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Annual Report

2010

Creating harmony between people and technology

We looked inside ourselves to find the thought that defines and drives everything we do. An idea that helps us open up to experience the world in a new way. An idea to drive us forward.

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

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The key to our success
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 userfriendly 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 interactive ways to use computers. We then looked at how we could make life better for mobile users such as traveling executives, doctors and financial 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.

Financial Highlights
For the year: Net sales Gross profit Operating income Net income At year end: Total assets Total net assets

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

Thousands of yen 2009 2010

Thousands of U.S. dollars* 2010

¥33,809,138 16,761,164 4,311,378 2,579,025 ¥25,631,057 17,796,487

¥32,044,578 15,668,147 3,127,822 1,968,406 ¥28,199,429 18,269,590

$344,417 168,402 33,618 21,157 $303,089 196,363

Per share (yen and U.S. dollars): Net income Primary Diluted Cash dividends applicable to the year

¥

6,213.93 6,197.78 3,000.00

¥

4,899.57 4,888.56 3,000.00

$

52.66 52.54 32.24

*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.

Net sales
36,739
35,000 30,000 25,000 23,992 20,000 15,000 10,000 5,000 0

Net income
33,809 32,045
3,500 3,000 2,500 2,000 1,500 1,000 500

Total assets
30,000

Total net assets
28,199 25,631
15,000 20,000

3,501 2,853 2,146

29,221 25,152 21,033

18,517 16,320 13,288

28,787

17,796

18,270

2,579 1,968

25,000 20,000 15,000 10,000

10,000

5,000 5,000 0 0

’06 ’07 ’08 ’09 ’10
(Millions of yen )

0

’06 ’07 ’08 ’09 ’10
(Millions of yen )

’06 ’07 ’08 ’09 ’10
(Millions of yen )

’06 ’07 ’08 ’09 ’10
(Millions of yen )

Contents
The key to our success Our milestones To our shareholders Business model Where are we now?
DISCLAIMER
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.

3 4 5 8 9

Our businesses Our global model Board of directors/Corporate governance Financial section Corporate data Investor information

11 15 17 18 41 42

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Our Milestones
Mar. 2010 Feb. 2010 Jan. 2010 Oct. 2009 Launch of mobile LCD tablet STU-300 for digital signature Spanish Savings Banks, CECA adopts LCD signature tablet for digital signature system Launch of interactive pen displays of 21.5” and15.6” wide LCD model to strengthen vertical markets Launch of new Bamboo series that merges multi-touch functions with pen technology for consumers Introduction of a new technology brand for user interface solutions, Wacom feel IT technologies Launch of a new professional DJ system, Nextbeat ECAD/dio Ver. 10.0 released Mass production and shipment of a new sensor system supporting the multi-touch functions of Windows 7 to PC manufacturers Launch of Intuos4 professional pentablets Announce of development of a high performance multi-touch sensor component Wacom Taiwan Information (a fully owned subsidiary) is established in Taiwan as a marketing and customer service base for Taiwan market New Hewlett-Packard Company (HP) notebook PC for the consumer market 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, is launched for general consumer and business PC users Received the first “Disclosure Newcomer Award” from the Tokyo Stock Exchange Wacom Singapore (a fully owned subsidiary) is established in Singapore as a sales base for the South and Southeast Asian markets Wacom Hong Kong (a fully owned subsidiary) is established in Hong Kong as a sales base in the South China Penabled DualPad is developed as a new pen and touch input device for 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-based imaging Wacom Digital Solutions (presently Wacom Korea a fully owned subsidiary) 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 as a 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 in Vancouver, Washington, as a marketing and sales base in the Americas Wacom Computer Systems (presently Wacom Europe a fully owned subsidiary) is established in Neuss, Germany, as a marketing and sales base in Europe Operation of tablet product and CAD system for electrical engineering begins Wacom Co., Ltd. is established in Ageo City, Saitama, Japan, with common stock of 48 million yen

Sep. 2009 Aug. 2009 Apr 2009 . Oct. 2008

Jan. 2008 Oct. 2007 Sep. 2007 May 2007 Feb. 2007 May 2006

Apr 2006 . Dec. 2005 Apr 2005 . Feb. 2005 Apr. 2004 Nov. 2003 Apr. 2003 Sep. 2001 Mar. 2000 Nov. 1999 Jun. 1999 Sep. 1998 Aug.1991 Jun. 1988

Jul. 1983

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To Our Shareholders
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.

Masahiko Yamada
President & CEO

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Growth strategy
Input market

1983

1990
Internet

1995
Broadband

2002
Ubiquitous

2007
Pen input

2009
Multi-touch

Near futu re

Tablet market

The world’s first tablet operated by cordless electronic pen developed. Core technology established with electronic pen.

Pen sensor components Interactive pen displays Tablets for consumer use

Electronic seals and other security applications

Touch sencer components

Digitizer and software

Tablets for professional use

elop Dev

m

an e nt

dS

a le s

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

Toward becoming the de facto standard for the Digital Paper era

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How did we do in our 27th year?
The 27th fiscal year started in the midst of a global economic crisis, full of uncer tainty. 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 fiscal 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%). ernment, and improved digital security, will increase our business opportunities. We expect to grow our component 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 foundations and global brand leadership for the future is our focus for emerging markets and to leverage our component business, continuing to strive in delivering natural and intuitive user interface technologies for a wide range of IT platforms.

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

Our message to you
We are committed to enhancing our corporate value through the ongoing development of exciting new technologies, investment in talented people and development of our business infrastructure. We will accelerate our business growth, improve efficiency and profitability. We take our social responsibility seriously and continue to improve our corporate governance and compliance. Your support is invaluable and is essential to our continuing success. We thank you ver y much for your unchanging support.

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 addition 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 segments. Taking into account our business outlook and necessary 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 million ( 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 operating 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. Furthermore, continued IT investments in medical and educational fields, including investments in digital gov-

WP1015
100,000 80,000 60,000 40,000 20,000 0
2010 2011 2012

(Millions of yen)

Net sales  Operating income

2013

2014

For the year ended March 31

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Business Model
Management Platform R&D Marketing & Sales

Supply Chain Management

Product Management

Tablet business
• Professional tablets • Consumer tablets • Interactive displays

Component business
• Pen sensor components • Touch sensor components

Other businesses
• Software of CAD systems for electrical and mechanical engineering • Professional DJ device

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

• Control Panel Industry • Electrical Machinery Industry • Machine Assembling Industry • Automotive Industry • Food Industry • Medical Equipment Industry

• 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.

