FY2019 March

The 3Q Summary of Accounting Statements[Japanese Standards] (consolidated)

February 13, 2019
Listed company:
Tamagawa Holdings Co., Ltd.
Exchange: Tokyo
Code No.:6838
URL http://www.tmex.co.jp
Representative (Title) President(Name) Toru Masuzawa
Finance and accounting division
Contact person (Title)(Name) Katsuya Kubo (TEL) 03-6435-6933
manager
Quarterly report to be submitted on: February 13, 2019 Dividends payment to be started on: －Preparation of supplementary explanation document for the : No
quarterly accounting statement
Explanatory meeting for the quarterly accounting statement : No(amount under mil. yen rounded off)

1. Consolidated performance of FY 2019 Mar.: 3Q (from Apr 1, 2018 to Dec 31, 2018)(% indication: change compared with the same quarterof the previous year)
Quarterly profit belonging
Operating profit
Ordinary profit
to the parent company’s
shareholders(1) Consolidated management result (cumulative)
Sales amountmil. yen%mil. yen%mil. yen%

FY2019 Mar. 3Q
2,475
24.0
15
△145
－
FY2018 Mar. 3Q
1,997 △21.3
△96
△174
－
(Note) Comprehensive profit: FY2019 Mar. 3Q △39mil. yen ( －%) FY2018 Mar. 3Q
Quarterly net profit Quarterly net profit per share after
per share
issuable share adjustment
yen

yen

△8.73
△43.43－－

FY2019 Mar. 3Q
FY2018 Mar. 3Q

mil. yen

%

△37
－
△182
－
△177mil. yen (

－
－
－％)

We conducted reverse split with ratio of 1 share per 10 ordinary shares on October 1, 2018. Quarterly net profit per shareis calculated with assumption that the reverse split was conducted at the beginning of the previous accounting year.

(2) Consolidated financial status
Gross asset

Net asset

mil. yen

Own capital ratio
mil. yen

FY2019 Mar. 3Q
9,694
FY2018 Mar.
11,178(Reference) Own capital:FY2019 Mar. 3Q
3,147mil. yen

%

3,148
32.5
3,210
28.7
FY2018 Mar. 3,209mil. yen

2. Status of dividends
Annual dividends
End 1QFY2018 Mar.
FY2019 Mar.

End 2QEnd 3Q

Term end

Total

yen

yen

yen

yen

yen

－
－

0.00
0.00

－
－

0.50

0.50

5.00
～30.00: None5.00～30.00FY2019 Mar. (forecast)(Note) Correction from the dividend forecast recently announced

We conducted reverse split with ratio of 1 share per 10 ordinary shares on October 1, 2018. The amount of term-end
dividends per share of FY2019 Mar. (forecast) is listed in consideration of effect of such reverse split. See “Explanation
on appropriate use of the performance forecast and other special notes” for details.

3. Consolidated performance forecast of 2019 Mar. (from Apr 1, 2018 to Mar. 31, 2019)(% indication: change compared with the same quarter of the previous year)
Sales amountmil. yen

Operating profit%

mil. yen

Current net profit
belonging to the parent
company’s shareholders

Ordinary profit%

mil. yen%mil. yen%

Current net profit
per shareyen

Full fiscal year
3,875 19.1
119 125.2
△85
35
8.43
－
－
(Note) Correction from the performance forecast recently announced: NoneWe conducted reverse split with ratio of 1 share per 10 ordinary shares on October 1, 2018. Effect of such reverse split
is considered for the current net profit per share in the consolidated performance forecast of FY2019 March.
See “Explanation on appropriate use of the performance forecast and other special notes” for details.

―1―

※ Notes:None(1) Material transfer of subsidiary in the current quarter consolidated cumulative period:(Specified subsidiary transfer with change of the consolidated scope)
New－(company name)

Excluded －(2) Application of accounting process specific to preparation of the quarterly
consolidated accounting statement(company name): None(3) Change of accounting policy, change of accounting estimate, redisplay of revision: None①Change of accounting policy for revision of accounting standard, etc.
②Change of the accounting standard except for ①: None③Change of the accounting estimate: None④Redisplay of revision: None(4) Number of shares issued (ordinary shares)①Number of term-end shares issued(including own shares)②Number of term-end own shares③Average number of midterm shares(quarterly accumulation)

FY2019 Mar. 3Q

4,404,600

shares

FY2018 Mar.

4,404,600 shares

FY2019 Mar. 3Q

61,454

shares

FY2018 Mar.

