EIZO Corporation and Subsidiaries
Consolidated Balance Sheet
March 31, 2020

Millions of Yen
2020
2019

ASSETS
CURRENT ASSETS:
Cash and cash equivalents (Note 13)
Short-term investments (Notes 4 and 13)
Notes and accounts receivable (Note 13):
Trade notes
Trade accounts
Other
Allowance for doubtful receivables
Inventories (Note 5)
Prepaid expenses and other current assets

Thousands of
U.S. Dollars(Note 1)2020

¥ 17,942
700¥ 16,099
1,117$ 166,130
6,481

104
18,376543(83 )29,150691

216
17,030805(77 )28,377601

963
170,1485,028(769 )
269,907
6,399

67,42364,168624,287

CURRENT LIABILITIES:
Short-term bank loans (Notes 6 and 13)
Current portion of long-term debt (Notes 6 and 13)
Accounts payable (Note 13):
Trade accounts
Other
Income taxes payable
Accrued expenses
Other current liabilities
Total current liabilities

Total current assets
PROPERTY, PLANT, AND EQUIPMENT:Land
Buildings and structures
Machinery and equipment
Furniture and fixtures
Right-of-use assets
Construction in progress
Total
Accumulated depreciation
Net property, plant, and equipment
INVESTMENTS AND OTHER ASSETS:
Investment securities (Notes 4 and 13)
Goodwill
Deferred tax assets (Note 9)
Other assets
Total investments and other assets

3,736
18,278
6,049
8,040
496
432
37,031(20,688 )3,574
15,711
5,147
7,285
1,793
33,510(19,189 )

34,593
169,241
56,00974,4444,593
4,000
342,880(191,556 )

16,343

14,321

151,324

37,580
1,894
572
1,473

38,677
2,317
512
1,429

347,963
17,537
5,296
13,63941,51942,935

384,435

LONG-TERM LIABILITIES:Long-term debt (Notes 6 and 13)
Liability for retirement benefits (Note 7)
Deferred tax liabilities (Note 9)
Other long-term liabilities
Total long-term liabilities¥ 125,285¥ 121,424

¥

1,793
228

¥

1,868

$

16,602
2,111

8,185
1,820
924
4,087
1,212

6,696
1,387
565
4,023
1,134

75,787
16,852
8,556
37,843
11,221

18,24915,673

168,972

1,282
3,128
5,519
1,127

1,246
2,829
5,593
1,159

11,87028,963
51,102
10,435

11,056

10,827102,370

4,426
4,314
72,992

4,426
4,314
70,56340,981
39,944
675,852(2,663 )(2,663 )(24,657 )17,886(1,068 )93

18,471(510 )
323

165,612(9,889 )861

95,98094,924

888,704¥ 125,285¥ 121,424$ 1,160,046

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 2020 and 2019
Capital surplus
Retained earnings
Treasury stock—at cost, 1,410,769 shares in 2020 and
1,410,709 shares in 2019
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
2020
2019

LIABILITIES AND EQUITY

Thousands of
U.S. Dollars(Note 1)2020

$ 1,160,046

TOTAL

See notes to consolidated financial statements.

-4-

EIZO Corporation and Subsidiaries
Consolidated Statement of Income
Year Ended March 31, 2020

Millions of Yen
2020
2019
NET SALES

Thousands of
U.S. Dollars(Note 1)
2020

¥ 76,481¥ 72,944$ 708,157

50,96649,189471,907

25,51523,755236,250SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES (Notes 10 and 11)

19,074

18,385

176,611

Operating income

6,441

5,370

59,639712(13 )(613 )(155 )
71

639(3 )(481 )
185

6,593(120 )(5,676 )(1,435 )
656

2

340

18

INCOME BEFORE INCOME TAXES

6,443

5,710

59,657

INCOME TAXES (Note 9):
Current
Deferred

1,629
142

1,248
153

15,083
1,315

1,771

1,401

16,398

4,672

4,309

43,259¥ 4,672¥ 4,309$ 43,259

COST OF SALES
Gross profit

OTHER INCOME (EXPENSES):Interest and dividend income
Interest expense
Foreign exchange loss—net
Loss on valuation of investment securities (Note 4)
Other—net (Note 4)
Other income—net

Total income taxes
NET INCOME
NET INCOME ATTRIBUTABLE TO OWNERS OF
THE PARENTYen
PER SHARE OF COMMON STOCK (Note 2.q):
Basic net income
Cash dividends applicable to the year

¥ 219.13
105.00See notes to consolidated financial statements.

-5-

U.S. Dollars¥ 202.09
95.00$ 2.030.97

EIZO Corporation and Subsidiaries
Consolidated Statement of Comprehensive Income
Year Ended March 31, 2020

Millions of Yen
2020
2019
NET INCOME

Thousands of
U.S. Dollars(Note 1)2020

¥ 4,672¥ 4,309$ 43,259(585 )(558 )(230 )

964(283 )
439(5,416 )(5,167 )(2,130 )(1,373 )

1,120(12,713 )COMPREHENSIVE INCOME¥ 3,299¥ 5,429$ 30,546

TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO—
Owners of the parent¥ 3,299¥ 5,429$ 30,546

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

See notes to consolidated financial statements.