User Needs Partnerships
• Operating Systems (OS) vendor • Application vendor • Display vendor • Stationary goods / vendor

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Where are we now?
New generation Bamboo, the first interactive pen tablet combining multi-touch and pen input offered an intuitive way.
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 scrapbooking, popular in the U.S. and Europe and generally as an alternative to a mouse device. The new gesture control, by using two fingers enables a more intuitive interaction with computer interface 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 applications 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 expansion in the next fiscal year.

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

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Major PC manufacturers have adopted the Wacom multi-touch sensor system and are set to mass produce.
In October 2009, Wacom introduced a new brand "Wacom feel IT technologies" for the component business, which provides natural and intuitive user experience technology. In accordance with the release of Windows 7, Wacom developed an original multi-touch sensor system and b e g a n to s h i p to u c h p a n e l s 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.

CECA in Spain and other global financial institutions decided to deploy pen tablets to enable digital signature security.
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 application agreements, and this case was awarded the "TeleTrusT Innovation 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.

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Our Businesses
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 components as well as solutions with a multi-touch sensor system. Other businesses consists of CAD-based software packages for the manufacturing industry and a DJ interface device for professional use.

Tablets
We have various types of tablets; all models open up a world of possibilities and help our customers to experience 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.

Components
Major PC manufacturers worldwide have adopted our pen and multi-touch sensor components. Our components 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".

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

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Tablet Product Lines
Our professional tablets – Intuos4
Throughout 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 professionals 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 - Bamboo
Bamboo, 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 technology. 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/PL
Providing the freedom to work with the pen directly on screen, our interactive pen displays come in two ranges: the Cintiq, which is designed for professional 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 Church
Art director and concept designer of Avatar major works
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.

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Wacom Solutions
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 solutions with the advanced pen and multi-touch functionality incorporated in digital products.

Medical care
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, endoscopic 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.

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

Business
The use of interactive displays is increasingly common among business 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 capture 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. Consequently, our pen technology is opening up fresh opportunities in the business arena.

Meetings and presentations
Using an interactive pen display can bring meetings and presentations to life. During discussions, digital data can be viewed on an LCD screen and notes and amendments added and stored spontaneously 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 stronger, more immediate and easier to comprehend.

13

Components
Our pen sensor components
Not only are our pen sensor components incorporated into our own highquality 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 components
Supporting 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.

Others
Our CAD system –ECAD/dio
ECAD/dio, Japan’ s leading CAD system for electrical design, streamlines overall operations by helping users to create electrical system design diagrams, while synchronizing design data with control equipment and peripheral devices.
ECAD/dio

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

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Our Global Model

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.

Our market is global, and therefore it is vital to our success that we continue to enhance our global organizations 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 management
The 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 corporate sector. Therefore, our current emphasis in this region is on business products along with Japan and Europe.

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.

Manufacturing
We focus on developing optimal manufacturing models for cost, scalability and product quality leadership. To achieve this, all critical components continue to be made by Wacom, and all high-volume manufacturing 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 management (SCM) base in China. We regularly organize global executive conferences for strategic planning, business updates and knowledgesharing. 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.

Product development
Japan 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

15

Others

Others

Asia/Oceania 11.2%

Wacom 85%

Europe 25.7% Wacom 93.8%

Japan 34.1%

Global Market Share
Source: Wacom’s estimate Source: BCN research

America 29.0%

Domestic Market Share

Sales Breakdown by Region

(Millions of yen)

30 ,0 11
44 ,6 96

6 81 9,
58 ,5 97

1 28 9,

44 8,

9
1 19

99 7,

5

1 24 8,
89 ,0 63

1 69 3,

22 3,

4

2 59 3,

49 ,7 99

70 73 31 ,5 ,7 ,9 10 13 12

, 52

58 ,3 55

’08

’09

’10

’08

’09

’10

’08

’09

’10

’08

’09

’10

America

Europe

Asia/Oceania

Japan

For the year ended March 31

Wacom Technology Corporation
Wacom Technology Corporation was established in 1991 in Vancouver, 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 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 Europe GmbH
Wacom 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 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 China Corporation
Wacom 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 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.

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

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

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

Executive Officers
Masahiko 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

Corporate Governance
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 implementation 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 management 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.

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

General Meeting of Shareholders
Election/dismissal Report Election/dismissal

Election/dismissal

Board of Corporate Auditors (3 Auditors)

Operating audit Accounting audit

Board of Directors (6 Directors)

Accounting audit

Accounting Auditors

Cooperation Cooperation

Chief Executive Officer Internal Audit Office Corporate Management Meeting (10 Executive Officers) Risk Hotline Risk Management Committee

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Financial Section

Contents
19 Five-Year Summary 20 Overview of Business Performance 23 Consolidated Balance Sheets 25 Consolidated Statements of Income 26 Consolidated Statements of Changes in Net Assets 27 Consolidated Statements of Cash Flows 28 Notes to Consolidated Financial Statements 40 Report of Independent Auditors 41 Corporate data 42 Investor Information

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Five-Year Summary
Wacom Co., Ltd. and Its Subsidiaries

Five-Year Summary
Thousands of yen Year ended March 31 2007 2008 Thousands of U.S. dollars* Year ended March 31 2010

2006 For the year: Net sales Gross profit Operating income
Income before income taxes

2009

2010

Net income At year end:
Cash and cash equivalents

¥23,992,206 ¥28,787,066 ¥36,739,196 ¥33,809,138 ¥32,044,578 $344,417 16,761,164 15,668,147 168,402 11,970,762 15,027,641 18,640,355 33,618 4,311,378 3,127,822 5,538,871 4,564,593 3,424,365 33,544 4,179,661 3,120,867 5,564,082 4,738,219 3,400,678 21,157 2,579,025 1,968,406 3,501,360 2,853,274 2,145,821 10,342,643 13,287,904 21,032,863 12,707,153 16,320,081 25,152,191 13,577,194 18,516,742 29,221,330 11,014,114 17,796,487 25,631,057 12,350,113 18,269,590 28,199,429 132,740 196,363 303,089

Total net assets Total assets Net income per share (yen and U.S. dollars):** Basic Diluted Equity ratio(%)*** Return on equity (%) Number of employees

5,420.51 5,283.96 63.2 21.5 465

6,886.19 6,784.24 64.9 19.3 511

8,348.74 8,304.38 63.5 20.1 584

¥6,213.93 ¥6,197.78 69.4 14.2 637

¥4,899.57 ¥4,888.56 64.8 10.9 702

$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..

