CONSOLIDATED FINANCIAL STATEMENTS
TAMURA CORPORATIONAS OF MARCH 31, 2016 AND 2015

Independent Auditor’s Report
The Board of Directors
TAMURA CORPORATION
We have audited the accompanying consolidated financial statements of TAMURACORPORATION and its consolidated subsidiaries, which comprise the consolidated balance
sheet as at March 31, 2016, and the consolidated statements of income, comprehensive income,changes in net assets, and cash flows for the year then ended and a summary of significant
accounting policies and other explanatory information, all expressed in Japanese yen.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and fordesigning and operating such internal control as management determines is necessary to enable
the preparation and fair presentation of the consolidated financial statements that are free frommaterial misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on
our audit. We conducted our audit in accordance with auditing standards generally accepted inJapan. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the consolidated financial statements. The procedures selected depend on theauditor’s judgment, including the assessment of the risks of material misstatement of theconsolidated financial statements, whether due to fraud or error. The purpose of an audit of theconsolidated financial statements is not to express an opinion on the effectiveness of the entity’s
internal control, but in making these risk assessments the auditor considers internal controls
relevant to the entity’s preparation and fair presentation of the consolidated financial statements
in order to design audit procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness ofaccounting estimates made by management, as well as evaluating the overall presentation of theconsolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the consolidated financial position of TAMURA CORPORATION and its consolidated
subsidiaries as at March 31, 2016, and their consolidated financial performance and cash flows
for the year then ended in conformity with accounting principles generally accepted in Japan.
Convenience Translation
We have reviewed the translation of these consolidated financial statements into U.S. dollars,presented for the convenience of readers, and, in our opinion, the accompanying consolidated
financial statements have been properly translated on the basis described in Note 1(a).

June 28, 2016
Tokyo, JapanTAMURA CORPORATION AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED BALANCE SHEETSASSETS
Current Assets:
Cash and bank deposits (Notes 3 and 4)
Notes and accounts receivable-trade (Note 4)
Non-consolidated subsidiaries and affiliates
Other
Allowance for doubtful accounts¥

Millions of yen
March 31,
2016
2015

Thousands of
U.S. dollars(Note 1(a))
March 31,2016

15,133$¥

11,816

133,92074
21,444(101)
21,417
12,532579
1,986
51,647

111
23,574(106)
23,57914,412624
2,537
52,968654
189,769(893)
189,530
110,903
5,124
17,576457,053

Pro perty, Plant and Equipment: (Notes 14 and 18)
Land
6,057
Buildings and structures
18,018
Machinery and equipment
27,257
Lease assets
1,522
Construction in progress
471
53,325
Accumulated depreciation(34,321)
Property, plant and equipment, net
19,0046,130
18,193
27,212
1,522
560
53,617(33,855)
19,76253,602
159,451
241,212
13,4694,168
471,902(303,725)
168,177

Inventories (Note 6)
Deferred tax assets (Note 13)
Other current assets
Total current assets

Investments and Other Assets:
Investment securities in other than non-consolidated
subsidiaries and affiliates (Notes 4 and 5)

1,802

2,062

15,947

Investment securities in non-consolidated
subsidiaries and affiliates
Net defined benefit asset (Note 8)
Deferred tax assets (Note 13)
Other assets
Total investments and other assets
Total assets

2,131
245
122
1,837
6,137
76,788

1,958
904
288
2,313
7,525
80,25518,8582,168
1,080
16,25754,310679,540¥¥

The accompanying notes are an integral part of these statements.

2$

Thousands ofMillions of yen
March 31,
2015
2016
LIABILITIES AND NET ASSET
Curr ent Liabilities:
Short-term loans (Notes 4 and 7)¥

Current portion of long-term debt (Notes 4 and 7)

Lease obligations (Notes 4 and 7)
Notes and accounts payable-trade (Note 4)
Non-consolidated subsidiaries and affiliates

Other
Income tax payable
Accrued bonuses
Accrued bonuses for directors
Other current liabilities (Note 13)
Total current liabilities
Long-term Liabilities:
Long-term Debt (Notes 4 and 7)
Lease Obligations (Notes 4 and 7)
Net Defined Benefit Liability (Note 8)
Deferred Tax Liabilities (Note 13)
Other Long-term Liabilities
Contingent Liabilities and Commitment(Note 16 and 17)
Total long-term liabilities
Net Assets
Shar eholders' Equity:
Common stock:
Authorized - 252,000,000 shares
Issued and outstanding – 82,771,473 shares
Additional paid-in capital
Retained earnings
Treasury stock, at cost (Note 10)
Total shareholders' equity

4,865
5,493
344

¥

5,906
872
371

U.S. dollars(Note 1(a))
March 31,2016$

43,053
48,6103,044

309
10,535
10,844
547
1,024
62
2,838
26,017390
11,266
11,656
585
1,012
63
2,963
23,4282,734
93,23095,964
4,841
9,062
549
25,115230,238

9,421
488
3,252
395
766

14,914
547
2,765
26
411

83,372
4,319
28,7793,495
6,779

14,322

18,663

126,744

11,82911,829104,681

17,0377,357(283)
35,94017,1746,138(288)
34,853

150,770
65,106(2,504)
318,053

156
0
2,351
(2,194)313
121
75
36,44976,788

437
2
3,292
(617)
3,114
115
82
38,16480,2551,380
020,805(19,415)
2,770
1,071
664
322,558
679,540

Accumulated Other Comprehensiv e Income:Unrealized gain on securities
Deferred gain (loss) on hedges
Translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income

Subscription Rights to Shares
Non-contolling inter ests
Total net assets
Total liabilities and net assets¥¥

The accompanying notes are an integral part of these statements.

3$

TAMURA CORPORATION AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME ANDCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(CONSOLIDATED STATEMENTS OF INCOME)

Thousands ofMillions of yen
Year ended March 31,
2016
Net S ales
Cost of Sales (No te 12)
Gross Pr ofit
Selling, gener al and administrative expenses(Notes 11 and 12)
Operating income¥

Other Inc ome (Expenses):
Interest and dividend income
Equity in earnings of affiliates
Interest expense
Foreign exchange loss
Other income
Other expenses
Profit before income taxes
Inc ome Taxes (Note 13)
Current
DeferredProfitProft attributable to:Non-contolling interests
Owners of parent

¥

2015

84,64260,962¥

86,24862,760¥749,044539,487

23,488

209,557

19,414

19,459171,805

4,266

4,029

37,752

124
267
(309)
(488)
358
(660)
(708)
3,558

101
227
(328)
(159)
515
(288)
68
4,097

1,097
2,362
(2,734)(4,318)3,168(5,840)(6,265)31,487

1,134
641
1,775
1,783

972
19
991
3,106

10,035
5,673
15,70815,779

(0)
1,783

21.75
21.62
7.00

The accompanying notes are an integral part of these statements.

4$

23,680

¥

0
3,106

Yen
Per Share:
Basic profit attributable to owners of parent
Diluted profit attributable to owners of parent
Cash dividends per share

U.S. dollars(Note 1(a))
Year ended
March 31,
2016

¥

$

(0)
15,779U.S. dollars
37.88
37.68
7.00

$

0.19
0.19
0.06

(CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME)

Thousands ofMillions of yen
Year ended March 31,
2016
Profit

¥

1,783

2015
¥

3,106

U.S. dollars(Note 1(a))
Year ended
March 31,2016$

15,779Other Comprehensive Income:Unrealized gain on securities
Deferred gain (loss) on hedges
Translation adjustments
Remeasurements of defined benefit plans

(281)
(2)
(868)
(1,577)

308
10
2,216
521

(2,487)(18)(7,681)(13,955)

Share of other comprehensive income ofaffiliates accounted by using equity method
Total other comprehensive income (Note 9)Comprehensive income(79)(2,807)(1,024)

144
3,199
6,305

(699)
(24,840)(9,061)

Total comprehensive income attributable to:
Owners of parent
Non-contolling interests¥¥(1,017)(7)

The accompanying notes are an integral part of these statements.