-6-

EIZO Corporation and Subsidiaries
Consolidated Statement of Changes in Equity
Year Ended March 31, 2020

BALANCE, APRIL 1, 2018
Net income
Cash dividends, ¥95 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, 2019 (APRIL 1, 2019, as previously reported)

Thousands
Number of
Shares ofCommonStock
Outstanding

CommonStockCapitalSurplus21,321¥ 4,426¥ 4,314BALANCE, MARCH 31, 2019 (APRIL 1, 2019, as previously reported)¥ (116 )¥ 91,522

439

4,309
(2,026 )(1 )964(283 )
439

323

94,924¥ 17,507¥(227 )

964(283 )
21,320

4,426

4,314

70,563(2,663 )18,471(510 )(4 )21,320

4,426

4,314

70,559(4 )(2,663 )18,471(510 )

323

4,672(2,239 )(230 )(585 )(558 )(230 )

93¥ 95,980(558 )
21,320¥ 4,426¥ 4,314¥ 72,992

CommonStockCapitalSurplusRetained
Earnings$ 40,981$ 39,944$ 653,361¥ (2,663 )¥ 17,886¥ (1,068 )¥Thousands of U.S. Dollars (Note 1)
Accumulated Other Comprehensive Income
Unrealized
ForeignDefinedGain onCurrency
Retirement
Treasury
Available-forTranslation
Benefit
Stock
Sale Securities
Adjustments
Plans$ (24,657 )$ 171,028$ (4,722 )$ 2,991(37 )
40,981

39,944653,324(24,657 )

171,028(4,722 )2,991

See notes to consolidated financial statements.
-7-878,889(2,130 )(5,416 )(5,167 )(2,130 )$ 861$ 888,704(5,167 )$ 675,852$ 878,926

43,259(20,731 )(5,416 )$ 39,944

Total
Equity(37 )43,259(20,731 )$ 40,981

94,9204,672(2,239 )(585 )Net income
Cash dividends, $0.97 per share
Purchase of treasury stock
Net decrease in unrealized loss on available-for-sale securities
Net change in foreign currency translation adjustments
Net change in defined retirement benefit plans
BALANCE, MARCH 31, 2020

¥ (2,662 )(1 )Cumulative effect of accounting change (Note 3)
BALANCE, APRIL 1, 2019 (as restated)¥ 68,280(1 )Net income
Cash dividends, ¥105 per share
Purchase of treasury stock
Net decrease in unrealized loss on available-for-sale securities
Net change in foreign currency translation adjustments
Net change in defined retirement benefit plans
BALANCE, MARCH 31, 2020

Total
Equity4,309(2,026 )Cumulative effect of accounting change (Note 3)
BALANCE, APRIL 1, 2019 (as restated)

Retained
Earnings

Millions of Yen
Accumulated Other Comprehensive Income
Unrealized
ForeignDefinedGain onCurrency
Retirement
Treasury
Available-forTranslation
Benefit
Stock
Sale Securities
Adjustments
Plans$ (24,657 )$ 165,612$ (9,889 )EIZO Corporation and Subsidiaries
Consolidated Statement of Cash Flows
Year Ended March 31, 2020

Millions of Yen
2020
2019
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—net
Loss on valuation of investment securities
Changes in assets and liabilities:(Increase) decrease in notes and accounts receivable
Increase in inventories
Increase (decrease) in accounts payable
Increase (decrease) 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
Decrease (increase) in other assets
Net cash used in investing activities
FINANCING ACTIVITIES:
Proceeds from long-term debt
Repayments of long-term debt
Dividends paid
Repayments of lease obligations
Repurchases of treasury stockThousands of
U.S. Dollars(Note 1)2020

¥ 6,443¥ 5,710$ 59,657(1,256 )
2,563
424
8
92
155

(2,545 )
2,238
513
(53 )
88

(11,630 )
23,731
3,926
74
852
1,435

(1,652 )(1,311 )
2,545
94
43
10
1,715

5,105
(4,015 )(1,331 )(461 )
209(110 )(362 )(15,296 )(12,139 )
23,565870
398
94
15,880

8,158

5,348

75,537(4,041 )(246 )(3,841 )(192 )(37,417 )(2,278 )

780

302

7,222

(522 )
312(4,655 )(327 )(4,833 )2,889(3,717 )(8,713 )(34,417 )(2,239 )(194 )

1,284(55 )(2,025 )(20,732 )(1,796 )(1 )Net cash used in financing activities(2,433 )(797 )(22,528 )FOREIGN CURRENCY TRANSLATION ADJUSTMENT ON
CASH AND CASH EQUIVALENTS(165 )(134 )(1,527 )¥ 1,843¥ (4,296 )$ 17,065

NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS—(Forward)-8-(Continued)

EIZO Corporation and Subsidiaries
Consolidated Statement of Cash Flows
Year Ended March 31, 2020

Millions of Yen
2020
2019
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS—(Forward)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS, END OF YEAR

Thousands of
U.S. Dollars(Note 1)2020

¥ 1,843¥ (4,296 )$ 17,065

16,09920,395

149,065¥ 17,942¥ 16,099$ 166,130

See notes to consolidated financial statements.

-9-(Concluded)

EIZO Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Year Ended March 31, 2020

1.

BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared in accordance with theprovisions set forth in the Japanese Financial Instruments and Exchange Act and its related
accounting regulations and in accordance with 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 to readers outside Japan. In addition, certain reclassifications
have been made in the 2019 consolidated financial statements to conform to the classifications usedin 2020.
The consolidated financial statements are stated in Japanese yen, the currency of the country inwhich 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 ¥108 to $1, the approximate rate of exchange at March 31,
2020. 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, 2020, include theaccounts of the Company and its 16 (16 in 2019) 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.

b.

