for the Year Ended Ma
arch 31, 2
2016, andd Independent Aud
ditor's Re
eport

EIZO Corpora
ation andd Subsid
diariesFinancial Highlights
Thousands ofMillions of Yen

U.S. Dollars

2014

2015

2016

2016

Net sales

73,642

72,57774,879668,563

Operating income

6,834

4,473

5,081

45,366

Net income

5,438

3,322

4,202

37,518

Total assets

92,932

106,520

104,792

935,643

Total equity

69,202

79,29478,012

696,536

Years ended March 31:

As of March 31:

Per share information

Yen

U.S. Dollars

Basic net income

255.05155.80197.101.76

Cash dividends applicable to the year

55.00

60.00

65.00

0.58

Note: U.S. dollar amounts are provided solely for convenience at the rate of ¥112 to US$1, the approximate exchange rate at March 31, 2016

(Millions of Yen)

Net Sales

Operating Income
74,879Net Income

6,834

73,642

5,438

5,081

72,577

4,473

4,202
3,322

2014

2015

2016

Total Assets/
Total Equity
106,520
79,294

2014

2015

2015

78,012

5,970,
8.1%

45,706,
62.1%

2016

Visual Display Systems
Amusement Monitors
Other

104,792

21,966,
29.8%

2015

2014

2016

Net Salesby Products

92,932
69,202

2014

4,974,
6.6%

8,872,
12.2%
15,128,20.8%

48,577,67.0%

15,279,20.4%

54,626,73.0%

Total 73,642

Total 72,577

Total 74,879

2014

2015

2016

2016
Note:"Monitor for Computer Use" was renamed to "Visual Display Systems" from the current fiscal year.
The net sales of peripherals, such as graphics boards, QC software and other accessories, arereclassified from "Other" to "Visual Display Systems." Sales disclosure information in the previous
financial year was adjusted for comparative purposes.

EIZO Corporation and Subsidiaries
Consolidated Balance Sheet
March 31, 2016

ASSETS
CURRENT ASSETS:
Cash and cash equivalents (Note 13)
Short-term investments (Notes 3 and 13)
Notes and accounts receivables (Note 13):
Trade notes
Trade accounts
Other
Allowance for doubtful receivables
Inventories (Note 4)
Deferred tax assets (Note 9)
Prepaid expenses and other current assets
Total current assets
PROPERTY, PLANT, AND EQUIPMENT:Land
Buildings and structures
Machinery and equipment
Furniture and fixtures
Construction in progress
Total
Accumulated depreciation
Net property, plant, and equipment
INVESTMENTS AND OTHER ASSETS:
Investment securities (Notes 3 and 13)
Goodwill
Deferred tax assets (Note 9)
Other assets
Total investments and other assets¥

Millions of Yen
2016
2015

Thousands of
U.S. Dollars(Note 1)
2016

20,221796

18,023797$ 180,545
7,107

124
17,014497(125 )
23,912
1,792
541

143
17,360224(118 )
25,006
1,717
276

1,107
151,911
4,438(1,117 )
213,500
16,0004,830

64,772

63,428578,3212,824
14,312
4,122
5,931
29
27,218(16,216 )

2,824
11,541
3,943
5,488
12
23,808(15,824 )

25,214
127,786
36,80452,955259
243,018(144,786 )

11,002

7,984

98,232

26,528
313
237
1,940

32,282
522
266
2,038

236,857
2,795
2,116
17,32229,01835,108259,090¥

LIABILITIES AND EQUITYCURRENT LIABILITIES:
Short-term bank loans (Notes 6 and 13)
Accounts payable (Note 13):
Trade accounts
Other
Income taxes payable
Accrued expenses
Other current liabilities
Total current liabilities
LONG-TERM LIABILITIES:
Liability for retirement benefits (Note 7)
Deferred tax liabilities (Note 9)
Other long-term liabilities
Total long-term liabilities¥ 104,792¥ 106,520

¥

1,912

¥

1,954

$

17,071

5,995
2,948
831
4,165
1,631

5,855
1,610
620
3,914
1,902

53,52726,321
7,420
37,18814,562

17,48215,855

156,089

3,090
4,932
1,276

3,086
6,922
1,363

27,58944,036
11,393

9,298

11,371

83,0184,426
4,314
58,891

4,426
4,314
56,07539,51838,518525,813(2,662 )(2,661 )(23,769 )

13,503(126 )(334 )

17,358248(466 )

120,563(1,125 )(2,982 )78,012

79,294

696,536¥ 104,792¥ 106,520$ 935,643

COMMITMENTS AND CONTINGENT LIABILITIES(Notes 12 and 14)
EQUITY (Notes 8 and 16):
Common stock—authorized, 65,000,000 shares;
issued, 22,731,160 shares in 2016 and 2015
Capital surplus
Retained earnings
Treasury stock—at cost, 1,410,426 shares in 2016 and
1,410,318 shares in 2015
Accumulated other comprehensive income:Unrealized gain on available-for-sale securities
Foreign currency translation adjustments
Defined retirement benefit plans
Total equity

TOTAL

Millions of Yen
2016
2015

Thousands of
U.S. Dollars(Note 1)
2016

$ 935,643

TOTAL

See notes to consolidated financial statements.

-2-

EIZO Corporation and Subsidiaries
Consolidated Statement of Income
Year Ended March 31, 2016

Millions of Yen
2016
2015
NET SALES

Thousands of
U.S. Dollars(Note 1)
2016

¥ 74,879¥ 72,577$ 668,563

52,88450,795472,179

21,99521,782

196,384

SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES (Notes 10 and 11)

16,91417,309151,018

Operating income

5,081

4,473

45,366OTHER INCOME (EXPENSES):Interest and dividend income
Interest expense
Foreign exchange loss—net
Gain on sales of securities (Note 3)
Loss on impairment of long-lived assets (Note 5)
Other—net

465(2 )(264 )
432
(59 )
(14 )

319
(1 )
(69 )

(17 )

4,152
(18 )
(2,357 )3,857(527 )(125 )

Other income—net

558

232

4,982

INCOME BEFORE INCOME TAXES

5,639

4,705

50,348

INCOME TAXES (Note 9):
Current
Deferred

1,426
11

1,121
262

12,732
98

1,437

1,383

12,830

4,202

3,322

37,518COST OF SALES
Gross profit

Total income taxes
NET INCOME
NET INCOME ATTRIBUTABLE TO NONCONTROLLINGINTERESTS
NET INCOME ATTRIBUTABLE TO OWNERS OF
THE PARENT

¥

4,202

¥

3,322

Yen
PER SHARE OF COMMON STOCK (Note 2.q):
Basic net income
Cash dividends applicable to the year

¥ 197.10
70.00

See notes to consolidated financial statements.

-3-$

37,518

U.S. Dollars¥ 155.80
60.00$ 1.76
0.63

EIZO Corporation and Subsidiaries
Consolidated Statement of Comprehensive Income
Year Ended March 31, 2016

Millions of Yen
2016
2015
NET INCOME¥ 4,202

OTHER COMPREHENSIVE (LOSS)INCOME (Note 15):
Unrealized (loss) gain on available-for-sale securities
Foreign currency translation adjustments
Defined retirement benefit plans
Total other comprehensive (loss) income
COMPREHENSIVE INCOME¥

TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO—
Owners of the parent

See notes to consolidated financial statements.