5

¥
¥

6,298
7

$
$

(9,000)(61)

TAMURA CORPORATION AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSFor the year ended March 31, 2016

Number ofsharesissuedBalance at April 1, 2015

Commonstock

82,771,473 ¥Cumulative effects ofchanges in accounting
principle
Restated balance
Changes during the year
Cash dividends paid

Millions of yen
Shareholders’ equity
Treasury
Additional
paid-in
Retained
stock
capitalearnings(Note 10)

Total
shareholders'equity11,829 ¥17,173 ¥

6,139 ¥

(288) ¥

34,853

11,829(136)
17,037

12
6,151

(288)

(124)
34,729Profit attributable toowners of parent forthe period

(574)

(574)

1,783

1,783
(8)
10

(8)
13

Acquisition of treasury stock

Disposal of treasury stock

(0)

(3)

Items other than changes
in shareholders’ equity
Balance at March 31, 2016

082,771,473 ¥

11,829 ¥17,037 ¥7,357 ¥

(283) ¥

35,940Millions of yen
Accumulated other comprehensive income
Total

Balance at April 1, 2015

Unrealized

DeferredTranslation

Remeasurements

accumulated other

Subscription

gain ongain (loss) on

adjust-of definedcomprehensive

rights to

Non-contollingsecurities

hedgesments

benefit plansincomesharesinterests

Total net
assets

¥

¥

¥

¥

3,114

¥ 115

¥

¥

3,114

115

Cumulative effects ofchanges in accounting
principle
Restated balance
Changes during the year
Cash dividends paid

437

437

2

¥

2

3,292

3,292

(617)

(617)

82

82

(124)
38,040(574)

Profit attributable toowners of parent forthe period

1,783
(8)
10

Acquisition of treasury stock

Disposal of treasury stock
Items other than changes
in shareholders’ equity
Balance at March 31, 2016

38,164

(281)
¥

156

(2)
¥

0

¥

(941)

(1,577)2,351¥ (2,194)6(2,801)
¥

313

6
¥

121

¥

(7)

(2,802)75 ¥

36,449

For the year ended March 31, 2015

Number ofsharesissuedBalance at April 1, 2014
Changes during the year
Cash dividends paid

Commonstock

82,771,473 ¥Millions of yen
Shareholders’ equity
Treasury
Additional
paid-in
Retained
stock
capitalearnings(Note 10)

11,829 ¥17,173 ¥3,078 ¥

Total
shareholders'equity(281) ¥

31,799(492)

Profit attributable toowners of parent forthe period

(492)

3,106

Disposal of treasury stock

0(1)

Changes of scope of
consolidation

3,106
(9)
1

(9)
2

Acquisition of treasury stock

448

448

Items other than changes
in shareholders’ equity
Balance at March 31, 2015

82,771,473 ¥

11,829 ¥17,173 ¥

6,139 ¥

(288) ¥

34,853

Millions of yen
Accumulated other comprehensive income
Total

Balance at April 1, 2014
Changes during the year
Cash dividends paid

Unrealized

DeferredTranslation

Remeasurements

accumulated other

Subscription

gain ongain (loss) on

adjust-of definedcomprehensive

rights to

Non-contollingsecurities

hedgesments

benefit plansincomesharesinterests

Total net
assets¥¥¥ (1,138)

¥

¥

¥

¥

129

(8)

¥

939

(78)

99

75

(492)

Profit attributable toowners of parent forthe period

3,106
(9)
1

Acquisition of treasury stock

Disposal of treasury stock
Changes of scope of
consolidation

448

Items other than changes
in shareholders’ equity
Balance at March 31, 2015

31,895

308
¥

437

10
¥

2

2,353
¥

3,292

7

521
¥

(617)

3,192
¥

3,114

16
¥

115

7
¥

82

3,215
¥

38,164

For the year ended March 31, 2016

Number ofsharesissuedBalance at April 1, 2015

Thousands of U.S. dollars (Note 1(a))
Shareholders’ equity
Treasury
Additional
paid-in
Retained
stock
capitalearnings(Note 10)

Total
shareholders'equity$$Commonstock

82,771,473$

104,681

Cumulative effects ofchanges in accounting
principle
Restated balance

151,973$

54,327(1,203)
150,770

104,681$(2,548)10654,433

308,433(1,097)
307,336(2,548)Changes during the year
Cash dividends paid

(5,079)Profit attributable toowners of parent forthe period

15,779(5,079)15,779Acquisition of treasury stock
Disposal of treasury stock

(0)

(27)

(71)

(71)

115

88

Items other than changes
in shareholders’ equity
Balance at March 31, 2016

82,771,473$

104,681$

150,770$

65,106$(2,504)$

318,053

Total net
assetsThousands of U.S. dollars (Note 1(a))
Accumulated other comprehensive income
Total

Balance at April 1, 2015

Unrealized

DeferredTranslation

Remeasurements

accumulated other

Subscription

gain ongain (loss) on

adjust-of definedcomprehensive

rights to

Non-contollingsecurities

hedgesments

benefit plansincomesharesinterests$

Cumulative effects ofchanges in accounting
principle
Restated balance

3,867

$

3,867

18

$

18

29,132$

29,132(5,460)$(5,460)27,557$27,557

1,018

$

1,018

726 $

337,734726(1,097)
336,637

Changes during the year

0

Cash dividends paid

(5,079)Profit attributable toowners of parent forthe period

15,779Acquisition of treasury stock(71)

Disposal of treasury stock

88

Items other than changes
in shareholders’ equity
Balance at March 31, 2016

(2,487)
$

1,380

(18)
$

0

(8,327)$20,805(13,955)$(19,415)

The accompanying notes are an integral part of these statements.

8(24,787)
$

2,770

53
$

1,071

(62)
$

664

(24,796)$322,558

TAMURA CORPORATION AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS
Thousands ofMillions of yen

Year ended March 31,¥

Decrease in net defined benefit liability
Decrease in allowance for doubtful accounts
Gain on sales of investment securities
Interest and dividend income
Interest expense
Foreign exchange loss (gain)
Equity in earnings of affiliates
Increase in accrued bonuses
Decrease in accrued bonuses for directors
Decrease (increase) in trade receivable
Decrease (increase) in inventories
Decrease in trade payable
Other, net
Interest and dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities
Cash Fl o ws fro m Inve sting Ac ti vi ti e s:

3,558
2,659
(413)
(13)
－
(124)
309
480
(267)
12
(0)
1,120
1,417
(413)
1,214
9,539
284
(311)
(1,167)
8,345¥(2,156)
192(213)

Purchase of tangible fixed assets
Proceeds from sale of tangible fixed assets
Purchase of investment securities
Proceeds from sale of investment securities－

Other, net

Decrease in short-term loans(824)

Proceeds from long-term debt－

Repayment of long-term debt
Repayment of lease obligations
Purchase of treasury stock
Proceeds from sales of treasury stock
Cash dividends paid
Other, net
Net cash used in financing activities$

31,48723,530(3,654)(115)－(1,097)2,734
4,247(2,362)
106
(0)
9,911
12,539(3,654)
10,74384,4152,513(2,752)(10,327)
73,849(19,079)
1,699(1,885)－(195)(19,460)

(872)
(399)
(8)
0
(572)
(0)
(2,675)

(148)
1,440
(2,182)
(439)
(9)
0
(496)
(6)
(1,840)(7,717)(3,531)(71)
0(5,062)(0)(23,673)

(143)
3,328
11,68915,017311(285)
11,974
11,689(1,266)29,450103,441
132,891

Effect of Exchange Rate Changes on Cash andCash Equivalents
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at the Beginning of the Year
Cash and Cash Equivalents at the End of the Year (Note 3) ¥The accompanying notes are an integral part of these statements.