Unification of Accounting Policies Applied to Foreign Subsidiaries for the Consolidated
Financial Statements—Under Accounting Standards Board of Japan ("ASBJ") Practical Issues
Task Force No. 18, "Practical Solution on Unification of Accounting Policies Applied to Foreign
Subsidiaries for the Consolidated Financial Statements," the accounting policies and procedures
applied to a parent company and its subsidiaries for similar transactions and events under similar
circumstances should in principle be unified for the preparation of the consolidated financial
statements. However, financial statements prepared by foreign subsidiaries in accordance witheither International Financial Reporting Standards or generally accepted accounting principles in
the United States of America (Financial Accounting Standards Board Accounting Standards
Codification) tentatively may be used for the consolidation process, except for the 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 researchand development ("R&D"); (d) cancellation of the fair value model of accounting for property,
plant, and equipment and investment properties and incorporation of the cost model ofaccounting; and (e) recording a gain or loss through profit or loss on the sale of an investment in
an equity instrument for the difference between the acquisition cost and selling price, andrecording impairment loss through profit or loss for other-than-temporary declines in the fair valueof an investment in an equity instrument, where a foreign subsidiary elects to present in othercomprehensive income subsequent changes in the fair value of an investment in an equity
instrument.
- 10 -

c.

Business Combinations—Business combinations are accounted for using the purchasemethod. Acquisition-related costs, such as advisory fees or professional fees, are accounted foras expenses in the periods in which the costs are incurred. 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 forwhich the accounting is incomplete. During the measurement period, which shall not exceed one
year from the acquisition, the acquirer shall retrospectively adjust the provisional amounts
recognized at the acquisition date to reflect new information obtained about facts andcircumstances that existed as of the acquisition date and that would have affected themeasurement of the amounts recognized as of that date. Such adjustments shall be recognized
as if the accounting for the business combination had been completed at the acquisition date.
The acquirer recognizes any bargain purchase gain in profit or loss immediately on theacquisition date after reassessing and confirming that all of the assets acquired and all of theliabilities assumed have been identified after a review of the procedures used in the purchaseprice allocation. 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
the parent retains its controlling interest in its subsidiary. Any difference between the fair value ofthe consideration received or paid and the amount by which the noncontrolling interest is
adjusted is accounted for as capital surplus as long as the parent retains control over its
subsidiary.

d.

Cash Equivalents—Cash equivalents are short-term investments that are readily convertible
into cash and exposed to insignificant risk of changes in value.
Cash equivalents include time deposits, certificates of deposit, and commercial paper, all ofwhich 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 forfinished products and work in process and by the moving-average method for raw materials, or
net selling value.

f.

Short-Term Investments and Investment Securities—Short-term investments andinvestment securities are classified and accounted for, depending on management's intent, as
follows: (1) trading securities, which are held for the purpose of earning capital gains in the nearterm, are reported at fair value, and the related unrealized gains and losses are included inearnings; and (2) available-for-sale securities, which are not classified as either trading securities
or held to maturity debt securities, are reported at fair value, with unrealized 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-averagemethod.
For other-than-temporary declines in fair value, investment securities are reduced to net
realizable value by a charge 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 iscomputed 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, buildings improvements and structuresacquired on or after April 1, 2016, and all 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 for furniture and fixtures.

h.

Goodwill—Goodwill is amortized over 10 years or less by the straight-line method. Immaterial
goodwill may be charged entirely to income at acquisition. Amortization of goodwill is¥424 million ($3,926 thousand) and ¥513 million for the years ended March 31, 2020 and 2019,respectively.

- 11 -

i.

Long-Lived Assets—The Group reviews its long-lived assets for impairment whenever eventsor changes in circumstances indicate the carrying amount of an asset or asset group may not berecoverable. An impairment loss is recognized if the carrying amount of an asset or asset groupexceeds 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 theasset or the net selling price at disposition.

j.

Retirement and Pension Plans—The Company and certain of its domestic subsidiaries have adefined 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 Company accounts for the liability for retirement benefits based on the projected benefit
obligations and plan assets at the balance sheet date. The projected benefit obligations are
attributed to periods on a straight-line basis. Actuarial gains and losses and prior service costs
that are yet to be recognized in profit or loss are recognized within equity (accumulated othercomprehensive income), after adjusting for tax effects and are recognized in profit or loss over
five years, no longer than the expected average remaining service period of the employees. The
discount rate is determined using a single weighted-average discount rate reflecting theestimated timing and amount of benefit payment.
Retirement benefits to directors and the Audit and Supervisory Committee members arerecorded at the amount that would be required if the directors and the Audit and Supervisory
Committee 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 the time of the abolishment
will be paid to directors and the Audit and Supervisory Committee members upon theirretirement.

k.

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

l.

Software Development Contracts—Revenue from sales of customized software and costs ofdevelopment of the customized software should be recognized by the percentage-of-completion
method if the outcome of a development contract can be estimated reliably. When total revenue,
total costs, and the stage of completion of the contract at the consolidated balance sheet datecan be reliably measured, the outcome of a development contract can be estimated reliably. If
the outcome of a development contract cannot be reliably estimated, the completed contract
method should be applied. When it is probable that the total costs will exceed total revenue, anestimated 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 torecognize deferred tax assets and liabilities for the expected future tax consequences of
temporary differences between the carrying amounts and the 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 to base tax payments on the combined profits or losses of the parent company andits wholly owned domestic subsidiaries.

