－FY2019 March

The 2Q Summary of Accounting Statements[Japanese Standards] (consolidated)

November 12, 2018
Listed company: Tamagawa Holdings Co., Ltd.
Exchange: Tokyo
Code No.: 6838
URL http://www.tmex.co.jp
Representative: (Title): President (Name): Toru Masuzawa
Contact person: (Title): Finance and accounting division manager (Name): Katsuya Kubo (TEL): 03-6435-6933
Quarterly report to be submitted on: November 13, 2018 Dividends payment to be started on: ―Preparation of supplementary explanation document for the quarterly accounting statement: Yes
Explanatory meeting for the quarterly accounting statement: Yes(amount under mil. yen rounded off)

1. Consolidated performance of FY 2019 Mar.: 2Q (from Apr 1, 2018 to Sep 30, 2018)(1) Consolidated management result (cumulative)(% indication: change compared with the same quarter of the previous year)
Quarterly profit
belonging to theSales amountOperating profit
Ordinary profit
parent company’s
shareholders
mil. yen%mil. yen%mil. yen%mil. yen%

FY2019 Mar. 2Q

1,655

27.0

16

―

△94

―

△94

―

FY2018 Mar. 2Q

1,303

△28.1

△65

―

△114

―

△118

―

(Note) Comprehensive profit: FY2019 Mar. 2Q △80 mil. yen (―%) FY2018 Mar. 2Q △155 mil. yen(―%)
Quarterly net profit per share
Quarterly net profit per shareafter issuable share adjustment
yen

yen

FY2019 Mar. 2Q―△21.86FY2018 Mar. 2Q―△28.25
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

Own capital ratio

mil. yenmil. yen%

FY2019 Mar. 2Q

10,761

3,108

28.9

FY2018 Mar.

11,178

3,210

28.7

(Reference) Own capital: FY2019 Mar. 2Q

3,107 mil. yen

FY2018 Mar. 3,209 mil. yen

2. Status of dividends
End 1Q
yen

yen

―
―

FY2018 Mar.
FY2019 Mar.

Annual dividends
End 3QEnd 2Q

Term end

yen

0.00

FY2019 Mar. (forecast)

Total

―

yen

yen

0.50

0.50

―

5.00
～30.005.00～30.00(Note) Correction from the dividend forecast recently announced: None
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 amountOperating profit

Ordinary profit

Current net profit
belonging to theparent company’s
shareholders

mil. yenmil. yenmil. yenmil. yen

%

%

%

%

Current net profit
per shareyen

Full business year
5,186
59.3
239
349.2
22
―
14
―
3.44
(Note) Correction from the performance forecast recently announced: None
We 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.

※ Notes(1) Material transfer of subsidiary in the current quarter consolidated cumulative period: None
(Specified subsidiary transfer with change of the consolidated scope)New― (company name)
Excluded ― (company name)(2) Application of accounting process specific to preparation of the quarterly consolidated accounting
statement: None
(3) Change of accounting policy, change of accounting estimate, redisplay of revision① Change of accounting policy for revision of accounting standard, etc.: None
② Change of the accounting standard except for ①: None
③ Change of the accounting estimate: None
④ Redisplay of revision: None
(4) Number of shares issued (ordinary shares)① Number of term-end shares issued(including own shares)

FY2019 Mar. 2Q

4,404,600 shares② Number of term-end own shares

FY2019 Mar. 2Q

61,454 shares③ Average number of midterm shares(quarterly accumulation)

FY2019 Mar. 2Q

4,343,146 shares

FY2018 Mar. 4,404,600 shares
FY2018 Mar.

