ANNUAL REPORT 2016
Year Ended March 31, 2016

Mission Statement
The Shape of Our Future: “Creation of Fulfillment”
Each employee, with a good conscience and hope for the future,
will create fulfillment for our society.
Through advanced technology and scrupulous attention to detail,we will create fulfillment for our customers.
With pride and a desire to grow, we will create fulfillment
for the EXEDY family.

1-1-1, Kidamotomiya, Neyagawa-shi, Osaka, 572-8570, Japan
Tel: 81-72-822-1152 Fax: 81-72-822-7552
URL http://www.exedy.com

H Printed in Japan
2016.7.800. 602 ○Consolidated Financial Highlights
EXEDY CORPORATION AND CONSOLIDATED SUBSIDIARIES
Years ended March 31, 2015 and 2016
Japanese yen(millions)

U.S. dollars(thousands)%
ChangeFY2014 / FY2015

FY2014FY2015FY2015\ 256,011\ 268,752$ 2,385,092

+5.0%

9,503

12,013

106,615+26.4%

Total assets

260,972

259,2732,300,975-0.7%

Net assets

170,326

173,526

1,539,991+1.9%

For the year:
Net sales
Profit attributable to owners of parent

At year-end:

Japanese yen

Per share data:

U.S. dollars

Profit attributable to owners of parent\ 197.96\ 250.17

2.22+26.4%Net assets

3,294.13

3,366.87

29.88

+2.2%

70.00

70.00

0.62

－

Cash dividends$

Note：U.S. dollar amounts are included solely for the convenience of readers, translated at the rate of \ 112.68 to U.S. $1.00.

Net Sales(Millions of yen)

FY2015

268,752

FY2014

256,011

FY2013

234,262

FY2011201,931

FY2011150,000

200,000

250,000

Profit attributable to owners of parent

FY2015(Millions of yen)

9,503

FY2013

12,268FY20122,000

Annual Report 2016

4,000

6,000

8,000

10,000191.21

20

40

60

80

100 120 140 160 180 200 220 240 260 280

Net Assets Per Share of Common Stock

12,00014,000(Yen)

FY20153,366.87

FY2014

3,294.13

FY20133,032.56
2,642.60

FY20119,221

0201.95FY20129,722

FY2011

255.580

12,013

FY2014

197.96FY2013
FY2012100,000

250.17FY2014202,236

50,000(Yen)

FY2015FY20120

1

Net Income Per Share of Common Stock2,386.53

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Business Operations
Review of Fiscal Year 2015

Outlook of Fiscal Year 2016

We have, through both steady orders and theincrease in orders from products, the delivery ofwhich started during the previous consolidated
accounting period, reached record sales for FY
2015’ s consolidated accounting period. As for profit,in spite of things such as increases due todepreciation and amortization costs caused byinvestments in facilities and equipment, ouroperating income rose as a result of increased sales
and a drop in the exchange rate for the yen. Our
overall business results for this accounting period
are as follows: net sales of \268.7 BN (a 5.0%
increase compared to FY 2014), operating income of\21.3 BN (a 19.1% increase compared to FY 2014),
ordinary profit of \18.1 BN (a 7.5% decrease
compared to FY 2014), and Profit attributable toowners of parent amounting to \12 BN (a 26.4%
increase compared to FY 2014).

Our forecasts for the next period estimate that in spiteof having steady base quantities for orders centered aroundour overseas operations, the recent effect caused by therise in the exchange rate of the yen will cause a decrease insales. As for profit, we expect to experience strict conditions
due to changes in the composition of our sales, as well as
due to increases in depreciation/amortization costs andpersonnel expenses in the ASEAN region; however, we will
endeavor to secure profit and conduct streamlined
operations that will raise the overall strength of EXEDYGroup’ s business operations, which are centered aroundour fields of production. Due to the abovementioned items,
we expect the following for FY 2016: net sales of \250 BN(a decrease of 7.0% compared to FY 2015), operating
income of \18.5 BN (a decrease of 13.2% from FY 2015),
ordinary profit of \18 BN (a decrease of 0.6% from FY2015), and Profit attributable to owners of parent
amounting to \12 BN (a decrease of 0.1% from FY 2015).
July, 2016
Hidehito Hisakawa
President and Chief Exective Officer

Hidehito Hisakawa (President and Chief Executive Officer)

Annual Report 20162

Consolidated Sales (Unit : \ million)
TS, Motorcycle

ATMT

268,752

FY2015

256,011

FY2014

234,262

FY2013
FY2012

202,236

FY2011201,93150,0003

Annual Report 2016

100,000

150,000

200,000

EXEDY Nara Co.,Ltd.

250,000
Annual Report 20164

Consolidated Sales (Unit : \ million)
TS, Motorcycle

ATMT

268,752

FY2015

256,011

FY2014

234,262

FY2013
FY2012

202,236

FY2011201,93150,0003

Annual Report 2016

100,000

150,000

200,000

EXEDY Nara Co.,Ltd.

250,000
Annual Report 2016

4

Topics of the Year
Manufacturing
New Automated Lines Introduced at EXEDY Headquarters and Ueno Division
EXEDY’s automated torque converter line, which is located at our Ueno Division, was established and has entered
manufacturing operations. We also, at our headquarters located in Osaka, established an automated clutch cover line that has
already entered production.
Automated Torque Converter Line

Automated Clutch Cover Line

EXEDY Produces a Total of 300 Million Clutch Cover Units
The total number of clutch covers produced by EXEDY Grouphas reached 300 million units. In order to celebrate this, we,on December 1, 2015, held a commemorative ceremony
at one of EXEDY Headquarters’ factories.

Sales
EXEDY Establishes a New Company in Singapore and
Begins Sales Operations
On August 4, 2015, EXEDY established its newcompany EXEDY Singapore (ESP) as a newsales location aimed at the Southeast Asianmarket, and, on October 1, 2015, ESP begansales operations.

5

Annual Report 2016

Consolidated Five-Year Summary
EXEDY CORPORATION AND CONSOLIDATED SUBSIDIARIES
Years ended March 31
Japanese yen(millions)

FY2011For the year:
Net sales
Profit attributable to owners of parent

FY2012FY2013

U.S. dollars(thousands)

FY2014FY2015FY2015

		
		
		
		
		
		
\ 201,931\ 202,236\ 234,262\ 256,011\ 268,752$ 2,385,092

9,221

9,722

12,268

9,503

12,013

106,615

		

		

		
		

		

		

		
		

Total assets\ 176,038\ 196,375\ 230,740\ 260,972\ 259,273$ 2,300,975

Current assets

96,13897,723

114,306

122,941

121,420

1,077,565

Property, plant and equipment

71,091

88,589103,819

125,182

127,109

1,128,059

Current liabilities

37,487

38,734

48,32552,09355,497492,524

At year-end:

Long-term debt
Net assets
Shareholders' equity ratio
Retained earnings
Per share data:
Profit attributable to owners of parent
Profit attributable to owners of parent  - diluted
Net assets

9,837

14,903

19,15929,02021,629191,956

122,041

135,710

155,930

170,326

173,526

1,539,991

65.3 %
109,60764.6 %
116,91463.1 %
126,783

62.4 %

60.6 %
131,668		
Japanese
yen
		

		

62.4%

140,318

1,245,280
U.S. dollars\ 191.21\ 201.95\ 255.58\ 197.96\ 250.17

－

－

－

－

－

$

2.22

－

2,386.53

2,642.60

3,032.56

3,294.13

3,366.87

29.88

Note : U.S. dollar amounts are included solely for the convenience of readers, translated at the rate of  \ 112.68 to U.S. $1.00.

Financial Section
Consolidated Five-Year Summary

6

Consolidated Balance Sheets

7

Consolidated Statements of Income

9

Consolidated Statements of Comprehensive Income

10

Consolidated Statements of Changes in Net Assets

10Consolidated Statements of Cash Flows12

Notes to Consolidated Financial Statements

13

Independent Auditors' Report

33

Corporate Data

34

Annual Report 20166

Consolidated Balance Sheets
EXEDY CORPORATION AND CONSOLIDATED SUBSIDIARIES
Years ended March 31, 2015 and 2016
Japanese yen(millions)

ASSETS

FY2014

U.S. dollars(thousands)

FY2015FY2015Current Assets:		
Cash and deposits (Notes 17 and 20)\

Notes and accounts receivable (Notes 6, 17 and 18)

31,975$ 283,775

46,651

48,530430,697

14,001

13,109116,342

33,808\Inventories (Notes 2 and 6) Finished goods
Work-in process

6,148

6,049

53,683

Raw materials and Supplies

11,52911,12098,693

3,774

3,873

34,377

331

231

2,058

Other current assets

6,818

6,751

59,921

Allowance for doubtful accounts

(122)

(223)

(1,983)

122,941

121,420

1,077,565

Land

11,383

11,549102,502

Buildings and structures, net

35,201

36,089320,282

Machinery and vehicles, net

58,586

63,210560,977

Tools and furniture, net

8,344

7,905

70,157

Construction in progress

11,665

8,354

74,139125,182

127,109

1,128,059

Intangible assets

3,695

3,759

33,362

Investments in securities (Notes 3, 4 and 17)

4,394

3,292

29,216

346

311

2,760

Asset for retirement benefits (Note 10)

1,126

1,049

9,316

Deferred tax assets (Note 9)

1,611

544

4,835

Other assets

1,715

1,827

16,215

(41)

(40)

(357)

12,848

10,74495,350259,273$ 2,300,975

Deferred tax assets (Note 9)
Short-term loans to non-consolidated subsidiaries and affiliates

Total current assets						Property, Plant and Equipment (Notes 5 and 6) :		

Total property, plant and equipment						Investments and Other Assets: 		Long-term loans to non-consolidated subsidiaries and affiliates

Allowance for doubtful accounts
Total investments and other assets						
Total Assets		

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

7 Annual Report 2016\

260,972\

Japanese yen(millions)

LIABILITIES AND NET ASSETS

U.S. dollars(thousands)

FY2014FY2015FY2015\ 20,870\ 19,266$ 170,988

9,319

9,751

86,540－7,000

62,122

Accrued expenses (Note 17)

8,638

8,801

78,108

Accrued income taxes (Note 17)

1,562

1,839

16,325

Provision for product warranties

2,963

1,399

12,417

Other current liabilities

8,738

7,439

66,02052,09355,497492,524

Current Liabilities:		
Notes and accounts payable (Note 17)
Short-term borrowings (Notes 6, 7 and 17)
Current portion of bonds (Notes 7 and 17)

Total current liabilities				Long-term Liabilities:				

Bonds payable (Notes 7 and 17)

7,000

－

－

Long-term debt (Notes 7 and 17)

22,02021,629191,956

Long-term other accounts payable

463

356

3,159

Deferred tax liabilities (Note 9)

3,691

2,403

21,330Liability for retirement benefits (Note 10)

4,809

5,178

45,956

28

28

255

Asset retirement obligations

538

653

5,801

38,55230,250268,459

8,284

8,284

73,519

7,556

7,564

67,128Retained earnings

131,668

140,318

1,245,280

Treasury stock		

Other long-term liabilities
Total long-term liabilities
				Contingent Liabilities (Note 18)		

		

		

		

Net Assets				

Shareholders' Equity:				Common stock
Authorized - 168,000 thousand shares at March 31, 2015 and 2016
Issued - 48,593 thousand shares at March 31, 2015 and 2016
Capital surplus

583 thousand shares at March 31, 2015 and 568 thousand shares at March 31, 2016
Total shareholders' equity
Accumulated Other Comprehensive Income		

(1,480)(1,444)(12,823)