-4-¥

Thousands of
U.S. Dollars(Note 1)
2016

3,322

$ 37,518(3,855 )(374 )
132

8,196
95
(230 )(34,419 )(3,339 )
1,179(4,097 )

8,061(36,579 )105¥ 11,383¥105¥ 11,383

$

939

$939

EIZO Corporation and Subsidiaries
Consolidated Statement of Changes in Equity
Year Ended March 31, 2016

BALANCE, APRIL 1, 2014(as previously reported)

Thousands
Number of
Shares ofCommonStock
Outstanding

Millions of Yen

CommonStockCapitalSurplusRetained
Earnings

TreasuryStock21,321¥ 4,426¥ 4,314¥ 54,044¥ (2,661 )Cumulative effect of accounting change (Note 2.j)
BALANCE, APRIL 1, 2014 (as restated)

21,321

4,426

4,314

BALANCE, MARCH 31, 2015

¥ 153

¥ (236 )54,032(2,661 )

9,162

153

4,426

4,314

56,07569,190(230 )

3,322(1,279 )8,196
95(230 )(2,661 )17,358248(466 )

79,294132

4,202(1,386 )(1 )(3,855 )(374 )132¥ (334 )¥ 78,012

4,202(1,386 )(1 )(3,855 )(374 )

21,321¥ 4,426¥ 4,314¥ 58,891

CommonStockCapitalSurplusRetained
Earnings$ 39,518$ 38,518$ 500,670¥ (2,662 )¥ 13,503¥ (126 )Thousands of U.S. Dollars (Note 1)
Accumulated Other Comprehensive Income
Unrealized
ForeignDefinedGain onCurrency
Retirement
Treasury
Available-forTranslation
Benefit
Stock
Sale Securities
Adjustments
Plans$ (23,759 )$ 154,982$ 2,214$ 707,982

1,179

37,518(12,375 )(10 )(34,419 )(3,339 )1,179$ (2,982 )$ 696,536(10 )(34,419 )(3,339 )$ 38,518

See notes to consolidated financial statements.

-5-$ 525,813$ (23,769 )$ 120,563$ (1,125 )Total
Equity$ (4,161 )

37,518(12,375 )$ 39,518¥ 69,202(236 )

95

21,321

Total
Equity

(12 )

8,196

Net income
Cash dividends, $0.63 per share
Purchase of treasury stock
Net increase in unrealized gain on available-for-sale securities
Net change in foreign currency translation adjustments
Net change in defined retirement benefit plans
BALANCE, MARCH 31, 2016

9,162

3,322
(1,279 )Net income
Cash dividends, ¥70 per share
Purchase of treasury stock
Net increase in unrealized gain on available-for-sale securities
Net change in foreign currency translation adjustments
Net change in defined retirement benefit plans
BALANCE, MARCH 31, 2016

¥

(12 )

Net income
Cash dividends, ¥60 per share
Net increase in unrealized gain on available-for-sale securities
Net change in foreign currency translation adjustments
Net change in defined retirement benefit plans
BALANCE, MARCH 31, 2015

Accumulated Other Comprehensive Income
Unrealized
ForeignDefinedGain onCurrency
Retirement
Available-forTranslation
BenefitSale Securities
Adjustments
Plans

EIZO Corporation and Subsidiaries
Consolidated Statement of Cash Flows
Year Ended March 31, 2016

Millions of Yen
2016
2015
OPERATING ACTIVITIES:
Income before income taxes
Adjustments for:
Income taxes—paidDepreciation and amortization
Amortization of goodwill
Provision of allowance for doubtful receivables
Foreign exchange loss (gain)—net
Gain on sales of securities
Loss on impairment of long-lived assets
Changes in assets and liabilities:
Decrease (increase) in notes and accounts receivable
Decrease in inventories
Decrease in accounts payable
Increase in accrued expenses
Increase in liability for retirement benefits
Other—net
Total adjustments
Net cash provided by operating activities
INVESTING ACTIVITIES:
Purchases of property, plant, and equipment
Purchases of software and other long-lived assets
Proceeds from sales of short-term investments andinvestment securities
Purchases of short-term investments and investment
securities(Increase) decrease in other assets
Net cash used in investing activities
FINANCING ACTIVITIES:
Increase in short-term bank loans—net
Purchase of treasury stock
Dividends paid

Thousands of
U.S. Dollars(Note 1)
2016

¥ 5,639¥ 4,705$ 50,348(1,263 )
1,843
205
(30 )
94
(432 )
59(2,325 )
1,803
215
3
(41 )

(11,277 )
16,4551,830(268 )
839(3,857 )
527

346
782
(304 )
273
146(585 )
1,134(2,791 )128(1,371 )
427
176
517
(3,259 )

3,089
6,982
(2,714 )
2,438
1,304
(5,223 )10,125

6,773

1,446

60,473(2,733 )(465 )(1,130 )(255 )(24,402 )(4,152 )

2,244

11

20,036(1,959 )(120 )(2,371 )318(17,491 )(1,071 )(3,033 )(3,427 )(27,080 )

2,204
(1 )
(1,385 )(1,281 )(9 )(12,366 )Net cash (used in) provided by financing activities(1,386 )923(12,375 )FOREIGN CURRENCY TRANSLATION ADJUSTMENT ON
CASH AND CASH EQUIVALENTS(156 )NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS—(Forward)¥ 2,198-6-(1,393 )¥ (1,058 )$ 19,625(Continued)

EIZO Corporation and Subsidiaries
Consolidated Statement of Cash Flows
Year Ended March 31, 2016

NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS—(Forward)

Millions of Yen
2016
2015

Thousands of
U.S. Dollars(Note 1)
2016

2,198

¥ (1,058 )$

18,02319,081

160,920¥ 20,221¥ 18,023$ 180,545¥

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS, END OF YEAR

19,625

See notes to consolidated financial statements.

-7-(Concluded)

EIZO Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Year Ended March 31, 2016

1.

BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared in accordance with the provisions set forthin the Japanese Financial Instruments and Exchange Act and its related accounting regulations and in accordancewith accounting principles generally accepted in Japan ("Japanese GAAP"), which are different in certain respects
as to the application and disclosure requirements of International Financial Reporting Standards.
In preparing these consolidated financial statements, certain reclassifications and rearrangements have been made to
the consolidated financial statements issued domestically in order to present them in a form that is more familiar toreaders outside Japan. In addition, certain reclassifications have been made in the 2015 consolidated financial
statements to conform to the classifications used in 2016.
The consolidated financial statements are stated in Japanese yen, the currency of the country in which EIZO
Corporation (the "Company") is incorporated and operates. The translations of Japanese yen amounts into U.S.
dollar amounts are included solely for the convenience of readers outside Japan and have been made at the rate of¥112 to $1, the approximate rate of exchange at March 31, 2016. Such translations should not be construed as
representations that the Japanese yen amounts could be converted into U.S. dollars at that or any other rate.

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa.

Consolidation—The consolidated financial statements as of March 31, 2016, include the accounts of theCompany and its 16 (15 in 2015) subsidiaries (together, the "Group").
Under the control concept, those companies in which the Company, directly or indirectly, is able to exercise
control over operations are fully consolidated.
All significant intercompany balances and transactions have been eliminated in consolidation. All material
unrealized profit included in assets resulting from transactions within the Group is also eliminated.
During the year ended March 31, 2016, EIZO Medical Solutions Inc. has been included in consolidation as aresult of the business acquisition.

b.