9

4,097
2,352
(212)
(36)
(0)
(101)
328
(63)
(228)
49
(5)
(630)
(223)
(1,375)
382
4,335
113
(333)
(983)
3,132

2016

(2,590)
1,196
(537)
1
42
(1,888)(22)(2,199)Net cash used in investing activities
Cash Flows from Financing Activities:

Year ended
March 31,

2015

2016
Cash Flows from Ope rating Activities:
Profit before income taxes
Depreciation

U.S. dollars(Note 1(a))¥(7,292)－$

TAMURA CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Significant Accounting Policies(a) Basis of presentation of the consolidated financial statements
The accompanying consolidated financial statements of TAMURACORPORATION (the “Company”) and its consolidated subsidiaries (collectively,
the “Companies”) are prepared on the basis of accounting principles generally
accepted in Japan, which are different in certain respects as to the application anddisclosure requirements of International Financial Reporting Standards, and havebeen compiled from the consolidated financial statements prepared by theCompany as required by the Financial Instruments and Exchange Law of Japan.
Certain items presented in the consolidated financial statements submitted to the
Director of Kanto Local Finance Bureau in Japan as required by the Financial
Instruments and Exchange Law of Japan have been reclassified for theconvenience of readers outside Japan.
Amounts in U.S. dollars are included solely for the convenience of readers outside
Japan. The rate of ¥113=U.S. $1, the approximate rate of exchange on March 31,
2016 has been used in translation. The inclusion of such amounts is not intended to
imply that Japanese yen have been or could be readily converted, realized or
settled in U.S. dollars at the above rate or any other rate.
(b) Principles of consolidation and accounting for investments in non-consolidated
subsidiaries and affiliates
The accompanying consolidated financial statements include the accounts of theCompany and, with the exception of entities which are not material, those of its 31
majority owned subsidiaries. All significant inter-company accounts andtransactions have been eliminated on consolidation.
Effective from the year ended March 31, 2016, Tamura Thermal Device (H.K.) Co.
Ltd. has been excluded from consolidation because of its absorption and merger
into the Company.
Investments in non-consolidated subsidiaries and affiliates are carried at cost
since their total assets, net sales and the Company’s interests in their net income(loss), or retained earnings, in aggregate, do not have a material effect on the
consolidated financial statements.
The fiscal year end of the foreign consolidated subsidiaries is December 31. The
necessary adjustments for significant transactions between the fiscal year end of
the Company and the fiscal year end of the foreign consolidated subsidiaries, if any,
are made in the preparation of the consolidated financial statements.
(c) Financial instruments(1) Derivatives
All derivatives are stated at fair value, with changes in fair value included in
net profit or loss for the period in which they arise, except for derivatives
10

designated as “hedging instruments” (see Note 1(c)(3) Hedge accounting below).
(2) Securities
Securities held by the Companies are classified as follows:
Available-for-sale securities with market values are stated at fair value. Net
unrealized gains and losses on these securities are reported as a separate
component of shareholders’ equity at a net-of-tax amount.
Available-for-sale securities without market values are stated at cost
determined by the moving average method, except as stated in the paragraphbelow.
In cases where the fair value of equity securities issued by non-consolidated
subsidiaries and affiliates, or available-for-sale securities, has declined
significantly and such impairment of the value is not deemed temporary, thesesecurities are written down to their fair value and the resulting losses areincluded in net profit or loss for the period.
(3) Hedge accounting
Deferral hedge accounting is adopted for derivatives which qualify as hedges,
under which unrealized gain or loss is deferred as a component of net assets.
The derivatives designated as hedging instruments by the Companies are
principally forward exchange contracts and interest rate swaps. The underlying
hedged items are trade accounts receivable and trade accounts payable
denominated in foreign currencies, forecast transactions denominated inforeign currencies and interest on long-term bank loans.
The Companies have a policy to utilize the above hedging instruments in orderto reduce the Companies’ exposure to the risk of exchange rate and interest rate
fluctuations. Thus, the Companies’ purchases of the hedging instruments arelimited to, at maximum, the amount of the hedged items.
The Companies evaluate the effectiveness of their hedging activities byreference to the accumulated gains or losses on the hedging instruments andthe underlying hedged items from the commencement of the hedges.
(d) Allowance for doubtful accounts
Allowance for doubtful accounts is provided based on past experience for normal
receivables and on an estimate of collectability of receivables from companies infinancial difficulty.
(e) Inventories
Inventories are principally stated at cost determined by the following methods:
・Finished goods and work-in-process:Electronic Components business, Electronic Chemicals business andInformation Equipment business: Mainly periodic average method(Inventories with lower profitability are written down)
FA Systems business: Specific identification method (Inventories with lower
profitability are written down)
11

・Merchandise and raw materials: Mainly periodic average method (Inventories
with lower profitability are written down)
・Supplies: Mainly last purchase price method (Inventories with lower
profitability are written down)(f) Property, plant and equipment, and depreciation (excluding lease assets)
Property, plant and equipment, including significant capital expenditures andadditions, are stated at cost and are principally depreciated using thedeclining-balance method at rates based on the estimated useful lives of the assets.
Repairs and maintenance expenses are charged to income as incurred.
Intangible assets are amortized by the straight-line method over their respective
estimated useful lives.
(g) Accrued bonuses
The Company and its domestic consolidated subsidiaries have provided theestimated amounts of bonus to employees.
(h) Reserve for directors’ bonus
The Company and its domestic consolidated subsidiaries have provided theestimated amounts of directors’ bonus as a reserve for directors’ bonus.
(i) Reserve for retirement benefits
The reserve for retirement benefits represents the estimated present value of
projected benefit obligations in excess of the fair value of the plan assets.
The unrecognized prior service costs are amortized on a straight-line basis over a
period of 1 to 12 years from the year in which they arise. The unrecognizedactuarial differences are amortized on a straight-line basis over a period of 5 to 12
years from the year following the year in which they arise.
(j) Reserve for loss on guarantee
Reserve for loss on guarantee is provided at the estimated amount of future loss inview of the financial position of the guarantee.
(k) Reserve for loss of transfer
Reserve for loss on office transfer, etc. for consolidated subsidiaries is provided at
the estimated amount of future loss related to non-cancelable periods of real estateleasing contracts.
(l) Amortization of goodwill
Goodwill is amortized on a straight-line basis over 10 years.
(m) Income taxes
The income taxes of the Company and its domestic consolidated subsidiaries
consist of corporate income taxes, local inhabitant taxes and enterprise taxes.
Deferred income taxes were determined using the assets and liabilities approach,12whereby deferred tax assets and liabilities were recognized in respect of temporary
differences between the tax basis of assets and liabilities and those as reported in
the financial statements.
Deferred tax assets relating to tax loss carryforwards are recorded because theJapanese accounting standard requires that the benefit of tax loss carryforwards
be estimated and recorded as an asset, with deduction of a valuation allowance if it
is expected that some portion or all of the deferred tax assets will not be realized.
(n) Foreign currency translation
All monetary assets and liabilities of the Company and its domestic consolidated
subsidiaries denominated in foreign currencies, whether long-term or short-term,
are translated into Japanese yen at the exchange rates prevailing at the balance
sheets dates. The foreign exchange gains and losses from translation arerecognized in the statements of income to the extent that they are not hedged byforward exchange contracts. Revenue and expenses are translated using the
average exchange rates for the respective periods.
The balance sheet accounts of the foreign consolidated subsidiaries are translated
into yen at the rate of exchange in effect at the balance sheet date. Revenue
accounts and expense accounts of the foreign consolidated subsidiaries aretranslated into yen at the average exchange rate for the year. Differences arisingfrom the translation are presented as translation adjustments and minority
interests in the consolidated financial statements.
(o) Accounting for consumption tax
Transactions subject to consumption taxes are recorded at amounts exclusive ofconsumption taxes.
(p) Profit per share
Basic profit per share of common stock is computed on the basis of the weighted
average number of shares of common stock outstanding during the respective
years, and diluted profit per share of common stock is computed on the basis of theweighted average number of shares of common stock outstanding during therespective year after giving effect to the dilutive potential of shares of common
stock to be issued upon the exercise of stock options. Cash dividends per sharerepresent the dividends declared as applicable to the respective period.
The basis of the calculation of basic profit per share and diluted profit per share forthe years ended March 31, 2016 and 2015 were as follows:13Millions of yen
2016
2015