146,028

154,721

1,373,104

		Valuation difference on available-for-sale securities

1,587

920

8,165

Foreign currency translation adjustments

10,524

6,224

55,23912(172)(1,533)12,124

6,971

61,872

11,833105,014173,526

1,539,991\ 259,273$ 2,300,975

Remeasurements of defined benefit plans (Note 10)
Total accumulated other comprehensive income				

Non-controlling interests 						

12,172
		Total net assets

170,326

				Total Liabilities and Net Assets		

\ 260,972

Annual Report 20168

Consolidated Statements of Income
EXEDY CORPORATION AND CONSOLIDATED SUBSIDIARIES
Years ended March 31, 2015 and 2016
Japanese yen(millions)

Net Sales 				
Cost of Sales 		Gross profit		Selling, General and Administrative Expenses		
Packing and haulage expenses
Provision for product warranties
Provision of allowance for doubtful accounts
Director's remuneration and salary and other allowances
Welfare expense
Retirement benefit cost
Depreciation
Research and development expenses (Note 11)
Other, net
Total selling, general and administrative expenses
Operating income
		Non-operating Income : 		Interest income
Dividend income
Rent income
Income from sponsorship
Gains on sale of property, plant and equipment
Gains on sales of investment securities
Foreign exchange gains
Examination trust profit
Share of profit of entities accounted for using equity method
Other, net
Total non-operating income
		Non-operating Expenses : 		Interest expense
Bond interest
Losses on sale or disposal of property, plant and equipment
Foreign exchange losses
Other, net
Total non-operating expenses
Ordinary Profit		Special Loss : 		Provision for product warranties
Losses on sales of investment securities
Total special loss
Income before income taxes and non-controlling interests  		
Income Taxes (Note 9)		Current
DeferredProfitProfit attributable to non-controlling interests  		Profit attributable to owners of parent
		
Per Share Data (Note 15) :		
Profit attributable to owners of parent
Profit attributable to owners of parent - diluted		
Cash dividends
The accompanying notes to the consolidated financial statements are an integral part of these statements.

9 Annual Report 2016

U.S. dollars(thousands)

FY2014FY2015FY2015\ 256,011
		206,284
49,727\ 268,752
		214,152
54,600$ 2,385,092
		1,900,533
484,559

		
6,752
304
44
8,224
1,546
77
2,108
5,208
7,572
31,83917,887

		
6,349
1,125
－
8,721
1,765
172
2,296
5,374
7,488
33,29421,305

		
56,354
9,991－
77,404
15,664
1,527
20,376
47,69966,456295,475
189,083

		
182
79
133
118
85
－
1,675
62
121
593
3,051

		
139
64
130
151
46
375
－
8
51
736
1,704

		
1,237
568
1,159
1,343
414
3,336
－
77
454
6,539
15,130

		
774
35
163
－
382
1,356
19,582

		
1,089
35
320
2,677
776
4,898
18,112

		
9,667
313
2,846
23,7576,890
43,475
160,738

		
2,200
68
2,269
17,313

		
－－－18,112

		

		
5,755
1,060
10,496992
		\ 9,503

		
4,996
238
12,876863
		\ 12,013

		
44,344
2,118
114,275
7,660
		
$ 106,615

Japanese yen\ 197.96
－
		
70.00

\ 250.17
－
		
70.00

－
－
－
160,738

U.S. dollars
$

2.22
－
		
0.62

Consolidated Statements of Comprehensive Income
EXEDY CORPORATION AND CONSOLIDATED SUBSIDIARIES
Years ended March 31, 2015 and 2016
Japanese yen(millions)

ProfitU.S. dollars(thousands)

FY2014FY2015FY2015\ 10,496\ 12,876

114,275

Other Comprehensive Income
529

(667)

(5,927)

Foreign currency translation adjustments

8,604(4,956)(43,990)

Remeasurements of defined benefit plans

(71)

(185)

(1,645)

Share of other comprehensive income of associates accounted for the using equity method

(23)

(4)

(37)

Valuation difference on available-for-sale securities

Total other comprehensive income (Note 19)(5,814)

9,038

Comprehensive Income		\ 19,535(51,600)

7,062

\

$

62,675Comprehensive Income attributable to:
Owners of the parent

17,1766,860

60,885

Non-controlling interests

2,358

201

1,790

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

Consolidated Statements of Changes in Net Assets
EXEDY CORPORATION AND CONSOLIDATED SUBSIDIARIES
Years ended March 31, 2015 and 2016
Japanese yen (millions)Shareholders' Equity
CommonStock
Balance at April 1, 2014
Cumulative effects of changes
in accounting policies
Restated balance
Profit attributable to owners of parent
Purchase of treasury stock
Disposal of treasury stock
Dividends of surplus
Other, net
Balance at March 31, 2015

\

8,284

CapitalSurplus\7,543

Retained
Earnings\ 126,783

Treasury
Stock\(1,478)

Total
Shareholders'Equity\ 141,132

(777)
\

8,284

\

7,543

\ 126,005
9,503

13

\

8,284

\

7,556

(777)
\

(0)
(1)

(3,840)\ 131,668(1,478)\(1,480)\ 140,354
9,503
(0)
12
(3,840)\ 146,028
Japanese yen (millions)

Balance at April 1, 2014
Cumulative effects of changes
in accounting policies
Restated balance
Profit attributable to owners of parent
Purchase of treasury stock
Disposal of treasury stock
Dividends of surplus
Other, net
Balance at March 31, 2015

Accumulated Other Comprehensive Income
Valuation
Foreign
Remeasurements Total Accumulated
Difference on
Currency
Otherof definedComprehensive
Available-for-saleTranslation
benefit plans
IncomeSecurities
Adjustments
1,058
3,308
84
4,451
\
\
\
\

Non-controllinginterests

Total
net
Assets\

10,346\ 155,930\ 155,153
9,503
(0)
12
(3,840)9,498\ 170,326

(777)
\

1,058

\

3,308

\

84

\

4,451

\

10,346

\

529
1,587

\

7,215
10,524

\

(71)
12

\

7,672
12,124\

1,826
12,172

Annual Report 201610

Japanese yen (millions)Shareholders' Equity
CommonStock
Balance at April 1, 2015
Cumulative effects of changes
in accounting policies
Restated balance
Profit attributable to owners of parent
Purchase of treasury stock
Disposal of treasury stock
Dividends of surplus
Other, net
Balance at March 31, 2016

CapitalSurplusRetained
Earnings

Treasury
Stock

\

8,284

\

7,556

\ 131,668\(1,480)

\

8,284

\

7,556

\ 131,668
12,013\(1,480)

7

\

8,284

\

7,564

(1)
36

(3,363)\ 140,318(1,444)\

Total
Shareholders'Equity\ 146,028\ 146,028  
12,013(1)
44(3,363)\ 154,721
Japanese yen (millions)

Balance at April 1, 2015
Cumulative effects of changes
in accounting policies
Restated balance
Profit attributable to owners of parent
Purchase of treasury stock
Disposal of treasury stock
Dividends of surplus
Other, net
Balance at March 31, 2016

Accumulated Other Comprehensive Income
Valuation
Foreign
Remeasurements Total Accumulated
Difference on
Currency
Otherof definedComprehensive
Available-for-saleTranslation
benefit plans
IncomeSecurities
Adjustments
1,587
12
\
\ 10,524\\ 12,124

Non-controllinginterests

Total
net
Assets\12,172\ 170,326\ 170,326
12,013(1)
44(3,363)(5,492)\ 173,526

－
\

1,587

\

10,524\12\

12,124\

12,172

\

(667)
920

\

(4,299)
6,224

\

(185)
(172)

\

(5,152)
6,971

\

(339)
11,833

U.S. dollars (thousands)
Shareholders' Equity
CommonStock
Balance at April 1, 2015
Cumulative effects of changes
in accounting policies
Restated balance
Profit attributable to owners of parent
Purchase of treasury stock
Disposal of treasury stock
Dividends of surplus
Other, net
Balance at March 31, 2016

CapitalSurplusRetained
Earnings

TreasuryStock$73,519$67,061$1,168,518$ (13,138)$

73,519$67,061$1,168,518
106,615$ (13,138)

66$

73,519$67,128(11)
326(29,853)$1,245,280$ (12,823)

Total
Shareholders'Equity$1,295,961$1,295,961
106,615(11)393(29,853)$1,373,104
U.S. dollars (thousands)

Balance at April 1, 2015
Cumulative effects of changes
in accounting policies
Restated balance
Profit attributable to owners of parent
Purchase of treasury stock
Disposal of treasury stock
Dividends of surplus
Other, net
Balance at March 31, 2016

Accumulated Other Comprehensive Income
Valuation
Foreign
Remeasurements Total Accumulated
Difference on
Currency
Otherof definedComprehensive
Available-for-saleTranslation
benefit plans
IncomeSecurities
Adjustments$ 14,092$ 93,397$
111$ 107,602

Total
net
Assets$ 108,031$ 1,511,594－$

14,092$93,397$111$(5,927)8,165$(38,157)
55,239$(1,645)(1,533)

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

11 Annual Report 2016

Non-controllinginterests$ 107,602$ 108,031(45,729)
61,872(3,017)$ 105,014$$ 1,511,594
106,615(11)393(29,853)(48,747)$1,539,991

Consolidated Statements of Cash Flows
EXEDY CORPORATION AND CONSOLIDATED SUBSIDIARIES
Years ended March 31, 2015 and 2016
Japanese yen(millions)

U.S. dollars(thousands)

FY2014FY2015FY2015\ 17,313\ 18,112$ 160,738

Cash Flows from Operating Activities:
Income before income taxes and non-controlling interests
Adjustments for :14,363

16,925150,210(Gains) losses on sale or disposal of property, plant and equipment  

72

274

2,432

Increase (decrease) in allowance for doubtful accounts

(0)

95

850

(Increase) decrease in asset for retirement benefits

(210)

77

684

Increase (decrease) in liability for retirement benefits

275

84

749

Increase (decrease) in provision for product warranties

1,804(1,551)(13,768)

Interest and dividend income

(261)

(203)

(1,805)Interest expense

809

1,124

9,980

(Increase) decrease  in notes and accounts receivables(1,126)(3,296)(29,251)(Increase) decrease in inventories(1,744)

97

869

(592)

(529)

(4,695)

Depreciation and amortization

Increase (decrease) in notes and accounts payables
Increase (decrease) in long-term other accounts payable
Other, net

(25)

(68)

(603)

(3,577)

1,639

14,551
290,943

27,10132,783

Interest and dividend income received

330

244

2,167

Interest paid

(803)

(1,104)(9,798)(8,932)(4,756)(42,216)

17,69627,166

241,096

Increase in time deposits

(0)  

(376)

(3,339)Decrease in time deposits

1

40

355

(25,304)(24,344)(216,047)

Subtotal

Income taxes paid
Net cash provided by operating activities
Cash Flows from Investing Activities:

Payments for purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment

225

170

1,510

Payments for acquisitions of intangible assets

(814)

(841)

(7,470)

Payments for purchases of investment in securities

(36)

(13)

(115)

－

558

4,953

Payments for acquisition of consolidated subsidiaries involving changes in scope of consolidation

－

(961)

(8,530)Additions to loans receivable

(1)

(4)

(43)

Collection of loans receivable

273

139

1,237

Proceeds from sales of investment securities

Other, net
Net cash used in investing activities

9

(103)

(918)

(25,647)(25,737)(228,409)

240

144

1,286

Cash Flows from Financing Activities:
Increase (decrease) in short-term borrowings, net
Proceeds from long-term loans payable

10,833

5,784

51,339

Repayments of long-term loans payable(2,357)(4,782)(42,439)

(0)  

(1)

(11)

(3,846)(3,363)(29,853)

Dividends paid to non-controlling interests

(532)

(568)

(5,043)

Other, net

(35)

(15)

(135)

4,302

(2,800)(24,857)

Payments for acquisitions of treasury stock
Cash dividends paid

Net cash provided by (used in) financing activities
Effect of Exchange Rate Changes on Cash and Cash Equivalents

2,125

(777)

(6,902)Net Increase (Decrease) in Cash and Cash Equivalents(1,523)(2,149)(19,072)

Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year (Note 20)

35,23333,710299,166\ 33,710\ 31,560$ 280,093

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

Annual Report 201612

Notes to Consolidated Financial Statements
EXEDY CORPORATION AND CONSOLIDATED SUBSIDIARIES

1. Summary of Significant Accounting Policies(a) Basis of presenting the consolidated financial statements(c) Translation of foreign currencies

The accompanying consolidated financial statements of EXEDY
Corporation (“the Company") and its consolidated subsidiaries havebeen prepared in accordance with the provisions set forth in the
Financial Instruments and Exchange Act in Japan and its related
accounting regulations, and in conformity with accounting principles
generally accepted in Japan (“Japanese GAAP”), which are different
in certain respects as to application and disclosure requirements fromInternational Financial Reporting Standards.