Unification of Accounting Policies Applied to Foreign Subsidiaries for the Consolidated Financial
Statements—In May 2006, the Accounting Standards Board of Japan (the "ASBJ") issued ASBJ Practical
Issues Task Force ("PITF") No. 18, "Practical Solution on Unification of Accounting Policies Applied toForeign Subsidiaries for the Consolidated Financial Statements" which was subsequently revised in February2010 and March 2015 to reflect revisions of the relevant Japanese GAAP or accounting standards in otherjurisdictions. PITF No. 18 prescribes that the accounting policies and procedures applied to a parent company
and its subsidiaries for similar transactions and events under similar circumstances should in principle beunified for the preparation of the consolidated financial statements. However, financial statements prepared byforeign subsidiaries in accordance with either International Financial Reporting Standards or generally
accepted accounting principles in the United States of America (Financial Accounting Standards Board
Accounting Standards Codification—"FASB ASC") tentatively may be used for the consolidation
process, except for the-8-following items that should be adjusted in the consolidation process so that net income is accounted for inaccordance with Japanese GAAP, unless they are not material: (a) amortization of goodwill; (b) scheduled
amortization of actuarial gain or loss of pensions that has been recorded in equity through other comprehensive
income; (c) expensing capitalized development costs of research and development ("R&D"); (d) cancellationof the fair value model of accounting for property, plant, and equipment and investment properties andincorporation of the cost model of accounting.
c.

Business Combinations—In September 2013, the ASBJ issued revised ASBJ Statement No. 21, "AccountingStandard for Business Combinations," revised ASBJ Guidance No. 10, "Guidance on Accounting Standards
for Business Combinations and Business Divestitures," and revised ASBJ Statement No. 22, "AccountingStandard for Consolidated Financial Statements." Major accounting changes are as follows:(a) Transactions with noncontrolling interest—A parent's ownership interest in a subsidiary might change if
the parent purchases or sells ownership interests in its subsidiary. The carrying amount of noncontrollinginterest is adjusted to reflect the change in the parent's ownership interest in its subsidiary while theparent retains its controlling interest in its subsidiary. Under the previous accounting standard, any
difference between the fair value of the consideration received or paid and the amount by which thenoncontrolling interest is adjusted is accounted for as an adjustment of goodwill or as profit or loss in the
consolidated statement of income. Under the revised accounting standard, such difference is accounted
for as capital surplus as long as the parent retains control over its subsidiary.
(b) Presentation of the consolidated balance sheet—In the consolidated balance sheet, "minority interest"
under the previous accounting standard is changed to "noncontrolling interest" under the revised
accounting standard.
(c) Presentation of the consolidated statement of income—In the consolidated statement of income, "netincome before minority interest" under the previous accounting standard is changed to "net income"under the revised accounting standard, and "net income" under the previous accounting standard ischanged to "net income attributable to owners of the parent" under the revised accounting standard.
(d) Provisional accounting treatments for a business combination—If the initial accounting for a businesscombination is incomplete by the end of the reporting period in which the business combination occurs,
an acquirer shall report in its financial statements provisional amounts for the items for which theaccounting is incomplete. Under the previous accounting standard guidance, the impact of adjustments toprovisional amounts recorded in a business combination on profit or loss is recognized as profit or loss inthe year in which the measurement is completed. Under the revised accounting standard guidance, during
the measurement period, which shall not exceed one year from the acquisition, the acquirer shallretrospectively adjust the provisional amounts recognized at the acquisition date to reflect new
information obtained about facts and circumstances that existed as of the acquisition date and that would
have affected the measurement of the amounts recognized as of that date. Such adjustments shall berecognized as if the accounting for the business combination had been completed at the acquisition date.
(e) Acquisition-related costs—Acquisition-related costs are costs, such as advisory fees or professional fees,
which an acquirer incurs to effect a business combination. Under the previous accounting standard, theacquirer accounts for acquisition-related costs by including them in the acquisition costs of theinvestment. Under the revised accounting standard, acquisition-related costs shall be accounted for as
expenses in the periods in which the costs are incurred.

-9-

The above accounting standards and guidance for (a) transactions with noncontrolling interest, (b) presentationof the consolidated balance sheet, (c) presentation of the consolidated statement of income, and(e) acquisition-related costs are effective for the beginning of annual periods beginning on or after April 1,
2015. Earlier application is permitted from the beginning of annual periods beginning on or after April 1,
2014, except for (b) presentation of the consolidated balance sheet and (c) presentation of the consolidated
statement of income.
Either retrospective or prospective application of the revised accounting standards and guidance for(a) transactions with noncontrolling interest and (e) acquisition-related costs is permitted. In retrospective
application of the revised standards and guidance, the accumulated effects of retrospective adjustments for all(a) transactions with noncontrolling interest and (e) acquisition-related costs which occurred in the past shallbe reflected as adjustments to the beginning balance of capital surplus and retained earnings for the year of thefirst-time application. In prospective application, the new standards and guidance shall be applied
prospectively from the beginning of the year of the first-time application.
The revised accounting standards and guidance for (b) presentation of the consolidated balance sheet and(c) presentation of the consolidated statement of income shall be applied to all periods presented in financial
statements containing the first-time application of the revised standards and guidance.
The revised standards and guidance for (d) provisional accounting treatments for a business combination are
effective for a business combination which occurs on or after the beginning of annual periods beginning on orafter April 1, 2015.
The Company applied the revised accounting standards and guidance for (a) transactions with noncontrollinginterest, (b) presentation of the consolidated balance sheet, (c) presentation of the consolidated statement ofincome, and (e) acquisition-related costs above, effective April 1, 2015, and (d) provisional accounting
treatments for a business combination above for a business combination which occurred on or after April 1,
2015.
With respect to (b) presentation of the consolidated balance sheet and (c) presentation of the consolidated
statement of income, the applicable line items in the 2015 consolidated financial statements have been
accordingly reclassified and presented in line with those in 2016.
In the consolidated statement of cash flows for the year ended March 31, 2016, cash flows for purchases orsales of ownership interests in a subsidiary without a change in consolidation scope are presented underfinancing activities, and cash flows for acquisition-related costs are presented under operating activities. There
was no effect from these accounting changes.
d.

Cash Equivalents—Cash equivalents are short-term investments that are readily convertible into cash and thatare exposed to insignificant risk of changes in value.
Cash equivalents include time deposits, certificates of deposit, and commercial paper, all of which mature or
become due within three months of the date of acquisition.

e.

Inventories—Inventories are stated at the lower of cost, determined by the average method for finishedproducts and work in process and by the moving-average method for raw materials, or net selling value.

- 10 -

f.

Short-Term Investments and Investment Securities—Short-term investments and investment securities areclassified and accounted for, depending on management's intent, as follows: (1) trading securities, which areheld for the purpose of earning capital gains in the near term, are reported at fair value, and the related
unrealized gains and losses are included in earnings; and (2) available-for-sale securities, which are notclassified as either of trading securities or held to maturity debt securities, are reported at fair value, withunrealized gains and losses, net of applicable taxes, reported in a separate component of equity.
Nonmarketable available-for-sale securities are stated at cost determined by the moving-average method.
For other-than-temporary declines in fair value, investment securities are reduced to net realizable value by acharge to income.

g.