- 12 -

With regard to the transition to the Group Tax Sharing System established based on "Act for
Partial Amendment of the Income Tax Act, etc." (Act No. 8, 2020) and to the items reconsideredon the Non-consolidated Tax Return Filing System in accordance with this transition to the GroupTax Sharing System, the Company and certain subsidiaries calculate the amounts of deferred
tax assets and deferred tax liabilities based on the provisions of the Income Tax Act before theamendment, without applying the provisions of Paragraph 44 of the "Implementation Guidanceon Tax Effect Accounting" (ASBJ Guidance No. 28, February 16, 2018) pursuant to Paragraph 3of the "Practical Solution on the Treatment of Tax Effect Accounting for the Transition from theConsolidated Tax Return Filing System to the Group Tax Sharing System" (Practical Issues Task
Force No. 39, March 31, 2020).
n.

Foreign Currency Transactions—All short-term and long-term monetary receivables andpayables denominated in foreign currencies are translated into Japanese yen at the exchange
rates at the consolidated balance sheet date. The foreign exchange gains and losses fromtranslation are recognized in the consolidated statement of income to the extent that they are nothedged by forward exchange contracts.

o.

Foreign Currency Financial Statements—The balance sheet accounts of the foreignsubsidiaries are translated 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" under accumulated other comprehensive income as a separate component ofequity.
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 tofluctuations in foreign currency exchange rates. Foreign exchange forward contracts are utilized
by the Group to reduce foreign currency exchange rate risks. The Group does not enter into
derivatives for trading or speculative purposes.
Derivative financial instruments are classified and accounted for as follows: all derivatives arerecognized as either assets or liabilities and measured at fair value with gains or losses onderivative transactions recognized in the consolidated statement of income.

q.

Per Share Information—Basic net income per share is computed by dividing net income
attributable to common 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, and include interim dividends paid and year-end dividends to be approved after
the 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, 2020 and
2019.

r.

New Accounting Pronouncements"Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020)"Implementation Guidance on Accounting Standard for Revenue Recognition" (ASBJ
Guidance No. 30, March 31, 2020)"Implementation Guidance on Disclosures about Fair Value of Financial Instruments"(ASBJ Guidance No. 19, March 31, 2020)- 13 -

(1) Overview
The standard and guidance provide comprehensive principles for revenue recognition.
Under the standard and guidance, revenue is recognized by applying the following five
steps:
Step 1: Identify contract(s) with customers
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligation in the contract
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation(2) Effective date
Effective from the beginning of the year ending March 31, 2022
(3) Effects of the application of the standards
The Company and its consolidated domestic subsidiaries are currently in the process ofdetermining the effects of these new standards on the consolidated financial statements.
"Accounting Standard for Accounting Changes and Error Corrections" (ASBJ Statement
No. 24, March 31, 2020)(1) Overview
For the purpose of enhancing notes information based on the principles and procedures ofaccounting treatment adopted when related accounting standards are not clear.
(2) Effective date
Effective from the end of the year ending March 31, 2021
"Accounting Standard for Fair Value Measurement" (ASBJ Statement No. 30, July 4, 2019)"Implementation Guidance on Accounting Standard for Fair Value Measurement" (ASBJ
Guidance No. 31, July 4, 2019)"Accounting Standard for Measurement of Inventories" (ASBJ Statement No. 9, July 4,
2019)"Accounting Standard for Financial Instruments" (ASBJ Statement No. 10, July 4, 2019)"Implementation Guidance on Disclosures about Fair Value of Financial Instruments"(ASBJ Guidance No. 19, March 31, 2020)(1) Overview
In order to enhance comparability with internationally recognized accounting standards,"Accounting Standard for Fair Value Measurement" and "Implementation Guidance on
Accounting Standard for Fair Value Measurement" (together, hereinafter referred to as "Fair
Value Accounting Standards") were developed and guidance on methods measuring fairvalue was issued. Fair Value Accounting Standards are applicable to the fair value
measurement of the following items:• Financial instruments in "Accounting Standard for Financial Instruments"; and• Inventories held for trading purposes in "Accounting Standard for Measurement of
Inventories."- 14 -

In addition, "Implementation Guidance on Disclosures about Fair Value of Financial
Instruments" has been revised, and items of notes such as the breakdown by the fair valuelevel of financial instruments are required.
(2) Effective date
Effective from the beginning of the year ending March 31, 2022
(3) Effects of the application of the standards
The Company and its consolidated domestic subsidiaries are currently in the process ofdetermining the effects of these new standards on the consolidated financial statements.
"Accounting Standard for Disclosure of Accounting Estimates" (ASBJ Statement No. 31,
March 31, 2020)(1) Overview
For the purpose of disclosing information that contributes to the users of financial statements
to understand, the standard addresses figures recorded in the financial statements for thecurrent fiscal year based on accounting estimates for items that have a risk of a significantly
impacting financial statements in the next fiscal year.
(2) Effective date
Effective from the end of the year ending March 31, 2021
3.

ACCOUNTING CHANGE
Effective from the first quarter of the consolidated fiscal year under review, the International Financial
Reporting Standard 16 Lease ("IFRS 16") has been applied to the subsidiaries which adopt theInternational Financial Reporting Standard. With this change, a lessee, in principle, reports all theleases as the Assets and the Liabilities. To apply IFRS 16, the Company followed the transition
practices, and recorded a cumulative effect of adoption in "Retained earnings" at the beginning of thefirst quarter of the consolidated fiscal year under review.
As a result, the "Property, plant and equipment" account increased by ¥311 million, the "Other"account under the "Current liabilities" increased by ¥168 million, and the "Other long-term liabilities"
account under the "Long-term liabilities" increased by ¥146 million at the end of consolidated fiscal
year. The "Retained earnings" decreased by ¥3 million at the beginning of the consolidated fiscal
year. Effects of these changes to the "Consolidated statement of income" were not material.