Monetary assets and liabilities denominated in foreign currency aretranslated into Japanese yen at current rates at each balance sheet
date and the resulting translation gains or losses are charged to income
for the current year.

The accounts of the Company’s overseas subsidiaries are preparedin accordance with either International Financial Reporting Standards
or U.S. generally accepted accounting principles, and partially reflect
the adjustments which are necessary to conform to Japanese GAAP.
The accompanying consolidated financial statements have beenrearranged and translated into English from the consolidated financial
statements of the Company and its consolidated subsidiaries preparedin accordance with Japanese GAAP and filed with the appropriate Local
Finance Bureau of the Ministry of Finance as required by the Financial
Instruments and Exchange Act in Japan. Certain supplementary
information included in the statutory consolidated financial statements
prepared in Japanese, but not required for fair presentation, is notpresented in the accompanying consolidated financial statements.
The translation of the Japanese yen amounts into U.S. dollar amounts
is included solely for the convenience of readers outside Japan, using
the prevailing exchange rate at March 31, 2016, which was ¥112.68 to
U.S. $1.00. Such translation should not be construed as representations
that the Japanese yen amounts have been, could have been, or couldin the future be, converted into U.S. dollars at this or any other rateof exchange. Amounts are rounded down to the nearest million yen
and thousand dollars. Therefore, the total shown in the consolidated
financial statements and notes thereto do not necessarily agree with thesum of the individual account balances.

(b) Principles of consolidation
The accompanying consolidated financial statements include theaccounts of the Company and 35 (FY2014:32) significant subsidiaries
as of March 31, 2016, over which the Company has power of control
through majority voting rights or the existence of certain conditions
evidencing control by the Company.
Investments in 5 (FY2014:4) non-consolidated subsidiaries and 2(FY2014:2) affiliates as of March 31, 2016, over which the Company
has the ability to exercise significant influence over operating andfinancial policies of the investees, are accounted for using the equity
method.
In the elimination of investments in consolidated subsidiaries, the assets
and liabilities of the subsidiaries, including the portion attributable
to non-controlling interests, are measured at fair value at the time
the Company acquires control of the respective subsidiary. Materialintercompany balances, transactions and profits have been eliminatedin consolidation. All the consolidated overseas subsidiaries, except for 2
subsidiaries, EXEDY India Ltd. and EXEDY Clutch India Pvt. Ltd., havethe fiscal year ending December 31. Significant transactions occurring
during the period between January 1 and March 31, the Company’s
fiscal year-end, are adjusted for in the consolidated financial statements.

13 Annual Report 2016

The balance sheets of consolidated overseas subsidiaries are translated
into Japanese yen at the year-end rates except for shareholders' equity
accounts, which are translated at historical rates. Income statementsof consolidated overseas subsidiaries are translated at the average
rates during the year. Translation adjustments resulting from translating
financial statements whose accounts are denominated in foreign
currencies are not included in the determination of net income but arereported as “Foreign currency translation adjustments” in a componentof net assets and non-controlling interests.

(d) Securities
Securities consist principally of marketable and nonmarketable equity
securities.Available-for-sale securities with available fair value arestated at fair value. Valuation differences on available-for-sale securities
are reported, net of applicable income taxes, as a separate componentof net assets. Realized gains and losses on the sale of such securities
are computed using the moving average cost method. Available-for-salesecurities with no available fair value are stated at moving average cost.
If the fair value of available-for-sale securities declines significantly,
such securities are stated at fair value and the difference between thefair value and the carrying amount is recognized as a loss in the yearof decline. If the net asset value of available-for-sale securities withno available fair value declines significantly, such securities should be
written down to the net asset value by charging to income.

(e) Derivatives
All derivatives are stated at fair value.

(f) Inventories
Inventories held for sale except for supplies are mainly stated at thelower of cost (moving average method) or net realizable value at thebalance sheet date. Supplies are mainly stated at cost determined by
the last purchase cost method.

(g) Property ,plant and equipment (excluding leased assets)
The Company and its domestic consolidated subsidiaries compute thedepreciation of property, plant and equipment by using the decliningbalance method and its overseas consolidated subsidiaries mainly byusing the straight-line method. The depreciation of buildings acquiredby the Company and its domestic consolidated subsidiaries on and after
April 1, 1998 is computed by using the straight-line method.
Estimated useful lives of property, plant and equipment are as follows:
Buildings and structures ........... 10 - 30 years
Machinery and vehicles …........ 7 - 20 years
Tools and furniture........... 4 - 7 years(h) Intangible Assets (excluding leased assets)
Intangible assets are amortized using the straight-line method. Software
for internal use is amortized using the straight-line method overestimated in-house working life of 3 to 5 years.

(i) Leases(r) Reclassification

Finance leases, except for certain immaterial leases, are capitalized anddepreciated over lease terms, as applicable.

Certain comparative figures have been reclassified to conform to thecurrent year’s presentation.

(j) Income taxes(s) Change in Accounting Policy

The Company and its consolidated subsidiaries recognize the tax
effects of temporary differences between the carrying amounts of assets
and liabilities for tax and financial reporting purposes.

(Application of accounting standards for business combinations)
Following the adoption from the current fiscal year of AccountingStandards Board of Japan (ASBJ) Statement No.21"AccountingStandard for Business Combinations" (September 13,2013), and ASBJ
Statement No. 22 "Accounting Standard for Consolidated Financial
Statements" (September 13, 2013), and ASBJ Statement No.7
"Accounting Standard for Business Divestitures" (September 13, 2013),
the accounting method was changed to record the difference arisingfrom changes in the Company's equity in its subsidiaries that remain
under its control as capital surplus, and to record acquisition-related
costs as expenses for the fiscal year in which such expenses are
incurred. In addition, regarding business combinations which becameor will become effective on or after April 1, 2015, the accounting method
was changed to reflect the adjustment to the allocated amount of
the acquisition cost associated with the finalization of the provisional
accounting treatment, in the consolidated financial statements ofthe fiscal year in which the date of business combination belongs.
Furthermore, changes have been made to the presentation of net
income, etc. while minority interests have been changed to noncontrolling interests.

The asset and liability approach is used to recognize deferred tax assets
and liabilities for the expected future tax consequences of temporary
differences between the carrying amounts of assets and liabilities forfinancial reporting purposes and the amounts used for income tax purposes.

(k) Allowance for doubtful accounts
The Company and its consolidated subsidiaries provide for doubtful
accounts principally at an amount computed based on the historicalbad debt ratio during a certain reference period plus the estimateduncollectible amount based on the analysis of individual accounts.

(l) Provision for product warranties
The Company and its consolidated subsidiaries provide for warranty
claim costs relating to quality of products. The provision is estimatedbased on historical warranty claims ratio and other individual conditions
during a certain reference period.

(m) Employees' severance and retirement benefits
The Company and its consolidated subsidiaries provide for employees'
severance and retirement benefits at the end of the fiscal year based on
the estimated amounts of projected benefit obligation and the fair valueof the plan assets at that date.
Actuarial differences are fully recognized in expenses in the year
following the fiscal year in which the actuarial differences are incurredor in the year in which they are incurred. Prior service costs are fullyrecognized in expenses in the year in which they are incurred.

(n) Accounting for consumption taxes
Consumption taxes withheld upon sale and consumption taxes paid by theCompany and its consolidated subsidiaries on their purchases of goods
and services are not included in the amounts of respective revenue, costor expense items in the accompanying consolidated statements of income.

(o) Per share data
The computation of net income per share is based on the weighted
average number of shares outstanding during each year, excluding theCompany’s treasury stock, and based on net income attributable tocommon stockholders, excluding bonuses to directors and corporate
auditors, etc. The computation of net assets per share is based on
the number of shares of common stock outstanding at the year-end,
excluding the Company’s treasury stock, and based on net assets
attributable to common stockholders, excluding non-controlling interests.
Cash dividends per share shown in the statements of income are theamounts attributable to the respective years.

(p) Goodwill
Goodwill, except for minor goodwill, is amortized by the straight-line
method over five years. Minor goodwill is expensed as incurred.

(q) Cash and cash equivalents
Cash and cash equivalents include cash on hand, demand deposits andshort-term investments which have maturities of three months or lesswhen purchased, are easily convertible into cash and have little risk offluctuation in value.

The Accounting Standard for Business Combinations, etc. are adopted
in accordance with the transitional handling set forth in Article 58-2(4)of the Accounting Standard for Business Combinations, Article 44-5(4)of the Accounting Standard for Consolidated Financial Statements, andArticle 57-4(4) of the Accounting Standard for Business Divestitures,
effective from the beginning of the current fiscal year onward.
Impacts of this change in accounting policies in the fiscal year ended
March 31, 2016 are minor.
In the Consolidated Statement of Cash Flows, cash flows related topurchases or sales of subsidiary shares not resulting in change in scopeof consolidation are listed under “Cash flows from financing activities,”while cash flows for costs related to purchases of subsidiary shares
resulting in change in scope of consolidation or costs arising in relation
to purchases or sales of subsidiary shares not resulting in change
in scope of consolidation are listed in “Cash flows from operating
activities.”(t) Accounting standard issued but not yet adopted(Implementation Guidance on Recoverability of Deferred Tax Assets)
Implementation Guidance on Recoverability of Deferred Tax Assets(ASBJ Guidance No. 26, December 28, 2015)(1) Overview
The accounting treatment on recoverability of deferred tax assets stillbasically follows the framework of the Auditing Treatment Regarding
Judgment of the Recoverability of Deferred Tax Assets outlined in the
JICPA Industry Audit Committee Statement No. 66, i.e. a framework for
estimating deferred tax assets by classifying entities into five categories
and calculating the amount according to those categories, but it has
made the following necessary revisions on treatment.
(2) Effective date
The above revisions are scheduled to be applied from the  beginning of
the fiscal year beginning on April 1 , 2016 .
(3) Effects of application of the Accounting Standards and relevant regulations
The effects of the application are under assessment at the time of
preparing these consolidated financial statements.