Net sales
(Millions of yen)

Gross profit/Gross profit margin
(Millions of yen) (%)

Operating income/Operating margin
(Millions of yen) (%)

40,000

20,000

55

6,000

30

36,739
35,000

18,640 52.2 16,761 50.7 15,028
15,000

5,539
5,000 25

33,809 32,045 28,787 49.9

15,668 49.6 48.9
50

4,565

30,000

4,311
20

4,000 25,000 23,992

11,971

3,424
45 3,000

15.9

15.1 12.8

3,128
15

20,000

10,000

14.3

15,000 2,000 10,000 5,000 40 1,000 5,000

9.8
10

5

0

’06

’07

’08

’09

’10

0

’06

’07

’08

’09

’10

35

0

’06

’07

’08

’09

’10

0

(For the year’s ended March 31)

(For the year’s ended March 31)

(For the year’s ended March 31)

19

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

How did the global economy affect our business in our 27th year?
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 domestic production activities and consumer consumption of automobiles and flat panel TVs showed gradual recovery owing to economic stimulus measures and export expansion to Asian countries. In the US., the financial crisis was averted and consumer consumption went out of the worst period owing to the extension of home buyer tax credit and the federal “Cash for Clunkers” 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 government. However, each country wasn’ t on a track to recovery due to the decrease in corporate capital investment, the sluggish consumer consumption caused by worsening employment conditions, and the deep-seated credit crunch for financial institutions demonstrated by Dubai debt crisis and Greece's fiscal problems. The economy in the Asia-Oceania countries in general 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, manufacturing, and selling new products as well as efficient cost control. 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 consumer tablets, “Bamboo” . The Company also began to massproduce and provide a new multi-touch component that supports the functions of Windows 7 to major PC manufacturers, strengthening its leadership in the user interface field. Additionally in the music device field as a new entry, Wacom commercialized 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). Net income per share (basic)
(Millions of yen)

10,000

8,349
8,000

6,886
6,000

6,214 4,900

5,421

4,000

2,000

0 ’06 ’07 ’08 ’09 ’10 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. (For the year’s ended March 31)

ROE/ROA
(%)

25

21.5
20

20.1 19.3

15

14.2 (ROE) 10.9 12.2 12.4 12.9 9.4 (ROA) 7.3

10

5

0 ’06 ’07 ’08 ’09 ’10 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. (For the year’s ended March 31)

Equity ratio
(%)

80

70

69.4 63.2 64.9 63.5 64.8

60

50

40

30

’06

’07

’08

’09

’10

(For the year’s ended March 31)

20

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

Our results by business sector
Electronic Systems and Devices (ESD) business
Global 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 equipment 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 professional 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 consumer 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 “SignPad” 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 customers 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 distribution 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).

Sales Breakdown by Business

(Millions of yen)

2009

¥33,809

ESD Business 97.8% ECS Business 2.2%

2010

¥32,045

ESD Business 98.7% ECS Business 1.3%
(For the year’s ended March 31)

ESD Business
’09 Sales ’10

(Millions of yen)

DOWN 4.3%

33,058 31,634

DOWN 21.4% Operating income ’09 ’10

6,211 4,880

(For the year’s ended March 31)

ECS Business
’09 Sales ’10

(Millions of yen)

DOWN 45.3%

751 411

Engineering Collaborative Solutions (ECS) business
ECS business suffered from the severe business environment. 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 user s 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 participating in domestic exhibitions and focused on the acquisition 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).
Operating income ’10

’09

49

△109

(For the year’s ended March 31)

21

Our financial position
Total 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 receivable 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 intellectual property for maintaining the competitiveness and the structuring of the next enterprise resource planning systems. Total liabilities increased by ¥2.10bn to ¥9.93bn compared 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 purchase 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 shareholders’ dividends and a ¥0.29bn decrease in foreign currency 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 payable, 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 purchases of mold, intellectual property, and the next enterprise resource planning systems of ¥1.31bn in fixed assets and a proceed from redemption of held-tomaturity 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 payment of shareholders’ dividends of ¥1.20bn.

Cash f lows from operating activities
(Millions of yen)

4,000 3,500 3,000 2,500 2,000

3,758 3,461

3,606

2,270

1,478
1,500 1,000 500 0 ’06 ’07 ’08 ’09 ’10 (For the year’s ended March 31)

Cash f lows from investing activities
(Millions of yen)

0 -100 -200 -300

-93

-323
-400 -1000

-805 -1,174

-1500

-1,539
-1600

’06

’07

’08

’09

’10

(For the year’s ended March 31)

Cash f lows from f inancing activities
(Millions of yen)

Cash Dividends per Share / Payout Raito
Cash Dividends per share(yen) Pay out Raito(%)

4,000 3,000 2,000

3,720

61.2
60

1,000 0 -1,000

48.3
50 40 30

3,000 2,000 18.4 1,000 0

29.9 21.8 1,500 1,000
’06 ’07 ’08

3,000 2,500

3,000

-511 -1,229 -1,199

20

-2,000
10

’09

’10

-3,000

-2,676
’06 ’07 ’08 ’09 ’10 (For the year’s ended March 31)

(For the year’s ended March 31)

22

Consolidated Balance Sheets
Wacom Co., Ltd. and Its Subsidiaries

Thousands of yen March 31 2009 2010

Thousands of U.S. dollars (Note 1) March 31 2010

Assets: 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 structures Accumulated depreciation Buildings and structures, net Machinery, equipment and vehicles Accumulated depreciation Machinery, equipment and vehicles, net Tools, furniture and fixtures (Note 4) Accumulated depreciation Tools, furniture and fixtures, net Land Construction in progress Total property, plant and equipment Intangible assets: Goodwill (Note 2) Others Total intangible assets Investments and other assets: Investment securities (Notes 2 and 11) Deferred tax assets (Note 15) Others Allowance for doubtful accounts (Note 2) Total investments and other assets Total noncurrent assets Total assets