4.

SHORT-TERM INVESTMENTS AND INVESTMENT SECURITIESShort-term investments and investment securities as of March 31, 2020 and 2019, consisted of thefollowing:Thousands ofMillions of Yen
U.S. Dollars
2020
2019
2020
Short-term investments:
Debt securities
¥
200
¥
317
$ 1,852
Others
500
800
4,629
Total

¥

700

¥ 1,117$

Investment securities:
Marketable equity securities
Nonmarketable equity securities
Debt securities¥ 36,134
150
1,296¥ 36,870
150
1,657$ 334,574
1,389
12,000Total¥ 37,580¥ 38,677$ 347,963- 15 -

6,481

The cost and aggregate fair value of short-term investments and investment securities at March 31,
2020 and 2019, were as follows:

March 31, 2020
Securities classified as:
Available for sale:
Equity securities
Debt securities
OthersTotal

Cost

Millions of Yen
Unrealized
Unrealized
Gains
LossesFair
Value¥ 10,389
1,500
500¥ 27,245¥ 1,500
4¥ 36,134
1,496
500¥ 12,389¥ 27,245¥ 1,504¥ 38,130

March 31, 2019
Securities classified as:
Trading

317

Available for sale:
Equity securities
Others¥ 10,323
800¥ 27,128¥ 581¥ 36,870
800

Total

¥ 11,123¥ 27,128¥ 581¥ 37,670

March 31, 2020
Securities classified as:
Available for sale:
Equity securities
Debt securities
Others
Total
5.

¥

Cost

Thousands of U.S. Dollars
Unrealized
Unrealized
Gains
LossesFair
Value$ 96,194
13,8894,630$ 252,269$ 13,889
37$ 334,574
13,852
4,630$ 114,713$ 252,269$ 13,926$ 353,056

INVENTORIESInventories at March 31, 2020 and 2019, consisted of the following:
Millions of Yen
2020
2019

Thousands of
U.S. Dollars
2020

Finished products
Work in process
Raw materials and supplies¥ 10,839
4,481
13,830¥ 12,238
4,576
11,563$ 100,360
41,491
128,056

Total¥ 29,150¥ 28,377$ 269,907- 16 -

6.

SHORT-TERM BANK LOANS AND LONG-TERM DEBT
Short-term bank loans at March 31, 2020 and 2019, consisted of notes to banks. The
weighted-average annual interest rate applicable to the short-term bank loans was 0.07% at March
31, 2020 and 2019.
Long-term debt at March 31, 2020 and 2019, consisted of the following:
Millions of Yen
2020
2019
Loans from banks, due 2030, with interest rates of
0.15% at March 31, 2020 and 2019

¥ 1,197¥ 1,246

Thousands of
U.S. Dollars
2020$ 11,083

Annual maturities of long-term debt, as of March 31, 2020, for the next five years and thereafter wereas follows:Year Ending
March 31

7.

Millions of Yen

2021
2022
2023
2024
2025
2026 and thereafter

¥

60
120
120
120
120
657

Total

¥ 1,197

Thousands of
U.S. Dollars
$

556
1,111
1,111
1,111
1,111
6,083

$ 11,083

RETIREMENT AND PENSION PLANS
The Company and certain of its subsidiaries have severance payment plans for employees, directors,
and the Audit and Supervisory Committee members.
Under most circumstances, employees terminating their employment are entitled to retirement
benefits determined based 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 fromthe Company or from certain subsidiaries and annuity 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, orby 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, 2020 and 2019, were as
follows:
Millions of Yen
2020
2019

Thousands of
U.S. Dollars
2020

Balance at beginning of year
Current service cost
Interest cost
Actuarial losses (gains)
Benefits paid
Prior service cost
Others¥ 3,712241
19192(110 )(4 )(50 )¥ 4,147257
21(541 )(102 )(4 )(66 )$ 34,370
2,231
176
1,778
(1,019 )(37 )(462 )

Balance at end of year

¥ 4,000¥ 3,712$ 37,037- 17 -

(2) The changes in plan assets for the years ended March 31, 2020 and 2019, were as follows:
Millions of Yen
2020
2019

Thousands of
U.S. Dollars
2020

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

¥ 985
22
(46 )
34
(15 )
(6 )

¥ 1,025
22
(24 )
23
(20 )
(41 )

$ 9,120204(426 )
315(139 )(55 )Balance at end of year

¥ 974

¥ 985

$ 9,019(3) A reconciliation between the liability recorded in the consolidated balance sheet and thebalances of defined benefit obligation and plan assets as of March 31, 2020 and 2019, was asfollows:
Millions of Yen
2020
2019

Thousands of
U.S. Dollars
2020

Funded defined benefit obligation
Plan assets
Total
Unfunded defined benefit obligation¥ 1,902(974 )
928
2,098¥ 1,727(985 )
742
1,985$ 17,612(9,019 )8,593
19,426Net liability for defined benefit obligation¥ 3,026¥ 2,727$ 28,019

Millions of Yen
2020
2019

Thousands of
U.S. Dollars
2020

Liability for retirement benefits¥ 3,026¥ 2,727$ 28,019

Net liability for defined benefit obligation¥ 3,026¥ 2,727$ 28,019(4) The components of net periodic benefit costs for the years ended March 31, 2020 and 2019,were as follows:
Millions of Yen
2020
2019