61,454 shares

FY2018 Mar.2Q 4,198,346 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 business year: 0.34 yen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 as of the final day of the current quarterly
consolidated accounting period.
Additionally, classification of the report segments was changed from 1Q consolidated accounting period
The following is comparison of the value of the same term of the previous year with the value after changing to thesegment classification after change.
While the Japanese economics in the current 2Q 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, although there was a period with bad climate due to impact of Typhoon
No.21, the weather was good with a lot of sunlight in the first half, resulting increase of power selling amountcompared to that in the same period of the previous year. In addition, mega solar plant in Goto City, Nagasaki Pref.
and solar sharing plant in Shimada City, Shizuoka Pref. started to operate in the current period, and are sellingelectricity at a good rate. Our group are actively considering renewable energy and general environmental business
which will be the next pillar, aiming for expansion of operations of such businesses.
As the result of the above, the amount of orders received in the current 2Q consolidated cumulative period was
1,743 mil. yen (66.2% increase compared with the same term of the previous year), and the sales amount was 1,655
mil. yen (27.0% increase compared with the same term of the previous year). In terms of profit and loss, operating
loss was 16 mil. yen (operating loss of the same term of the previous year: 65 mil. yen), ordinary loss was 94 mil yen(ordinary loss of the same term of the previous year: 114 mil. yen), and quarterly net loss belonging to the parent
company shareholders was 94 mil. yen (quarterly net loss belonging to the parent company shareholders of thesame term of the previous year: 118 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 generation plant, power selling started at the mega solar plant in Noboribetsu City,
Hokkaido on November 2, 2018. This plant can sell power for 40 yen / 1kWh for 20 years, and in addition, it has 12
units of automatic tracking system which may improve power generation efficiency by photovoltaic energy, which is
expected to contribute to our group’s profit acquirement.
We will continuously endeavor not only reduce CO2, but also contribute to the community and society and to
introduce, spread and promote renewable energy by taking advantage of characteristics of the community, andaccelerating development of community-based renewable energy.
Management result status by business type segments is as follows.

Classification of the report segments was changed from 1Q consolidated accounting period.
The following is comparison of the value of the same term of the previous year with the value after changing to thesegment 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 1,649 mil. yen (75.4% increase compared with the same term of the previous year), sales
amount was 1,035 mil. yen (2.5% decrease compared with the same term of the previous year), and segment
loss was 31 mil. yen (segment profit of the same term of the previous year was 10 mil. yen).
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 93 mil. yen (13.2% decrease compared with the same term of the previous year), sales
amount was 256 mil. yen (592.6% increase compared with the same term of the previous year), and segment
loss was 15 mil. yen (segment loss of the same term of the previous year was 79 mil. yen).
c. Renewable energy generation business
As the result that each of the already-operating photovoltaic power plants in Shimonoseki City, Tateyama City,
Sodegaura City and Kasumigaura City has been selling power at a good rate, and that the mega solar power
plant in Goto City, Nagasaki Pref. and the solar sharing plants in Shimada City, Shizuoka Pref. started power
selling in full scale in the current term, sales amount was 379 mil. yen (87.5% increase compared with thesame term of the previous year) and segment profit was 149 mil. yen (74.9% increase compared with the same
term of the previous year).

(2) Explanation on the financial status① Analysis of financial status(Gross asset)
Gross asset of term-end of the current 2Q consolidated accounting period was 10,761 mil. yen, which was 417
mil. yen less than that of the term-end of the previous consolidated accounting year.
This was mainly because cash and deposit decreased due to expenditure of long-term advance payment andrepayment of loan.
(Debt)
Debt of term-end of the current 2Q consolidated accounting period was 7,653 mil. yen, which was 315 mil. yenless than that of the term-end of the previous consolidated accounting year.
This was mainly because there was repayment of short-term loan and long-term loan.
(Net asset)
Net asset t of term-end of the current 2Q consolidated accounting period was 3,108 mil. yen, which was 102 mil.
yen less 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.
②Cash-flow condition
Although there was income, etc. from decrease of trade receivables by collection of accounts receivable, etc. and long-termloan, cash and cash-equivalent (hereafter “Fund”) during the current 2Q consolidated accumulation period was 1,426 mil. yen,which was 291 mil. yen less than that of the term-end of the previous consolidated accounting year due to expenditures byacquirement of tangible fixed asset and repayment of lease debt.

