Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for the Consolidated Financial Statements” (Accounting Standards Board

of Japan Practical Issues Task Force No. 18 issued on May 17, 2006) has been adopted effective for the fiscal year ended March 31, 2009. As a result, operating profit, ordinary income and income before income taxes are decreased by ¥17,576 thousand compared with what would have been reported under the previous accounting policy that consolidated subsidiaries overseas had applied generally accepted accounting principles in each country to their own financial statements and no adjust-ments had been made to their financial statements on consolidation. The impact on segment information is explained in Note 16. (2) Lease accounting -Finance lease transactions that do not transfer ownership of the assets had been accounted for using the same method as for operating leases. However, “Accounting Standard for Lease Transactions” (Accounting Standards Board of Japan Statement No. 13, originally issued on June 17, 1993 and revised on March 30, 2007) and “Guidance on Accounting Standard for Lease Transac-tions” (Accounting Standards Board of Japan Guidance No. 16, originally issued on January 18, 1994 and revised on March 30, 2007) have been adopted effective from the fiscal year beginning on and after April 1, 2008. Therefore finance lease transactions that do not transfer ownership of the assets were treated as ordinary sales transactions.As for finance lease transactions that do not transfer ownership which commenced before April 1, 2008, the Company has applied the same method as for operating leases continuously.The adoption did not have any impact on the consolidated statement of income.

4. Changes in presentation methods:Changes in accounting principles and policies for the year ended March 31, 2009 were as follows.(Consolidated Balance Sheets)(1) “Merchandise and finished goods”, “Work in process” and “Raw materials and supplies” accounts are separately presented from this fiscal year, which was included in “Inventories” presentation in the previous years. “Merchan-dise and finished goods”, “Work in process” and “Raw materials and supplies” represented ¥2,349,469 thousand, ¥177,043 thousand and ¥847,171 thousand, respectively in the previous year.(2) “Tools, furniture and fixtures” account and its “Accumu-lated depreciation” account is separately presented from this fiscal year, which was included in “Others” of “Property, plant and equipment” in the previous fiscal years, as its significance has increased. Each amount of “Tools, furniture and fixtures” account and its “Accumulated depreciation” account in the previous year is ¥1,454,331 thousand and ¥1,079,531 thousand, respectively. Changes in accounting principles and policies for the year ended March 31, 2010 are as follows.(Consolidated Balance Sheets)(1) “Accounts receivable - other” account is separately presented from this fiscal year, which was included in “Others” of “Total current assets” in the previous fiscal years, as its significance has increased. The amount of “Accounts receivable - other” account in the previous year is ¥897,994 thousand.

30

March 31, 2010 March 31, 2010

Thousands of U.S. dollars

Thousands of yen

Amount of overdraft limitUtilized overdraft facilities

Net amount

¥2,000,000–

¥2,000,000

March 31, 2009

¥2,000,000–

¥2,000,000

$21,496–

$21,496

(Consolidated Cash Flow Statements)(1) “Payments for lease and guarantee deposits” account and “Proceeds from collection of lease and guarantee deposits” account of “Net cash provided by (used in) investing activities” is included in “Others, net” of “Net cash provided by (used in) investing activities” from this fiscal year, as its significance has decreased. The amount of “Payments for lease and guarantee deposits” account and “Proceeds from collection of lease and guarantee deposits” account which is included in “Others, net” of “Net cash provided by (used in) investing activities” in this fiscal year is ¥9,253 thousand ($99 thousand) and ¥881 thousand ($9 thousand), respectively.

5. Consolidated balance sheets:Information regarding consolidated balance sheets as of March 31, 2009 and 2010 is as follows.

(1) Overdraft facility -For effective funding to meet working capital require-ments, the Company has established overdraft facilities with two banks. Unutilized overdraft facilities under these contracts as of March 31, 2009 and 2010 are as follows:

6. Consolidated statement of income:Information regarding consolidated balance sheets as of March 31, 2009 and 2010 is as follows.

(1) Cost of sales -Devaluation amount due to decrease of net realizable value is reflected in inventory amount. As a result, cost of sales includes loss on inventory devaluation of ¥40,330 thousand and ¥3,158 ($34 thousand) for the years ended March 31, 2009 and 2010, respectively. (2) Selling, general and administrative expenses -The major components of “Selling, general and adminis-trative expenses” are as follows:


Advertising expensesProvision for allowance for doubtful accountsSalariesPension expensesProvision for directors’ and statutory corporate auditors’ retirement benefitsProvision for bonusesProvision for directors’ and statutory corporate auditors’ bonusesResearch and development expenses


Thousands of yen

Year ended March 31

20102009 2010

$15,030

20931,5201,726

3662,874

14,679360

16,984

¥1,398,410

19,4742,932,634

160,575

34,024267,438

33,4641,580,173

¥1,378,351

82,6262,874,375

151,176

57,382269,786

–1,441,953

Year ended March 31

31

(3) Research and development expenditures -Research and development expenditures are included in selling, general and administrative expenses. Such expenses amounted to ¥1,441,953 thousand and ¥1,580,173 thousand ($16,984 thousand) for the years ended March 31, 2009 and 2010, respectively.

(4) Gain on sales of noncurrent assets -

7. Consolidated statements of changes in net assets:Information regarding consolidated balance sheets as of March 31, 2009 and 2010 is as follows.