Annual Report 201614

(u) Additional information
Application of the Practical Solution on Transactions of Delivering theCompany’s Own Stock to Employees etc. through Trusts
The Company conducts transactions of delivering its own shares to its
employees through a trust with the aim of improving employee welfare.
(1) Overview of transactions
At the Board of Directors meeting held on April 27, 2011, the Company
resolved the launch of “stock-granting Employee Stock Ownership Plan(“ESOP”)”, a trust-type employee incentive plan, for the purpose of
improving corporate value in the medium-and-long term by promoting
management that aims to enhance stock value as well as further
improvement in employee motivation and willingness to participate inmanagement. The Company instituted the plan on May 16, 2011.
A Trust is established by the company in which its employees whomeet certain requirements are the beneficiaries and the Company
contributes the amount required to purchase its own shares to the Trust.
Mitsubishi UFJ Trust and Banking, Ltd. (stock-granting ESOP trust
account) purchases the number of shares expected to be delivered toour employees from the Company by the third-party allotment according
to a rule for granting shares.
According to the rule for granting shares, the Trust delivers theCompany’s shares to the employees with no charge during the periodsof services, based on the employees’ promotion and appointment as
management positions during the period of trust.
As the Company contributes the full amount required for the Trust topurchase its own shares, the employees pay no costs. Because thelaunch of the Trust enables the employees to receive economic benefits
from increase in the Company’s stock price, improvement in employee
motivation can be expected. Also, exercise of voting rights related to theCompany’s shares categorized as trust assets of the Trust should reflect
the employees’ intentions as candidates for beneficiaries in this scheme,
and it is effective as a plan for enhancing corporate value to promote
employees’ participation in management.
(2) The Company has applied the "Practical Solution on Transactions ofDelivering the Company's Own Stock to Employees etc. through Trusts"(ASBJ PITF No.30, March 26, 2015); however, it is accounted for using
the same method as the previous method.
(3) Matters relating to the Company shares held by the Trust
A. The carrying amount of shares held by the Trust was ¥197 million at
the end of the previous fiscal year and ¥163 million ($1,446thousand)at the end of the fiscal year.
B. The shares held by the Trust are recorded as treasury stock undershareholders' equity.
C. The number of shares at the end of the year was 78,800 for theprevious fiscal year and 65,000 for the fiscal year, while the average
number of shares during the year was 80,308 for the previous fiscal
year and 69,477 for the fiscal year.

D. For the purposes of calculating per-share data, the number of sharesat the end of the year and the average number of shares for the year
are included in the treasury stock which should be deducted.
Stock-based compensation plan linked to company performance
The company has instituted a stock-based compensation plan linked
to company performance (the “Plan”) for directors (excluding outside
directors and part-time directors) and executive officers (excluding
personnel assigned overseas) ("Directors, etc."). The Plan is closely
linked to company performance, which helps improve the Company’s
performance and enhance the awareness of contributions to increase
corporate value. The Plan adopts a scheme called executive
compensation BIP trust.
(1) Overview of transactions
At the Board of Directors meeting held on May 28, 2014, the launch of
the Plan was resolved for Directors, etc. and proposition for the Plan
was approved at the 64th Ordinary General Meeting of Shareholders
held on June 24, 2014. The Company’s shares that the Trust acquires
will be delivered to Directors, etc., in a quantity corresponding to thenumber of points awarded to them based on performance indicators andtitles under the Plan.
The Trust is established by the company in which Directors, etc. whomeet certain requirements are the beneficiaries and the Company
contributes the amount required to purchase its own shares to the Trust.
The Master Trust Bank of Japan, Ltd. (executive compensation BIP trust
account) purchases the number of shares expected to be delivered to
Directors, etc. from the Company by the third-party allotment according
to a prescribed rule for granting shares.
According to the rule for granting shares, the Trust delivers theCompany’s shares to Directors, etc. who meets certain requirements forbeneficiaries upon their retirement in the number of shares determinedbased on the performance indicators, etc. for each fiscal year.
Voting rights related to the Company’s shares categorized as trust
assets of the Trust shall not be exercised during the period of trust.
(2) Matters relating to the Company shares held by the Trust
A. The carrying amount of shares held by the Trust was ¥111 million at theend of the previous fiscal year and ¥109 million ($973thousand) at theend of the fiscal year.
B. The shares held by the Trust are recorded as treasury stock undershareholders' equity.
C. The number of shares at the end of the year was 40,000 for theprevious fiscal year and 39,226 for the fiscal year, while the average
number of shares during the year was 12,308 for the previous fiscal
year and 39,345 for the fiscal year.
D. For the purposes of calculating per-share data, the number of sharesat the end of the year and the average number of shares for the year
are included in the treasury stock which should be deducted.

2. Inventories
Inventories as of March 31, 2015 and 2016 were as follows:
Japanese yen(millions)Finished goods
Work-in process
Raw materials
Supplies

FY2014FY2015\ 14,001
6,148
8,009
3,520
\ 31,679\ 13,109
6,049
7,445
3,675
\ 30,279

U.S. dollars(thousands)

FY2015$

116,342
53,68366,072
32,620$ 268,719

The ending inventory balance presented above is net of write-downs of inventories when their carrying amounts become unrecoverable. The amountof write-downs recognized in cost of sales were ¥143 million and ¥(355) million ($(3,158)thousand) as of March 31, 2015 and 2016, respectively.
The figure shown in minus () means gains on reversal.

15 Annual Report 2016

3. Securities
Available-for-sale securities with carrying amounts (fair values) exceeding acquisition costs as of March 31, 2015 and 2016 were as follows:
Japanese yen (millions)

March 31, 2015

Acquisition cost Carrying amount

Equity securities
Bonds
Others

\

\

1,101
－
－
1,101

\

\

3,127
－
－
3,127

Difference
\

\

2,026
－
－
2,026

Japanese yen (millions)

March 31, 2016

Acquisition cost Carrying amount

Equity securities
Bonds
Others

\

\

716
－
－
716

\

\

2,059
－
－
2,059

U.S. dollars (thousands)
Difference\\

Acquisition cost Carrying amount

1,343
－
－
1,343

$

$

6,354
－
－
6,354

$

$

18,281－－
18,281

Difference$$

11,926－－
11,926

Available-for-sale securities with carrying amounts (fair values) not exceeding acquisition costs as of March 31, 2015 and 2016 were as follows:
Japanese yen (millions)

March 31, 2015

Acquisition cost Carrying amount

Equity securities
Bonds
Others

\

\

194
－
－
194

\

\

153
－
－
153

Difference
\

\

(40)
－
－
(40)

Japanese yen (millions)

March 31, 2016

Acquisition cost Carrying amount

Equity securities
Bonds
Others

\

\

63
－
－
63

\

\

40
－
－
40

U.S. dollars (thousands)
Difference\\

Acquisition cost Carrying amount

(23)
－
－
(23)

$

$

560
－
－
560

$

$

352
－
－
352

Difference
$

$

(207)
－
－
(207)

The carrying amount of securities with no available fair values as of March 31, 2015 and 2016 were as follows:
Japanese yen(millions)

FY2015FY2014
Available-for-sale securities with no available fair values
Non-listed equity securities

50\

U.S. dollars(thousands)

FY2015

50

\

$

444

Available-for-sale securities sold during FY2014 and FY2015 were as follows:
Japanese yen (millions)

March 31, 2015

Amounts sold

Equity securities
Bonds
OthersGains on salesof available-forsale securities

－
－
－
－

Loss on salesof available-forsale securities

－
－
－
－

－
－
－
－

Japanese yen (millions)

March 31, 2016
Equity securities
Bonds
OthersAmounts sold
\

\

558
－
－
558

Gains on salesof available-forsale securities
\

\

375
－
－
375

U.S. dollars (thousands)

Loss on salesof available-forsale securities－－－－

Amounts sold

Gains on salesof available-forsale securities

$

$

$

4,953
－
－
4,953

$

3,336
－
－
3,336

Loss on salesof available-forsale securities－－－－

Annual Report 201616

4. Investments in non-consolidated subsidiaries and affiliates
Investments in non-consolidated subsidiaries and affiliates that were included in "Investments in securities" as of March 31, 2015 and 2016 were as
follows:
Japanese yen(millions)

FY2015FY2014
Investment securities (equity securities)\   1,062

U.S. dollars(thousands)

\

1,142

FY2015$

10,138

5. Accumulated depreciation
Accumulated depreciation as of March 31, 2015 and 2016 were as follows:
Japanese yen(millions)

Accumulated depreciation

U.S. dollars(thousands)

FY2014FY2015FY2015\ 188,425\ 196,244$ 1,741,613

6. Assets Pledged as Collateral
The following assets were pledged as collateral for ¥330 million and ¥192 million ($1,708 thousand) of secured loans as of March 31, 2015 and2016, respectively :Japanese yen(millions)

FY2015FY2014
Accounts receivable and inventories\

Property, plant and equipment

1,305

\

2,759

1,081

FY2015
$

1,200

1,454
\

U.S. dollars(thousands)

\

2,281

9,594
10,657$

20,251

Secured debt as of March 31, 2015 and 2016 were as follows:
Japanese yen(millions)

FY2015FY2014
Short-term borrowings

17 Annual Report 2016

U.S. dollars(thousands)

FY2015

\

330

\

192

$

1,708

\

330

\

192

$

1,708

7. Bonds Payable, Short-term Borrowings and Long-term Debt
Bonds Payable, Short-term borrowings and long-term debt as of March 31, 2015 and 2016 were as follows:
Japanese yen(millions)

U.S. dollars(thousands)

FY2015FY2014

48,133

3.6 %Current Portion of Bond Payable

－

7,000

62,122

0.5

Current portion of long-term debt

4,177

4,327

38,407

3.1

Current portion of lease obligation

49

44

392

－

Short-term borrowings

\

5,142

\

5,423

$

FY2015Weighted
averageinterest rates

Year due
FY2016

Bonds Payable

7,000

－

－

0.5

Long-term debt

22,02021,629191,956

1.6

FY2016-FY2020

Lease obligations

82

44

397

－

FY2016-FY2020

Other interest bearing debt

751

301

2,677

0.3

\ 39,223\ 38,771$ 344,088

Average interest rates for lease obligations are omitted because lease obligations include assumed interest amounts.
Annual maturities of bonds payable, long-term debt and lease obligations as of March 31, 2016 were as follows:

Long-term Debt

Years ending March 31

Japanese yen(millions)

U.S. dollars(thousands)

2018\ 10,809

$

2019

4,476

39,730

2020

2,398

21,285

2021

527

4,682

3,417

30,324\ 21,629$ 191,956

Lease Obligations

Years ending March 31

Japanese yen(millions)

U.S. dollars(thousands)

2018

\

2022 and thereafter

27$

95,932

241

2019

11

106

2020

4

44

2021

0

5

2022 and thereafter

－

－

\

44

$

397

Annual Report 201618

8. Leases(a) Finance leases
As discussed in Note 1 (i), finance leases commenced prior to April 1, 2008 which do not transfer ownership of leased assets to lessees areaccounted for as operating leases.
Information relating to finance leases, except those leases for which the ownership of the leased assets is considered to be transferred to the lessee,
is described below.
Pro forma information regarding leased property such as acquisition cost, accumulated depreciation, accumulated losses on impairment and future
minimum lease payments under finance leases that do not transfer the ownership of the leased property to the lessee as of March 31, 2015 and2016 were as follows:
Japanese yen (millions)

March 31, 2015

Accumulated
Acquisition Accumulated losses on
cost
depreciation impairment

Machinery and vehicles\

Tools and furniture

134

\

90
\

225

134

\

90
\

225

－

Endingbalance
\

－
\

－

0
－

\

0

Japanese yen (millions)

March 31, 2016
Machinery and vehicles
Tools and furniture

U.S. dollars (thousands)

Accumulated
Acquisition Accumulated losses on
cost
depreciation impairment

EndingbalanceAccumulated
Acquisition Accumulated losses on
cost
depreciation impairment

Endingbalance

\

\

$

$

－

\

－
\

－

－

\

－
\

－

－
－

\

－

－
－

\

－

$

－
$

－

－

$

－
－

$

－
－

$

－

－
－

$

－

－

The scheduled maturities of future lease payments under such lease contracts as of  March 31, 2015 and 2016 were as follows:
Japanese yen(millions)

FY2015FY2014
Due within one year\

Due over one year

Lease payments for the year

0

U.S. dollars(thousands)

\

－

－

FY2015
$

－

－

－

\

0

\

－

$

－

\

21

\

0

$

3

The amounts of acquisition costs and future minimum lease payments under finance leases includes relevant interest expenses.   
Depreciation expenses, which are not reflected in the accompanying consolidated statements of income, calculated by the straight-line method,were  \21 million and \0 million ($3 thousand) for the years ended March 31, 2015 and 2016, respectively.
The Company had no leased assets on which impairment should have been recognized for the years ended March 31, 2015 and 2016.