Property, Plant, and Equipment—Property, plant, and equipment are stated at cost. Depreciation of property,
plant, and equipment of the Company and its domestic subsidiaries is computed substantially by the
declining-balance method at rates based on the estimated useful lives of the assets, while the straight-line
method is applied to buildings of the Company and its domestic subsidiaries acquired after April 1, 1998, andall property, plant, and equipment of foreign subsidiaries. The range of useful lives is principally from 15 to 50
years for buildings and structures, from 7 to 10 years for machinery and equipment, and from 2 to 6 years forfurniture and fixtures.

h.

Goodwill—Goodwill is amortized over 10 years by the straight-line method. Immaterial goodwill may becharged entirely to income at acquisition. Amortization of goodwill is ¥205 million ($1,830 thousand) and¥215 million for the years ended March 31, 2016 and 2015, respectively.

i.

Long-Lived Assets—The Group reviews its long-lived assets for impairment whenever events or changes incircumstances indicate the carrying amount of an asset or asset group may not be recoverable. An impairment
loss is recognized if the carrying amount of an asset or asset group exceeds the sum of the undiscounted future
cash flows expected to result from the continued use and eventual disposition of the asset or asset group. The
impairment loss would be measured as the amount by which the carrying amount of the asset exceeds its
recoverable amount, which is the higher of the discounted cash flows from the continued use and eventual
disposition of the asset or the net selling price at disposition.

j.

Retirement and Pension Plans—The Company and certain of its domestic subsidiaries have a defined
contribution pension plan and unfunded retirement benefit plans. Other domestic subsidiaries have a defined
benefit pension plan and unfunded retirement benefit plans. Certain foreign subsidiaries have either a defined
contribution plan or defined benefit plan. Additionally, the Company or its subsidiaries may add premium
severance pay.
The Group accounted for the liability for retirement benefits based on the projected benefit obligations andplan assets at the consolidated balance sheet date.
The projected benefit obligations are attributed to periods on a straight-line basis. Actuarial gains and losses
are amortized on a straight-line basis over 5 years within the average remaining service period.

- 11 -

In May 2012, the ASBJ issued ASBJ Statement No. 26, "Accounting Standard for Retirement Benefits" andASBJ Guidance No. 25, "Guidance on Accounting Standard for Retirement Benefits," which superseded theprevious accounting standard for retirement benefit originally issued in 1998 and subsequent relevant
amendments. The following are the major changes from the previous standard.
(a) Under the revised accounting standard, actuarial gains and losses that are yet to be recognized in profit orloss are recognized within equity (accumulated other comprehensive income), after adjusting for tax
effects, and any resulting deficit or surplus is recognized as a liability (liability for retirement benefits) or
asset (asset for retirement benefits).
(b) The revised accounting standard does not change how to recognize actuarial gains and losses in profit orloss. Those amounts are recognized in profit or loss over a certain period no longer than the expected
average remaining service period of the employees. However, actuarial gains and losses that arose in thecurrent period and have not yet been recognized in profit or loss are included in other comprehensive
income, and actuarial gains and losses that were recognized in other comprehensive income in priorperiods and then recognized in profit or loss in the current period, are treated as reclassification
adjustments (see Note 15).
(c) The revised accounting standard also made certain amendments relating to the method of attributing
expected benefit to periods, the discount rate, and expected future salary increases.
This accounting standard and the guidance for (a) and (b) above are effective for the end of annual periods
beginning on or after April 1, 2013, and for (c) above are effective for the beginning of annual periods
beginning on or after April 1, 2014, or for the beginning of annual periods beginning on or after April 1, 2015,
subject to certain disclosure in March 2015, all with earlier application being permitted from the beginning ofannual periods beginning on or after April 1, 2013. However, no retrospective application of this accounting
standard to consolidated financial statements in prior periods is required.
The Company applied the revised accounting standard and guidance for retirement benefits for (a) and (b)above, effective March 31, 2014, and for (c) above, effective April 1, 2014.
With respect to (c) above, the Company changed the method of determining the discount rate from using theperiod which approximates the expected average remaining service period to using average discount rate
reflecting the estimated timing of benefit payment. The impact of the change in this accounting policy isinsignificant.
Retirement benefits to directors and Audit & Supervisory Board members are recorded at the amount thatwould be required if the directors and Audit & Supervisory Board members retired at the consolidated balance
sheet date. In June 2004, the retirement benefit system was abolished and the amount required to be paid at thetime of the abolishment will be paid to directors and Audit & Supervisory Board members upon theirretirement.
k.

R&D Costs—R&D costs are charged to income as incurred.

- 12 -

l.

Software Development Contracts—Revenue from sales of customized software and costs of development of
the customized software should be recognized by the percentage-of-completion method if the outcome of adevelopment contract can be estimated reliably. When total revenue, total costs, and the stage of completion of
the contract at the consolidated balance sheet date can be reliably measured, the outcome of a development
contract can be estimated reliably. If the outcome of a development contract cannot be reliably estimated, thecompleted contract method should be applied. When it is probable that the total costs will exceed total
revenue, an estimated loss on the contract should be immediately recognized by providing for a loss ondevelopment contracts.

m. Income Taxes—The provision for income taxes is computed based on the pretax income included in the
consolidated statement of income. The asset and liability approach is used to recognize deferred tax assets andliabilities for the expected future tax consequences of temporary differences between the carrying amounts andthe tax bases of assets and liabilities. Deferred taxes are measured by applying currently enacted tax laws to
the temporary differences.
The Group files a tax return under the consolidated corporate tax system in Japan, which allows companies tobase tax payments on the combined profits or losses of the parent company and its wholly owned domestic
subsidiaries.
n.

Foreign Currency Transactions—All short-term and long-term monetary receivables and payables
denominated in foreign currencies are translated into Japanese yen at the exchange rates at the consolidatedbalance sheet date. The foreign exchange gains and losses from translation are recognized in the consolidated
statement of income to the extent that they are not hedged by forward exchange contracts.

o.

Foreign Currency Financial Statements—The balance sheet accounts of the foreign subsidiaries aretranslated into Japanese yen at the current exchange rate as of the balance sheet date, except for equity, which
is translated at the historical rate.
Differences arising from such translation were shown as "Foreign currency translation adjustments" underaccumulated other comprehensive income as a separate component of equity.
Revenue and expense accounts of foreign subsidiaries are translated into Japanese yen at the average exchange
rate.

p.

Derivatives—The Group uses derivative financial instruments to manage its exposures to fluctuations inforeign exchange. Foreign exchange forward contracts are utilized by the Group to reduce foreign currency
exchange risks. The Group does not enter into derivatives for trading or speculative purposes.
Derivative financial instruments are classified and accounted for the following: all derivatives are recognized
as either assets or liabilities and measured at fair value with gains or losses on derivative transactions
recognized in the consolidated statement of income.

q.

Per Share Information—Basic net income per share is computed by dividing net income attributable tocommon shareholders by the weighted-average number of common shares outstanding for the period.
Cash dividends per share shown in the consolidated statement of income are presented on an accrual basis, andinclude interim dividends paid and year-end dividends to be approved after consolidated balance sheet date.
Diluted net income per share of common stock is not disclosed herein because the Company has not issued any
securities that are potentially dilutive for the years ended March 31, 2016 and 2015.

r.