(1) Type and number of shares outstanding and treasury stock -

(2) Matters related to dividends - a)Dividends payment Dividend payment approved at the board meeting held on April 30, 2008 are as follows:

Number of shares as of March 31, 2008 (Unit: shares)Number of shares increased during the accounting periodended March 31, 2009 (Unit: shares)Number of shares decreased during the accounting period ended March 31, 2009 (Unit: shares)

Number of shares as of March 31, 2009 (Unit: shares)

Common stockType of shares outstanding

Total Common stockType of treasury stock

Total

420,156

1,540

-

421,696

420,156

1,540

-

421,696

-

20,000

-

20,000

-

20,000

-

20,000

Tools, furniture and fixtures

Total

Thousands of U.S. dollarsThousands of yen

Year ended March 312010

Year ended March 312009 2010

$-

$-

¥-

¥-

¥155

¥155

Machinery, equipment and vehiclesTools, furniture and fixtures

Total




$76

$13

¥624¥619

¥1,243

¥446-

¥446

(5) Loss on sales of noncurrent assets -

Buildings and structuresTools, furniture and fixturesOther intangible assets

Total




$-32442

$366

¥-30,1713,883

¥34,054

¥4,9547,777

603

¥13,334

(6) Loss on retirement of noncurrent assets -

Note: a) Increase in the number of shares was due to exercise of stock options. b) Increase in the number of treasury stock was due to purchase of treasury stock based on the resolution of the board meeting.

Number of shares as of March 31, 2009 (Unit: shares)Number of shares increased during the accounting periodended March 31, 2010 (Unit: shares)Number of shares decreased during the accounting period ended March 31, 2010 (Unit: shares)

Number of shares as of March 31, 2010 (Unit: shares)

421,696

120

-

421,816

421,696

120

-

421,816

20,000

-

-

20,000

20,000

-

-

20,000

Common stockType of shares outstanding

Total Common stockType of treasury stock

Total

Note: Increase in the number of shares was due to exercise of stock options.

b) Dividends of which record date is attributable to the accounting period ended March 31, 2009 and 2010, respectively, but to be effective after said accounting period.

Board meeting onApril 30, 2008

(Approval by)

June 3, 2008

March 31, 2008$25 $10,484Common

stock

Total amont of dividends(Thousands

of U.S. dollars)

Type of shares

Dividends per share

(dollar)

Record date

Effective date

Board meeting onMay 8, 2009

(Approval by)

June 3, 2009

March 31, 2009¥3,000¥1,205,088Common

stock


of yen)

Type of shares

Dividends per share

(yen)

Record date

Effective date


(Approval by)

June 3, 2009

March 31, 2009$32$12,952Common

stock


of U.S. dollars)

Type of shares

Dividends per share

(dollar)

Record date

Effective date

Dividends payment approved at the board meeting held on May 8, 2009 are as follows:

(Approval by)

June 3, 2008

March 31, 2008¥2,500¥1,050,390Common

stock


of yen)

Type of shares

Dividends per share

(yen)

Record date

Effective date



(Approval by)

June 3, 2009

March 31, 2009¥3,000¥1,205,088Common

stock


of yen)

Type of shares

Dividends per share

(yen)

Record date

Effective date


(Approval by)

June 3, 2009

March 31, 2009$32$12,952Common

stock


of U.S. dollars)

Type of shares

Dividends per share

(dollar)

Record date

Effective date

The Company resolved approval at the board meeting held on May 8, 2009 as follows:

(b) Future lease payments under finance leases are as follows:

(c) Lease payments and amounts representing depreciation and interest are as follows:

(2) Calculation method of depreciation equivalentsDepreciation equivalents are calculated using the declining-balance method for tangible fixed assets over the lease terms with residual value by 10%, before multiplying by 10 and being divided by 9 and on the straight-line method for the intangible assets over the lease terms without residual value. (3) Allocation of interest expense equivalentsDifferences between total lease expenses and pur-chase price equivalents of the leased properties comprise interest expense equivalents and insurance, maintenance and certain other operating costs. Interest expense equivalents are allocated using the interest method over the lease terms.

(4) Minimum lease payments under non-cancelable operating leases are as follows:

There is no impairment losses allocated to leased assets.


32


(Approval by)

June 3, 2010

March 31, 2010¥3,000¥1,205,448Common

stock


of yen)

Type of shares

Dividends per share

(yen)

Record date

Effective date


(Approval by)

June 3, 2010

March 31, 2010$32 $12,956Common

stock


of U.S. dollars)

Type of shares

Dividends per share

(dollar)

Record date

Effective date

The Company resolved approval at the board meeting held on April 30, 2010 as follows:

8. Consolidated statements of cash flow:Information regarding consolidated statements of cash flows for the years ended March 31, 2009 and 2010 is as follows.

(1) Cash and cash equivalents as of March 31, 2009 and 2010, is consisted of as follows -

9. Leases:Finance lease transactions that do not transfer ownership of the assets have been accounted for as ordinary sale and purchase transactions. The amended standards (See Note 3) are applied to new lease contracts entered since the fiscal year ended March 31, 2009. Such new contracts, however, have not been entered for the fiscal year ended March 31, 2009 and 2010.Finance lease transactions that do not transfer ownership of the assets which commenced before April 1, 2008, have been accounted for using the same method as for operating leases continuously. Such finance lease transactions of the Company and its subsidiaries, as a lessee, are shown below: (1) Finance leases, which do not transfer ownership of the assets to the lessee and are accounted for as operating leases, are as follows:

(a) Acquisition costs of leased assets under finance leases are as follows:

Cash and depositsShort-term investment securitiesLess: Held-to-maturity debt securities due within one year

Cash and cash equivalents


2010

$132,740 -

-

$132,740

¥12,350,113 -

-

¥12,350,113

¥9,994,114 1,520,000

(500,000)

¥13,577,194

2009 2010


¥2,70516,419

¥19,124

¥1,91915,319

¥17,238

¥7861,100

¥1,886

Thousands of yenNet balance as of

March 31, 2009Acquisition

costAccumulateddepreciation

$2971

$100

$2567

$92

$44

$8


Thousands of U.S. dollarsNet balance as of



Thousands of yenNet balance as of




¥2,7056,608

¥9,313

¥2,3206,286

¥8,606

¥385322

¥707

¥2,4402,136

¥4,576

¥1,654482

¥2,136

$185

$23

Due within one yearDue after more than one year


Thousands of yen

2009 2010 2010

¥4,2612,463

300

¥2,4401,179

174

$2613

2

Lease paymentsAmount representing depreciationAmount representing interest

2009 2010 2010

¥109,381115,089

¥224,470

¥100,514110,897

¥211,411

$1,0801,192

$2,272

Due within one yearDue after one year

Total minimum lease payments


Thousands of yen

2009 2010 2010


Thousands of yen

33

10. Financial instruments:(1) Matters relating to financial instruments-

(a) Policy for financial instruments:The Group's financing is mainly covered by the internal fund, in terms of stable and low-cost financ-ing. However, some short-term financial needs and working capital needs may be covered by short-term loan. Long-term financing is also flexible to demand selecting appropriate vehicle from long-term debt, issuance of new bond, or issuance of new shares.

Investment of surplus fund is limited in relatively secure financial instruments with high liquidity and high credit ratings.

The derivatives are used only for the purpose to avoid a risk of future currency fluctuations, and any specu-lative trading is strictly prohibited.

(b) Content of financial instruments and their risks and risk management scheme:

“Notes and accounts receivable – trade” account as operating receivables is exposed to credit risk of customers. Such risks are controlled by the scheme to keep track of due date and outstanding balance for every customer, and check customer's credit status on a regular basis according to the Company’s credit limit management policy.

“Accounts receivable – other” account mainly con-sists of operating receivables for supplied materials to outsourcing production contractors and those receivables are exposed to credit risk of each con-tractor. Such risks are controlled by the scheme to keep track of due date and outstanding balance for each contractor. Net outstanding balance for such contractors is relatively small because receivables are net by payables balance for product purchase to those contractors.

“Notes and account payable – trade” account as operating payables is mostly due within one year. “Short-term loans payable” account is primarily utilized for financing relating to business transactions. Liquidity risk for the operating payables and the short-term loans payable is controlled by a monthly cash flow forecast.

As to derivative transactions, in order to hedge the risk of fluctuation in foreign currency monetary assets and liabilities, the Company uses forward exchange contracts. For execution and management of deriva-tive transactions, the finance department is respon-sible for executing such transactions upon an approval from authorized personnel in accordance with the Company’s derivatives transaction policy that defines approval authority and trading limit of transac-tions. In addition, to reduce the risk of default on derivatives trading, the Company limits trading counterparties to high rated financial institutions only.

(c) Supplementary information concerning the fair value of financial instruments:

The amount of derivatives contracts in the Notes to "Derivatives Transaction" is the nominal value of derivatives contracts or the calculated notional amount only, and it does not show the size of market risk relating to the derivative transaction itself.

(2) Fair value of financial instruments-

The following table presents the carrying amounts recorded in the consolidated balance sheet as of March 31, 2010, estimated fair values of financial instruments and the differences. Financial instruments deemed extremely difficult to calculate the current market value is not included. (See Note: b)

(*) Derivatives are expressed in net amount of receiv-ables and payables, and payables in net are expressed in ( ).

Notes:a) Matters related to method for calculating market value of financial instruments and securities and derivatives transactions. Assets (1) Cash and deposits, (2) notes and accounts receiv-able – trade and (3) accounts receivable - other Due to expected settlement with in a short period of time, we estimate that the carrying amount is equiva-lent to market value.Liabilities (1) Notes and accounts payable - trade and (2) short-term loans payable Due to expected settlement with in a short period of time, we estimate that the carrying amount is equiva-lent to market value.Derivatives transaction See Note 12 “Derivatives”.

(1) Cash and deposits(2) Notes and accounts receivable - trade(3) Accounts receivable - otherTotal assets(1) Notes and accounts payable - trade(2) Short-term loans payableTotal liabilitiesDerivatives (*)

Thousands of yen

Difference

¥ -

- -

¥ -

- -

¥ - ¥ -

¥12,350,113

4,701,126 1,920,657

¥18,971,896

4,983,535 600,000

¥5,583,535 (¥62,897)

¥12,350,113

4,701,126 1,920,657

¥18,971,896

4,983,535 600,000

¥5,583,535 (¥62,897)

Carrying Amount Fair value

(1) Cash and deposits(2) Notes and accounts receivable - trade(3) Accounts receivable - otherTotal assets(1) Notes and accounts payable - trade(2) Short-term loans payableTotal liabilitiesDerivatives (*)

Thousands of U.S. dollars (Note 1)

Difference

$ -

- -

$ -

- -

$ - $ -

$132,740

50,528 20,643

$203,911

53,563 6,449

$60,012 ($676)

$132,740

50,528 20,643

$203,911

53,563 6,449

$60,012 ($676)

Carrying Amount Fair value


(ii) Securities for which market price or quotations are not available.