Thousands of
U.S. dollars
2016

Basic profit per share
Profit attributable to owners of parent forthe period
¥

1,783

¥

3,106

$

15,779Amount not attributable to common stock ¥Total profit attributable to common stock ¥

－
1,783

¥
¥

－
3,106

$
$

－
15,779Average number of shares outstanding during
the year [thousands of shares]

81,99582,00681,995

466

436

466

Diluted profit per share
Increase in common stock:
Subscription rights to shares[thousands of shares]

2. Additional Information(Changes in Accounting Policies)(Application of “Accounting Standard for Business Combinations” and others)
The Company has applied “Revised Accounting Standards for Business
Combinations”(ASBJ Statement No.21,September 13, 2013)(hereinafter, the“Business Combinations Accounting Standard”), “Revised Accounting Standard forConsolidated Financial Statements”(ASBJ Statement No. 22, September
13,2013)( hereinafter, the Consolidation Accounting Standard”), “Revised AccountingStandard for Business Divestitures”(ASBJ Statement No. 7, September
13,2013)(hereinafter, the Business Divestitures Accounting Standard”)and otherstandards from the fiscal year ended March 31,2016.Accordingly,the accounting
methods have been changed to record the difference arising from changes in equity insubsidiaries which the Company continues to control in capital surplus, and to record
business acquisition costs as expenses for the fiscal year in which they are incurred.
In addition, regarding business combinations occurring on or after April 1, 2015, theaccounting method has been changed to retroactively reflect adjustments to theamount allocated to acquisition costs arising from the finalization of the provisional
accounting treatment on the consolidated financial statements for the period inwhich the business combination occurs. Furthermore, the presentation of Net Income
and others has been changed and the presentation of minority interests has beenchanged to non-controlling interests. In order to reflect the changes in presentation of
the consolidated financial statements, reclassifications were made accordingly in the
consolidated statements of cash flows for the fiscal year ended March 31, 2015
The Business Combinations Accounting Standard and other standards have been
applied in accordance with the transitional treatment set forth in Article 58-2(3) of
the Business Combinations Accounting Standard, Article 44-5(3) of the Consolidation
Accounting Standard and Article 57-4(3) of the business Divestitures AccountingStandard. The cumulative effects arising from the retroactive application of these
new accounting policies to previous fiscal years were added to or deducted from
capital surplus and retained earnings as of April 1, 2015.
As a result, goodwill decreased by ¥124 million ($1,098 thousand), capital surplus
decreased by ¥136 million ($1,204 thousand), and retained earnings increased by ¥12
million ($107 thousand) as of April 1, 2015. In addition, operating income, ordinary
profits and income before income taxes for the fiscal year ended March 31, 2016 eachincreased by ¥20 million ($177 thousand).
14

In the consolidated statements of cash flows from the fiscal year ended March 31,
2016, cash flows related to the acquisition or sale of the shares of subsidiaries that do
not result in a change in the scope of consolidation are classified into cash flow fromfinancing activities. Cash flows related to costs arising from the acquisition of sharesof subsidiaries that result in a change in the scope of consolidation or costs arisingfrom the acquisition or sale of shares of subsidiaries that result in a change in thescope of consolidation are classified into cash flow from operating activities.
As a result of the reflection of the cumulative effects of these changes on net assets asof April 1, 2015, capital surplus decreased by ¥136 million ($1,204thousand) andretained earnings increased by ¥12 million ($107 thousand) as of April1, 2015 in the
consolidated statements of changes in net assets.
Similarly, net assets per share as of the end of the fiscal year decreased by ¥1.26 ($0)
while basic and diluted earnings per share for the fiscal year ended March
31,2016increased by ¥0.25 ($0), respectively.
(Unapplied Accounting Standards, etc.)
Implementation Guidance on Recoverability of Deferred Tax Assets (ASBJ Guidance
No.26, March 28, 2016)(a) Overview
The practical guidance on accounting standards and auditing standards (where it
is related to the accounting treatment) for tax effect accounting, issued by theJapanese Institute of Certified Public Accountants (JICPA), is to be transferred tothe competence of the Accounting Standards Board of Japan (ASBJ).
For the sake of said transfer,” Implementation Guidance on Recoverability ofdeferred Tax Assets (Implementation Guidance)” has been issued by the ASBJ,
based, in principle, on the framework used in the “Audit Treatment of Judgmentswith Regard to Recoverability of Deferred Tax Assets” (Report No.66, the audit
committee of the JICPA), where the recoverability is assessed in accordance withfive corporate categories. The Implementation Guidance made certain necessarychanges in the criteria for these categories and also in the treatment of the amountof deferred tax assets.
The Implementation Guidance thereby provides the guidelines in applying the“Accounting Standard for Tax Effect Accounting”, by the Business Accounting
Council, in view of recoverability of deferred tax assets.
(The requirements of classification and the changes in the treatment of the amountof deferred tax assets)
・Treatment of companies that do not fall into any of the five corporate categories
・Criteria for inclusion in categories 2 and 3・Treatment of deductible temporary differences that cannot be scheduled for
category 2 entities
・Determination of the reasonable period of time for estimating future changes inamounts of taxable income before adding or deducting temporary differences for
category 3 entities
・Treatment of category 4 entities that also meet the criteria for inclusion in
category 2 and 3.
(b) Date of adoption
This implementation guidance will be adopted from the fiscal year beginning on
April 1, 2016.
(c) Impact of adoption of implementation guidance
The Company is currently evaluating the effects of adopting this implementation
guidance.
15

3. Supplementary Cash Flow Information
Cash and cash equivalents in the consolidated statements of cash flows are composedof cash in hand, bank deposits with a maturity of 3 months or less and which
represent a minor risk of fluctuation in value.
At March 31, 2016 and 2015, cash and cash equivalents consisted of the following:Thousands of
U.S. dollars
2016

Millions of yen
2016
2015
Cash and bank deposits¥

Time deposits with maturities of over 3 months

15,133¥(116)

Cash and cash equivalents¥

15,017

11,816$

133,920$

132,891(127)¥

11,689(1,029)4. Financial Instruments
Overview(a) Policy for financial instruments
The Companies obtain necessary funding in accordance with their capital
expenditure planning. The Companies obtain medium and long-term operating
funds and funds for the purchase of equipment from banks and utilize highly liquid
financial instruments for fund management purposes.
The Companies also utilize derivative financial instruments to hedge various risks
as described in detail below and do not enter into derivatives for trading or
speculative purposes.
(b) Types of financial instruments and related risk
Operating receivables, such as notes and accounts receivable-trade, are exposed tocredit risk of customers. Operating receivables in foreign currencies are exposed toforeign currency exchange risk. Forward foreign exchange contracts are principallyused to hedge this risk.
Investment securities, the issuers of which have business relationships with theCompanies, are exposed to stock market fluctuation risk.
Maturities of operating debts, such as notes and accounts payable-trade, aremostly within six months. Though operating debts in foreign currencies are
exposed to foreign currency exchange risk, they are limited to the balances ofoperating receivables in the same foreign currency on an ongoing basis.
Loans and lease obligations related to finance leases are used mainly for operating
funds and for equipment purposes, respectively. Maturities of loans and leaseobligations recorded as of the closing date of the fiscal year are within five years.
Almost all long-term loans are variable interest rate loans, and are exposed tointerest rate risk. Interest rate swaps are used for certain loans in order to hedge
this risk.
In order to hedge foreign currency exchange risk associated with operating debts
and receivables in foreign currencies and interest rate risk associated with interest
expense, derivative transactions such as forward foreign exchange contracts andinterest rate swap transactions are used.
Hedging instruments, hedged items, hedging policy and effectiveness of hedge
16