¥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

¥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

$132,740 50,528 22,818 1,602 7,346 20,643 5,832 4,231 (427) 245,313

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

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

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

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

23

Thousands of yen March 31 2009 2010

Thousands of U.S. dollars (Note 1) March 31 2010

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' equity Valuation and translation adjustments Foreign currency translation adjustment (Note 2) Total valuation and translation adjustments Total net assets Total liabilities and net assets

¥3,895,717 600,000 414,881 343,537 1,613,275 6,867,410

¥4,983,535 600,000 813,874 314,192 32,357 2,137,885 8,881,843

115,334 420,151 429,227 2,448 967,160 7,834,570

102,386 438,024 459,085 48,501 1,047,996 9,929,839

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

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

$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

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

24

Consolidated Statements of Income
Wacom Co., Ltd. and Its Subsidiaries

Thousands of yen Year ended March 31 2009 2010

Thousands of U.S. dollars (Note 1) Year ended March 31 2010

Net sales Cost of sales (Notes 6 and 16) Gross profit Selling, 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

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

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

85,102 27,638 112,740

21,510 28,687 50,197

231 308 539

12,375 204,410 28,264 245,049 4,179,069

14,131 4,210 3,514 21,855 3,156,164

152 45 37 234 33,923

155 14,217 14,372

-

-

446 13,334 13,780 4,179,661 1,528,131 72,505 1,600,636 ¥2,579,025

1,243 34,054 35,297 3,120,867 986,438 166,023 1,152,461 ¥1,968,406

13 366 379 33,544 10,602 1,785 12,387 $21,157

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

25

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

Thousands of yen Year ended March 31 2009 2010
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

Thousands of U.S. dollars (Note 1) Year ended March 31 2010

¥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

¥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

$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

(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

(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

(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

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

26

Consolitated Statements of Cash Flows
Wacom Co., Ltd. and Its Subsidiaries

Thousands of yen Year ended March 31 2009 2010

Thousands of U.S. dollars (Note 1) Year ended March 31 2010

Net cash provided by (used in) operating activities : Income before income taxes Depreciation and amortization Increase (decrease) in allowance for doubtful accounts Increase (decrease) in provision for bonuses Increase (decrease) in provision for directors' bonuses Increase (decrease) in provision for retirement benefits Increase (decrease) in provision for directors' retirement benefits Interest and dividends income Interest expenses Foreign exchange losses (gains) Loss (gain) on sales and retirement of noncurrent assets Decrease (increase) in notes and accounts receivable-trade Decrease (increase) in inventories Increase (decrease) in notes and accounts payable-trade Others, net Sub total Interest and dividends income received Interest expenses paid Income taxes paid Net cash provided by (used in) operating activities Net cash provided by (used in) investing activities: Purchase of property, plant and equipment Purchase of intangible assets Purchase of software Proceeds from sales of noncurrent assets Proceeds from redemption of securities Payments for lease and guarantee deposits Proceeds from collection of lease and guarantee deposits Others, net Net cash provided by (used in) investing activities Net cash provided by (used in) financing activities: Proceeds from issuance of common stock Purchase of treasury stock Cash dividends paid Net cash provided by (used in) financing activities Effect of exchange rate change on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year (Note 8)

¥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

¥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

$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

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

27

Notes to Consolidated Financial Statements
Wacom Co., Ltd. and Its Subsidiaries

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 Financial 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 requirements 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 representations that the Japanese yen amounts could have been or could be converted into U.S. dollars at that or any other rate.

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 determined by the gross average method. (Accounting changes) “Accounting Standard for Measurement of Inventories” (Accounting Standards Board of Japan Statement 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 depreciation. 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 years Machinery, equipment and vehicles 3 to 7 years Tools, furniture and fixtures 2 to 20 years

2. Summary of significant accounting policies:
(1) Principles of consolidation The consolidated financial statements include the accounts of the Company and all of its majorityowned 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.

28

(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 calculated 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 receivables 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 employees’ 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 consolidated 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 unrecognized 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 procedures 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 accompanying 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 policies applied 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

29

Notes to Consolidated Financial Statements

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 adjustments 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 Transactions” (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.

(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 requirements, 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:
Thousands of yen March 31, 2009 March 31, 2010 Thousands of U.S. dollars March 31, 2010

Amount of overdraft limit Utilized overdraft facilities Net amount

¥2,000,000 ¥2,000,000 – – ¥2,000,000 ¥2,000,000

$21,496 – $21,496

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 administrative expenses” are as follows:
Thousands of yen Year ended March 31 2009 2010 Thousands of U.S. dollars Year ended March 31 2010

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. “Merchandise 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 “Accumulated 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.

Advertising expenses Provision for allowance for doubtful accounts Salaries Pension expenses Provision for directors’ and statutory corporate auditors’ retirement benefits Provision for bonuses Provision for directors’ and statutory corporate auditors’ bonuses Research and development expenses

¥1,378,351 ¥1,398,410 82,626 2,874,375 151,176 57,382 269,786 – 1,441,953 19,474 2,932,634 160,575 34,024 267,438 33,464 1,580,173

$15,030 209 31,520 1,726 366 2,874 14,679 360 16,984

30

(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 Thousands of yen Year ended March 31 2009 2010 Thousands of U.S. dollars Year ended March 31 2010

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

(2) Matters related to dividends a)Dividends payment Dividend payment approved at the board meeting held on April 30, 2008 are as follows:
(Approval by) Board meeting on April 30, 2008
Type of shares Total amont Dividends of dividends per share (Thousands (yen) of yen) Record date Effective date

Common ¥1,050,390 stock

¥2,500

March 31, June 3, 2008 2008

Tools, furniture and fixtures Total

¥155 ¥155

¥¥-

$$(Approval by)
Type of shares Total amont Dividends of dividends per share (Thousands (dollar) of U.S. dollars) Record date Effective date

(5) Loss on sales of noncurrent assets Thousands of yen Year ended March 31 2009 2010 Thousands of U.S. dollars Year ended March 31 2010

Board meeting on April 30, 2008

Common stock

$10,484

$25

March 31, June 3, 2008 2008

Machinery, equipment and vehicles Tools, furniture and fixtures Total

¥446 ¥446

¥624 ¥619 ¥1,243

$7 6 $13

Dividends payment approved at the board meeting held on May 8, 2009 are as follows:
(Approval by)
Type of shares Total amont Dividends of dividends per share (Thousands (yen) of yen) Record date Effective date