(iii) Redemption scheduleThe redemption schedule of held-to-maturity debt securities as of March 31, 2009

Investment securities of ¥35,077 thousand ($377 thousand) on the consolidated balance sheet for the fiscal year ended March 31, 2010 do not have market prices. And there is no readily available information to calculate the current market value, thus omitted from fair market value presentation.

12. Derivatives: All derivative transactions are entered into to hedge foreign currency exposures within the Company’s business. Accordingly, the market risk in these derivatives is offset by opposite movements in the value of hedged assets or liabilities. The Company does not hold derivatives for trading or speculative purposes. Because the counterparties to these derivatives are limited to major international finance institutions, the Company does not anticipate any losses arising from credit risk.

Derivative transactions entered into by the Company have been executed in accordance with internal policies, which regulate the authorization and credit limit amount of transactions.

The amount of the derivative contracts does not necessarily indicate the significance of the risk.Certain information on outstanding derivative contracts is shown below.

b) Financial instruments per which there is no readily available information are reported at their carrying value as of March 31, 2010.

These financial instruments do not have market prices. And there is no readily available information to calcu-late the current market value, thus omitted from fair market value presentation.

c) Redemption schedule of financial instruments after year ended March 31, 2010.

(Additional information) “Accounting Standard for Financial Instruments” (Accounting Standards Board of Japan Statement No. 10, issued on March 10, 2008) and “Guidance on Disclosure of fair value of financial instruments” (Accounting Standards Board of Japan Guidance No. 19 issued on March 10, 2008) has been adopted effective for the fiscal year ended March 31, 2010.

11. Investment securities:Marketable and investment securities:The following is certain information relating to the aggregate acquisition cost and market value of securities in fiscal year 2009.

(i) Held-to-maturity debt securities with fair market value

34

Financial instrumentsUnlisted securities

Thousands of yen

¥35,077 Carrying Amount

Financial instrumentsUnlisted securities


$377 Carrying Amount

¥12,350,113

4,701,126

1,920,657¥18,971,896

¥–

– –

¥–

¥–

– –

¥–

¥–

– –

¥–

Thousands of yen

Cash and depositsNotes and accounts receivable - tradeAccounts receivable - other Total

Due withinone year

Due over one year to 5 years

Due over 5 years to 10 years

Due Over 10 years

$132,740

50,528

20,643$203,911

$–

– –

$–

$–

– –

$–

$–

– –

$–


Cash and depositsNotes and accounts receivable - tradeAccounts receivable - other Total

Due withinone year

Due over one year to 5 years

Due over 5 years to 10 years

Due Over 10 years

Thousands of yenMarch 31, 2009

Securities with fair market value not exceeding book carrying amount-other: Book carrying amount Fair market value

Difference

¥500,000 490,400

(¥9,600)

Thousands of yenMarch 31, 2009Book carrying

amountOther securities: Non-marketable equity securities Other

¥35,2771,020,000

Thousands of yen

Bonds (1) Government bonds, Municipal bonds, etc. (2) Corporate bonds (3) Others Other Total

Due 2009 Due 2010～2013

Due 2014～2018

Due after 2019

¥––

500,000

¥500,000

¥––

– –¥–

¥––

– –¥–

¥––

– –¥–

¥972,403538,65289,292

¥1,600,347

¥1,011,634545,32885,173

¥1,642,135

(¥39,231)(6,676)4,119

(¥41,788)

Foreign exchange forward contracts: To sell U.S. dollars To sell Euros To sell British Pound

Total


Contractamount Fair value Unrealized

gain/(loss)

¥1,608,691455,38036,438

173,259

¥-

(¥65,060)5,668

-

(3,505)

(¥62,897)

(¥65,060)5,668

-

(3,505)

(¥62,897)


To buy U.S. dollars

Total



gain/(loss)

35

13. Provision for retirement benefits:The Company has an unfunded retirement allowance plan (the “Plan”) covering substantially all of its employees who meet eligibility requirements under the Plan. In addition, the Company is a member of the Saitama prefectural industrial park multi-employer pension plan, which covers substantially all of its employees and provides for benefits under the governmental welfare pension benefit plan, which would otherwise be provided by the Japanese government.This multi-employer pension plan does not permit us to reasonably calculate the value of the pension plan assets based on our contributions. As a result, this multi-employer pension plan is excluded from the calculation of projected benefit obligation.

Overview of the multi-employer pension plan is as follow, under which the required contributions to the plan are charged to income.

(1) The funded status of the pension plan as of March 31, 2009 and 2010

(2) The ratio of the number of company’s employees to total employees in the multi-employer pension plan as of March 31, 2009 is 16.2% and 2010 is 17.6%, respectively.