New Accounting Pronouncements
Tax Effect Accounting—On December 28, 2015, the ASBJ issued ASBJ Guidance No. 26, "Guidance on
Recoverability of Deferred Tax Assets," which included certain revisions of the previous accounting andauditing guidance issued by the Japanese Institute of Certified Public Accountants. While the new guidancecontinues to follow the basic framework of the previous guidance, it provides new guidance for the applicationof judgment in assessing the recoverability of deferred tax assets.
- 13 -

The previous guidance provided a basic framework which included certain specific restrictions on recognizing
deferred tax assets depending on the company's classification in respect of its profitability, taxable profit andtemporary differences, etc.
The new guidance does not change such basic framework but, in limited cases, allows companies to recognize
deferred tax assets even for a deductible temporary difference for which it was specifically prohibited torecognize a deferred tax asset under the previous guidance, if the company can justify, with reasonablegrounds, that it is probable that the deductible temporary difference will be utilized against future taxable
profit in some future period.
The new guidance is effective for the beginning of annual periods beginning on or after April 1, 2016. Earlier
application is permitted for annual periods ending on or after March 31, 2016. The new guidance shall not beapplied retrospectively and any adjustments from the application of the new guidance at the beginning of thereporting period shall be reflected within retained earnings or accumulated other comprehensive income at the
beginning of the reporting period.
The Company expects to apply the new guidance on recoverability of deferred tax assets effective April 1,
2016, and is in the process of measuring the effects of applying the new guidance in future applicable periods.

- 14 -

3.

SHORT-TERM INVESTMENTS AND INVESTMENT SECURITIESShort-term investments and investment securities as of March 31, 2016 and 2015, consisted of the following:Thousands of
U.S. Dollars
2016

Millions of Yen
2016
2015
Short-term investments:
Trust fund investments
Debt securities

¥

796

¥

497
300

$

7,107

Total

¥

796

¥

797

$

7,107

Investment securities:
Marketable equity securities
Nonmarketable equity securities
Others¥ 26,483
41
4¥ 32,249
16
17$ 236,455
366
36

Total

¥ 26,528¥ 32,282$ 236,857

The cost and aggregate fair value of short-term investments and investment securities at March 31, 2016 and 2015,
were as follows:

March 31, 2016

Cost

Millions of Yen
Unrealized
Unrealized
Gains
LossesSecurities classified as:
Trading

Fair
Value

¥

796

Available for sale:
Equity securities
Others¥ 7,149
3¥ 20,0921¥ 758¥ 26,483
4

Total¥ 7,152¥ 20,093¥ 758¥ 26,487

March 31, 2015
Securities classified as:
Trading¥

Available for sale:
Equity securities
Debt securities
Others¥ 7,014300
16¥ 25,238

Total¥ 7,330¥ 25,239- 15 -

497¥

3¥ 32,249
300
17

¥

3

¥ 32,566

1

March 31, 2016

Thousands of U.S. Dollars
Unrealized
Unrealized
Gains
Losses

Cost

Fair
Value

Securities classified as:
Trading$

7,107

Available for sale:
Equity securities
Others$ 63,830
27$ 179,393
9$ 6,768$ 236,455
36

Total

$ 63,857$ 179,402$ 6,768$ 236,491

The proceeds from sales of available-for-sale securities for the year ended March 31, 2016, were ¥1,928 million($17,214 thousand). The gross realized gains on these sales, computed on the moving-average cost basis, for theyear ended March 31, 2016, were ¥432 million ($3,857 thousand).
4.

INVENTORIESInventories at March 31, 2016 and 2015, consisted of the following:

Millions of Yen
2016
2015

5.

Finished products
Work in process
Raw materials and supplies

¥

8,803
5,112
9,997

Total

¥ 23,912

¥

8,572
5,187
11,247¥ 25,006

Thousands of
U.S. Dollars
2016$

78,59845,64389,259$ 213,500

LONG-LIVED ASSETSThe Group reviewed its long-lived assets for impairment as of March 31, 2016. As a result, the Group recognized
an impairment loss of ¥59 million ($527 thousand) as other expense for buildings, structures, furniture and fixturesof some offices in Japan. Due to the decision of moving and closing, the carrying amount of these assets was
written down to the recoverable amount. The recoverable amount of that group was measured at its value in use andevaluated to zero.

6.

SHORT-TERM BANK LOANS
Short-term bank loans at March 31, 2016 and 2015, consisted of notes to banks. The weighted-average annualinterest rate applicable to the short-term bank loans is 0.07% and 0.1% at March 31, 2016 and 2015, respectively.

7.

RETIREMENT AND PENSION PLANS
The Company and its certain subsidiaries have severance payment plans for employees, directors, and Audit &Supervisory Board members.

- 16 -

Under most circumstances, employees terminating their employment are entitled to retirement benefits determinedbased on the rate of pay at the time of termination, years of service, and certain other factors. Such retirement
benefits are given in the form of a lump-sum severance payment from the Company or from certain subsidiaries andannuity payments from the Company, certain subsidiaries, or a trustee. Employees of the Company or certain
subsidiaries are entitled to larger payments if the termination is involuntary, by retirement at the mandatory
retirement age, by death, or by voluntary retirement at certain specific ages prior to the mandatory retirement age.
(1) The changes in defined benefit obligation for the years ended March 31, 2016 and 2015, were as follows:

Millions of Yen
2016
2015
Balance at beginning of year (as previously
reported)
Cumulative effect of accounting change
Balance at beginning of year (as restated)
Current service cost
Interest cost
Actuarial (gains) losses
Benefits paid
Others¥ 3,945

Balance at end of year

Thousands of
U.S. Dollars
2016$ 35,223

3,945
203
22
(36 )
(168 )(29 )¥ 3,578
17
3,595
204
35
335
(128 )(96 )¥ 3,937¥ 3,945$ 35,152

35,2231,813
196(321 )(1,500 )(259 )(2) The changes in plan assets for the years ended March 31, 2016 and 2015, were as follows:

Millions of Yen
2016
2015

Thousands of
U.S. Dollars
2016

Balance at beginning of year
Expected return on plan assets
Actuarial (losses) gains
Contributions from the employer
Benefits paid
Others

¥ 961
24
(43 )
49
(39 )
(3 )

¥ 967
13
18
50
(63 )
(24 )

$ 8,580214(384 )
438(348 )(27 )Balance at end of year

¥ 949

¥ 961

$ 8,473- 17 -

(3) Reconciliation between the liability recorded in the consolidated balance sheet and the balances of defined
benefit obligation and plan assets as of March 31, 2016 and 2015, was as follows:

Millions of Yen
2016
2015

Thousands of
U.S. Dollars
2016

Funded defined benefit obligation
Plan assets
Total
Unfunded defined benefit obligation¥ 1,720(949 )
771
2,218¥ 1,759(961 )
798
2,186$ 15,357(8,473 )6,884
19,804

Net liability for defined benefit obligation¥ 2,989¥ 2,984$ 26,688

Millions of Yen
2016
2015

Thousands of
U.S. Dollars
2016

Liability for retirement benefits¥ 2,989¥ 2,984$ 26,688

Net liability for defined benefit obligation¥ 2,989¥ 2,984$ 26,688(4) The components of net periodic benefit costs for the years ended March 31, 2016 and 2015, were as follows:

Millions of Yen
2016
2015

Thousands of
U.S. Dollars
2016

Service cost
Interest cost
Expected return on plan assets
Recognized actuarial losses
Others

¥ 203
22
(24 )
136
61

¥ 204
35
(13 )
85
66

$ 1,813196(214 )
1,214
545

Net periodic benefit costs

¥ 398

¥ 377

$ 3,554(5) Amounts recognized in other comprehensive income (before income tax effect) in respect of defined
retirement benefit plans for the years ended March 31, 2016 and 2015

Millions of Yen
2016
2015

Thousands of
U.S. Dollars
2016

Actuarial (gains) losses¥ (127 )¥ 220$ (1,134 )Total¥ (127 )¥ 220$ (1,134 )- 18 -

(6) Amounts recognized in accumulated other comprehensive income (before income tax effect) in respect ofdefined retirement benefit plans as of March 31, 2016 and 2015, were as follows:
Thousands of
U.S. Dollars
2016

Millions of Yen
2016
2015
Unrecognized actuarial losses

¥ 362

¥ 489

$ 3,232

Total

¥ 362

¥ 489

$ 3,232(7) Plan assetsa.