(b) Operating leases
The scheduled maturities of future lease payments under non-cancelable operating leases as of March 31, 2015 and 2016, were as follows:
Japanese yen(millions)

FY2015FY2014
Due within one year\

Due over one year

\

9

3

FY2015$3

3\

19 Annual Report 2016

5

U.S. dollars(thousands)

\

6

31
28

$

59

9. Income Taxes
Significant components of the Company and consolidated subsidiaries' deferred tax assets and liabilities as of March 31, 2015 and 2016 were as follows:
Japanese yen(millions)

U.S. dollars(thousands)

FY2015FY2014FY2015

Deferred Tax Assets:
Liability for retirement benefits

\

1,637

\

1,584

$

14,061

1,855

1,449

12,866

855

826

7,334

8

6

59

Unrealized gains or losses (inventories)

711

736

6,539

Losses on write-down of inventories

709

643

5,715

Net operating losses carried forward
Accrued bonuses to employees
Impairment losses on property, plant and equipment

445

390

3,469

1,004

487

4,328

Accrued enterprise tax

139

123

1,097

Retirement benefits for directors and corporate auditors  

75

69

619

Unrealized gains or losses (fixed assets)
Provision for product warranties

Remeasurements of defined benefit plans

－

79

707

Depreciation

867

1,133

10,055

1,294

1,812

16,088

9,606

9,345

82,942

Other
Subtotal Deferred Tax Assets
Valuation allowance

(693)

(397)

(3,527)

Total deferred Tax Assets

8,912

8,948

79,415

Property,plant and equipment(3,448)(3,635)(32,265)

Asset for retirement benefits

(364)

(312)

(2,769)(2,172)(2,194)(19,472)

Reserve for advanced depreciation

(284)

(265)

(2,352)Net unrealized gains on available-for-sale securities

(736)

(400)

(3,551)

(6)

－

－

(212)

(154)

(1,367)(7,224)(6,961)(61,780)

Deferred Tax Liabilities:

Retained earnings of overseas subsidiaries

Remeasurements of defined benefit plans
Other
Total deferred tax liabilities
Net Deferred Tax Assets

\

1,688

\

1,987

$

17,635(Note) Net deferred tax asset for the prior and current fiscal year is included in the following line items of consolidated balance sheet:
Japanese yen(millions)

Current Assets - Deferred tax assets

U.S. dollars(thousands)

FY2014FY2015FY2015

3,774

3,873

34,377

6

27

246

Fixed Assets - Deferred tax assets

1,611

544

4,835

Fixed Liabilities - Deferred tax liabilities

3,691

2,403

21,330Current Liabilities - Other current liabilities

Annual Report 201620

The Company and its consolidated subsidiaries are subject to a number of taxes based on income, which, in the aggregate, indicate a statutory tax
rate in Japan of approximately  35.6% and 33.1% for the years ended March 31, 2015 and 2016.
The following table summarizes the significant differences between the statutory tax rate and the Company's effective tax rate for financial statement
purposes for the years ended March 31, 2015 and 2016:

Statutory Tax Rate
Adjustments for:

FY2014FY201535.6 %

33.1 %

				

Different tax rates applied to overseas subsidiaries

(4.3)

(3.6)

Tax credit for research and development expenses

(3.5)

(4.1)

Per capital inhabitants tax

0.2

0.1

Non-deductible expenses

0.3

0.3

Foreign withholding tax

0.4

0.5

Increase(decrease) of retained earnings of overseas subsidiaries

2.2

0.1

Increase (decrease) in valuation allowance

(0.2)

2.5

Tax-rate change

2.1

0.9

Net operating losses carried forward of subsidiary

7.6

0.8

		Other

(1.0)

(1.7)

Effective Tax Rate

39.4 %

28.9 %

Revision of the amounts of deferred tax assets and deferred tax liabilities due to the change in corporate income tax rate
"Following the enactment of the “Act for Partial Revision of the Income Tax Act, etc. ” and the “Act for the Partial Revision of the Local Tax Act, etc. ”
on March 29, 2016, the statutory effective tax rate used in the calculation of deferred tax assets and deferred tax liabilities for the fiscal year ended
March 31, 2016 has been changed from the 33.1% of the previous fiscal year to 30.9% for those expected to be collected or paid during the fiscal
years beginning on April 1,2016 and 2017, and to 30.6% for those expected to be collected or paid on and after April 1, 2018.
As a result of these changes, deferred tax assets (net of deferred tax liabilities) decreased by \ 139 million($ 1,242 thousand) and, valuationdifference on available-for-sale securities, remeasurements of defined benefit plans and deferred income taxes increased by \ 22 million($ 203
thousand) , \ 9 million($ 87 thousand) and \ 162 million($ 1,446 thousand), respectively.

21 Annual Report 2016

10. Employees' Severance and Retirement Benefits
The Company and its domestic consolidated subsidiaries have adopted defined benefit retirement plans such as cash balance plans and lump-sum
payment plans, as well as defined contribution pension plans. Some domestic consolidated subsidiaries use the simplified method for the calculationof projected benefit obligation.
Certain consolidated subsidiary transferred part of its defined benefit retirement plan to a defined contribution pension plan as of April 1, 2015.
The following tables provide information on defined benefit plans for the years ended March 31, 2015 and 2016.
Japanese yen(millions)Defined benefit plans

Beginning balance of retirement benefit obligations

FY2015FY2014(1) Rollforward of retirement benefit obligations, except plans applying simplified method\

Cumulative effects of changes in accounting policies

6,834

U.S. dollars(thousands)

\

8,233

FY2015$73,069

1,229

－

－

Restated balance

8,064

8,233

73,069Service costs

332

240

2,131

		Interest costs

84

43

388

Actuarial loss (gain)

376

373

3,311

Benefits paid

(624)

(379)

(3,367)－(1,321)(11,730)

Effect of transfer to defined contribution pension plan
Ending balance of retirement benefit obligations

\

8,233

\

7,189

$

63,803

		
Beginning balance of plan assets

FY2015FY2014(2) Rollforward of plan assets
\

4,609

\

4,726

FY2015$41,950

Expected return on plan assets

109

70

625

Actuarial gain (loss)

376

(115)

(1,022)Contributions paid by the employer
Benefits paid
Effect of transfer to defined contribution pension plan
Ending balance of plan assets

77

－

－

(445)

(233)

(2,069)(1,202)

－
\

4,726

\

3,246

(10,673)$

28,810		
Beginning balance of liability for retirement benefits

FY2015FY2014(3) Rollforward of liability for retirement benefits related to plans applying simplified method
\

162

\

176

FY2015$

1,565

Retirement benefit costs

19

18

162

Benefits paid

(5)

(9)

(81)

Ending balance of liability for retirement benefits

\

176

\

185

$

1,646

		
Funded retirement benefit obligations\

Plan assets
		
Unfunded retirement benefit obligations
Net liability (asset) for retirement benefits

FY2015FY2014(4) Reconciliation of retirement benefit obligations and plan assets and liability (asset) for retirement benefits

\

3,612

\

2,180

FY2015$

19,349(4,726)(3,246)(28,810)(1,114)(1,066)(9,461)

4,797

5,194

3,682

\

4,128

46,101$

36,639		Liability for retirement benefits

4,809

5,178

45,956

Asset for retirement benefits(1,126)(1,049)(9,316)Net liability (asset) for retirement benefits

\

3,682

\

4,128

$

36,639(Note) Include plans applying simplified method		Service costs

FY2015FY2014(5) Retirement benefit costs\

Interest costs

351

\

258

FY2015
$

2,294

84

43

388

Expected return on plan assets

(109)

(70)

(625)

Net actuarial loss amortization

(112)

220

1,956

Total retirement benefit cost for defined benefit plans

\

215

\

452

$

4,013

Gain (loss) on transfer to defined contribution pension plan

\

－

\

105

$

935

Annual Report 201622

Japanese yen(millions)(130)

Recognized actuarial loss (gain)
\

(130)

\

18

(268)

(2,378)$FY2015\(249)(2,378)FY2015(249)

18

Unrecognized actuarial loss (gain)

FY2015(268)\

FY2014(7) Accumulated remesurements of defined benefit plans, before tax effectTotal accumulated adjustments for retirement benefit

FY2015FY2014(6) Remeasurements of defined benefit plans, before tax effect

U.S. dollars(thousands)(2,211)$(2,211)

		(8) Plan assets

FY2014FY201570%

72%

Equity securities

27%

25%

Cash and deposits0%0%① Plan assets comprise		Bonds

		Other3%3%

		Total

100%

100%

		
② Long-term expected rate of return
Current and target asset allocations, historical and expected returns on various categories of plan assets have been considered in determining
the long-term expected rate of return.
		

FY2014FY20150.5 ～ 0.7%

0.2 ～ 0.4%

2.0%

2.0%

(9) Actuarial assumptions
The principal actuarial assumptions (expressed as weighed averages) were as follow:
Discount rateLong-term expected rate of return(10) Other matters in detail concerning employees’ Severance and Retirement Benefits
The effects of the partial transfer of the defined benefit pension plans to the defined contribution pension plan are as follows:

Decrease of retirement benefit obligations

Japanese yen(millions)

U.S. dollars(thousands)

FY2015FY2015

\

1,321

$

11,730(1,210)(10,741)

Unrecognized actuarial gains and losses

(6)

(53)

Decrease of Liability for retirement benefits

105

935

Decrease of plan assets(Note) The total amount of the plan assets transferred to the defined contribution pension plan was ¥ 1,210 million ($10,741).

\

23 Annual Report 2016

FY2015FY2014(11)  Payment for defined contribution plan

471

\

549

FY2015$4,872

11. Research and development expenses
Research and development expenses are charged to income as incurred. Research and development expenses for the years ended March 31,
2015 and 2016 were as follows:
Japanese yen(millions)

FY2015FY2014
Research and development expenses

5,208

\

U.S. dollars(thousands)\

FY2015

5,374$

47,69912. Derivatives
The following table provides information on derivative instruments as of March 31, 2015 and 2016.
Japanese yen (millions)

March 31, 2015

Contract
amount

Fair
value

Gain
(Loss)

Forward exchange contracts:
To sell U.S. dollars

\

581

\

(2)

(2)

\

To sell Euro

102

2

2

To sell New Zealand dollars

13

(0)

(0)

\

696

\

(0)

(0)

\

Japanese yen (millions)

March 31, 2016

Contract
amountFair
value

U.S. dollars (thousands)

Gain(Loss)

Contract
amount2$ 1,342

Fair
value

Gain
(Loss)

Forward exchange contracts:
To sell U.S. dollars

\

151

\

256

\

105

To sell Euro

2

\

(1)
\

1

\

(1)

933

1

$ 2,275

$

25

$

(14)
$

10

25
(14)

$

10

Annual Report 201624

13. Segment Information(a) General information about reporting segments
The Company and its consolidated subsidiaries are mainly engaged in the manufacture and sale of automotive parts. Based on function, technological
specification and productive structure, the product lines of the Company are classified into two groups, "Manual Transmission Parts" and AutomaticTransmission Parts". The Company, in cooperation with its consolidated subsidiaries, designs strategies and conducts business for these two productlines in Japan and overseas. For each of these product lines, separate financial information is available among the constituent units of the Company
and is regularly reviewed by the company's Board of Directors in determining how to allocate resources and in performance evaluation. Accordingly,
the reporting segments of the Company consist of "MT (Manual automotive drivetrain related business)" which manufactures and sells manualtransmission parts and "AT (Automatic automotive drivetrain related business)" which manufacturs and sells automatic transmission parts.'(b) Basis of measurement for reporting segment profit or loss, segment assets, segment liabilities and other material items
The accounting policies of the reporting segments are mainly consistent with what is described in Note 1 "Summary of Significant Accounting andReporting Policies". The segment profit (loss) is based on operating income before amortization of goodwill. The prices of the goods traded ortransferred among the segments are mainly determined by considering market prices of the goods.
(c) Information about reporting segment profit or loss, segment assets, segment liabilities and other material items
Reporting segment information for the years ended 31, 2015 and 2016 were as follows :Japanese yen(millions)