The provision for retirement benefits for employees as of March 31, 2009 and 2010 can be analyzed as follows:

The components of the net periodic pension expense for the years ended March 31, 2009 and 2010 are as follows:

$17,290 4,894

392

1,862

-

($699)61

-

(38)

($676)

($699)61

-

(38)

($676)


To buy U.S. dollars

Total

Thousands of U.S. dollarsMarch 31, 2010


gain/(loss)

The amount of pension assetsThe amount of benefit obligations under pension funding programs

Net


Thousands of yen

March 312010

March 312009 2010

$64,008

(83,919)

($19,911)

¥5,955,349

(7,807,823)

(¥1,852,474)

¥6,998,395

(7,458,524)

(¥460,129)

(1) Projected benefit obligation (2) Unrecognized actuarial loss (3) Provision for retirement benefits for employees (1)+(2)


20102009 2010

($5,053)345

($4,708)

(¥470,090)32,066

(¥438,024)

(¥425,615)5,464

(¥420,151)

(1) Service cost (2) Interest cost (3) Recognized actuarial loss (4) Contribution (5) Extra retirement payments

(6) Net periodic pension expense


Thousands of yen

20102009 2010

$536104

(6)966577

$2,177

¥49,9049,665(545)

89,90853,632

¥202,564

¥45,1617,2826,186

88,076-

¥146,705

The assumptions used as of March 31, 2009 and 2010 are as follows:

Certain of our consolidated foreign subsidiaries have defined contribution pension plans.

14. Stock options:The following represents stock options granted to directors and employees, which would result in an increase in the number of common shares with the following exercise prices.

The contents of stock options, the changes in stock options and price per share information for the year ended March 31, 2009 are as follows:

2010

(1) Discount rate (2) Method of attributing the projected benefits to periods of service (3) Amortization of unrecognized actuarial differences

2009

Mainly 1.39%Straight-line

basisMainly

straight-lineover 5 years

2.0%Straight-line

basisStraight-lineover 5 years

November 8, 2002

June 26, 2003

June 24, 2004

June 23, 2005

Date of ordinary

shareholders’ meeting

1136

334

6613

249169

EmployeesSubsidiaries’ executive officersSubsidiaries’ employeesExecutive officersEmployeesSubsidiaries’ employeesExecutive officersEmployeesSubsidiaries’ employeesExecutive officersEmployeesSubsidiaries’ employees

Person granted

19,160

7,440

1,200

800

28,600

Number of options granted

(shares)

November 8, 2002

June 26, 2003

June 24, 2004

June 23, 2005

Date of ordinary


¥17,659

158,951

306,139

242,865

Exercise price per share

(exact yen)

¥203,550

256,391

-

-

Average price per share at exercise(exact yen) Exercise periods

From November 9, 2004 to October 31, 2011From June 27, 2005 to June 26, 2008From June 25, 2006 to June 24, 2009From June 24, 2007 to June 23, 2010

Outstanding at March 31, 2008

GrantedExercisedExpiredOutstanding

at March 31, 2009Exercise periods

1,200-

140-

1,060From November 9,

2004 to October31, 2011

2,140-

1,400740

-From June 27,2005 to June 26, 2008

844--

40

804From June 25,2006 to June 24, 2009

800---

800From June 24,2007 to June 23, 2010

Date of ordinary shareholders’ meeting

November 8, 2002

June 26, 2003

June 24, 2004

June 23, 2005

（Unit:shares）

36


The contents of stock options, the changes in stock options and price per share information for the year ended March 31, 2010 are as follows:

15. Income taxes:The significant components of deferred tax assets and liabilities for the years ended March 31, 2009 and 2010 are as follows:

November 8, 2002

June 24, 2004

June 23, 2005

Date of ordinary


1136

33249169

EmployeesSubsidiaries’ executive officersSubsidiaries’ employeesExecutive officersEmployeesSubsidiaries’ employeesExecutive officersEmployeesSubsidiaries’ employees

Person granted

19,160

1,200

800

21,160

Number of options granted

(shares)

Outstanding at March 31, 2009

GrantedExercisedExpiredOutstanding

at March 31, 2010Exercise periods

800--

20

780From June 24,2007 to June 23, 2010

Date of ordinary shareholders’ meeting

June 23, 2005

（Unit:shares）

804--

804

-From June 25,2006 to June 24, 2009

June 24, 2004

1,060-

120-

940From November 9,

2004 to October31, 2011

November 8, 2002

November 8, 2002

June 24, 2004

June 23, 2005

Date of ordinary


¥17,659

306,139

242,865

Exercise price per share

(exact yen)

¥156,650

-

-

Average price per share at exercise(exact yen) Exercise periods

From November 9, 2004 to October 31, 2011From June 25, 2006 to June 24, 2009From June 24, 2007 to June 23, 2010

Deferred tax assets: Inventory-inter-company profit Accrued retirement benefits Accrued severance indemnities for directors and statutory corporate auditors Accrued bonuses Accrued expenses Enterprise tax Account receivables Software development costs Net loss carried forward for tax purposes Lump-sum depreciation assets Deferred assets Inventories Accrued vacation payable Investment securities Trademark rights Others Total deferred tax assets

Deferred tax liabilities: Undistributed earnings of overseas subsidiaries Fixed assets of overseas subsidiaries Others Total deferred tax liabilities

Net deferred tax assets

Thousands of yenThousands of

U.S. dollars20102009 2010

$2,4271,813

1,7831,095

902701410393

2901501461181178571

40410,905

(5,329)(302)(364)

(5,995)

$4,910

¥225,775168,679

165,915101,85683,93465,20038,12936,562

26,99013,95313,54010,99710,9437,9396,612

37,5181,014,542

(495,783)(28,087)(33,893)

(557,763)

¥456,779

¥444,472162,331

136,470114,05272,63338,84620,74439,125

27,59717,118

-28,682

--

7,55632,329

1,141,955

(442,402)(31,269)(44,383)

(518,054)

¥623,901

The difference between the statutory income tax rate and the effective income tax rate for the year ended March 31, 2009 was less than 5% of the statutory income tax rate, and accordingly, the reconciliation between these two rates has been omitted.