61,454 shares

FY2019 Mar. 3Q

4,343,145

shares

FY2018 Mar. 3Q

4,198,345 shares

We conducted reverse split with ratio of 1 share per 10 ordinary shares on October 1, 2018. Quarterly net profit per
share is calculated with assumption that the reverse split was conducted at the beginning of the previous accounting
year.

*
*

The quarterly summary of accounting statement is not subject to quarterly review by the certified
accountant or audit company.
Explanation on appropriate use of the performance forecast and other special notes
Description concerning the future of performance forecast, etc. described in this document is based on theinformation currently obtained by us and the certain precondition judged as reasonable, and the actual
performance, etc. may drastically vary due to various factors. Please see Annex p.4 “Explanation on the Future
Forecast Information of the Consolidated Performance Forecast, etc.” for assumption as the precondition of theperformance forecast. and attention for usage of performance forecast.
(Dividends after reverse split and consolidated performance forecast)
The reverse split at the ratio of 1 share per 10 ordinary shares was conducted in accordance with decision at our
50th ordinary shareholders’ meeting held on June 28, 2018. The dividend forecast and consolidated
performance forecast of FY2019 Mar. when not considering the reverse split shall be as follows.
1. Dividend forecast of FY2019 Mar.
Dividend per share: Term-end: 0.50 yen~3 yen
2. Consolidated performance forecast of FY2019 Mar.
Current net profit per share: Full fiscal year: 0.84 yen―2―1. Qualitative information concerning the account settlement of the current quarter(1) Explanation concerning the management result
Matters herein concerning the future have been determined by our group (we and our consolidated subsidiaries) asof the final day of the current quarterly consolidated accounting period.
While the Japanese economics in the current 3Q consolidated cumulative period continues to be in the mild
turnaround such as recovery of individual consumption and facility investment thanks to improvement in thecontinuous corporate performance and employment situation, it continued to shift with uncertain future due to trade
conflict arising from the trading policy of US and impact of series of natural disasters in various areas of Japan, etc.
Under such economic circumstances, for the electronic and communication device business, in addition to sales
expansion business mainly in the fourth-generation mobile phone equipment related market and public related
market, we have also focused on new markets and client exploration to acquire orders from new fields. We havealso worked on enhancement of proposal of our self-developed products by continuously promoting “effort for highadded-value products,” “expansion and exploration of business field” and “co-development with the company ofbusiness tie-up.”
As a result, newly explored clients and inquiries are increasing from new markets besides the existing analog highfrequency products, including optics related products of various business-use wireless, digital signal processor, etc.
indispensable for high-speed signal processing, etc.
In the mobile communication field, while amount of facility investment of each carrier has been reduced year by
year, demands in IBS (industrialized building system) is recovering. Additionally, mobile communication facility
related field for overseas is acquiring more inquiries from new clients little by little.
Demands for the optical transmission device, digital signal processor, etc. are increasing for disaster measures,
business-use wireless and surveillance system in the public filed, and therefore we will work on further demand
expansion in the public filed as well as positively working on self-developed products including product development
for the fifth-generation mobile communication related market.
Order receipt condition in general is improving, and we will continue to promote expansion of our group’s businessfield and also continue the activities for profit expansion by proposal and enhancement of self-development products.
We have actively promoted development and sales of the photovoltaic power plant and small wind power plant
especially among the renewable energy system sales business. Considerable amount of period is still required forcompletion of the certification procedures, but the procedures for the cases which filed application since last year
have been completed and accordingly inquiries from new clients are increasing little by little. We will continue thesales activity of photovoltaic power plant, etc. for profit expansion.
In the renewable power plant business, each of the already-operating photovoltaic power plants has been selling
power at a good rate, and the mega solar power plant in Goto City, Nagasaki Pref. and the solar sharing plants in
Shimada City, Shizuoka Pref. are engaged in power selling more in full scale since the current term. In addition,
power selling at the mega solar power plant in Noboribetsu City, Hokkaido started on November 2, 2018. On theother hand, we assigned Kamo Power Plant in Kasumigaura City owned by our group as of December 3, 2018, andrecorded special profit of 132 mil. yen.
As the result of the above, the amount of orders received in the current 3Q consolidated cumulative period was
2,682 mil. yen (0.8% decrease compared with the same term of the previous year), and the sales amount was 2,475
mil. yen (24.0% increase compared with the same term of the previous year). In terms of profit and loss, operating
loss was 15 mil. yen (operating loss of the same term of the previous year: 96 mil. yen), ordinary loss was 145 milyen (ordinary loss of the same term of the previous year: 174 mil. yen), and quarterly net loss belonging to the parent
company shareholders was 37 mil. yen (quarterly net loss belonging to the parent company shareholders of thesame term of the previous year: 182 mil. yen).
For the electronic and communication device business, in addition to sales expansion activities mainly in the public
related market, we are focusing on exploration of new clients. Especially in the civil service field, the demands arestably increasing and it is expected to shift steadily hereafter. We will continue to promote expansion of our group’sbusiness fields and also continue the activities for profit expansion by enhancement of proposal of self-developed
products.
For the renewable energy plant business, we entered into the memorandum on January 25, 2019 concerningbusiness cooperation for wind power plant business with AURA-Green Energy who secures the power selling right ofsmall wind power generation in Hokkaido and Aomori Pref. The details of this memorandum are that ①AURAGreen Energy shall assign the power selling right of wind power generation and the land to be used for the business
to SPC organized or founded by us, ②both companies shall jointly invest to the investment portion of SPC, ③bothcompanies shall aim for commencement of power selling at 150 wind power plants within three years since theconclusion date of the Memorandum, ④we shall issue share acquisition rights to the president of AURA-Green
Energy, ⑤we shall be obligated to make effort for procurement by debt including loan, etc. of SPC. We consider
that we can contribute to our group’s future profit by processing construction of the small wind power plants under the
Memorandum as much as possible.
Through these efforts, we will continuously endeavor not only to reduce CO2, but also to contribute to thecommunity and society and to introduce, spread and promote renewable energy by taking advantage ofcharacteristics of the community, and accelerating development of community-based renewable energy.