Components of plan assets
Plan assets as of March 31, 2016 and 2015, consisted of the following:

b.

2016

2015

Debt investments
Equity investments
Cash and cash equivalents
Others

53%
16
2
29

54 %
16
2
28

Total

100%

100%

Method of determining the expected rate of return on plan assets
The expected rate of return on plan assets is determined considering the long-term rates of return which
are expected currently and in the future from the various components of the plan assets.

(8) Assumptions used for the years ended March 31, 2016 and 2015, are set forth as follows:

Discount rate
Expected rate of return on plan assets

2016

2015

0.1%–1.6%
4.5%

0.2%–1.7%
2.5%

The expected raise rate is based on the index of the raise calculated by age as of March 31, 2013.
(9) Defined contribution plan
The required contribution amounts of the Group for the years ended March 31, 2016 and 2015, were¥215 million ($1,920 thousand) and ¥215 million, respectively.
The liability for retirement benefits at March 31, 2016 and 2015, for directors and Audit & Supervisory Board
members was ¥102 million ($911 thousand) and ¥102 million, respectively.

- 19 -

8.

EQUITYJapanese companies are subject to the Companies Act of Japan (the "Companies Act"). The significant provisions
in the Companies Act that affect financial and accounting matters are summarized below:a.

Dividends
Under the Companies Act, companies can pay dividends at any time during the fiscal year in addition to theyear-end dividend upon resolution at the shareholders' meeting. Additionally, for companies that meet certain
criteria, such as (1) having a board of directors, (2) having independent auditors, (3) having an Audit &Supervisory Board, and (4) the term of service of the directors being prescribed as one year rather than thenormal two-year term by its articles of incorporation, the board of directors may declare dividends (except for
dividends in kind) at any time during the fiscal year if the company has prescribed so in its articles ofincorporation. With respect to the third condition above, the board of directors of companies with an audit andsupervisory committee (as implemented under the Companies Act effective May 1, 2015) may also declare
dividends at any time because such companies, by their nature, meet the criteria under the Companies Act. The
Company is organized as a company with an audit and supervisory committee, effective June 23, 2016. The
Company meets all the above criteria, and accordingly, the board of directors may declare dividends (except
for dividends-in-kind) at any time during the fiscal year.
The Companies Act permits companies to distribute dividends in kind (noncash assets) to shareholders subject
to certain limitations and additional requirements.
Semiannual interim dividends may also be paid once a year upon resolution by the board of directors if thearticles of incorporation of the company so stipulate. The Companies Act provides certain limitations on theamounts available for dividends or the purchase of treasury stock. The limitation is defined as the amountavailable for distribution to the shareholders, but the amount of net assets after dividends must be maintained
at no less than ¥3 million.

b.

Increases/Decreases and Transfer of Common Stock, Reserve, and Surplus
The Companies Act requires that an amount equal to 10% of dividends must be appropriated as a legal reserve(a component of retained earnings) or as additional paid-in capital (a component of capital surplus), dependingon the equity account charged upon the payment of such dividends, until the aggregate amount of the legal
reserve and additional paid-in capital equals 25% of the common stock. Under the Companies Act, the total
amount of additional paid-in capital and legal reserve may be reversed without limitation. The Companies Act
also provides that common stock, legal reserve, additional paid-in capital, other capital surplus, and retained
earnings can be transferred among the accounts within equity under certain conditions upon resolution of theshareholders.

c.

Treasury Stock and Treasury Stock Acquisition Rights
The Companies Act also provides for companies to purchase treasury stock and dispose of such treasury stockby resolution of the board of directors. The amount of treasury stock purchased cannot exceed the amountavailable for distribution to the shareholders which is determined by a specific formula.

- 20 -

Under the Companies Act, stock acquisition rights are presented as a separate component of equity.
The Companies Act also provides that companies can purchase both treasury stock acquisition rights andtreasury stock. Such treasury stock acquisition rights are presented as a separate component of equity or
deducted directly from stock acquisition rights.
9.

INCOME TAXESThe Company and its domestic subsidiaries are subject to Japanese national and local income taxes that, in theaggregate, resulted in normal effective statutory tax rates of approximately 32.8% and 35.4% for the years ended
March 31, 2016 and 2015, respectively.
The tax effects of significant temporary differences and tax loss carryforwards that resulted in deferred tax assets
and liabilities at March 31, 2016 and 2015, are as follows:

Millions of Yen
2016
2015
Deferred tax assets:
Inventories
Liability for retirement benefits
Tax loss carryforwards
Accrued expenses
Other
Less valuation allowance

¥

Total
Deferred tax liabilities:
Unrealized gain on available-for-sale securities
Other
Total
Net deferred tax liabilities

775
719
1,309
744
1,560
(2,166 )

¥

793
736
1,608
777
1,605
(2,567 )Thousands of
U.S. Dollars
2016

$

6,920
6,420
11,688
6,643
13,927(19,339 )

2,941

2,952

26,259(5,833 )(52 )(7,880 )(48 )(52,080 )(465 )(5,885 )(7,928 )(52,545 )¥ (2,944 )¥ (4,976 )$ (26,286 )Deferred tax assets and liabilities were included in the consolidated balance sheet as follows:

Millions of Yen
2016
2015

Thousands of
U.S. Dollars
2016

Current assets—deferred tax assets
Investments and other assets—deferred tax assets
Current liabilities—other current liabilities
Long-term liabilities—deferred tax liabilities¥ 1,792
237(41 )(4,932 )¥ 1,717266(37 )(6,922 )$ 16,000
2,116(366 )(44,036 )Net deferred tax liabilities¥ (2,944 )¥ (4,976 )$ (26,286 )- 21 -

Reconciliation between the normal effective statutory tax rates and the actual effective tax rates reflected in theaccompanying consolidated statement of income for the year ended March 31, 2016, with the corresponding figuresfor 2015, is as follows:
2016

2015

Normal effective statutory tax rate
Tax credit for research expenses
Decrease in valuation allowance
Effect of reduction of income tax rates on deferred tax assets
Other—net

32.8 %
(4.1)
(5.0)
2.5
(0.7)

35.4 %
(4.5)
(5.9)
4.5
(0.1)

Actual effective tax rate

25.5 %

29.4 %At March 31, 2016, certain subsidiaries have tax loss carryforwards aggregating approximately ¥5,511 million($49,202 thousand) that are available to be offset against taxable income of such subsidiaries in future years. Thesetax loss carryforwards, if not utilized, will expire as follows:Year Ending
March 31