Sales:
Manual automotive drivetrain operations        Eliminations (inter-segment net sales)        Net sales to external customers
Automatic automotive drivetrain operations        Eliminations (inter-segment net sales)        Net sales to external customers
Reporting segments total
Other operations        Eliminations (inter-segment net sales)        Net sales to external customers
Operating Income:Manual automotive drivetrain operations
Automatic automotive drivetrain operations
Reporting segment total
Other operations
Sub Total
Corporate and eliminations
Assets:Manual automotive drivetrain operations
Automatic automotive drivetrain operations
Reporting segment total
Other operations
Sub Total
Corporate and eliminations  
Depreciation and Amortization:
Manual automotive drivetrain operations
Automatic automotive drivetrain operations
Reporting segment total
Other operations
Sub Total
Corporate and eliminations
Investment in associates accounted for under the equity method:
Manual automotive drivetrain operations
Automatic automotive drivetrain operations
Reporting segment total
Other operations
Sub Total
Corporate and eliminations

FY2014FY2015FY2015\ 71,905(457)
71,447
159,431(2,484)
156,947
228,395
34,920(7,304)
27,616\ 256,011\ 71,776(109)
71,667
167,826(1,432)
166,393
238,061
37,183(6,492)
30,690\ 268,752$ 636,997(967)
636,029
1,489,407(12,714)
1,476,692
2,112,722
329,990(57,619)
272,370$ 2,385,092

\

9,374
9,797
19,171(302)
18,869(981)\ 17,887\ 10,891
9,430
20,321
1,395
21,717(411)\ 21,305$\ 67,501
139,139
206,640
38,682
245,323
15,649\ 260,972\ 67,381
143,797
211,178
29,265
240,443
18,829\ 259,273$ 597,986
1,276,159
1,874,145
259,723
2,133,868
167,106$ 2,300,975

3,117
9,840
12,958
1,572
14,530(167)\ 14,363\

3,470
11,60815,078
2,033
17,112(186)\ 16,925

$

294
382
676
385
1,062
－
1,062

\

305
397
703
401
1,105
－
1,105

$

\

\

\

25 Annual Report 2016

U.S. dollars(thousands)\

96,657
83,691
180,349
12,387
192,736(3,652)$ 189,083

30,797103,023
133,820
18,048151,868(1,658)$ 150,210

$

2,714
3,531
6,246
3,566
9,812
－
9,812

Japanese yen(millions)

FY2015FY2014
Capital Expenditures:
Manual automotive drivetrain operations
Automatic automotive drivetrain operations
Reporting segment total
Other operations
Sub Total
Corporate and eliminations

4,595
19,597
24,192
3,406
27,599(235)\ 27,363\

U.S. dollars(thousands)

3,179
21,38924,5691,530
26,100(136)\ 25,964\

FY2015$28,215
189,828
218,043
13,585
231,629(1,207)$ 230,422

Note : 1. "Other operations" includes businesses which are not part of any of the two reporting segments and contains industrial machine drivetrain operation, clutches
for motorcycle operation, and transport operation, etc.
2. The details of adjustments are as follows :(a) "Corporate and eliminations" of Operating  Income \(411) million ($(3,652) thousand) consists of "Elimination of intersegment transactions" \961 million($8,531 thousand), "Amortization of goodwill" \(67) million ($(602) thousand) "Corporate expense" which is not allocated to reporting segments \(1,366)
million ($(12,126) thousand) and "other adjustments" \61 million ($544 thousand).
"Corporate expense" mainly consists of general and administrative expenses and expense for new-product development not attributable to any reporting
segments.
(b) "Corporate and eliminations" of Assets \18,829 million ($167,106 thousand) consists of "Corporate assets" which is not allocated to reporting segments\20,005 million ($177,542 thousand), "Elimination of intersegment transaction" \(1,175) million ($(10,436) thousand) and "Corporate assets" mainly consistsof the cash and deposits and securities that are not attributable to any reporting segments.
(c) "Corporate and eliminations" of Depreciation and Amortization \(186) million($(1,658) thousand) consists of "Adjustment of unrealized gain on intersegment
transaction of fixed assets" \(186) million($(1,658) thousand).
(d) "Corporate and eliminations" of Capital Expenditures \(136) million($(1,207) thousand) consists of "Adjustment of unrealized gain on intersegment
transaction of fixed assets" \(136) million($(1,207) thousand).
3. The segment income is adjusted to conform to operating income of "consolidated statement of income".

(1)  Information about products and services       As the segment of products and services are the same as the reporting segment, description of this item is omitted.
(2) Information about geographic areas for the years ended March 31, 2015 and 2016 were as follows :Japanese yen(millions)

Sales:
Japan
America
Asia-Oceania
Other
Property,plant and equipment:
Japan
America
Asia-Oceania
Other

U.S. dollars(thousands)

FY2014FY2015FY2015\ 120,818
46,55772,702
15,933\ 256,011\ 106,177
42,11691,392
29,066\ 268,752$ 942,289
373,768
811,081257,952$ 2,385,092\ 46,263
22,532
55,774610\ 125,182\ 53,842
20,437
49,696
3,133\ 127,109$ 477,833
181,372
441,043
27,810$ 1,128,059

    The Company's operations are classified into geographical areas as follows: Japan, America (including Mexico, Panama), Asia-Oceania      (Thailand, Malaysia, China, Korea, Indonesia, Vietnam, Australia, United Arab Emirates, New Zealand and India) and Other (mainly Europe).

(3) Information about major customer for the years ended March 31 2015and 2016 were as follows :Japanese yen(millions)Company Name

Sales Segment

JATCO Corporation

AT and MT

U.S. dollars(thousands)

FY2014FY2015FY2015\ 22,562\ 20,291$ 180,080

Annual Report 201626

14. Related Party Transactions
For the years ended March 31, 2016, the Company and its consolidated subsidiaries had operational transactions with Aisin AW Co., Ltd and Aisin
Holdings of America, Inc., which are the subsidiaries of Aisin Seiki Co., Ltd., holding 33.7% of the Company's voting rights.
A summary of the significant transactions between the Company and its consolidated subsidiaries and such companies for the years ended March
31, 2015 and 2016 were as follows:
March 31, 2015
Not Applicable.

March 31, 2016
Not Applicable.

15. Per Share Data
Per share data for the years ended March 31, 2015 and 2016 were as follows :Japanese yen

Profit attributable to owners of parent
Profit attributable to owners of parent - diluted
Net assets

U.S. dollars

FY2014FY2015\ 197.96－
3,294.13\ 250.17－
3,366.87

FY2015
$

2.22
－
29.88

Diluted net income per share is not disclosed because potentially dilutive securities have not been issued.
The information on which per share data was calculated for the years ended March 31, 2015 and 2016 was as follows:
Japanese yen(millions)

Net income per share of common stock
Profit (loss) attributable to owners of parent
Amounts not attributable to common stockholders
Net income attributable to common stockholders of parent  

\\The weighted average number of common stock (thousands)

U.S. dollars(thousands)

FY2014FY2015FY20159,503  
－9,503

\ 12,013－\ 12,013$ 106,615－$ 106,615

48,00948,02016. Changes in Net Assets(a) Shares issued / Treasury stock

March 31, 2015
Shares issued:
Common stock (thousands)
Treasury stock:
Common stock (thousands)

Number of shares
as of April 1, 2014

Number of shares
as of March 31, 2015

Increase

Decrease

48,593
48,593－－－－

48,593
48,593

586
586

0
0

3
3

583
583

The decrease in the number of treasury stock-common stock of 3 thousand shares is due to shares delivered from Mitsubishi UFJ Trust and Banking
Corporation (ESOP Trust Account) to employees who become beneficiaries of the ESOP based on the Company’s rules for granting shares.
The number of treasury stock as of March 31, 2015 includes the Company’s stock amounted to 78 thousand shares held by The Master Trust Bankof Japan ,Ltd. (ESOP Trust Account) and 40 thousand shares held by The Master Trust Bank of Japan, Ltd. (BIP Trust Account)
The increase in the number of treasury stock-common stock of 0 thousand shares is due to purchase of fractional shares of the stock.

27 Annual Report 2016

Number of shares
as of April 1, 2015

March 31, 2016
Shares issued:
Common stock (thousands)

Number of shares
as of March 31, 2016

Increase

Decrease

48,593
48,593－－－－

48,593
48,593

583
583

0
0

14
14

568
568

Treasury stock:
Common stock (thousands)

The decrease in the number of treasury stock-common stock of 14 thousand shares is due to shares delivered from Mitsubishi UFJ Trust andBanking Corporation (ESOP Trust Account) to employees who become beneficiaries of the ESOP based on the Company’s rules for granting shares.
(13 thousand shares) and due to investing stock from Mitsubishi UFJ Trust and Banking Corporation (BIP Trust Account) to directors and officers
who become beneficiaries of the BIP based on the Company’s rules for granting shares.(0 thousand shares)
The number of treasury stock as of March 31, 2016 includes the Company’s stock amounted to 65 thousand shares held by The Master Trust Bankof Japan ,Ltd. (ESOP Trust Account) and 39 thousand shares held by The Master Trust Bank of Japan, Ltd. (BIP Trust Account)
The increase in the number of treasury stock-common stock of 0 thousand shares is due to purchase of fractional shares of the stock.
(b) Dividends(1) Dividends
March 31, 2015
Cash dividends paid

Dividends per share

Common stock\ 2,164

Common stock

Resolution

Type of shares

Japanese yen (millions)
U.S. dollars (thousands)

Ordinary general
meeting of theshareholders on
June 26, 2015
Board of Directors'
meeting on
October 27, 2015

Resolution

Type of shares

Cut-off date

Effective dateOrdinary general
meeting of theshareholders on
June 24, 2014

\ 45.0March 31, 2014

June 25, 2014

Board of Directors'
meeting on
October 30, 2014

\ 1,683\ 35.0

September 30, 2014

November 25, 2014

Cash dividends paid

Dividends per share

Cut-off date

Effective dateCommon stock\ 1,684$ 14,949\ 35.0$ 0.31March 31, 2015

June 29, 2015

Common stock\ 1,684$ 14,949\ 35.0$ 0.31

September 30, 2015

November 24, 2015

Japanese yen (millions)(Japanese yen)March 31, 2016
(Japanese yen)
(U.S. dollars)(2) Dividends, of which cut-off date was in the year ended March 31, 2016, and effective date of which will be in the year ending March 31, 2016

Resolution

Type of shares

Ordinary general
meeting of theshareholders on
June 28, 2016

Common stock

Cash dividends paid

Source ofdividends

Dividends per share\ 1,684$ 14,949

Retainedearnings\ 35.0$ 0.31

Japanese yen (millions)
U.S. dollars (thousands)(Japanese yen)
(U.S. dollars)