―3―Management result status by business type segments is as follows.
Classification of the report segments was changed from 1Q consolidated accounting period. See “2. Quarterly
Consolidated Financial Statements and Major Nots (3) Notes for Quarterly Consolidated Financial Statements (segment
information, etc.), Segment information” for details. The following is comparison of the value of the same term of theprevious year with the value after changing to the segment classification after change.
a. Electronic / communication device business
As the result that expansion of order receipt in the mobile communication field, civil service and public related
field has been focused on, and that improvement of operational efficiency has been promoted, the amount oforders received was 2,479 mil. yen (43.1% increase compared with the same term of the previous year), sales
amount was 1,668 mil. yen (1.7% increase compared with the same term of the previous year), and segment
loss was 19 mil. yen (58.7% decrease compared with the same term of the previous year).
b. Renewable energy system sales businessAlthough it requires a considerable amount of period for completion of certification procedures by the revised FIT
Act, as the result that lot selling of photovoltaic power plant and others has been focused on, the amount oforders received was 202 mil. yen (79.2% decrease compared with the same term of the previous year), sales
amount was 333 mil. yen (272.4% increase compared with the same term of the previous year), and segment
loss was 24 mil. yen (segment loss of the same term of the previous year was 103 mil. yen).
c. Renewable energy plant business
Each of the already-operating photovoltaic power plants has been selling power at a good rate, and the mega
solar power plant in Goto City, Nagasaki Pref. and the solar sharing plants in Shimada City, Shizuoka Pref. areengaged in power selling more in full scale since the current term. In addition, power selling at the mega solar
power plant in Noboribetsu City, Hokkaido started on November 2, 2018. As a result, the sales amount was
498 mil. yen (88.5% increase compared with the same term of the previous year) and segment profit was 153
mil. yen (80.5% increase compared with the same term of the previous year).

(2)

Explanation on the financial status“Partial Amendments of ‘Accounting Standard for Tax Effect Accounting’” (ASBJ Statement No.28, Feb. 16, 2018),
etc. have been applied since the beginning of 1Q quarterly consolidated accounting period, and comparison is madewith the value after retroactively applying this standard for analysis of the financial status.
③ Analysis of financial status(Asset)Gross asset of term-end of the current 3Q consolidated accounting period was 9,694 mil. yen, which was 1,484
mil. yen less than that of the term-end of the previous consolidated accounting year.
This was mainly because the tangible fixed asset reduced due to assignment of Kamo Power Plant in
Kasumigaura.
(Debt)
Debt of term-end of the current 3Q consolidated accounting period was 6,545 mil. yen, which was 1,423 mil. yenless than that of the term-end of the previous consolidated accounting year.
This was mainly due to repayment of long-term accounts payable resulting from the installment sales agreement.
(Net asset)
Net asset t of term-end of the current 3Q consolidated accounting period was 3,148 mil. yen, which was 61 mil. yenless than that of the term-end of the previous consolidated accounting year.
This was mainly because of recording of dividend payment and quarterly net loss belonging to the parent’s company
shareholders.
② Business and financial issues to be tackled
There is no material matters of business and financial issue to be tackled which newly occurred during the current
3Q consolidated cumulative period.
③ Research and development activities
Amount of research and development activities of the entire group during the current 3Q consolidated cumulative
period is 134 mil. yen.
In addition, there is no material change in the status of our group’s research and development activities during thecurrent 3Q consolidated cumulative period.