Thousands of
U.S. Dollars
2020

Service cost
Interest cost
Expected return on plan assets
Recognized actuarial (gains) losses
Amortization of prior service cost
Others

¥ 241
19
(22 )
(33 )
(4 )
43

¥ 257
21
(22 )
73
(4 )
88

$ 2,231176(204 )(306 )(37 )399

Net periodic benefit costs

¥ 244

¥ 413

$ 2,259- 18 -

(5) Amounts recognized in other comprehensive income (before income tax effect) in respect ofdefined retirement benefit plans for the years ended March 31, 2020 and 2019, were as follows:
Thousands of
U.S. Dollars
2020

Millions of Yen
2020
2019
Actuarial losses (gains)
Prior service cost

¥ 288
(12 )

¥ (563 )(16 )$ 2,667(111 )

Total

¥ 276

¥ (579 )$ 2,556(6) Amounts recognized in accumulated other comprehensive income (before income tax effect) in
respect of defined retirement benefit plans as of March 31, 2020 and 2019, were as follows:
Thousands of
U.S. Dollars
2020

Millions of Yen
2020
2019
Unrecognized actuarial gains
Unrecognized prior service cost

¥ (138 )(12 )¥ (427 )(16 )$ (1,278 )(111 )Total¥ (150 )¥ (443 )$ (1,389 )(7) Plan assetsa.

Components of plan assets
Plan assets as of March 31, 2020 and 2019, consisted of the following:

b.

2020

2019

Debt investments
Equity investments
Cash and cash equivalents
Others

52 %
12
5
31

53 %
15
5
27

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 ofreturn which are expected currently and in the future from the various components of theplan assets.

(8) Assumptions used for the years ended March 31, 2020 and 2019, are set forth as follows:

Discount rate
Expected rate of return on plan assets

2020

2019

0.2%–0.9%
4.3%

0.2%–1.8%
4.3%

The expected raise rate is based on the index of the raise calculated by age as of March 31,
2018.
(9) Defined contribution plan
The required contribution amounts of the Group for the years ended March 31, 2020 and 2019,were ¥248 million ($2,296 thousand) and ¥239 million, respectively.

- 19 -

The liability for retirement benefits at March 31, 2020 and 2019, for directors and the Audit andSupervisory Committee members was ¥102 million ($944 thousand).
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 the year-end dividend upon resolution at the shareholders' meeting. Additionally, forcompanies that meet certain criteria, including (1) having a board of directors, (2) having
independent auditors, (3) having an Audit & Supervisory Board, and (4) the term of service of thedirectors being prescribed as one year rather than the normal two-year term by its articles ofincorporation, 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 of incorporation. 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 andsupervisory committee, effective June 23, 2016. The Company meets all the above criteria, andaccordingly, 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) toshareholders 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 the articles of incorporation of the company so stipulate. The Companies Act provides
certain limitations on the amounts available for dividends or the purchase of treasury stock. The
limitation is defined as the amount available for distribution to the shareholders, but the amountof 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 asa legal reserve (a component of retained earnings) or as additional paid-in capital (a componentof capital surplus), depending on 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 the shareholders.

c.

Treasury Stock and Treasury Stock Acquisition Rights
The Companies Act also provides for companies to purchase treasury stock and dispose of suchtreasury stock by resolution of the board of directors. The amount of treasury stock purchased
cannot exceed the amount available for distribution to the shareholders, which is determined by aspecific formula.
Under the Companies Act, stock acquisition rights are presented as a separate component ofequity.
The Companies Act also provides that companies can purchase both treasury stock acquisitionrights and treasury stock. Such treasury stock acquisition rights are presented as a separate
component of equity or deducted directly from stock acquisition rights.

- 20 -

9.

INCOME TAXESThe Company and its domestic subsidiaries are subject to Japanese national and local income taxes
that, in the aggregate, resulted in a normal effective statutory tax rate of approximately 30.5% for theyears ended March 31, 2020 and 2019.
The tax effects of significant temporary differences and tax loss carryforwards that resulted indeferred tax assets and liabilities at March 31, 2020 and 2019, are as follows:
Millions of Yen
2020
2019
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

Thousands of
U.S. Dollars
2020

788
840
718
831
1,431
(1,574 )¥ 1,047
808
781
755
1,428
(1,664 )

$

7,296
7,778
6,648
7,694
13,251(14,574 )

3,034

3,155

28,093(7,856 )(125 )(8,076 )(160 )(72,741 )(1,157 )(7,981 )(8,236 )(73,898 )¥ (4,947 )¥ (5,081 )$ (45,805 )A reconciliation between the normal effective statutory tax rates and the actual effective tax rates
reflected in the accompanying consolidated statement of income for the year ended March 31, 2020,
with the corresponding figures for 2019, is as follows:
2020

2019

Normal effective statutory tax rate
Tax credit for research expenses
Decrease in valuation
Amortization of goodwill
Other—net

30.5 %
(4.3)
(1.1)
2.2
0.2

30.5 %
(3.1)
(4.9)
2.9
(0.9)

Actual effective tax rate

27.5 %

24.5 %- 21 -

10.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses for the years ended March 31, 2020 and 2019,principally consisted of the following:
Millions of Yen
2020
2019
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

11.

¥ 6,001
400
241
509
5,727
(34 )
4

¥ 5,885
354
314
191
5,395
(86 )
(50 )

Thousands of
U.S. Dollars
2020$ 55,565
3,704
2,231
4,713
53,028(315 )
37

R&D COSTS
R&D costs charged to income were ¥5,993 million ($55,500 thousand) and ¥5,932 million for theyears ended March 31, 2020 and 2019, respectively.