(6) Loss on retirement of noncurrent assets Thousands of yen Year ended March 31 2009 2010 Thousands of U.S. dollars Year ended March 31 2010

Board meeting on May 8, 2009

Common ¥1,205,088 stock

¥3,000

March 31, June 3, 2009 2009

Buildings and structures Tools, furniture and fixtures Other intangible assets Total

¥4,954 7,777 603 ¥13,334

¥30,171 3,883 ¥34,054

$324 42 $366

(Approval by)

Type of shares

Total amont Dividends of dividends per share (Thousands (dollar) of U.S. dollars)

Record date

Effective date

Board meeting on May 8, 2009

Common stock

$12,952

$32

March 31, June 3, 2009 2009

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 Type of shares outstanding Common stock Total Type of treasury stock Common stock Total

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. The Company resolved approval at the board meeting held on May 8, 2009 as follows:
(Approval by)
Type of shares Total amont Dividends of dividends per share (Thousands (yen) of yen) Record date Effective date

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)

420,156 420,156

-

-

1,540

1,540

20,000

20,000

Board meeting on May 8, 2009

Common ¥1,205,088 stock

¥3,000

March 31, June 3, 2009 2009

-

-

20,000

20,000 (Approval by) Board meeting on May 8, 2009
Type of shares

421,696 421,696

Total amont Dividends of dividends per share (Thousands (dollar) of U.S. dollars)

Record date

Effective date

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.

Common stock

$12,952

$32

March 31, June 3, 2009 2009

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)

Type of shares outstanding Common stock Total

Type of treasury stock Common stock Total

421,696 421,696

20,000

20,000

120

120

-

-

-

-

20,000

20,000

421,816 421,816

31

Notes to Consolidated Financial Statements

The Company resolved approval at the board meeting held on April 30, 2010 as follows:
(Approval by)
Type of shares Total amont Dividends of dividends per share (Thousands (yen) of yen) Record date Effective date

Acquisition cost

Thousands of yen Accumulated Net balance as of depreciation March 31, 2010

Machinery, equipment and vehicles Tools, furniture and fixtures

¥2,705 6,608 ¥9,313

¥2,320 6,286 ¥8,606

¥385 322 ¥707

Board meeting on April 30, 2010

Common ¥1,205,448 stock

¥3,000

March 31, June 3, 2010 2010

Thousands of U.S. dollars Acquisition Accumulated Net balance as of cost depreciation March 31, 2010

(Approval by) Board meeting on April 30, 2010

Type of shares

Total amont Dividends of dividends per share (Thousands (dollar) of U.S. dollars)

Record date

Effective date

Machinery, equipment and vehicles Tools, furniture and fixtures

$29 71 $100

$25 67 $92

$4 4 $8

Common stock

$12,956

$32

March 31, June 3, 2010 2010

(b) Future lease payments under finance leases are 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 Thousands of yen 2009 2010 Thousands of U.S. dollars 2010

Thousands of yen 2009 2010

Thousands of U.S. dollars 2010

Due within one year Due after more than one year

¥2,440 2,136 ¥4,576

¥1,654 482 ¥2,136

$18 5 $23

(c) Lease payments and amounts representing depreciation and interest are as follows:
Thousands of yen 2009 2010 Thousands of U.S. dollars 2010

Cash and deposits Short-term investment securities Less: Held-to-maturity debt securities due within one year Cash and cash equivalents

¥9,994,114 ¥12,350,113 1,520,000 (500,000) -

$132,740 $132,740

Lease payments Amount representing depreciation Amount representing interest

¥4,261 2,463 300

¥2,440 1,179 174

$26 13 2

¥13,577,194 ¥12,350,113

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:
Thousands of yen Acquisition Accumulated Net balance as of cost depreciation March 31, 2009

(2) Calculation method of depreciation equivalents Depreciation 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 equivalents Differences between total lease expenses and purchase 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:
Thousands of yen 2009 2010 Thousands of U.S. dollars 2010

Due within one year Due after one year Total minimum lease payments

¥109,381 115,089 ¥224,470

¥100,514 110,897 ¥211,411

$1,080 1,192 $2,272

There is no impairment losses allocated to leased assets.

Machinery, equipment and vehicles Tools, furniture and fixtures

¥2,705 16,419 ¥19,124

¥1,919 15,319 ¥17,238

¥786 1,100 ¥1,886

32

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 financing. 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 speculative 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 consists of operating receivables for supplied materials to outsourcing production contractors and those receivables are exposed to credit risk of each contractor. 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 derivative transactions, the finance department is responsible 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 transactions. 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 instrumentsThe 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)
Thousands of yen Carrying Amount Fair value Difference

(1) Cash and deposits (2) Notes and accounts receivable trade (3) Accounts receivable - other Total assets (1) Notes and accounts payable trade (2) Short-term loans payable Total liabilities Derivatives (*)

¥12,350,113 ¥12,350,113 4,701,126 4,701,126 1,920,657 1,920,657 ¥18,971,896 ¥18,971,896 4,983,535 4,983,535 600,000 600,000 ¥5,583,535 ¥5,583,535 (¥62,897) (¥62,897)

¥¥¥¥-

Thousands of U.S. dollars (Note 1) Carrying Amount Fair value Difference

(1) Cash and deposits (2) Notes and accounts receivable trade (3) Accounts receivable - other Total assets (1) Notes and accounts payable trade (2) Short-term loans payable Total liabilities Derivatives (*)

$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)

$$$$-

(*) Derivatives are expressed in net amount of receivables 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 receivable – trade and (3) accounts receivable - other Due to expected settlement with in a short period of time, we estimate that the carrying amount is equivalent 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 equivalent to market value. Derivatives transaction See Note 12 “Derivatives”.