―4―

(3) Explanation on the future forecast information of the consolidated performance forecast, etc.
There is no change in the performance forecast announced on Jan 18, 2019.

―5―

2.Quarterly Consolidated Financial Statements(1) Quarterly consolidated balance sheets(In thousand yen)
FY 2017 (consolidated)(As of March 31,2018)

3Q FY 2018 (consolidated)(As of December 31, 2018)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable

1,718,000
1,377,764

1,261,133
991,637

Merchandise and finished goods
Work in process

157,216
176,416

265,497
488,356

Raw materials and supplies
Advance payments - trade

135,063
582,049

189,375
507,762

Other
Total current assets

525,287

183,273

4,671,798

3,887,035

Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation

452,374

536,582△322,700△331,937

Buildings and structures-trade, net

129,673

204,645

Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehiclestrade, net
Tools, furniture and fixtures
Accumulated depreciation

5,392,318

4,487,549△375,919△491,532

5,016,399

3,996,016

Tools, furniture and fixtures-trade, net
LandConstruction in progress
Total property, plant and equipment

665,628

790,993△587,760△625,229

77,868

165,763

382,049
45,326

387,466
15,5905,651,317

4,769,483

207,554
66,320218,01450,266

Intangible assets
Goodwill
Software
Other

0

0

273,875

268,280

Operational investment securities
Long-term loans receivable

26,172
103,809

19,12455,728Deferred tax assets
Other

132,765
300,557

123,749
549,601

Total intangible assets
Investments and other assets

Allowance for doubtful accounts△8,700△8,700Total investments and other assets

554,605

739,504

6,479,798

5,777,268

911

5,151

129
26,108107
24,707

Total non-current assets
Deferred assets
Share issuance cost
Development expenses
Business commencement expenses
Total deferred assets
Total assets―6―

27,14929,966

11,178,746

9,694,270

(In thousand yen)
FY 2017 (consolidated)(As of March 31,2018)

3Q FY 2018 (consolidated)(As of December 31, 2018)

Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable

411,372
461,800

413,139
79,464Current portion of long-term loans payable
Lease obligations

733,551
201,494

519,506
208,437

Accounts payable - other
Income taxes payable

164,435
13,437144,003
20,749Advances received
Provision for bonuses

238,622
66,637464,291
32,612

Provision for product warranties
Other

12,51986,26912,541
163,765

2,390,139

2,058,511

Long-term loans payable
Lease obligations

523,261
3,625,902

346,830
3,473,136

Deferred tax liabilities
Net defined benefit liability

1,049
176,616

1,496
183,974

55,0481,190,558

55,510361,318

6,013

64,776

5,578,449

4,487,043

7,968,589

6,545,555

1,748,137
1,065,087

1,748,137
1,043,371

466,480

428,540

Total current liabilities
Non-current liabilities

Asset retirement obligations
Long-term accounts payable - other
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury shares△61,313△61,313

Total shareholders' equity

3,218,392

3,158,736

3,543△3,563△12,774△7,453△9,230△11,016

Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Valuation difference on available-for-salesecurities
Accumulated other comprehensive income
Share acquisition rights
Total net assets
Total liabilities and net assets

―7―

994

994

3,210,156

3,148,715

11,178,746

9,694,270

(2) Quarterly consolidated statements of income and Quarterly consolidated statements of comprehensive income Quarterly
Consolidated statements of income
Consolidated third quarter period

Net Sales
Cost of sales

3Q FY2017(from April 1, 2017 to
December 31,2017)
1,997,404
1,372,145(In thousand yen)
3Q FY 2018(from April 1,2018 to
December 31,2018)
2,475,900
1,671,344

Gross profit

625,259804,555

Selling, general and administrative expenses

721,541

788,572

Operating loss（△）△96,282

15,983Non-operating income
Interest income

6,560

5,543

Dividend income
Insurance income

355
758

494
2,941

-

102

793

-

Exchange gain
Share of profit of entities accounted for using
equity method
Other

4,921

8,623

Total non-operating income

13,38917,70683,542

171,505

-

1,201

3,249
4,395

6,010

Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity
methodForeign exchange losses
Other
Total non-operating expenses