Cut-off date

Effective date

March 31, 2016

June 29, 2016

Annual Report 201628

17. Financial Instruments
The Company and its consolidated subsidiaries manage funds only in short-term deposits, raise funds by bonds or loans and engage in derivativetransactions for the purpose of avoiding the risk of foreign exchange rate fluctuation and ensuring steady cash flow, and not for trading or speculative
purposes. Hedging accounting of derivative transactions was not applied as the necessary conditions were not met.
Notes and accounts receivable and other receivables have exposure to the credit risk of customers. The Company and its consolidated subsidiaries
manage such risk by controlling the due date and balance of receivables from customers and monitoring their credit risk conditions in accordance with theGroup credit regulations. Furthermore, to avoid the risk of foreign exchange rate fluctuation and to ensure steady cash flows from accounts receivable, theCompany and its consolidated subsidiaries engage in derivative transactions (forward currency exchange contracts).
Equity securities have exposure to the risk of market price fluctuations. The Company and its consolidated subsidiaries hold such securities for the purposeof maintaining relationships with customers or suppliers and not for trading purposes. The fair values of the securities are periodically reported to the Boardof Directors at the board meeting of the Company.
Due dates of notes and accounts payable and other payables are mainly within one year.
Short-term borrowings are mainly for the purpose of fluctuations working capital and bonds payable and long-term debt are mainly for the purpose offunding capital investment.
Derivative transactions are entered and controlled by the financial department with approval of the financial manager under the rules of eachcompany, which prescribe details such as the department in charge of transactions and the limits for transaction. To reduce credit risk,
transaction counterparties are limited to major financial institutions.
Notes and accounts payable and borrowings have exposure to liquidity risk. The Company and its consolidated subsidiaries are controlling such risk by
developing  monthly cash planning.
The carrying amounts of the financial instruments included in the consolidated balance sheet and their fair values at March 31, 2015 and 2016 were as follows.
Japanese yen (millions)

March 31, 2015

Book
value

Fair
value

Cash and deposits\ 33,808\ 33,808

46,651

46,651

－

3,281

3,281

－

Notes and accounts payable(20,870)(20,870)－

Short-term borrowings(5,142)(5,142)－

Accrued expenses(8,638)(8,638)－

Accrued income taxes(1,562)(1,562)－

Notes and accounts receivable

Difference\－

Investments in securities
Available-for-sale securities

Bonds payable(7,000)(7,041)(41)

Long-term debt

(26,197)(25,660)(△537)

(0)

(0)

－

Derivative transactions

Japanese yen (millions)

March 31, 2016

Book
value

Fair
value

Cash and deposits\ 31,975\ 31,975

48,53048,5302,100

Notes and accounts payable
Short-term borrowings

U.S. dollars (thousands)
Book
value

Fair
value

－

$ 283,775$ 283,775－

430,697

430,697

－

2,100

－

18,634

18,634－(19,266)(19,266)－(170,988)(170,988)－(5,423)(5,423)－(48,133)(48,133)－

Accrued expenses(8,801)(8,801)－(78,108)(78,108)－

Accrued income taxes(1,839)(1,839)－(16,325)(16,325)－

Notes and accounts receivable

Difference\

Difference$－

Investments in securities
Available-for-sale securities

Bonds payable(7,000)(7,000)－(62,122)(62,122)－Long-term debt

(25,957)(26,112)(155)(230,364)(231,735)(1,371)

1

1

－

10

10

－

Derivative transactions

29 Annual Report 2016

1. The methods used to determine the fair value of financial instruments and derivative transactions are as follows:As cash and deposits, notes and accounts receivable, notes and accounts payable, short-term borrowings, accrued expenses and accrued
income taxes are settled  in the short term, the carrying amounts are considered to approximate fair values. Therefore, they are stated at carrying
amounts.
Investments in securities (Available-for-sale securities) are stated at fair value. The fair values of equity securities are their market prices.
Information regarding investments in securities classified by the purposes for which they are held is discussed in the relevant section of this report.
Bonds payable is stated at carrying amount which approximates fair value because the date of redemption comes within one year.
Long-term debt is stated at fair value based on the method in which total amount of principal and interest is discounted at the interest rate thatwould be applied if each company borrowed the same, but new, principal amount.
Derivative information is  discussed  in the relevant section of this report.
2. Financial instruments for which the fair values are considered difficult to determine
Non-listed equity securities (book value \1,192 million ($10,582 thousand)) have no market price available, also the future cash flows cannot be
estimated reliably, and are considered to be financial instruments for which the fair values are difficult to determine. Therefore, these instruments are
not included in "Investment insecurities (Available-for-sale securities)" in the table above.
3. Receipt schedule for receivables after the consolidated balance sheet dateJapanese yen (millions)

Cash and time deposits
Notes and accounts receivable

U.S. dollars (thousands)

FY2016FY2017 ～FY2020

FY2021～
FY2025

FY2026 andthereafter

FY2016FY2017 ～FY2020

FY2021～
FY2025

FY2026 andthereafter\ 31,975

\

\

\

－

$ 283,775

$

$

$

－

430,697－$ 714,472

48,530\ 80,506

－
－

\

－

－
－

\

－

\

－
－

$

－
－

$

－

－
－

$

－

－

4. Payment schedule for long-term debt after the consolidated balance sheet dateJapanese yen (millions)

Bonds Payable
Long-term debt

U.S. dollars (thousands)

FY2016FY2017 ～FY2020

FY2021～
FY2025

FY2026 andthereafter

FY2016FY2017 ～FY2020

FY2021～
FY2025

FY2026 andthereafter\ 7,000

\

\

－

\

－

$ 62,122

$

$

－

$

－

\ 4,327\ 18,212\ 3,417\－$ 38,407$ 161,631$ 30,324$－\ 11,327\ 18,212\ 3,417\－$ 100,530$ 161,631$ 30,324

$

－

－

－

18. Contingent Liabilities
Contingent liabilities as of March 31, 2015 and 2016 were as follows :Japanese yen(millions)

FY2015FY2014
Trade notes receivable discounted
Trade notes receivable endorsed

\

3,652
5

U.S. dollars(thousands)

\

669
34

FY2015
$

5,937
301

Annual Report 201630

19. Comprehensive Income
Amounts reclassified to net income (loss) in the current period that were recognized in other comprehensive income in the current or previous periods
and tax effects for each component of other comprehensive income were as follows
Japanese yen(millions)

U.S. dollars(thousands)

FY2015FY2014FY2015

Valuation difference on available-for-sale securities
Increase (decrease) during the year

\

697

(643)

\

$

(5,709)Reclassification adjustments

－

(378)

(3,361)

Sub-total, before tax

697(1,022)(9,071)Tax (expense) or benefit

(167)

354

3,144

Sub-total, net of tax

529

(667)

(5,927)

8,604(4,956)(43,990)

18

(488)

(4,334)Foreign currency translation adjustment
Increase (decrease) during the year
Remeasurements of defined benefit plans
Increase (decrease) during the year
Reclassification adjustments

(130)

220

1,956

Sub-total, before tax

(111)

(268)

(2,378)Tax (expense) or benefit

39

82

733

Sub-total, net of tax

(71)

(185)

(1,645)

Increase (decrease) during the year

58

(4)

(37)

Reclassification adjustments

(81)

－

－

Share of other comprehensive income of associates accounted for using the equity method

Sub-total, net of tax
Total other comprehensive income

(23)

(4)

(37)

9,038

(5,814)(51,600)

20. Cash and Cash Equivalents
Cash and Cash Equivalents as of March 31, 2015 and 2016 were as follows:
Japanese yen(millions)

Cash and deposits
Time deposits with maturities of more than three months
Cash and cash equivalents

31 Annual Report 2016

U.S. dollars(thousands)

FY2014FY2015FY2015\ 33,808\ 31,975$ 283,775

(98)

(414)

(3,681)

33,71031,560280,09321. Significant Subsequent Event (Funds Borrowed)
As shown below, the Company, in preparation for future capital investment increases, has financed a total of 10 billion Japanese yen by long-termborrowing from financial institutions on May 31, 2016
(1) Loan contract with The Bank of Tokyo-Mitsubishi UFJ, Ltd.
① Borrowed from The Bank of Tokyo-Mitsubishi UFJ, Ltd.
② Amount borrowed: 7 billion Japanese yen③ Interest rate: Fixed rate
④ Date borrowed: May 31, 2016
⑤ Repayment date: May 31, 2021
⑥ Collateral etc.: unsecured and unguaranteed⑦ Fund usage : Mainly for capital expenditure(2) Loan contract with Sumitomo Mitsui Banking Corporation① Borrowed from Sumitomo Mitsui Banking Corporation② Amount borrowed: 3 billion Japanese yen③ Interest rate: Fixed rate
④ Date borrowed: May 31, 2016
⑤ Repayment date: May 31, 2021
⑥ Collateral etc.: unsecured and unguaranteed⑦ Fund usage: Mainly for capital expenditure

Annual Report 201632

Independent Auditors' Report
EXEDY CORPORATION AND CONSOLIDATED SUBSIDIARIES

33 Annual Report 2016

Corporate Data
BOARD OF DIRECTORSAND CORPORATE AUDITORSEXECUTIVE OFFICERS

As of June 30, 2016

As of June 30, 2016

As of March 31, 2016

President and Chief Executive Officer :Hidehito Hisakawa

Senior Executive Managing Officer :Masayuki Matsuda
Hisayasu Masaoka
Shogo Okamura
Toshimasa Doi

Name:
EXEDY Corporation

Number of Issued Shares:
48,593 thousand shares

Established:
July 1, 1950

Number of Shareholders:
13,213Paid-in Capital:￥8,284 million

Average number of shares
held by one Shareholder:
3,678 shares

Director : Masayuki Matsuda
Hisayasu Masaoka
Shogo Okamura
Hiroshi Toyohara
Yoshihiro Kojima
Tadashi Nakahara
Fumio Fujimori
Koji Akita
Ichizo Yoshikawa
Osamu Okumura
Auditors : Keizo Nishigaki
Kanshiro Toyoda
Tadashi Fukuda
Satoshi Tsubota

Executive Managing Officer :Yoshio Katayama
Hiroshi Toyohara
Kenji Matsuda
Senior Executive Officer :Yoshihiro Kojima
Shinji Fujimoto

Tadashi Nakahara
Mitsuhiro Gondo

Executive Officer :Masahito Baba
Yoshihiro Yamamura
Yoshimi Osanai
Yuzuru Hirose

Tetsuya Yoshinaga
Shigeo Tabata
Tomoaki Goto
Junji Yamakawa

OUTLINE OF COMPANY

Number of Employees:
2,594
Number of Authorized Shares:
168,000 thousand shares

Listed on First Sections,Tokyo Stock Exchange

DOMESTIC NETWORKHead Office

1-1-1 Kidamotomiya, Neyagawa-shi, Osaka, 572-8570
Tel: 81-72-824-6933 Fax: 81-72-821-7913

Tokyo Sales Office

Shishido Building 6th Floor, 1-15-14 Sakai, Musashino City,
Tokyo, 180-0022
Tel: 81-4-2250-0751 Fax: 81-4-2253-1110< Utsunomiya Office >Data Service Utsunomiya Bldg. 5th Floor, 4-8-22 Motoimaizumi,
Utsunomiya-shi, Tochigi, 321-0954
Tel: 81-28-614-3620 Fax: 81-28-614-3680

Kanagawa Sales Office

Asahi Mutual Life Insurance Co. Bldg., 2nd Floor, 4-1-10
Naka-cho, Atsugi-shi, Kanagawa, 243-0018
Tel: 81-46-297-7051 Fax: 81-46-225-5568

Shizuoka Sales Office

RICOH Solutions Higashi Shizuoka Bldg., 2nd Floor, 6-20
Aratajima-cho, Fuji-shi, Shizuoka, 417-0043
Tel: 81-545-54-0861 Fax: 81-545-54-0862

Hamamatsu Sales Office

CITY21 Bldg., 6th Floor, 320-4 Sunayama-cho, Naka-ku,
Hamamatsu-shi, Shizuoka, 430-0926
Tel: 81-53-413-6011 Fax: 81-53-413-6012

Chubu Sales Office

Tosho Bldg., 2nd Floor, 1-16-5 Mikawaanjo-cho, Anjo-shi,
Aichi, 446-0056
Tel: 81-566-71-2750 Fax: 81-566-72-7015

Hiroshima Sales Office

Crest Court Kaita Sakaemachi Bldg. Room 202, 6-6
Sakaemachi, Kaita-cho, Aki-gun, Hiroshima, 736-0043
Tel: 81-82-821-0021 Fax: 81-82-823-6620

Ueno Division

2418 Ota-cho, Iga-shi, Mie, 518-0825
Tel: 81-595-23-8101 Fax: 81-595-24-5521

Kawagoe Plant

1-103-25 Yoshinodai, Kawagoe-shi, Saitama, 350-0833
Tel: 81-49-225-0601 Fax: 81-49-225-0600

Hiroshima Plant

6-11 Taguchi Kenkyu Danchi, Higashi Hiroshima-shi,
Hiroshima, 739-0038
Tel: 81-82-425-3434/5 Fax: 81-82-425-3436

DYNAX Corporation

1053-1 Kamiosatsu, Chitose-shi, Hokkaido, 066-8585
Tel: 81-123-24-3247 Fax: 81-123-49-2050

EXEDY Casting Co., Ltd.