33

Notes to Consolidated Financial Statements

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

(ii) Securities for which market price or quotations are not available.
Thousands of yen March 31, 2009 Book carrying amount

Financial instruments Unlisted securities

Carrying Amount

¥35,077
Thousands of U.S. dollars (Note 1)

Other securities: Non-marketable equity securities Other

¥35,277 1,020,000

Financial instruments Unlisted securities

Carrying Amount

(iii) Redemption schedule The redemption schedule of held-to-maturity debt securities as of March 31, 2009
Due 2009 Thousands of yen Due 2010∼ Due 2014∼ 2013 2018 Due after 2019

$377 Bonds (1) Government bonds, Municipal bonds, etc. ¥– (2) Corporate bonds – (3) Others 500,000 Other Total ¥500,000

These financial instruments 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. c) Redemption schedule of financial instruments after year ended March 31, 2010.
Due within one year Thousands of yen Due over one year Due over 5 years to 5 years to 10 years Due Over 10 years

¥– – – – ¥–

¥– – – – ¥–

¥– – – – ¥–

Cash and deposits Notes and accounts receivable - trade Accounts receivable - other Total

¥12,350,113 4,701,126 1,920,657 ¥18,971,896

¥– – – ¥–

¥– – – ¥–

¥– – – ¥–

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.
Thousands of yen March 31, 2009 Contract amount Fair value Unrealized gain/(loss)

Thousands of U.S. dollars (Note 1) Due Over Due within Due over one year Due over 5 years 10 years one year to 5 years to 10 years

Cash and deposits Notes and accounts receivable - trade Accounts receivable - other Total

$132,740 50,528 20,643 $203,911

$– – – $–

$– – – $–

$– – – $–

(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.

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

¥972,403 ¥1,011,634 538,652 545,328 89,292 85,173 ¥1,600,347 ¥1,642,135
Thousands of yen March 31, 2010

(¥39,231) (6,676) 4,119 (¥41,788)

(i) Held-to-maturity debt securities with fair market value
Thousands of yen March 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)

Contract amount

Fair value

Unrealized gain/(loss)

Foreign exchange forward contracts: ¥1,608,691 To sell U.S. dollars 455,380 To sell Euros 36,438 To sell British Pound To buy U.S. dollars Total
173,259 ¥-

(¥65,060) 5,668 (3,505) (¥62,897)

(¥65,060) 5,668 (3,505) (¥62,897)

34

Contract amount

Thousands of U.S. dollars March 31, 2010 Unrealized Fair value gain/(loss)

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

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

$17,290 4,894 392 1,862 -

($699) 61 (38) ($676)

($699) 61 (38) ($676)

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

2.0% Mainly 1.39% Straight-line Straight-line basis basis Straight-line Mainly over 5 years straight-line over 5 years

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 multiemployer 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
Thousands of yen March 31 2009 2010 Thousands of U.S. dollars March 31 2010

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:
Date of ordinary shareholders’ meeting Number of options granted (shares)

Person granted

November 8, 2002

June 26, 2003

June 24, 2004

June 23, 2005

Employees Subsidiaries’ executive officers Subsidiaries’ employees Executive officers Employees Subsidiaries’ employees Executive officers Employees Subsidiaries’ employees Executive officers Employees Subsidiaries’ employees

113 6 33 4 66 13 2 4 9 1 6 9

19,160

7,440

1,200

800

28,600
(Unit:shares) Date of ordinary shareholders’ meeting November 8, 2002 June 26, 2003 June 24, 2004 June 23, 2005

The amount of pension assets The amount of benefit obligations under pension funding programs Net

¥6,998,395 ¥5,955,349 (7,458,524) (7,807,823) (¥460,129) (¥1,852,474)

$64,008 (83,919) ($19,911) Outstanding at March 31, 2008 Granted Exercised Expired Outstanding at March 31, 2009 Exercise periods

(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:
Thousands of yen 2009 2010 Thousands of U.S. dollars 2010

1,200 140 1,060 From November 9, 2004 to October 31, 2011

2,140 1,400 740 From June 27, 2005 to June 26, 2008

844 40 804 From June 25, 2006 to June 24, 2009

800 800 From June 24, 2007 to June 23, 2010

Date of ordinary shareholders’ meeting

Exercise price per share (exact yen)

Average price per share at exercise (exact yen)

Exercise periods

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

(¥425,615) 5,464 (¥420,151)

(¥470,090) 32,066 (¥438,024)

($5,053) 345 ($4,708)

November 8, 2002 June 26, 2003 June 24, 2004

¥17,659 158,951 306,139 242,865

The components of the net periodic pension expense for the years ended March 31, 2009 and 2010 are as follows:
Thousands of yen 2009 2010 Thousands of U.S. dollars 2010

June 23, 2005

¥203,550 From November 9, 2004 to October 31, 2011 256,391 From June 27, 2005 to June 26, 2008 - From June 25, 2006 to June 24, 2009 - From June 24, 2007 to June 23, 2010

(1) Service cost (2) Interest cost (3) Recognized actuarial loss (4) Contribution (5) Extra retirement payments (6) Net periodic pension expense

¥45,161 7,282 6,186 88,076 ¥146,705

¥49,904 9,665 (545) 89,908 53,632 ¥202,564

$536 104 (6) 966 577 $2,177

35

Notes to Consolidated Financial Statements

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:
Date of ordinary shareholders’ meeting Number of options granted (shares)

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:
March 31, 2010

Person granted

November 8, 2002

June 24, 2004

June 23, 2005

Employees Subsidiaries’ executive officers Subsidiaries’ employees Executive officers Employees Subsidiaries’ employees Executive officers Employees Subsidiaries’ employees

113 6 33 2 4 9 1 6 9

19,160

1,200

800 Statutory effective tax rate 21,160
(Unit:shares)

39.7% (4.8) 1.7 0.7 0.4 (0.8) 36.9%

Date of ordinary shareholders’ meeting

November 8, 2002

June 24, 2004

June 23, 2005

Outstanding at March 31, 2009 Granted Exercised Expired Outstanding at March 31, 2010 Exercise periods

1,060 120 940 From November 9, 2004 to October 31, 2011
Exercise price per share (exact yen) Average price per share at exercise (exact yen)

804 804 From June 25, 2006 to June 24, 2009

800 20 780 From June 24, 2007 to June 23, 2010

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

16. Segment information:
(1) Segments by industry ESD business Thousands of yen Year ended March 31, 2009 ECS Elimination/ Total business Corporate Consolidated

Date of ordinary shareholders’ meeting

Exercise periods

November 8, 2002 June 24, 2004 June 23, 2005

¥17,659 306,139 242,865

¥156,650 From November 9, 2004 to October 31, 2011 - From June 25, 2006 to June 24, 2009 - From June 24, 2007 to June 23, 2010

I. Net sales: (1) Outside customers (2) Inter-segment Total Operating expenses Operating income

¥33,058,396 33,058,396 26,847,100 ¥6,211,296

¥750,742 ¥33,809,138 750,742 33,809,138 701,693 27,548,793

¥ - ¥33,809,138 (-) (-) 33,809,138 1,948,967 29,497,760 ¥4,311,378

¥49,049 ¥6,260,345 (¥1,948,967)