(Cash-flow by sales activities)
Fund acquired as a result of the sales activities was 605 mil. yen (Fund expenditure of 142 mil. yen in the same period of theprevious year).
This is mainly because of decrease of unearned consumption tax, etc. by reimbursement of consumption tax and local
consumption tax, and decrease, etc. of trade receivables by collection of accounts receivable, etc.

(Cash-flow by investment activities)
Fund acquired as a result of investment activities shall be 64 mil. yen (Fund expenditure of 636 mil. yen in the same period of
the previous year).
This is mainly because of income by collection of long-term loan and income, etc. by decrease of long-term advance payment.

(Cash-flow by financial activities)
Fund acquired as a result of financial activities shall be 969 mil. yen (Fund expenditure of 757 mil. yen in the same period of theprevious year).
This is mainly because of expenditure by repayment of short-term loan and long-term loan, etc.

③

④

⑤

Business and financial issues to be tackled
There is no material matters of business and financial issue to be tackled which newly occurred during thecurrent 2Q consolidated cumulative period.
Research and development activities
Amount of research and development activities of the entire group during the current 2Q consolidated cumulative
period is 93 mil. yen.
In addition, there is no material change in the status of our group’s research and development activities during
the current 2Q consolidated cumulative period.
Explanation on the future forecast information of the consolidated performance forecast, etc.
There is no change in the performance forecast announced on May 14, 2018.

(3)

Explanation on the future forecast information of the consolidated performance forecast, etc.
There is no change in the performance forecast announced on May 14, 2018.

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

2Q FY 2018 (consolidated)(As of June 30, 2018)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable

1,718,000
1,377,764

1,426,921
1,035,985

Merchandise and finished goods
Work in process

157,216
176,416

205,395
455,712Raw materials and supplies
Advance payments - trade

135,063
582,049

196,970
514,036

Other
Total current assets

525,287

212,166

4,671,798

4,047,189

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

452,374

513,365△322,700△328,398

Buildings and structures-trade, net

129,673

184,966

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

5,392,318

5,441,494△375,919△518,161

5,016,399

4,923,332

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

665,628

749,153△587,760△607,410

77,868

141,743

382,049
45,326

382,049
17,8385,651,317

5,649,930

207,554
66,320220,269
57,198Intangible assets
Goodwill
Software
Other

0

0

273,875

277,467

Operational investment securities
Long-term loans receivable

26,172
103,80928,122
52,999Deferred tax assets
Other

132,765
300,557

139,479
549,007

Total intangible assets
Investments and other assets

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

554,605

760,9086,479,798

6,688,306

911

957

129
26,108115
24,732

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

27,14925,804

11,178,746

10,761,300

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

2Q FY 2018 (consolidated)(As of June 30, 2018)

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

411,372
461,800

422,913
118,864

Current portion of long-term loans payable
Lease obligations

733,551
201,494

641,876
205,639

Accounts payable - other
Income taxes payable

164,435
13,437

272,083
22,346

Advances received
Provision for bonuses

238,622
66,637442,389
66,301

Provision for product warranties
Other

12,51986,26912,331
94,7632,390,139

2,299,508

Long-term loans payable
Lease obligations

523,261
3,625,902

396,777
3,526,292

Deferred tax liabilities
Net defined benefit liability

1,049
176,616

187,464

55,0481,190,558

57,462
1,179,082

6,013

6,691

5,578,449

5,353,770

7,968,589

7,653,279

1,748,137
1,065,087

1,748,137
1,043,372

466,480

371,530

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 stock
Retained earnings
Treasury shares△61,313△61,313

Total shareholders' equity

3,218,392

3,101,726

3,543

4,939

△12,774361△9,2305,300

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

994

994

3,210,156

3,108,021

11,178,746

10,761,300

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

Net Sales
Cost of sales

2Q FY2017(from April 1, 2017 toJune 30, 2017)
1,303,940
887,869(In thousand yen)
2Q FY2018(from April 1, 2018 toJune 30, 2018)
1,655,905
1,108,232