transactions are described in “Note 1. Significant Accounting Policies, (c) Financial
instruments, (3) Hedge accounting.”(c) Risk management for financial instruments(1) Monitoring of credit risk (the risk that customers or counterparties may
default)
To screen and reduce unrecoverable risk of operating receivables, the Company
regularly monitors major customers’ credit status and manages the due dates
and balances for each customer in accordance with customer credit
management rules at the sales section in each operating division. Consolidated
subsidiaries also act based on the Company’s customer credit management
rules.
The Companies do not anticipate losses resulting from default of counterparties
to derivative transactions as these are limited to major financial institutions
with sound credit ratings.
(2) Monitoring of market risks (the risks arising from fluctuations in foreignexchange rates, interest rates and others)
The Company and certain consolidated subsidiaries principally use forward
foreign exchange contracts to hedge the foreign currency exchange risk ofoperating debts and receivables in foreign currencies, which are evaluatedmonthly for each currency. The Company uses interest rate swap transactions
to hedge interest rate risk associated with interest expense.
The Company regularly monitors the financial condition of stock issuers andstock market fluctuations and continuously reviews shareholdings considering
the market status and business relationship with the Company.
Derivative transactions entered into by the Company are implemented andcontrolled based on internal rules established by the board of directors. The
rules which stipulate transaction purpose, nature of transaction, name ofcounterparty, transaction item, loss limitation and reporting system of risk
amount. A derivative transaction which exceeds the limitation amount under
the rule requires the approval of the board meeting.
(3) Monitoring of liquidity risk (the risk that the Group may not be able to meet its
obligations on scheduled due dates)
The Company timely formulates and updates the financing plan and controls
liquidity risk by managing ready liquidity on the basis of reports from eachdivision to the accounting department of the head office.
(d) Supplementary explanation of the fair value of financial instruments
Fair value of financial instruments is measured based on the quoted market price,
if available, or a reasonably assessed value if a quoted market price is not available.
Fair value of financial instruments is calculated based on certain valuation
assumptions and the fair value might differ if different factors are used. In
addition, the contract amount of the derivative transactions described below in“Derivative Transactions” does not represent the market risk of the derivativetransactions.
Fair value of financial instruments
The book value on the consolidated balance sheets, fair value and difference as ofMarch 31, 2016 and 2015 were as follows. In addition, financial instruments, for17which it is extremely difficult to measure the fair value, are not included (see “2.
Financial instruments for which the fair value is extremely difficult to measure”).
As of March 31, 2016
Millions of yen
Book value
Cash and bank deposits¥
Notes and accounts receivable-trade
Investment securities
Other securities
Total assets¥

15,13321,518Notes and accounts payable-trade
Short-term loans
Current portion of long-term debt
Long-term debt
Lease obligations
Total liabilities¥

10,844
4,865
5,493
9,421
832
31,455Derivatives (*)
Hedge accounting is not applied ¥Hedge accounting is applied
Total derivatives
¥

－
0
0

¥

1,772
38,423

Fair value

Difference

¥

¥

¥
¥

¥

¥
¥

15,13321,518
1,772
38,423
10,844
4,865
5,524
9,570
815
31,618

－
0
0

¥
¥

¥

¥
¥

－
－
－
－
－
－
31
149
(17)
163

－
－
－

As of March 31, 2015
Millions of yen
Book value
Cash and bank deposits¥
Notes and accounts receivable-trade
Investment securities
Other securities
Total assets¥

11,816
23,685

Notes and accounts payable-trade
Short-term loans
Current portion of long-term debt
Long-term debt
Lease obligations
Total liabilities¥

11,656
5,906
872
14,914918
34,266

Derivatives (*)
Hedge accounting is not applied ¥Hedge accounting is applied
Total derivatives
¥

－
2
2

¥

18

1,989
37,490Fair value

Difference

¥

¥

¥
¥

¥

¥
¥

11,816
23,685
1,989
37,49011,656
5,906
879
15,129918
34,488

－
2
2

¥
¥

¥

¥
¥

－
－
－
－
－
－
7
215
(0)
222

－
－
－

As of March 31, 2016
Thousands of U.S. dollars

Cash and bank deposits

Book value

Fair value

Difference

$

$

$

Notes and accounts receivable-trade133,920
190,425

133,920
190,425－－

Investment securities
Other securities

15,681

Total assets
Notes and accounts payable-trade

15,681－$

340,026$

340,026$－$

95,965$95,965$－

Short-term loans

43,05343,053－Current portion of long-term debt

48,61048,885275

Long-term debt

83,372

84,6901,318

Lease obligations

7,363

7,212

(151)

Total liabilities$

278,363$

279,805

$

1,442

$

－
0

$

－
0

$

－

0

$

0

$

Derivatives (*)
Hedge accounting is not applied
Hedge accounting is applied
Total derivatives$－－(*) The amount is the net balance of total transactions. Amounts reported
as liabilities are shown in parentheses.

Notes:
1. Methods to determine the fair value of financial instruments and other mattersrelated to securities and derivative transactions
AssetsCash and bank deposits and notes and accounts receivable-trade
The book value approximates fair value because of the short maturity ofthese instruments.
Investment securities
The fair value of investment securities equals quoted market price. The fairvalue of debt securities is measured at the price provided by financial
institutions. Investment securities based on holding purpose are described in“Note 5. Securities”.
Liabilities
Notes and accounts payable-trade and short-term loans
The book value approximates fair value because of the short maturity ofthese instruments.
Current portion of long-term debt and long-term debt
The fair value of current portion of long-term debt and long-term debt isbased on the present value of future cash flows discounted using the current
borrowing rate for similar debt contracts of comparable maturity.
Lease obligations
The fair value of lease obligations is based on the present value of future cash
flows discounted using the current interest rate for similar lease contracts ofcomparable maturity and contract conditions.
19

Derivative transactions
See “Note 15. Derivative Financial Instruments”.
2. Financial instruments for which the fair value is extremely difficult to measureat March 31, 2016 and 2015 were as follows:

Millions of yen
2016
2015
Available-for-sale securities without market
quotations:
Unlisted securities
¥
Total
¥

2,160
2,160

¥
¥

2,029
2,029

Thousands of
U.S. dollars
2016

$
$

19,115
19,115

Because no quoted market price is available and it is extremely difficult todetermine the fair value, the above financial instruments are not included in thepreceding table.
3. The aggregate maturities of monetary claims and held-to-maturity securities at
March 31, 2016 and 2015 were as follows:
As of March 31, 2016
Millions of yen
Due within
Due after 1 year
through 5 years
1 yearCash and bank deposits¥
15,133¥－
Notes and accounts receivable-trade21,518－
Total¥
36,651¥－

As of March 31, 2015
Millions of yen
Due within
Due after 1 year
through 5 years
1 yearCash and bank deposits¥
11,816¥－
Notes and accounts receivable-trade
23,685－
Total¥
35,501¥－

As of March 31, 2016
Thousands of U.S. dollars
Due within
Due after 1 year
through 5 years
1 yearCash and bank deposits$
133,920$－
Notes and accounts receivable-trade190,425－
Total$
324,345$－

4. The redemption schedules for long-term debt and lease obligations weredisclosed in “Note 7. Short-term Loans and Long-term Debt”.
20

5. Securities(a) At March 31, 2016 and 2015, securities consisted of the following:Thousands of
U.S. dollars
2016

Millions of yen
2016
2015
Available-for-sale securities for which market
quotations are available
Acquisition cost
Book value
Unrealized gain

¥
¥

1,458
1,772
314

¥

1,339
1,989
650

¥

$

12,903
15,681
2,778$(b) Sales of securities classified as other securities and the aggregate gain and loss forthe years ended March 31, 2016 and 2015 were as follows:
Thousands of
U.S. dollars
2016

Millions of yen
2016
2015
Sales proceeds
Available-for-sale securities
Aggregate gain
Available-for-sale securities
Aggregate loss
Available-for-sale securities

¥

－

¥

1

$

－

¥

－

¥

0

$

－

¥

－

¥

－

$

－

6. Inventories
At March 31, 2016 and 2015, inventories consisted of the following:

Millions of yen
2016
2015
Merchandise
Finished goods
Work in process
Raw materials and supplies
Total

¥

¥

4,214
1,324
1,806
5,188
12,532

¥

¥

4,360
1,399
2,310
6,343
14,412Thousands of
U.S. dollars
2016
$

$

37,292
11,717
15,98245,912110,903

7. Short-term Loans and Long-term Debt
Short-term loans at March 31, 2016 and 2015 were principally bank overdrafts andshort-term notes bearing interest at annual average interest rates of 1.08% and1.18%, respectively.