91,187

178,717△174,080△145,027

Gain on sales of non-current assets
Other

1,298
22

133,844-

Total extraordinary income

1,321

133,844

12

424

12

424

Ordinary loss（△）
Extraordinary income

Extraordinary losses
Other
Total extraordinary losses
Loss before income taxes（△）△172,771△11,607

Income taxes - current

3,444

15,686

Income taxes - deferred

6,154

10,645

Total income taxes

9,599

26,332△182,370△37,939--△182,370△37,939

Loss（△）
Loss attributable to non-controlling interests（△）
Loss attributable to owners of parent（△）―8―

Quarterly consolidated statements of comprehensive income
Consolidated second quarter period(In thousand yen)
3Q FY 2018(from April 1,2018 to
December 31,2018)

3Q FY2017(from April 1, 2017 to
December 31,2017)
Net Loss for the Quarter（△）
Accumulated other comprehensive income
Valuationdifferenceonavailable-for-salesecurities
Foreign currency translation adjustment△182,370△37,939

3,831△7,107

806

5,321

4,638

△1,786Comprehensive income△177,732△39,726（breakdown）
Comprehensive income attributable to owners ofparentComprehensive income attributable to noncontrolling interests△177,732△39,726--

Total other comprehensive income―9―(Segment information, etc.)【Segment information】
I. Previous 3Q consolidated cumulative period (from April 1, 2017 to December 31, 2017)
Information concerning the sales amount and the amount of profit or loss per report segment
Report segment

Renewable
Electronic /energycommunicatio
system salesn devicebusinessbusiness

Renewableenergygeneration
business(unit: thousand yen))Amountrecorded inquarterly
Adjusted
consolidated
amountprofit and loss
(Note) 1
Electronic /statement
communicatio Renewable(Note) 2
energy systemn device
Renewablebusiness sales businessenergygeneration
business

Sales amount
Sales amount to externalclients
Internal sales amount ortransfer amount between
segments

1,639,763

89,491

264,270

1,993,526

3,878

1,997,404

―

―

―

―

―

―

Total

1,639,763

89,491

264,270

1,993,526

3,878

1,997,404

48,005△103,519

85,211

29,697△125,979△96,282

Segment profit or loss (△)(Note) 1. Adjusted amount of segment profit or loss (△) △125,979 thousand yen is adjusted amount of unrealized
profit, etc. 3,983 thousand yen, adjusted amount of dividends from the consolidated subsidiary △79,500
thousand yen and profit and loss of group management division not distributed to business segment△50,462 thousand yen.
2. Segment profit or loss (△) matches operating loss (△) in the quarterly consolidated profit and loss
statement.
II. Current 3Q consolidated cumulative period (from April 1, 2018 to December 31, 2018)
Information concerning the sales amount and the amount of profit or loss per report segment
Report segment
Renewable
Electronic /energycommunicatio
system salesn devicebusinessbusiness

Renewableenergygeneration
business

Total(unit: thousand yen)Amountrecorded in
Adjustedquarterly
amountconsolidated(Note) 1
profit and loss
statement(Note) 2

Sales amount
Sales amount to externalclients
Internal sales amount ortransfer amount between
segments

1,668,144

305,176

498,1882,471,508

4,392

2,475,900―

28,126―28,126△28,126―

Total

1,668,144

333,303498,1882,499,635△23,734

2,475,900

Segment profit or loss (△)

19,847△24,388

153,786

149,244△133,261

15,983(Note) 1. Adjusted amount of segment profit or loss (△) △133,261 thousand yen is adjusted amount of unrealized
profit △4,681 thousand yen, adjusted amount of dividends from the consolidated subsidiary △52,500
thousand yen, transaction deletion between segments △6,000 thousand yen, and profit and loss of groupmanagement division not distributed to business segment △79,433 thousand yen.
2. Segment profit or loss (△) matches operating loss (△) in the quarterly consolidated profit and loss statemen t.

―10―

2. Matters concerning change, etc. in report segment
Our group’s report segment classification had been four segments of “Electronic / communication device business,”“Renewable energy system sales business,” “Photovoltaic power plant business” and “Geothermal power plant business,”but we changed it into three segments of “Electronic / communication device business,” “Renewable energy system sales
business” and “Renewable energy generation business” from the current 1Q consolidated accounting period.
This was because the major power generation plant we owned was the photovoltaic power plant in renewable energy
business, but we are engaged in business development and consideration of general renewable energy plants other thanphotovoltaic power plants, such as wind power plant, etc., and therefore we changed the report segments in order to reflect
our group’s actual activity situation. The report segments of the previous 3Q consolidated cumulative period are listed withwhat was created by classification after the change.

―11―