The reconciliation between the statutory tax rate and the effective income tax rate in the consolidated statement of income for the year ended March 31, 2010 is as follows:

16. Segment information:(1) Segments by industry -

Statutory effective tax rate

Tax credit of corporation tax Taxes on undistributed earnings 　of overseas subsidiaries Non deductible expenses for tax purposes Equalization tax Others

Effective income tax rate

39.7%

(4.8)

1.70.70.4(0.8)

36.9%

March 31,2010

Year ended March 31, 2009

I. Net sales:(1) Outside customers(2) Inter-segment

Total

Operating expenses

Operating income

II. Assets, depreciation and capital expenditure:

AssetsDepreciationCapital expenditure

¥750,742-

750,742

701,693

¥49,049

¥33,809,138-

33,809,138

27,548,793

¥6,260,345

¥ - (-)(-)

1,948,967

(¥1,948,967)

¥33,809,138-

33,809,138

29,497,760

¥4,311,378

¥33,058,396-

33,058,396

26,847,100

¥6,211,296

¥14,480,863513,311940,194

¥476,06045,17724,643

¥14,956,923558,488964,837

¥10,674,134105,951209,659

¥25,631,057664,439

1,174,496

Thousands of yen

ECSbusiness

ESDbusiness Total

Elimination/Corporate Consolidated



Total

Operating expenses

Operating income



¥410,777-

410,777

519,787

(¥109,010)

¥32,044,578-

32,044,578

27,273,603

¥4,770,975

¥ - (-)(-)

1,643,153

(¥1,643,153)

¥32,044,578-

32,044,578

28,916,756

¥3,127,822

¥31,633,801-

31,633,801

26,753,816

¥4,879,985

¥17,699,823601,094573,774

¥468,55631,62322,361

¥18,168,379632,717596,135

¥10,031,050124,450789,114

¥28,199,429757,167

1,385,249

Thousands of yen

ECSbusiness

ESDbusiness Total


37



Total

Operating expenses

Operating income



$4,415-

4,415

5,587

($1,172)

$5,036340240

$344,417-

344,417

293,138

$51,279

$195,2756,8006,407

$ - (-)(-)

17,661

($17,661)

$107,8141,3388,482

$344,417-

344,417

310,799

$33,618

$303,0898,138

14,889

$340,002-

340,002

287,551

$52,451

$190,2396,4606,167


ECSbusiness

ESDbusiness Total


Segment information by business activity is determined based upon consideration of the product line and management control of the business.

The main products of each business segment include the following:i) ESD business: Professional graphics tablet, Consumer graphics tablet, LCD tablet, Pen sensor component, etc.ii) ECS business: ECAD/dio, etc.

Notes:a)

b)

Elimination or Corporate expenses of ¥1,948,967 thousand and ¥1,643,153 thousand ($17,661 thousand) during the years ended March 31, 2009 and 2010, respectively, mainly include the adminis-trative expenses of the Company.

Elimination or Corporate assets of ¥10,674,134 thousand and ¥10,031,050 thousand ($107,814 thousand) at March 31, 2009 and 2010, respec-tively, primary includes cash, investment securities and assets belonging to the general and adminis-trative departments of the Company.

Effective from the fiscal year ended March 31, 2009, the Company changed accounting policies as stated in Note 2 (2) (c) Inventories. As a result, operating profit decreased by ¥40,130 thousand for ESD business and ¥200 thousand for ECS business compared with what would have been reported under the previous accounting policy.

Effective from the fiscal year ended March 31, 2009, the Company changed accounting policies as stated in Note 3 (1) Practical solution on unification of accounting policies applied to foreign subsidiar-ies for the consolidated financial statements. As a result, operating profit decreased by ¥17,576 thousand for ESD business compared with what would have been reported under the previous accounting policy.

c)

d)

e)

f)

Segment information by geographic area is deter-mined by taking into account the geographic area where the Company or its subsidiaries are located.

The countries in each geographic segment exclud-ing Japan and U.S.A.:i) Europe: Germany, United Kingdomii) Asia/Oceania: China, South Korea, Australia, Hong Kong, Singapore and Taiwan Europe segment is changed to Germany segment from the fiscal year ended March 31, 2010 as a liquidation of Wacom Components Europe Ltd. located in United Kingdom was completed. There is no impact on the consolidated statements as a result of this change.

Elimination or Corporate expenses of ¥1,948,967 thousand and ¥1,643,153 thousand ($17,661 thousand) during the years ended March 31, 2009 and 2010, respectively, mainly include the adminis-trative expenses of the Company.

Notes:a)

b)

c)

d)



Total

Operating expenses

Operating income

II. Assets


U.S.A.Japan EuropeAsia/

Oceania TotalElimination/Corporate Consolidated

$99,7493,537

103,286

103,776

($490)

$56,027

$88,572566

89,138

83,741

$5,397

$39,260

$38,6082,410

41,018

38,485

$2,533

$19,404

$344,417156,244500,661

453,355

$47,306

$250,172

$ - (156,244)(156,244)

(142,556)

($13,688)

$52,917

$344,417-

344,417

310,799

$33,618

$303,089

$117,488149,731267,219

227,353

$39,866

$135,481



Total

Operating expenses

Operating income

II. Assets

Thousands of yen



¥9,280,641329,117

9,609,758

9,655,323

(¥45,565)