Gross profit

416,071547,672

Selling, general and administrative expenses

481,514

531,424

Operating profit（△）△65,442

16,248Non-operating income
Interest income

4,415

4,435

320
-

254
11

2,962

-

4,625

7,856

12,323

12,55655,206

116,773-

2,466

Dividend income
Exchange gain
Share of profit of entities accounted for using
equity method
Other
Total non-operating income
Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity
methodForeign exchange losses
Other
Total non-operating expenses
Ordinary loss（△）
Extraordinary income
Gain on sales of non-current assets
Other
Total extraordinary income

1,765

-

3,913

4,035

60,885

123,276△114,004△94,470

1,009

1,666

22

-

1,032

1,666

12

424

Extraordinary losses
Other
Total extraordinary losses

12

424

△112,984△93,229

Income taxes - current
Income taxes - deferred

3,170
2,463

△8,322

Total income taxes

5,634

1,720

△118,619△94,950--△118,619△94,950

Loss before income taxes（△）

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

10,043

Quarterly consolidated statements of comprehensive income
Consolidated second quarter period(In thousand yen)
2Q FY2018(from April 1, 2018 toJune 30, 2018)

2Q FY2017(from April 1, 2017 toJune 30, 2017)
Net Loss for the Quarter（△）
Accumulated other comprehensive income
Valuationdifferenceonavailable-for-salesecurities
Foreign currency translation adjustment△118,619△94,950

2,316

1,395

606

13,1352,923

14,530Comprehensive income△115,695△80,419（breakdown）
Comprehensive income attributable to owners ofparentComprehensive income attributable to noncontrolling interests△115,695△80,419--

Total other comprehensive income

(Segment information, etc.)【Segment information】
I. Previous 2Q consolidated cumulative period (from April 1, 2017 to September 30, 2017)
Information concerning the sales amount and the amount of profit or loss per report segment(unit: thousand yen))Amountrecorded in
Adjustedquarterly
amountconsolidated(Note) 1
profit and loss
statement(Note) 2

Report segment
Renewable
Electronic /energycommunicatio
system salesn devicebusinessbusiness

Renewableenergygeneration
business

Total

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

1,061,933

37,067

202,515

1,301,516

2,424

1,303,940

－

－

－

－

－

－

Total

1,061,933

37,067

202,515

1,301,516

2,424

1,303,940

10,384△79,950

85,635

16,070△81,512△65,442

Segment profit or loss (△)(Note) 1. Adjusted amount of segment profit or loss (△) △81,512 thousand yen is adjusted amount of unrealized profit,
etc. 2,493 thousand yen, adjusted amount of dividends from the consolidated subsidiary △62,000 thousand
yen and profit and loss of group management division not distributed to business segment △22,006 thousandyen.
2. Segment profit or loss (△) matches operating loss (△) in the quarterly consolidated profit and loss statement.
II. Current 2Q consolidated cumulative period (from April 1, 2018 to September 30, 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

1,035,579

237,668

379,729

1,652,977

2,928

1,655,905－

19,071－

19,071△19,071－

Total

1,035,579

256,740

379,729

1,672,048△16,143

1,655,905

Segment profit or loss (△)△31,816△15,360

149,733

102,556△86,307

16,248(Note) 1. Adjusted amount of segment profit or loss (△) △ 86,307 thousand yen is adjusted amount of unrealized profit△3,115 thousand yen, adjusted amount of dividends from the consolidated subsidiary △35,000 thousand yen,transaction deletion between segments △4,000 thousand yen, and profit and loss of group management
division not distributed to business segment △50,423 thousand yen.
2. Segment profit or loss (△) matches operating loss (△) in the quarterly consolidated profit and loss statemen t.
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 renewableenergy business, but we are engaged in business development and consideration of general renewable energy plants
other than photovoltaic 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 2Q consolidated cumulative period are listed with what was created byclassification after the change.