12.

LEASES
The minimum rental commitments under noncancelable operating leases at March 31, 2020 and
2019, were as follows:
Millions of Yen
2020
2019

13.

Thousands of
U.S. Dollars
2020

Due within one year
Due after one year

¥ 55
60

¥ 245
1,449

$ 509
556

Total

¥ 115

¥ 1,694$ 1,065

FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES(1) Group Policy for Financial Instruments
The Group uses financial instruments based on its capital expenditure plan. Cash surpluses, ifany, are invested in low-risk financial assets. Derivatives are not used, for speculative purposes,
but to manage exposure to financial risks as described in (2) below.

- 22 -

(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, net of 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 interest rate.
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 consolidatedbalance sheet date. The long-term bank loan is used to finance for construction of new buildings
at EIZO GmbH which is a consolidated subsidiary. All the loans are traded in foreign currency
and have variable interest rates. Thus, they are exposed to the market risk of fluctuation in
exchange rates and interest rates.
Derivatives mainly include forward foreign currency contracts that are used to manage exposure
to risk of changes in foreign currency exchange rates of receivables and payables. Please see
Note 14 for more details about derivatives.
(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 ofmajor customers by each business administration department to identify the default risk ofcustomers at an early stage. With respect to debt securities, the Group manages its exposure tocredit 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 ofMarch 31, 2020.
Market risk management (foreign exchange rate risk and interest rate risk)
Foreign currency trade receivables, payables, short-term bank loans, and long-term debt are
exposed to fluctuations in foreign currency exchange rates. Such foreign exchange rate risk ishedged occasionally by forward foreign currency contracts.
Marketable and investment securities are managed by monitoring the market values andfinancial position of issuers on a regular basis.
The basic policies regarding derivative transactions have been approved by the director in
charge of accounting based on internal guidelines that prescribe the authority and the limit foreach transaction by the corporate treasury department. Reconciliation of the transactions andbalances with customers is made and the transaction data is reported to the director in charge ofaccounting 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 an adequate volume of liquid
assets along with adequate financial planning by the corporate treasury department.

- 23 -

(4) Concentration of Credit Risk
As of March 31, 2020, 17.8% 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 not available, other rational valuation techniques are used instead.
(a) Fair value of financial instruments
Millions of Yen
Carrying
AmountMarch 31, 2020

Fair Value

Cash and cash equivalents
Notes and accounts receivable
Allowance for doubtful receivables
Notes and accounts receivable (net)
Short-term investments andinvestment securities¥ 17,942
19,023(83 )
18,940¥ 17,942

38,13038,130Total¥ 75,012¥ 75,012

Accounts payable
Short-term bank loans
Long-term bank loan

¥ 10,005
1,793
1,196

¥ 10,005
1,793
1,196

Total

¥ 12,994¥ 12,994

Derivatives

¥

¥

(10 )

18,940(10 )March 31, 2019
Cash and cash equivalents
Notes and accounts receivable
Allowance for doubtful receivables
Notes and accounts receivable (net)
Short-term investments andinvestment securities¥ 16,099
18,051(77 )
17,974¥ 16,099

37,98737,987

Total¥ 72,060¥ 72,060

Accounts payable
Short-term bank loans
Long-term debt

¥ 8,083
1,868
1,246

¥ 8,083
1,868
1,246

Total

¥ 11,197¥ 11,197- 24 -

17,974

Unrealized
Gain/LossThousands of U.S. Dollars
Carrying
Unrealized
AmountFair Value
Gain/Loss

March 31, 2020
Cash and cash equivalents
Notes and accounts receivable
Allowance for doubtful receivables
Notes and accounts receivable (net)
Short-term investments andinvestment securities$ 166,130
176,139(769 )
175,370$ 166,130353,056

353,056

Total$ 694,556$ 694,556

Accounts payable
Short-term bank loans
Long-term bank loan

$ 92,639
16,602
11,074$ 92,639
16,602
11,074Total$ 120,315$ 120,315

Derivatives

$

$

(93 )

175,370(93 )Cash and Cash Equivalents
The carrying values of cash and cash equivalents approximate fair value because of theirshort maturities.
Notes and Accounts Receivable
The carrying values of notes and accounts receivable approximate fair value because of
their short-term settlement periods. The allowance for doubtful receivables is deducted fromnotes and accounts receivable.
Short-Term Investments and Investment Securities
The fair values of short-term investments and investment securities are measured at thequoted market price of the stock exchange for equity instruments and at the quoted priceobtained from financial institutions for certain debt instruments. Fair value information for the
short-term investments and investment securities by classification is included in Note 4.
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 periods.
Long-Term Bank Loan
As those with variable interest rates reflect market interest rates within a short period of time
and the EIZO Corporation's credit capability is not different markedly from the execution, thefair value is approximately the same as the book value and thus is stated at that carrying
value.
Derivatives
Fair value information for derivatives is included in Note 14.