¥5,212,724

¥8,240,73152,665

8,293,396

7,791,244

¥502,152

¥3,652,776

¥3,592,145224,158

3,816,303

3,580,644

¥235,659

¥1,805,363

¥32,044,57814,536,88946,581,467

42,180,092

¥4,401,375

¥23,275,972

¥ - (14,536,889)(14,536,889)

(13,263,336)

(¥1,273,553)

¥4,923,457

¥32,044,578-

32,044,578

28,916,756

¥3,127,822

¥28,199,429

¥10,931,061 13,930,949 24,862,010

21,152,881

¥3,709,129

¥12,605,109



Total

Operating expenses

Operating income

II. Assets

Thousands of yen



¥9,816,329233,032

10,049,361

9,693,111

¥356,250

¥4,997,714

¥7,995,377-

7,995,377

7,642,570

¥352,807

¥3,444,995

¥3,224,47652,195

3,276,671

3,232,594

¥44,077

¥1,370,768

¥33,809,13815,007,15548,816,293

42,710,140

¥6,106,153

¥19,140,396

¥ - (15,007,155)(15,007,155)

(13,212,380)

(¥1,794,775)

¥6,490,661

¥33,809,138-

33,809,138

29,497,760

¥4,311,378

¥25,631,057

¥12,772,956 14,721,928 27,494,884

22,141,865

¥5,353,019

¥9,326,919

(2) Segments by geography -

38



I.Overseas salesII.Consolidated sales

III.Percentage of overseas sales to consolidated sales

Thousands of yen

¥8,072,554-

25.2%

¥7,081,700-

22.1%

¥504,019-

1.6%

¥25,055,35532,044,578

78.2%

¥9,397,082 -

29.3%





$86,764-

25.2%

$76,115-

22.1%

$5,417-

1.6%

$269,297344,417

78.2%

$101,001-

29.3%

Countries or regions are determined by geographi-cal proximity.

Principal countries or regions belonging to each segment:i) North America: U.S.A. and Canadaii) Europe: United Kingdom, Germany, France, Netherlands, etc.iii) Asia/ Oceania: South Korea, Taiwan, Australia, China, etc.iv) Others: Middle East, South America, Africa, etc.

Notes:a)

b)

NorthAmerica

Asia/Oceania Others TotalEurope

NorthAmerica





Thousands of yen

¥7,916,818-

23.4%

¥8,243,340-

24.4%

¥303,777-

0.9%

¥26,321,63933,809,138

77.9%

¥9,857,704 -

29.2%

(3) Overseas sales

NorthAmerica


Elimination or Corporate assets of ¥10,674,134 thousand and ¥10,031,050 thousand ($107,814 thousand) at March 31, 2009 and 2010, respectively, mainly include cash, investment securities and assets belonging to the general and administrative departments of the Company. Effective from the fiscal year ended March 31, 2009, the Company changed accounting policies as stated in Note 2 (2) (c) Inventories. As a result, operating profit decreased by ¥40,330 thousand for Japan compared with what would have been reported under the previous accounting policy.

Effective from the fiscal year ended March 31, 2009, the Company changed accounting policies as stated in Note 3 (1) Practical solution on unification of accounting policies applied to foreign subsidiar-ies for the consolidated financial statements. As a result, operating profit decreased by ¥17,576 thousand for U.S.A. compared with what would have been reported under the previous accounting policy.

e)

f)

g)

Overseas sales comprise the sales of the Company and its subsidiaries outside Japan.

c)

17. Related party transactionsThere were no applicable transactions under this category for the year ended March 31, 2009 and year ended March 31, 2010.

(Additional information)“Accounting Standard for Related Party Transactions” (Accounting Standards Board of Japan Statement No. 11, issued on October 17, 2006) and “Implementation Guidance on Accounting Standard for Related Party Transactions” (Accounting Standards Board of Japan Guidance No. 13, issued on October 17, 2006) has been adopted effective for the fiscal year ended March 31, 2009. As a result, in addition to directors who are included in disclosure scope for related party transactions in past years, directors of significant subsidiaries of the Company, Joseph E. Deal (Wacom Technology Corpora-tion) and Han Stoffels (Wacom Europe GmbH) have been included in a disclosure scope for related party transac-tions for the year ended March 31, 2009.

18. Earnings per share information:The computation of net income per share is based on the weighted-average number of common shares outstanding during each fiscal year. Treasury stocks held during these fiscal years are excluded.

Note: The basis for calculating basic and diluted earning per share is as follows.

¥44,303.376,213.936,197.78

¥45,467.554,899.574,888.56

$488.6952.6652.54

Net assets per shareNet income per shareDiluted net income per share

U.S. dollarsYenMarch 31 March 31

2009 2010 2010

March 31

¥2,579,025

- 2,579,025

415,039

-

1,082

¥1,968,406

- 1,968,406

401,751

-

905

$21,157

- 21,157

-

-

-

Basic net income per share

Net incomeNet income not available to common shareholdersNet income available to common shareholdersWeighted-average number of shares outstanding (shares)

Diluted net income per share

Amount of net income adjustmentIncrease in the number of common shares outstanding during each fiscal year that would result in exercising options to issue new shares(shares)


March 312009 2010 2010

19. Short-term and long-term debt:

Notes: a) Average interest rate is a weighted average interest rate to the ending balance of debts. b) Five-year schedule of other interest bearing liabilities excluding the amount due within one year is as follows:

20. Subsequent events:There were no applicable items under this category.

39

Averageinterestrate (%)