Millions of Yen

2017
2018
2019
2020 and thereafter

¥

29
110
58
5,314

Total

¥ 5,511

Thousands of
U.S. Dollars
$

259
984
514
47,445$ 49,202

New tax reform laws enacted in 2016 in Japan changed the normal effective statutory tax rate for the fiscal year
beginning on or after April 1, 2016, to approximately 30.7% and for the fiscal year beginning on or after April 1,
2018, to approximately 30.5%. The effect of these changes was to decrease deferred tax liabilities, net of deferred
tax assets, by ¥158 million ($1,411 thousand) and increase accumulated other comprehensive income for unrealized
gain on available-for-sale securities by ¥305 million ($2,723 thousand) and defined retirement benefit plan by¥1 million ($9 thousand) in the consolidated balance sheet as of March 31, 2016, and to increase income taxes—
deferred in the consolidated statement of income for the year then ended by ¥146 million ($1,303 thousand).
10.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses for the years ended March 31, 2016 and 2015, principally consisted of
the following:

Millions of Yen
2016
2015
Salaries for employees
Provision for bonuses
Retirement benefit expenses
Provision for product warranty liabilities
R&D expenses
Provision for loss on recycling of monitors
Provision of allowance for doubtful accounts¥ 5,382
321
293
436
4,962
(70 )
(7 )

- 22 -¥ 4,999
301
241
632
5,542
(70 )
4

Thousands of
U.S. Dollars
2016$ 48,054
2,866
2,616
3,893
44,304(625 )(63 )11.

R&D COSTS
R&D costs charged to income were ¥5,387 million ($48,098 thousand) and ¥6,049 million for the years ended
March 31, 2016 and 2015, respectively.

12.

LEASES
The minimum rental commitments under noncancelable operating leases at March 31, 2016 and 2015, were as
follows:

Millions of Yen
2016
2015

13.

Thousands of
U.S. Dollars
2016

Due within one year
Due after one year

¥ 238
350

¥ 230
410

$ 2,125
3,125

Total

¥ 588

¥ 640

$ 5,250FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES(1) Group Policy for Financial Instruments
The Group uses financial instruments based on its capital expenditure plan. Cash surpluses, if any, are invested
in low-risk financial assets. Derivatives are used, not for speculative purposes, but to manage exposure tofinancial risks as described in (2) below.
(2) Nature and Extent of Risks Arising from Financial Instruments
Receivables such as trade notes and trade accounts are exposed to customer credit risk. Although receivables
in foreign currencies are exposed to the risk of fluctuation in foreign currency exchange rates, the position, netof payables in foreign currencies, is hedged by using forward foreign currency contracts. Short-term
investment and investment securities, mainly equity instruments of customers and suppliers of the Group, debt
securities and funds in trust are exposed to credit risk and the risk of fluctuation in market price and interestrate.
All payment terms of payables, such as trade accounts, are within one year. Although payables in foreign
currencies are exposed to the risk of fluctuation in foreign currency exchange rates, those risks are netted
against the balance of receivables denominated in the same foreign currency, as noted above.
Short-term bank loans are used to hedge the exchange risk for nontrade receivables denominated in foreign
currency. The payment term is within three months after the consolidated balance sheet date. The loans aretraded in foreign currency and have variable interest rates. Thus, they are exposed to the market risk offluctuation in exchange rate and interest rates.
Derivatives mainly include forward foreign currency contracts that are used to manage exposure to risk ofchanges in foreign currency exchange rates of receivables and payables. Please see Note 14 for more details
about derivatives.

- 23 -

(3) Risk Management for Financial Instruments
Credit risk management
Credit risk is the risk of economic loss arising from a counterparty's failure to repay or service debt according
to the contractual terms. The Group manages its credit risk from receivables on the basis of internal guidelines,
which include monitoring of payment terms and balances of major customers by each business administration
department to identify the default risk of customers at an early stage. With respect to debt securities, the Groupmanages its exposure to credit risk by limiting its funding to high credit rating bonds in accordance with in its
internal guidelines. Please see Note 14 for information about derivatives.
The maximum credit risk exposure of financial assets is limited to their carrying amounts as of March 31,
2016.
Market risk management (foreign exchange risk and interest rate risk)
Foreign currency trade receivables, payables and short-term bank loans are exposed to fluctuations in foreign
currency exchange rates. Such foreign exchange risk is hedged occasionally by forward foreign currency
contracts.
Marketable and investment securities are managed by monitoring the market values and financial position ofissuers on a regular basis.
The basic principles of derivative transactions have been approved by the Chief Financial Officer based oninternal guidelines that prescribe the authority and the limit for each transaction by the corporate treasury
department. Reconciliation of the transactions and balances with customers is made and the transaction data isreported to the Chief Financial Officer on a monthly basis.
Liquidity risk management
Liquidity risk comprises the risk that the Group cannot meet its contractual obligations in full on maturity
dates. The Group manages its liquidity risk by holding adequate volumes of liquid assets along with adequate
financial planning by the corporate treasury department.
(4) Concentration of Credit Risk
As of March 31, 2016, 19.5% of total receivables are from specific major customers of the Group.
(5) Fair Values of Financial Instruments
Fair values of financial instruments are based on quoted prices in active markets. If quoted prices are notavailable, other rational valuation techniques are used instead.

- 24 -

(a) Fair value of financial instruments
Millions of Yen
Carrying
AmountMarch 31, 2016

Fair Value

Cash and cash equivalents
Notes and accounts receivables
Allowance for doubtful receivables
Notes and accounts receivables (net)
Short-term investments andinvestment securities¥ 20,221
17,635(125 )
17,510¥ 20,221

27,28327,283

Total¥ 65,014¥ 65,014

Accounts payable
Short-term bank loans

¥

¥

Total

¥ 10,855¥ 10,855

Derivatives

¥

¥

8,943
1,912

4

17,510

8,943
1,912

4

March 31, 2015
Cash and cash equivalents
Notes and accounts receivables
Allowance for doubtful receivables
Notes and accounts receivables (net)
Short-term investments andinvestment securities¥ 18,023
17,727(118 )
17,609¥ 18,023

33,06333,063

Total¥ 68,695¥ 68,695

Accounts payable
Short-term bank loans

¥

7,465
1,954

¥

7,465
1,954

Total

¥

9,419

¥

9,419

Derivatives

¥

46

¥

46

- 25 -

17,609Unrealized
Gain/LossCarryingAmountMarch 31, 2016

Thousands of U.S. Dollars
Unrealized
Fair Value
Gain/Loss

Cash and cash equivalents
Notes and accounts receivables
Allowance for doubtful receivables
Notes and accounts receivables (net)
Short-term investments andinvestment securities$ 180,545
157,456(1,117 )
156,339$ 180,545

243,598

243,598

Total$ 580,482$ 580,482

Accounts payable
Short-term bank loans$

79,84817,071$

79,84817,071

Total$

96,919$96,919Derivatives

$

36

$

36

156,339

Cash and Cash Equivalents
The carrying values of cash and cash equivalents approximate fair value because of their short maturities.
Notes and Accounts Receivables
The carrying values of notes and accounts receivables approximate fair value because of their short-term
settlement. The allowance for doubtful receivables is deducted from the notes and accounts receivables.
Short-Term Investments and Investment Securities
The fair values of short-term investments and investment securities are measured at the quoted market
price of the stock exchange for equity instruments and at the quoted price obtained from financial
institution for certain debt instruments. Fair value information for the short-term investments andinvestment securities by classification is included in Note 3.
Accounts Payable and Short-Term Bank Loans
The carrying values of accounts payable and short-term bank loans approximate fair value because of
their short-term settlement.
Derivatives
Fair value information for derivatives is included in Note 14.