- 25 -

(b) Carrying amount of financial instruments whose fair value cannot be reliably determined
Millions of Yen
2020
2019
Investments in equity instruments that do nothave a quoted market price in an active market
Debt securities that do not have a quoted market
price in an active market¥ 150

Thousands of
U.S. Dollars
2020

¥ 150

$ 1,389

1,657(6) Maturity Analysis for Financial Assets and Securities with Contractual Maturities

March 31, 2020

Due in1 Yearor Less

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

Cash and cash equivalents
Receivables
Investment securities:
Debt securities
Others¥ 17,939
19,023200500¥ 1,300

Total¥ 37,662¥ 1,300

Due after
10 Years

March 31, 2019
Cash and cash equivalents
Receivables
Investment securities:
Debt securities
Others¥ 16,097
18,051800¥ 1,200
457

Total¥ 34,948¥ 1,657

March 31, 2020

Due in1 Yearor Less

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

Cash and cash equivalents
Receivables
Investment securities:
Debt securities
Others$ 166,102
176,139
1,852
4,629

$ 12,037

Total$ 348,722$ 12,037- 26 -

Due after
10 Years

14.

DERIVATIVESThe Group enters into derivative contracts, including foreign currency forward contracts, to hedge
foreign exchange rate 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's business. Accordingly, market risk in these derivatives is basically offset by opposite
movements in the value of hedged 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, 2020 and 2019, wereas follows:

March 31, 2020

Contract
AmountMillions of Yen
Contract
AmountDue after
Fair
1 YearValue

Foreign currency forward contracts—
Selling Euro

¥ 2,486¥ (10 )March 31, 2020

Thousands of U.S. Dollars
Contract
AmountContract
Due after
Fair
Unrealized
Amount1 YearValue
Gain/Loss

Foreign currency forward contracts—
Selling Euro$ 23,019$ (93 )

Unrealized
Gain/Loss¥ (10 )$ (93 )

As of March 31, 2019, there is no such matter.
The fair value of derivative transactions is measured at the quoted price obtained from financial
institutions.

- 27 -

15.

OTHER COMPREHENSIVE INCOME (LOSS)
The components of other comprehensive income and loss for the years ended March 31, 2020 and
2019, were as follows:
Millions of Yen
2020
2019
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
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) income

16.

¥

Thousands of
U.S. Dollars
2020(813 )
6(807 )
222¥ 1,449
1,449(485 )$ (7,528 )
56(7,472 )2,056¥(585 )¥ 964$ (5,416 )¥(558 )(558 )¥ (283 )(283 )$ (5,167 )(5,167 )¥(558 )¥ (283 )$ (5,167 )¥(275 )(2 )(277 )
47

¥ 508
71
579
(140 )$ (2,546 )(19 )(2,565 )435¥(230 )¥ 439$ (2,130 )¥ (1,373 )¥ 1,120$ (12,713 )SUBSEQUENT EVENT
The following appropriation of retained earnings at March 31, 2020, was approved at the board of
directors' meeting held on May 19, 2020:

Year-end cash dividends, ¥55 ($0.5) per share
17.

Millions of Yen

Thousands of
U.S. Dollars¥ 1,173$ 10,861

SEGMENT INFORMATION
Under ASBJ Statement No. 17, "Accounting Standard for Segment Information Disclosures," andASBJ Guidance No. 20, "Guidance on Accounting Standard for Segment Information Disclosures," anentity is required to report financial and descriptive information about its reportable segments.
Reportable segments are operating segments or aggregations 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.

- 28 -

(1) Description of Reportable Segments
The Group is primarily engaged in the manufacture, development, and sale of visual products and related products. The Group consists of this single industry, andtherefore, it is not required to disclose separate financial information by segment.
(2) Information about Products and Services

Sales to external customers

Sales to external customers

Sales to external customers

Business&
Plus

Healthcare

Creative
Work

Millions of Yen
2020
Vertical&Specific¥ 16,409¥ 29,390¥ 5,346¥ 10,403

Business&
Plus

Healthcare

Millions of Yen
2019
VerticalCreative&
Work
Specific¥ 17,788¥ 30,409¥ 5,972

Amusement

Other

Total

¥ 9,608¥ 5,325¥ 76,481

Amusement

Other

Total

¥ 8,584¥ 2,771¥ 72,944

Other

Total

$ 49,305$ 708,157¥ 7,420

Business&
Plus

Healthcare

Thousands of U.S. Dollars
2020
VerticalCreative&
Work
Specific
Amusement$ 151,935$ 272,130$ 49,500$ 96,324$ 88,963(3) Information about Geographical Areas(a) Sales

Japan

EuropeMillions of Yen
2020
North
America¥ 37,127¥ 27,112¥ 7,912¥ 4,330¥ 76,481

Japan

EuropeMillions of Yen
2019
North
America

Other

Total

¥ 32,484¥ 30,283¥ 6,132¥ 4,045¥ 72,944- 29 -

Other

Total

JapanEuropeThousands of U.S. Dollars
2020
North
America$ 343,769$ 251,037$ 73,259

Other

Total

$ 40,092$ 708,157

Note: Sales are classified by country or region based on the location of customers.
(b) Property, plant, and equipment

Japan

EuropeMillions of Yen
2020
North
America¥ 11,224¥ 4,999

¥ 49

¥ 71

¥ 16,343

Japan

EuropeMillions of Yen
2019
North
America

Other

Total

¥ 11,139¥ 3,115

¥ 27

¥ 40

¥ 14,321

Thousands of U.S. Dollars
2020
North
EuropeAmerica

Other

Total

$ 46,287$ 657$ 151,324

Japan$ 103,926

$ 454

Other

Total

(4) Information about Major Customers

Name of Customers

Millions of Yen
2020
Sales

JT Japan Technicals¥ 13,454

Name of Customers

Millions of Yen
2019
Sales

JT Japan Technicals¥ 9,760

Name of Customers

Thousands of
U.S. Dollars
2020
Sales

JT Japan Technicals$ 124,574******- 30 -