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

II. Assets, depreciation and capital expenditure: Assets ¥14,480,863 Depreciation 513,311 Capital expenditure 940,194

¥476,060 ¥14,956,923 ¥10,674,134 ¥25,631,057 45,177 558,488 105,951 664,439 24,643 964,837 209,659 1,174,496
Thousands of yen Year ended March 31, 2010 ECS Elimination/ Total business Corporate Consolidated

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

¥444,472 162,331

¥225,775 168,679

$2,427 1,813

ESD business

136,470 114,052 72,633 38,846 20,744 39,125 27,597 17,118 28,682 7,556 32,329 1,141,955

165,915 101,856 83,934 65,200 38,129 36,562 26,990 13,953 13,540 10,997 10,943 7,939 6,612 37,518 1,014,542

1,783 1,095 902 701 410 393 290 150 146 118 117 85 71 404 10,905

I. Net sales: (1) Outside customers (2) Inter-segment Total Operating expenses Operating income

¥31,633,801 31,633,801 26,753,816 ¥4,879,985

¥410,777 ¥32,044,578 410,777 32,044,578 519,787 27,273,603

¥ - ¥32,044,578 (-) (-) 32,044,578 1,643,153 28,916,756 ¥3,127,822

(¥109,010) ¥4,770,975 (¥1,643,153)

II. Assets, depreciation and capital expenditure: Assets ¥17,699,823 Depreciation 601,094 Capital expenditure 573,774

¥468,556 ¥18,168,379 ¥10,031,050 ¥28,199,429 31,623 632,717 124,450 757,167 22,361 596,135 789,114 1,385,249

(442,402) (31,269) (44,383) (518,054) ¥623,901

(495,783) (28,087) (33,893) (557,763) ¥456,779

(5,329) (302) (364) (5,995) $4,910

36

ESD business

Thousands of U.S. dollars Year ended March 31, 2010 ECS Elimination/ Total business Corporate Consolidated

(2) Segments by geography Thousands of yen Year ended March 31, 2009 Asia/ Elimination/ Europe Oceania Total Corporate Consolidated

I. Net sales: (1) Outside customers (2) Inter-segment Total Operating expenses Operating income

$340,002 340,002 287,551 $52,451

$4,415 4,415 5,587 ($1,172)

$344,417 344,417 293,138 $51,279

$(-) (-) 17,661 ($17,661)

$344,417 344,417 310,799 $33,618

Japan

U.S.A.

I. Net sales: (1) Outside customers ¥12,772,956 ¥9,816,329 ¥7,995,377 ¥3,224,476 ¥33,809,138 ¥ - ¥33,809,138 (2) Inter-segment 14,721,928 52,195 15,007,155 (15,007,155) 233,032 27,494,884 10,049,361 7,995,377 3,276,671 48,816,293 (15,007,155) 33,809,138 Total Operating expenses Operating income 22,141,865 ¥5,353,019 9,693,111 ¥356,250 7,642,570 ¥352,807 3,232,594 42,710,140 (13,212,380) 29,497,760 ¥44,077 ¥6,106,153 (¥1,794,775) ¥4,311,378

II. Assets, depreciation and capital expenditure: Assets $190,239 Depreciation 6,460 Capital expenditure 6,167

$5,036 340 240

$195,275 6,800 6,407

$107,814 1,338 8,482

$303,089 8,138 14,889

II. Assets

¥9,326,919 ¥4,997,714 ¥3,444,995 ¥1,370,768 ¥19,140,396 ¥6,490,661 ¥25,631,057
Thousands of yen Year ended March 31, 2010 Asia/ Elimination/ Corporate Consolidated Europe Oceania Total

Notes: a) Segment information by business activity is determined based upon consideration of the product line and management control of the business. b) 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. c) 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 administrative expenses of the Company. d) Elimination or Corporate assets of ¥10,674,134 thousand and ¥10,031,050 thousand ($107,814 thousand) at March 31, 2009 and 2010, respectively, primary includes cash, investment securities and assets belonging to the general and administrative departments of the Company. e) 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. f) 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 subsidiaries 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.

Japan

U.S.A.

I. Net sales: (1) Outside customers ¥10,931,061 ¥9,280,641 ¥8,240,731 ¥3,592,145 ¥32,044,578 ¥ - ¥32,044,578 (2) Inter-segment 13,930,949 329,117 52,665 224,158 14,536,889 (14,536,889) Total 24,862,010 9,609,758 8,293,396 3,816,303 46,581,467 (14,536,889) 32,044,578 Operating expenses Operating income II. Assets 21,152,881 ¥3,709,129 9,655,323 (¥45,565) 7,791,244 ¥502,152 3,580,644 42,180,092 (13,263,336) 28,916,756 ¥235,659 ¥4,401,375 (¥1,273,553) ¥3,127,822

¥12,605,109 ¥5,212,724 ¥3,652,776 ¥1,805,363 ¥23,275,972 ¥4,923,457 ¥28,199,429
Thousands of U.S. dollars Year ended March 31, 2010 Asia/ Elimination/ Corporate Consolidated Europe Oceania Total

Japan

U.S.A.

I. Net sales: (1) Outside customers $117,488 (2) Inter-segment 149,731 267,219 Total Operating expenses Operating income II. Assets 227,353 $39,866 $135,481

$99,749 3,537 103,286 103,776 ($490) $56,027

$88,572 566 89,138 83,741 $5,397 $39,260

$38,608 $344,417 $ - $344,417 2,410 156,244 (156,244) 41,018 500,661 (156,244) 344,417 38,485 $2,533 453,355 (142,556) $47,306 ($13,688) 310,799 $33,618

$19,404 $250,172

$52,917 $303,089

Notes: a) Segment information by geographic area is determined by taking into account the geographic area where the Company or its subsidiaries are located. b) The countries in each geographic segment excluding Japan and U.S.A.: i) Europe: Germany, United Kingdom ii) Asia/Oceania: China, South Korea, Australia, Hong Kong, Singapore and Taiwan c) 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. d) 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 administrative expenses of the Company.