Due dateof

paymentMarch 31 March 31


Thousands of yen

Short-term debtLong-term debt due within one yearLease obligation due within one yearLong-term debtLease obligationOther interest bearing liabilities: Accounts payable - other Long-term accounts payable Total

2009 2010 2010

¥600,000

–

–––

1,135

1,981¥603,116

$6,449

–

–––

12

21$6,482

–

–

–––

–Due 2010

2011

1.031

–

–––

9.040

9.040

¥600,000

–

–––

2,855

2,448¥605,333

Due after1 year to 2 year

¥1,981


¥–


¥–


¥–

Thousands of yen

Long-term accounts payable - other


$21


$–


$–


$–


Long-term accounts payable - other

Report of Independent Auditors

40

Corporate DataEstablished

Capital

Employees

Business Segments

Head Office / Factory

Branch / Offices

International Affiliates

July 12, 1983

¥4,196 million (As of March 31, 2010)

Consolidated: 702Non-consolidated: 400

(As of March 31, 2010)

1. Tablet Business Development, manufacture, and sale of computer input devices• Professional tablets• Consumer tablets• Interactive displays

2. Component BusinessDevelopment, manufacture andsales of computer input components• Pen sensor components• Touch sensor components

3. Other BusinessesDevelopment, manufacture, sales ofCAD solution and DJ interface device• CAD Software for electrical and mechanical engineering• Professional DJ device

Banks Mizuho Bank, Ltd.The Bank of Tokyo-Mitsubishi UFJ, Ltd.Saitama Resona Bank, Ltd.

2-510-1 Toyonodai Kazo-shi,Saitama 349-1148, JapanTEL: +81-480-78-1211 (Main)FAX: +81-480-78-1220

Tokyo BranchHarmony Tower 21th Floor, 1-32-2 Hon-cho, Nakano-ku, Tokyo 164-0012, Japan

Nagoya OfficeOrigin Nishiki Bldg. 8th Floor, 1-6-17 Nishiki Naka-ku, Nagoya-shi, Aichi 460-0003, Japan

Osaka OfficeShogyo 2nd Bldg. 6th Floor, 5-4-9 Toyosaki Kita-ku, Osaka-shi, Osaka 531-0072, Japan

Fukuoka OfficeHakata Ekimae Daini Bldg. 5th Floor, 2-6-23 Hakataeki Higashi, Hakata-ku Fukuoka-shi, Fukuoka 812-0013, Japan

Wacom Technology Corporation (U.S.A.)1311 SE Cardinal Court, Vancouver, WA 98683, U.S.A.

Wacom Europe GmbH (Germany)Europark Fichtenhain A9 D-47807, Krefeld, Germany

Wacom China Corporation (China)Unit 2807, 28th Floor, Capital Tower, No. 6 Jia, Jianguomenwai Avenue, Beijing, China

Wacom Korea Co., Ltd. (Korea)Rm #1211, 12F, KGIT Sangam Center,1601 Sangam-dong, Mapo-gu,Seoul 121-913, Korea

Wacom Australia Pty. Ltd. (Australia)Unit 8, 2-8 South Street, Rydalmere NSW 2116, Australia

Wacom Singapore Pte Ltd. (Singapore) 5 Temasek Boulevard #12-09Suntec Tower Five Singapore 038985

(As of July 29, 2010) 41

Wacom Hong Kong Ltd. (Hong Kong)Room 2108, 21F, C. C. Wu Building302-308 Hennessy Road Wanchai, Hong Kong

Wacom Taiwan Information Co., Ltd. (Taiwan)Suite 605, 6th floor, No. 205 Tun Hwa NorthRoad, Taipei, Taiwan 105 R.O.C.

Investor Information

Major Shareholders (As of March 31, 2010)

Shareholder Distribution (As of March 31, 2010)

Foreign enterprises, etc.

18.33%,

<146 shareholders>

Other enterprises

5.32%,

<143 shareholders>

Financial institutions

13.69%

Treasury stock

4.74%

57,776 shares,<32 shareholders>

20,000 shares<1 shareholder>

Securities companies

2.91%,

<54 shareholders>

Individuals and other shareholders

55.01%,

<27,836 shareholders>

1,380,000421,81628,212

Name of shareholder Number of

shares ownedPercentage of

voting rights (%)

421,816shares

28,212shareholders

Stock Exchange ListingTokyo Stock Exchange First Section (Trade code 6727)

Share Data (As of March 31, 2010) Total number of shares to be issued Total number of issued shares Total number of shareholders

42

Yoji Eto

State Street Bank and Trust Company

The Master Trust Bank of Japan, Ltd. (Trust Account)

Wilnau Co.

Japan Trustee Services Bank, Ltd. (Trust Account) The Chase Manhattan Bank, N.A. London SECS LendingOmunibus Account

MASA-JAPANESE EQUITY

Masahiko Yamada

JPMCB Omnibus U.S. Pension Treaty Jasdec 380052

Yoshimi Ogawa

31,320

16,705

15,008

12,100

11,432

8,040

7,586

7,420

4,538

3,900

7.79

4.16

3.74

3.01

2.85

2.00

1.89

1.85

1.13

0.97

＊Wacom has 20,000 shares of treasury stock at the end of 2009 F.Y., which isn't included in the above list.＊Percentage of voting rights are calculated after deduction of treasury stock.

12,287 shares

232,009 shares

22,437 shares

77,307 shares

© 2010 Wacom Co., Ltd. Wacom is a trademark of the Wacom Company, Ltd. All rights reserved. All other company names and product names are trademarks or registered trademarks of their respective owners.

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