- 26 -

(b) Carrying amount of financial instruments whose fair value cannot be reliably determined

Millions of Yen
2016
2015
Investments in equity instruments that do nothave a quoted market price in an active market

¥ 41

¥ 16

Thousands of
U.S. Dollars
2016

$ 366

(6) Maturity Analysis for Financial Assets and Securities with Contractual Maturities

March 31, 2016

Due in1 Yearor Less

Cash and cash equivalents
Receivables¥ 20,218
17,635

Total¥ 37,853

Millions of Yen
Due after
Due after
1 Year
5 Years
throughthrough
5 Years
10 Years

Due after
10 YearsThousands of U.S. Dollars
Due after
Due after
1 Year
5 Years
throughthrough
5 Years
10 Years

Due after
10 Years

March 31, 2015
Cash and cash equivalents
Receivables
Investment securities—corporate bonds¥ 18,019
17,727300

Total¥ 36,046

Due in1 Yearor Less

March 31, 2016
Cash and cash equivalents
Receivables$ 180,518
157,455

Total$ 337,973- 27 -

14.

DERIVATIVESThe Group enters into derivative contracts, including foreign currency forward contracts, to hedge foreign exchange
risk associated with certain assets and liabilities denominated in foreign currencies.
All derivative transactions are entered into to hedge foreign currency exposures incorporated within the Group'sbusiness. Accordingly, market risk in these derivatives is basically offset by opposite movements in the value ofhedged assets or liabilities.
Because the counterparties to these derivatives are limited to major international financial institutions, the Group
does not anticipate any losses arising from credit risk.
Derivative transactions entered into by the Group have been made in accordance with internal policies that regulate
the authorization and credit limit amount.
Derivative Transactions to Which Hedge Accounting Is Not Applied
Derivative transactions to which hedge accounting is not applied at March 31, 2016 and 2015, were as follows:

March 31, 2016
Foreign currency forward contracts:
Selling Euro
Buying U.S. dollar

Contract
AmountMillions of Yen
Contract
AmountDue after
Fair
1 Year
Value

¥438
175

¥ 10
(6 )

¥ 10
(6 )

¥ 1,417

¥ 46

¥ 46

Unrealized
Gain/Loss

March 31, 2015
Foreign currency forward contracts—
Selling EuroMarch 31, 2016

Contract
AmountThousands of U.S. Dollars
Contract
AmountDue after
Fair
1 YearValue

Foreign currency forward contracts:
Selling Euro
Buying U.S. dollar$ 3,911
1,563

$ 89
(54 )

Unrealized
Gain/Loss

$ 89
(54 )

The fair value of derivative transactions is measured at the quoted price obtained from financial institutions.

- 28 -

15.

OTHER COMPREHENSIVE (LOSS) INCOME
The components of other comprehensive income and loss for the years ended March 31, 2016 and 2015, were as
follows:

Millions of Yen
2016
2015
Unrealized (loss) gain on available-for-sale securities:(Losses) gains arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effectTotal
Foreign currency translation adjustments:
Adjustments arising during the year
Amount before income tax effect
Income tax effect
Total
Defined retirement benefit plans:
Adjustments arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effectTotal
Total other comprehensive (loss) income16.

¥ (5,470 )(432 )(5,902 )2,047¥ 11,266¥ (3,855 )¥Thousands of
U.S. Dollars
2016

11,266(3,070 )$ (48,839 )(3,857 )(52,696 )18,277¥8,196$ (34,419 )(374 )(374 )

¥

95
95

$

(3,339 )(3,339 )¥(374 )¥

95$(3,339 )

¥

(5 )
132
127
5

¥

(304 )
84(220 )
(10 )

$

(45 )
1,179
1,134
45

¥

132

¥

(230 )$

1,179¥ (4,097 )

¥

8,061

$ (36,579 )SUBSEQUENT EVENT
The following appropriation of retained earnings at March 31, 2016, was approved at the board of directors'
meeting held on May 19, 2016:

Year-end cash dividends, ¥35 ($0.3) per share- 29 -

Millions of Yen

Thousands of
U.S. Dollars¥ 746$ 6,661

17.

SEGMENT INFORMATION
Under ASBJ Statement No. 17, "Accounting Standard for Segment Information Disclosures," and ASBJ Guidance
No. 20, "Guidance on Accounting Standard for Segment Information Disclosures," an entity is required to reportfinancial and descriptive information about its reportable segments. Reportable segments are operating segments oraggregations of operating segments that meet specified criteria. Operating segments are components of an entity
about which separate financial information is available, and such information is evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and in assessing performance. Generally, segment
information is required to be reported on the same basis as is used internally for evaluating operating segment
performance and deciding how to allocate resources to operating segments.
(1) Description of Reportable Segments
The Group is primarily engaged in the manufacture, development, and sale of visual display systems andrelated products. The Group consists of this single industry, and therefore, it is not required to disclose
separate financial information by segment.
(2) Information about Products and Services

Visual Display
Systems
Sales to external customers¥ 54,626

Visual Display
Systems
Sales to external customers¥ 48,577

Visual Display
Systems
Sales to external customers$ 487,732

Millions of Yen
2016
Amusement
Monitors
Other¥ 15,279¥ 4,974

Millions of Yen
2015
Amusement
Monitors
Other¥ 15,128¥ 8,872

Thousands of U.S. Dollars
2016
Amusement
Monitors
Other$ 136,420$ 44,411

Total¥ 74,879

Total¥ 72,577

Total$ 668,563

Note: A re-characterization from "Computer use monitors" to "Visual Display Systems" was implemented.
The net sales of peripherals, such as graphics boards, QC software and other accessories, arereclassified from "Others" to "Visual Display Systems." Sales disclosure information in the previous
financial year was adjusted for comparable purposes.

- 30 -

(3) Information about Geographical Areas(a) Sales

Japan

EuropeMillions of Yen
2016
North
America¥ 40,457¥ 25,929¥ 5,116¥ 3,377¥ 74,879

Japan

EuropeMillions of Yen
2015
North
America

Other

Total

¥ 40,479¥ 25,261¥ 4,112¥ 2,725¥ 72,577

Japan

EuropeThousands of U.S. Dollars
2016
North
America

Other

Total

$ 361,223$ 231,509$ 45,679$ 30,152$ 668,563

Other

Total

Note: Sales are classified by country or region based on the location of customers.
(b) Property, plant, and equipment
The amount of property, plant, and equipment for Japan exceeds 90% of the amount of property, plant, andequipment in the consolidated balance sheet, and thus, there is no requirement to disclose such information.
(4) Information about Major Customers

Name of Customers

Millions of Yen
2016
Sales

JT Japan Technicals¥ 18,960

Name of Customers

Millions of Yen
2015
Sales

JT Japan Technicals¥ 22,131

Name of Customers

Thousands of
U.S. Dollars
2016
Sales

JT Japan Technicals$ 169,286******