21

At March 31, 2016 and 2015, long-term debt consisted of the following:Thousands of
U.S. dollars
2016

Millions of yen
2016
2015
Long-term loans, principally from banks (*)¥

14,914

Lease obligations¥

15,787$

131,982

832

918

7,363

15,746

16,705

139,345

Less: current portion - Long-term loans(5,493)(873)(48,610)

Less: current portion - Lease obligations

(344)

(371)

(3,044)

Total

¥

9,909

¥

15,461$

87,691(*) At March 31, 2016 and 2015, long-term loans and lease obligations consisted of thefollowing:

Millions of yen
2016
2015
Long-term loans, at an annual average rateof 1.37 (2014 - 1.44)

¥

9,421

Lease obligations, at an annual average rateof 2.16 (2014 - 2.24)
Current portion- Long-term loans, at anannual average rate of 1.55 (2014 - 1.25)
Current portion- Lease obligations, at anannual average rate of 2.42 (2014 - 2.47)

14,914$

83,372

488

547

4,319

5,493

872

48,610344
15,746¥¥

Thousands of
U.S. dollars
2016

¥

371
16,704$

3,044
139,345

The aggregate annual maturities of long-term debt and lease obligations at March 31,
2016 were as follows:
Millions of yen
Long-term
Lease
loans
obligations
Year ending March 31,
2018
2019
2020
2021

¥

3,457
5,881
82
－

¥

189
143
58
30

Thousands of U.S. dollars
Long-term
Lease
loans
obligations$

30,592
52,044
725
－

$

1,672
1,265
513
265

8. Retirement Benefit Plan(a) Outline of employee retirement benefits
The Company and certain consolidated subsidiaries have defined benefit
retirement plans covering substantially all employees. Benefits under the plans
are covered by two plans. One is governed by the regulations of the Defined Benefit
22

Corporate Pension Law and the other is a severance indemnity by the Companies.
KOHA CO., LTD. (KOHA) also has defined benefit retirement plans covering
substantially all employees. Benefits under the plans are covered by three plans.
One is an employees’ pension fund, the second is governed by the regulations of theDefined Benefit Corporate Pension Law, and the third is a severance indemnity by
KOHA.
Certain foreign consolidated subsidiaries have defined benefit pension plans anddefined benefit lump-sum payment plans. The Company also has employee
retirement benefit trusts.
During the year ended March 31, 2011, the Company and some of its domestic
consolidated subsidiaries have changed a part of their retirement benefit plansfrom defined benefit plans to defined contribution plans.
Certain foreign consolidated subsidiaries have introduced their own defined
contribution plans.
(b) Contributory defined benefit retirement plan
(1) The changes in the defined benefit obligation and fair value of plan assets
except plans for which the simplified method is applied for calculating
retirement benefit obligations adopted by certain consolidated subsidiaries,
during the fiscal years ended March 31, 2016 and 2015 were as follows:

Millions of yen
2015
2016

Thousands of
U.S. dollars

2016

Change in benefit obligations:Benefit obligation, the beginning of the year

Service cost
Interest cost
Actuarial loss (gain)
Benefit payments
Effects of changes in foreignexchange rates
Other
Benefit obligation, the end of the year¥¥

11,658
426
175
1,117
(580)
(78)
33
12,751¥¥

10,695
383
217
666
(429)
126
(0)
11,658$$103,168
3,770
1,548
9,884
(5,132)(690)
292
112,840

Change in fair value of plan assets:
Plan assets, the beginning of the year
Expected return on plan assets
Actuarial gain
Employer contributions
Benefit payments
Effects of changes in foreignexchange rates
Plan assets, the end of the year

¥

¥

9,916
224
(564)
771
(447)
(46)
9,854

¥

¥

8,224
163
1,031
777
(366)
87
9,916

(2) Changes in the defined benefit obligation and fair value of plan assets
estimated by the simplified method for calculating retirement benefit
obligations for the year ended March 31, 2016 and 2015.
23

$

$

87,752
1,982(4,991)
6,823(3,956)(407)
87,203

Millions of yen
2016
2015

Change in net defined benefit liability
Net defined benefit liability,
the beginning of the year¥

Service cost
Benefit payments
Other
Benefit obligation, the end of the year

¥

118
12
(7)
(15)
108

¥

¥

107
16
(5)
－
118

Thousands of
U.S. dollars

2016

$

$

1,044
106
(62)
(133)
955

(3) Reconciliation of the projected benefit obligation and plan assets with net
defined benefit liability and asset reflected on the consolidated balance sheets
as of march 31, 2016 and 2015.
Thousands ofFunded projected benefit obligation
Plan assets¥¥

Unfunded projected benefit obligation
Net of liability and asset reported on
the consolidated balance sheets

Net defined benefit liability
Net defined benefit asset
Net of liability and asset reported on
the consolidated balance sheets

Millions of yen
2016
2015

U.S. dollars
201612,367(9,854)
2,513
494

$

¥
¥

11,273(9,916)
1,357
504

$

109,442(87,203)
22,239
4,372

¥

3,007

¥

1,861

$

26,611

¥

3,252
(245)

¥

2,765
(904)

$

28,779(2,168)

¥

3,007

¥

1,861

$

26,611(4) Components of pension expense for the years ended March 31, 2016 and 2015.
Thousands ofMillions of yen
2016
2015
Service cost
Interest cost
Expected return on plan assets
Amortization of prior service cost
Amortization of actuarial differences
Other

Net pension expense

¥

¥

211
¥

24

439
175
(224)
(29)
78
650

¥

400
217
(162)
(73)
233
5
620

U.S. dollars
2016
$

$

3,884
1,548
(1,982)
(256)
691
1,867
5,752

(5) Remeasurements of defined benefit plans
The components of remeasurements of defined benefit plans (before tax effect)in accumulated other comprehensive income and other comprehensive income
were as follows for the year ended march 31, 2016 and 2015.
Thousands ofMillions of yen
2016
2015
Prior service cost
Net actuarial difference
Total

¥

29

¥

1,558
1,587

U.S. dollars
2016

¥

73

$

¥

(597)
(524)

$

Millions of yen
2016
2015

Unrecognized prior service cost
Unrecognized actuarial difference
Total

¥

(194)

¥

2,384
2,190

256
13,78814,044

Thousands of
U.S. dollars

2016

¥

(224)

$

¥

826
602

$

(1,717)21,097
19,380(6) Matters related to pension assets
i. Major components of pension assets
The fair values of plan assets, by major category, as a percentage of total plan
assets as of March 31, 2016 and 2015 were as follows.
2016
Bonds
Equity securities
Life insurance company
general accounts
Cash and cash equivalents
Other

2015

35 %
44

35 %
47

12
1
8
100 %

11
2
5
100 %

*Of total plan assets, 19% and 23% were included in a retirement benefit
trust (stocks, cash and bank deposits) established for the corporate pension
plan as of March 31, 2016 and 2015, respectively.
ii. Method for expected long-term rate of return on pension plan
The Companies determine the expected long-term rate of return on pension
plan assets based on the current and expected asset allocation, as well as thecurrent and expected long-term rate of return from various assets whichconstitute the plan assets.
(7) Assumptions used in actuarial calculations
The assumptions used in accounting for the above plans for the years ended
March 31, 2016 and 2015 were as follows.
25