37

Notes to Consolidated Financial Statements

e) 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. f) 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. g) 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 subsidiaries 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. (3) Overseas sales
North America Thousands of yen Year ended March 31, 2009 Asia/ Oceania Others Europe

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

17. Related party transactions
There 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 Corporation) and Han Stoffels (Wacom Europe GmbH) have been included in a disclosure scope for related party transactions for the year ended March 31, 2009.

18. Earnings per share information:
Total

I.Overseas sales II.Consolidated sales III.Percentage of overseas sales to consolidated sales

¥9,857,704 ¥7,916,818 ¥8,243,340 -

¥303,777 ¥26,321,639 - 33,809,138

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.
Yen March 31 2009 2010 U.S. dollars March 31 2010

29.2%

23.4%

24.4%

0.9%

77.9%

North America

Thousands of yen Year ended March 31, 2010 Asia/ Oceania Others Europe

Total

Net assets per share Net income per share Diluted net income per share

¥44,303.37 ¥45,467.55 6,213.93 4,899.57 6,197.78 4,888.56

$488.69 52.66 52.54

I.Overseas sales II.Consolidated sales III.Percentage of overseas sales to consolidated sales

¥9,397,082 ¥8,072,554 ¥7,081,700 -

¥504,019 ¥25,055,355 - 32,044,578

Note: The basis for calculating basic and diluted earning per share is as follows.
Thousands of yen March 31 2009 2010 Thousands of U.S. dollars March 31 2010

29.3%

25.2%

22.1%

1.6%

78.2%

North America

Thousands of U.S. dollars Year ended March 31, 2010 Asia/ Oceania Others Europe

Basic net income per share
Total

I.Overseas sales II.Consolidated sales III.Percentage of overseas sales to consolidated sales

$101,001 -

$86,764 -

$76,115 -

$5,417 -

$269,297 344,417

29.3%

25.2%

22.1%

1.6%

78.2%

Net income ¥2,579,025 ¥1,968,406 Net income not available to common shareholders Net income available to common shareholders 2,579,025 1,968,406 Weighted-average number of shares outstanding (shares) 415,039 401,751 Diluted net income per share Amount of net income adjustment Increase in the number of common shares outstanding during each fiscal year that would result in exercising options to issue new shares(shares) -

$21,157 21,157 -

Notes: a) Countries or regions are determined by geographical proximity. b) Principal countries or regions belonging to each segment: i) North America: U.S.A. and Canada ii) Europe: United Kingdom, Germany, France, Netherlands, etc. iii) Asia/ Oceania: South Korea, Taiwan, Australia, China, etc. iv) Others: Middle East, South America, Africa, etc.

-

1,082

905

-

38

19. Short-term and long-term debt:
Thousands of yen March 31 2009 2010 Thousands of U.S. dollars March 31 2010 Average interest rate (%) Due date of payment

Short-term debt Long-term debt due within one year Lease obligation due within one year Long-term debt Lease obligation Other interest bearing liabilities: Accounts payable other Long-term accounts payable Total

¥600,000 ¥600,000 – – – – – – – –

$6,449 – – – –

1.031 – – – –

– – – – –

2,855

1,135

12 21 $6,482

9.040

2,448 1,981 ¥605,333 ¥603,116

– Due 2010 9.040 ~ 2011

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:
Thousands of yen

Due after Due after Due after Due after 1 year to 2 year 2 year to 3 year 3 year to 4 year 4 year to 5 year Long-term accounts payable - other ¥1,981 ¥–
Thousands of U.S. dollars

¥–

¥–

Due after Due after Due after Due after 1 year to 2 year 2 year to 3 year 3 year to 4 year 4 year to 5 year Long-term accounts payable - other $21 $– $– $–

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

39

Report of Independent Auditors

40

Corporate Data
Established Capital July 12, 1983 ¥4,196 million (As of March 31, 2010) Consolidated: 702 Non-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 Business Development, manufacture and sales of computer input components • Pen sensor components • Touch sensor components 3. Other Businesses Development, manufacture, sales of CAD 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. Head Office / Factory 2-510-1 Toyonodai Kazo-shi, Saitama 349-1148, Japan TEL: +81-480-78-1211 (Main) FAX: +81-480-78-1220

Employees

Branch / Offices

Business Segments

Tokyo Branch Harmony Tower 21th Floor, 1-32-2 Hon-cho, Nakano-ku, Tokyo 164-0012, Japan Nagoya Office Origin Nishiki Bldg. 8th Floor, 1-6-17 Nishiki Naka-ku, Nagoya-shi, Aichi 460-0003, Japan Osaka Office Shogyo 2nd Bldg. 6th Floor, 5-4-9 Toyosaki Kita-ku, Osaka-shi, Osaka 531-0072, Japan Fukuoka Office Hakata Ekimae Daini Bldg. 5th Floor, 2-6-23 Hakataeki Higashi, Hakata-ku Fukuoka-shi, Fukuoka 812-0013, Japan

International Affiliates

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 #12-09 Suntec Tower Five Singapore 038985 Wacom Hong Kong Ltd. (Hong Kong) Room 2108, 21F, C. C. Wu Building 302-308 Hennessy Road Wanchai, Hong Kong Wacom Taiwan Information Co., Ltd. (Taiwan) Suite 605, 6th floor, No. 205 Tun Hwa North Road, Taipei, Taiwan 105 R.O.C.

41

(As of July 29, 2010)

Investor Information
Stock Exchange Listing
Tokyo 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 1,380,000 421,816 28,212

Major Shareholders (As of March 31, 2010)

Name of shareholder
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 Lending Omunibus Account MASA-JAPANESE EQUITY Masahiko Yamada JPMCB Omnibus U.S. Pension Treaty Jasdec 380052 Yoshimi Ogawa
*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.

Number of shares owned
31,320 16,705 15,008 12,100 11,432 8,040

Percentage of voting rights (%)
7.79 4.16 3.74 3.01 2.85 2.00

7,586 7,420 4,538 3,900

1.89 1.85 1.13 0.97

Shareholder Distribution (As of March 31, 2010)

Treasury stock

4.74%
20,000 shares <1 shareholder> Foreign enterprises, etc. Financial institutions

13.69%
57,776 shares , <32 shareholders> Securities companies , 12,287 shares <54 shareholders>

18.33%
77,307 shares, <146 shareholders>

2.91%

Other enterprises

5.32%
22,437 shares, <143 shareholders>

421,816
shares

28,212
shareholders
Individuals and other shareholders

55.01%
232,009 shares, <27,836 shareholders>

42

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