112 Haishi, Fukuchiyama-shi, Kyoto, 620-0955
Tel: 81-773-22-1156 Fax:81-773-23-8477

EXEDY Kyoto Co., Ltd.

15 Kizuogawa, Kizugawa-shi, Kyoto, 619-0214
Tel: 81-774-73-0631 Fax: 81-774-73-2147

EXEDY Precision Co., Ltd.

104-1 Joden, Mimasaka-shi, Okayama, 701-2625
Tel: 81-868-74-3501 Fax: 81-868-74-3503

EXEDY Logistics Co., Ltd.

1-30-1 Kidamotomiya, Neyagawa-shi, Osaka, 572-0822
Tel: 81-72-822-1462 Fax: 81-72-822-1174

EXEDY Trading Co., Ltd.

1-1-33 Kidamotomiya, Neyagawa-shi, Osaka, 572-0822
Tel: 81-72-824-7633 Fax: 81-72-822-1016

EXEDY Sun Co., Ltd.

1-16-5 Kidamotomiya, Neyagawa-shi, Osaka, 572-0822
Tel: 81-72-822-1147 Fax: 81-72-824-3871

EXEDY Electric Facilities Co., Ltd.

8-6 Hyuga-cho, Moriguchi-shi, Osaka, 570-0023
Tel: 81-6-6997-3131 Fax: 81-6-6997-3150

Nippon Retarder System Co., Ltd.

1-1-33 Kidamotomiya, Neyagawa-shi, Osaka, 572-0822
Tel: 81-72-820-0911 Fax: 81-72-824-1035

EXEDY Fukushima Co., Ltd.

65, Torimiyama, Matsuyama-machi, Kitakata-shi, Fukushima, 966-0901
Tel: 81-241-23-3100 Fax: 81-241-25-7367

EXEDY SB Hyogo Co., Ltd.

1-10-9, Shin-machi, Nishi-ku, Osaka-shi, Osaka, 550-0013
Tel: 81-6-7634-8017

EXEDY Nara Co., Ltd.

68 Nukatabeteramachi, Yamatokoriyama-shi, Nara, 639-1036
Tel: 81-743-56-6878 Fax: 81-743-56-5033

OVERSEAS NETWORKEXEDY America Corporation (EAC)

2121 Holston Bend Drive, Mascot, TN 37806, U.S.A.
Tel: 1-865-932-3700 Fax: 1-865-932-2230

EXEDY Globalparts Corporation (EGP)

8601 Haggerty Road South, Belleville, MI 48111, U.S.A.
Tel: 1-734-397-3333 Fax: 1-734-397-7300

EXEDY-DYNAX America Corporation (EDA)

8601 Haggerty Road South, Belleville, MI 48111, U.S.A.
Tel: 1-734-397-6556 Fax: 1-734-397-6566

DYNAX America Corporation (DXA)

568 East Park Drive, Roanoke, VA 24019, U.S.A.
Tel: 1-540-966-6010 Fax: 1-540-966-6011

EXEDY DYNAX MEXICO, S.A. DE C.V. (EDM)

Circuito Progreso #101, Parque Industrial de Logística Automotriz (Pila),
Peñuelas; Aguascalientes, Mexico, CP 20340
Tel: 52-449-176-0000 Fax: 52-449-139-4904

EXEDY Mexico Aftermarket Sales, S.A. de C.V. (EMA)
Vía Adolfo Lopez Mateos 9, Col. Lomas Verdes, Naucalpan,
Edo. De Mexico, 53120, Mexico
Tel: 52-55-5572-5127

EXEDY Latin America S.A. (ELA)

Edificio Paitilla Office Tower, Oficina # 902, 903, 904, Avenida 8va.
Sur y Calle 56 Esta, Corregimiento de San Francisco,
Ciudad de Panama, Republica de Panama.
Tel: 507-395-7122 Fax: 507-395-7124

EXEDY Clutch Europe Ltd. (ECE)

Unit2, Rokeby Court, Manor Park, Runcorn, Cheshire, WA7 1RW, U.K.
Tel: 44-1928-571850 Fax: 44-1928-571852< Moscow Representative Office >Park Place, Office E311, Leninskiy prospect 113/1, Moscow,
117198, RUSSIA
Tel: 7-495-510-6175 Fax: 7-495-510-6176

EXEDY DYNAX Europe Ltd. (EDE)

2800 Tatabanya, Szarkalab UT6, HUNGARY
Tel: 36-34-311-117 Fax: 36-34-311-122

EXEDY Australia Pty. Ltd. (EAP)

21 Fiveways Boulevard, Keysborough,Victoria 3173, AUSTRALIA
Tel: 61-3-9701-5556 Fax: 61-3-9701-5684

EXEDY New Zealand Ltd. (ENZ)

151 Wairau Road Glenfield Auckland, NEW ZEALAND
Tel: 64-9-444-0901 Fax: 64-9-444-0903

EXEDY Thailand Co., Ltd. (EXT)EXEDY Corporation Asean Regional Office (EAR)

700/316 Moo 6, Bangna-Trad Road, Tumbon Don Hua Roh,
Amphur Muang, Chonburi 20000, THAILAND
Tel: 66-38-214-423 Fax: 66-38-214-422

EXEDY ENGINEERING ASIA Co., Ltd. (EEA)

700/552 Moo 6, Bangna-Trad Road, Tumbon Don Hua Roh,
Amphur Muang, Chonburi 20000, THAILAND
Tel: 66-38-214-423 Fax: 66-38-214-422

EXEDY Friction Material Co., Ltd. (EFM)

700/359 Moo 6, Bangna-Trad Road, Tumbon Don Hua Roh,
Amphur Muang, Chonburi 20000, THAILAND
Tel: 66-38-743-923 Fax: 66-38-743-927

EXEDY (Malaysia) Sdn.Bhd. (EXM)

PT 16748, Jalan Permata 1/5, Arab-Malaysian Industrial Park
71800 Nilai, Negeri Sembilan, MALAYSIA
Tel: 60-6-7992988 Fax: 60-6-7996388

EXEDY SINGAPORE PTE. LTD. (ESP)
37 Ubi Crescent, Singapore 408586
Tel: 65-6749-1395 Fax: 65-6742-6936

PT. EXEDY Manufacturing Indonesia (EMI)Jl. Permata V Lot EE 3 Kawasan Industri KIIC Karawang 41361
Jawa Barat, INDONESIA
Tel: 62-21-89114666 Fax: 62-21-89114568

PT. EXEDY PRIMA INDONESIA (EPI)

Jl. Gardu Induk PLN No.5, Margomulyo, Tandes, Surabaya 60187,
East Java, Indonesia
Tel: 62-31-2977777 Fax: 62-31-7491739

EXEDY Vietnam Co., Ltd. (EXV)Khai Quang Industrial Zone, Vinh Yen City, Vinh Phuc Province,
Socialist Republic of VIETNAM
Tel: 84-211-3721252 Fax: 84-211-3721253

EXEDY Chongqing Co., Ltd. (EXC)

No.4 Longjing Road，North New Economic Development Zone，
Chongqing，401122, CHINA
Tel: 86-23-62924439 Fax: 86-23-62900348

EXEDY DYNAX Shanghai Co., Ltd. (EDS)

1399 Chenqiao Road Fengxian District, Shanghai, China 201401
Tel: 86-21-67109075 Fax: 86-21-37565209

EXEDY Guangzhou Co., Ltd. (EGC)

No.406 E-Area, Longfu Car Accessories Centre, Hengfu Road,
Guangzhou, CHINA
Tel: 86-20-83489166 Fax: 86-20-83489370

EXEDY BEIJING Co., Ltd. (EBC)

Parts wholesale hall No.3063-3065, Wufangtianya Auto
Accessories & Parts Market , Chaoyang district, Beijing, CHINA
Tel: 86-10-67297987

DYNAX Industry (Shanghai) Co., Ltd. (DXS)

No.350 Rongxiang Road, Songjiang Export Processing Zone,
Shanghai 201613,CHINA
Tel: 86-21-57748388 Fax: 86-21-57748389

EXEDY India Ltd. (EIL)< Aurangabad Plant >Plot No.L-4, M.I.D.C. Industrial Area, Chikalthana, Aurangabad431 210, Maharashtra, not M.H.INDIA
Tel: 91-240-2484014 Fax: 91-240-2484403< Greater Noida Plant >Plot No.9, Udyog Kendra Industrial Area, Greater Noida, 201 304,
U.P., INDIA
Tel: 91-750-3131000 Fax: 91-120-2397086

EXEDY Clutch India Pvt. Ltd. (ECI)

Plot No 5-P, 9-18, 19P, 32-38, Narsapura Industrial Area, Appasandra
Village, Appasandra Village, Kolar, INDIA
Tel: 91-8152-244-004

EXEDY Middle East FZCO (EME)

P.O.BOX 18199, Warehouse No. ZE5 & ZE6 Jebel Ali Free
Zone, Jebel Ali Dubai, U.A.E.
Tel: 971-4-883-2244 Fax: 971-4-883-2500< Amman Representative Office >Room No.103, 1st Floor, AI Housanie Bldg. #6 Salem Moh'd
AI-Ekdhah Street Sweifieh, Wadi AI-Saier, Amman, JORDAN
Tel: 962-658-13215 Fax: 962-658-13015< Nairobi Representative Office >International House, 1st Floor, Room No.12, Mama Ngina Street,
P.O. Box 41931-00100, Nairobi, KENYA
Tel: 254-20-221-1214 Fax: 254-20-221-5700< Riyadh Representative Office >Room #1 AI Edressi Bldg, Price Fahed Bin Ibrahim St.
In front of AL-Majal Centre, Riyadh, Kingdom SAUDI ARABIA
Tel: 966-121-48431 Fax: 966-121-48728

EXEDY SOUTH AFRICA (PTY) LTD (ESA)

Glen Erasmia Blvd Estate P O Box 270 Glen Erasmia 1638 South Africa

Annual Report 201634

ANNUAL REPORT 2016
Year Ended March 31, 2016

Mission Statement
The Shape of Our Future: “Creation of Fulfillment”
Each employee, with a good conscience and hope for the future,
will create fulfillment for our society.
Through advanced technology and scrupulous attention to detail,we will create fulfillment for our customers.
With pride and a desire to grow, we will create fulfillment
for the EXEDY family.

1-1-1, Kidamotomiya, Neyagawa-shi, Osaka, 572-8570, Japan
Tel: 81-72-822-1152 Fax: 81-72-822-7552
URL http://www.exedy.com

H Printed in Japan
2016.7.800. 602 ○