2015

2016
Discount rates

0.0 ~ 5.3

Expected rate of long-term
return on plan assets

1.8 ~ 3.1

1.1 ~ 2.9

Expected rates of salary

3.9 ~ 5.0

3.9 ~ 4.4%

1.0 ~ 5.3%(c) Defined contribution plans
The required contributions by the Companies were ¥185 million ($1,638 thousand)and ¥182 million as of March 31, 2016 and 2015, respectively.
9. Other Comprehensive Income
Reclassification adjustments and the related tax effects for components of othercomprehensive income for the years ended March 31, 2016 and 2015 were as follows:
Thousands of
U.S. dollars
2016

Millions of yen
2016
2015

Unrealized gain on securities
Amount arising during the period¥
Reclassification adjustments for gains andlosses included in net income
Before tax effectTax effectUnrealized gain on securities
Deferred loss on hedges
Amount arising during the period
Reclassification adjustments for gains andlosses included in net income
Before tax effectTax effect
Deferred loss on hedges
Translation adjustments
Amount arising during the period
Reclassification adjustments for gains andlosses included in net income
Before tax effectTax effectTranslation adjustments
Remeasurements of defined benefit plans
Amount arising during the period
Reclassification adjustments for gains andlosses included in net income
Before tax effectTax effectPension liability adjustments
Share of other comprehensive income ofaffiliates accounted for using equity method
Amount arising during the period
Total amount of othercomprehensive income

¥

26

(336)

¥

408

$

(2,973)

－
(336)
55
(281)

0
408
(100)
308

0
(2,973)486(2,487)

(3)

10

(26)

－
(3)
1
(2)

－
10
－
10

－
(26)
8
(18)

(868)

1,956

(7,681)

－
(868)
－
(868)

260
2,216
－
2,216

－
(7,681)－(7,681)(1,636)362(14,477)48(1,588)
11(1,577)

162
524
(3)
521

424
(14,053)
98(13,955)

(79)

144

(699)

(2,807)

¥

3,199

$

(24,840)

10. Treasury Stock
The Company had 759 thousand shares and 775 thousand shares of treasury stock asof March 31, 2016 and 2015, respectively, in order to prepare for the exercise of stock
options granted to certain directors and executive officers, subject to the approval of
the General Meeting of Shareholders.
The amount of treasury stock is stated at cost and is presented as a separate
component of shareholders’ equity.

11. Selling, General and Administrative Expenses
For the years ended March 31, 2016 and 2015, the significant components of selling,
general and administrative expenses were as follows:
Thousands ofMillions of yen
2016
2015
Salaries
Pension expense
Research and development expense
Freight¥

Reserve for directors’ bonuses

Accrued bonuses

5,941
449
1,182
1,942
65
637

¥

6,032
563
1,179
1,980
67
671

U.S. dollars
2016$

52,575
3,973
10,46017,185575
5,637

12. Research and Development Expenses
Total research and development expenses included in manufacturing costs andselling, general and administrative expenses amounted to ¥1,240 million ($10,973
thousand) and ¥1,233 million for the years ended March 31, 2016 and 2015,
respectively.

13. Income Taxes
At March 31, 2016 and 2015, the significant components of deferred tax assets andliabilities were as follows:27

Thousands ofDeferred tax assets:
Accrued bonuses
Accrued enterprise taxes
Net defined benefit liability
Tax loss carryforwards

Millions of yen
2016
2015

U.S. dollars
2016
$

¥

318
53
969
2,374
280
142
504
4,640
(3,778)
862

¥

¥

117

¥

¥

440
557
305

¥

Loss on valuation of investment securities

Loss on impairment of fixed assets
Other
Total
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Unrealized gain on securities
Other
Total deferred tax liabilities
Net deferred tax assets

¥

340
30
1,124
3,031
364
94
593
5,576
(4,523)
1,053

¥

172
－
172
881

$

2,814
469
8,575
21,009
2,478
1,256
4,460
41,061(33,433)
7,628

$

1,035

$

3,894
4,929
2,699

The reconciliation between the statutory tax rate and the effective tax rate for theyears ended March 31, 2016 and 2015 was as follows:
2016

2015

33.0 %

35.0 %

Non-deductible expenses
Non-taxable items
Inhabitant tax on per capita basis
Amortization of goodwill

2.0
(0.3)
0.9
1.0

1.8
(1.7)
0.8
2.9

Equity in earnings (losses) ofaffiliated companies

(2.5)

(3.9)

Tax rate difference applied forforeign subsidiaries(2.2)(13.9)

Change in valuation allowance

(1.6)

(1.1)

Foreign income taxes

8.7

3.8

Adjustment on deferred tax assets
due to change in income tax rate

1.2

1.6

9.7
49.9 %(1.1)
24.2 %

Statutory tax rate
Effect of:Others
Effective tax rate28

(Revisions in the Amounts of Deferred Tax Assets and liabilities as a result of a
Change in the Corporate Tax Rate)“Act on Partial Amendment to the Income Tax Act, etc.” (Act No.15, 2016) and “Act on
Partial Amendment to the Local Tax Act, etc.” (Act No.13, 2016) were enacted on
March 29, 2016, and accordingly, the corporate tax act and other rates have been
lowered from fiscal years beginning on or after April 1, 2016.
As a result, the effective statutory tax rate used to measure the Company’s deferred
tax assets and liabilities was changed from 32.0% to 30.0% for the temporary
differences expected to be realized or settled during the fiscal year beginning April 1,
2016.The effect of the announced reduction of the statutory effective tax rate was todecrease deferred tax assets after offsetting deferred tax liabilities by ¥24 million($213 thousand) and increase deferred income taxes, valuation difference on
available-for-sale securities, deferred losses on hedges and remeasurements ofdefined benefit plans by ¥32 million ($284 thousand), ¥7 million ($62 thousand), ¥0
million ($0 thousand) and ¥0 million ($0 thousand),respectively, as of and for theyear ended March 31, 2016. In addition, due to the revision of the net operating loss
carry-forward system, the amount of net operating losses that can be deducted has
been limited to the equivalent of 60% of taxable income before such deductions in thefiscal year beginning on April 1, 2016, while the amount of net operating losses thatcan be deducted has been limited to the equivalent of 55% of taxable income before
such deductions in or after the fiscal year beginning on April 1, 2017 and the amountof net operating losses that can be deducted has been limited to the equivalent of 50%
of taxable income before such deductions in or after the fiscal year beginning on April
1, 2018.
As a result of the change in the net operating loss carry-forward system, deferred tax
assets decreased by ¥4 million ($36 thousand) and deferred income taxes increasedby ¥4 million ($36 thousand).

14. Leases
Finance lease transactions (lessee)(a) Finance lease transactions with ownership transfer
Lease assets;
・Property, plant and equipment: Machinery and equipment in connection with
Electronic Components business・Intangible fixed assets: Software
Lease assets are depreciated using the same method as fixed assets.
(b) Finance lease transactions without ownership transfer
Lease assets;
・Property, plant and equipment: Machinery and equipment in connection with
Electronic Components business, research and development facilities, andtools and fixtures in connection with IT
・Intangible fixed assets: Software
Lease assets are depreciated by the straight-line method over the respective
lease terms, assuming no residual value.
Operating lease transactions (lessee)
The future payments under non-cancelable operating leases as of March 31, 2016
and 2015 were as follows:29Millions of yen
2016
2015
Due within one year
Due after one year

¥

239

¥

516

¥

755

¥

228
645
873

Thousands of
U.S. dollars
2016
$

2,115

$

6,681

4,566

15. Derivative Financial Instruments
The Companies do not hold or issue derivatives for trading purposes and it is theCompanies’ policy to use derivatives only for the purpose of reducing exposure tomarket risks and financing costs in accordance with internal policies.
The Companies do not anticipate any losses resulting from default of thecounterparties as these are limited to major financial institutions with sound credit
ratings.
As of March 31, 2016 and 2015, there were no derivative transactions outstanding forwhich hedge accounting has not been applied.
The notional amounts and the fair value of the derivative instruments outstanding asof March 31, 2016 and 2015, for which hedge accounting has been applied aresummarized as follows:30

(a) Foreign currency-related transactions
As of March 31, 2016
Millions of yen
Derivativetransactions

Contract
amountMain hedged
items

Portion maturing
over one year

Fair value¥¥

Foreign exchange allocation method:
Forward foreignexchange contracts:
Sell
USD
EUR

Accounts
receivabletrade

¥

1,860

－

[*1]

45

－

[*1]

1,368

－

[*1]

Contracts
outstanding

9

－

0

Contracts
outstanding

12

－

(0)

Buy
USD

Accounts
payable-trade

Deferral hedge accounting:
Forward foreignexchange contracts:
Sell
USD
Buy
USD
Total

¥

31

3,294

¥

－

¥

0

As of March 31, 2015
Millions of yen
Derivativetransactions

Contract
amountMain hedged
items

Portion maturing
over one year

Fair value¥¥

Foreign exchange allocation method:
Forward foreignexchange contracts:
Sell
USD
EUR

Accounts
receivabletrade

¥

2,964

－

[*1]

92

－

[*1]

559

－

[*1]

Contracts
outstanding

19

－

(0)

Contracts
outstanding

143

－

3

Buy
USD

Accounts
payable-trade

Deferral hedge accounting:
Forward foreignexchange contracts:
Sell
USD
Buy
USD
Total

¥

32

3,777

¥

－

¥

3

Derivativetransactions

As of March 31, 2016
Thousands of U.S. dollars
Contract
Portion maturing
Fair value
over one year
amountMain hedged
items

Foreign exchange allocation method:
Forward foreignexchange contracts:
Sell
USD
EUR

Accounts
receivabletrade$16,460

$

－

$

[*1]

398

－

[*1]

12,106

－

[*1]

80

－

0

106

－

(0)

Buy
USD

Accounts
payable-trade

Deferral hedge accounting:
Forward foreignexchange contracts:
Sell
Contracts
USD
outstanding
Buy
USD

Contracts
outstanding

Total

$

29,150$－$0[*1] The fair value is included in the fair value of the accounts receivable-trade and theaccounts payable-trade since the forward foreign exchange contracts are accounted
for as part of accounts receivable and payable under the allocation method forhedge accounting.
[*2] Price provided by financial institutions.

(b) Interest rate-related transactions
As of March 31, 2016
Millions of yen
Derivativetransactions
Interest-rate swaps:
Pay fixed andreceive variable

Contract
amountMain hedged
itemsLong-term
debt

¥

33

11,862

Portion maturing
over one year

Fair value

¥

¥

7,022

[*]

As of March 31, 2015
Millions of yen
Derivativetransactions
Interest-rate swaps:
Pay fixed andreceive variable

Derivativetransactions
Interest-rate swaps:
Pay fixed andreceive variable

Contract
amountMain hedged
itemsLong-term
debt¥

12,483

Portion maturing
over one year

Fair value¥¥

11,862[*]As of March 31, 2016
Thousands of U.S. dollars
Contract
Portion maturing
Fair value
over one year
amountMain hedged
itemsLong-term
debt$

104,973$

62,141$[*][*] The fair value is included in the fair value of long-term debt since the short-cut
method is applied.

16. Contingent Liabilities
The Companies are contingently liable as guarantors of borrowings for a
non-consolidated subsidiary (TE Energy Co., Ltd. and Novel Crystal Technology, Inc.)in amount of ¥300 million ($2,655 thousand) and ¥30 million ($266 thousand) at
March 31, 2016, respectively.
The Companies were contingently liable as guarantors of borrowings for a
non-consolidated subsidiary (TE Energy Co., Ltd.) in amount of ¥300 million ($2,500
thousand) at March 31, 2015.

17. Loan Commitment
In order to achieve more efficient and flexible financing, the Company has concluded
loan commitment contracts with five financial institutions.
The status of these contracts as of March 31, 2016 and 2015 is summarized asfollows:

Millions of yen
2016
2015
Maximum overdraft amount and total
amount of loan commitment
Executed loan amounts
Net amount

34

¥
¥

2,500
－
2,500

¥

2,500

Thousands of
U.S. dollars
2016
$

－

¥

2,500

$

22,123－22,123

18. Loss on Impairment of Fixed Assets
The Companies recognized no impairment losses for the following group of assets
during the year ended March 31, 2015.
The Companies recognized impairment losses for the following group of assets during
the year ended March 31, 2016.
Loss on impairment of fixed assets:
At the Board of Directors meeting held on January 27, 2016, the Company resolved toclose a factory of a consolidated subsidiary, Koha, in Hamamatsu.
As a result an impairment loss was recognized on certain fixed assets.
Amount of impairment loss: ¥76 million ($673 thousand)(Asset categories)
Machinery and vehicles: ¥7 million ($62 thousand)Equipment: ¥0 million ($0 thousand)
Investment: ¥56 million ($496 thousand)Transfer cost and others: ¥10 million ($89 thousand)Asset grouping:
Assets are generally grouped by the lowest level that generates independent cash
flows, based on the business segmentation.
Estimation of the recoverable value:
The amount recoverable is measured by the net selling amount based on appraisal
value.

19. Stock Options(a) Stock options expenses recognized in selling, general and administrative
expenses for the years ended March 31, 2016 and 2015

Millions of yen
2016
2015
Selling, general and administrative
expenses¥(b) Outline of stock options and changes
a. Outline of stock options

35

15

¥

16

Thousands of
U.S. dollars
2016
$

132

TAMURA CORPORATION TAMURA CORPORATION TAMURA CORPORATIONThe 2nd Stock Option Plan The 3rd Stock Option Plan The 4th Stock Option Plan
June 29, 2005
June 29, 2006
June 28, 2007
Directors 6
Directors 6
Directors 6
Title and number of grantees (Exclude outside director) (Exclude outside director) (Exclude outside director)
Executive officers 9
Executive officers 6
Executive officers 7
Number of stock options
Common shares 35,000
Common shares 28,000
Common shares 30,000
Grant dateJuly 1, 2005
July 1, 2006
July 1, 2007
Retirement of director
Retirement of director
Retirement of director
Condition for vestingand executive officer
and executive officer
and executive officer
Requisite service period
N.A.
N.A.
N.A.
For the period of five
July 1, 2006 to
July 1, 2007 to
years from the next day of
Exercise period
retirement of director andJune 30, 2036
June 30, 2037
executive officer
Date of resolution

TAMURA CORPORATION TAMURA CORPORATION TAMURA CORPORATION
The 5th Stock Option Plan The 6th Stock Option Plan The 7th Stock Option Plan
June 27, 2008
June 26, 2009
June 29, 2010
Directors 6
Directors 6
Directors 6
Title and number of grantees (Exclude outside director) (Exclude outside director) (Exclude outside director)
Executive officers 6
Executive officers 4
Executive officers 6
Number of stock options
Common shares 42,000
Common shares 77,000
Common shares 52,000
Grant dateJuly 1, 2008
July 1, 2009
July 1, 2010Retirement of director
Retirement of director
Retirement of director
Condition for vestingand executive officer
and executive officer
and executive officer
Requisite service period
N.A.
N.A.
N.A.
July 1, 2008 to
July 1, 2009 to
July 1, 2010 to
Exercise period
June 30, 2038
June 30, 2039
June 30, 2040
Date of resolution

TAMURA CORPORATION TAMURA CORPORATION TAMURA CORPORATION
The 8th Stock Option Plan The 9th Stock Option Plan The 10th Stock Option Plan
June 29, 2011
June 28, 2012
June 27, 2013
Directors 6
Directors 6
Directors 6
Title and number of grantees (Exclude outside director) (Exclude outside director) (Exclude outside director)
Executive officers 6
Executive officers 6
Executive officers 6
Number of stock options
Common shares 65,000
Common shares 72,000
Common shares 78,000
Grant dateJuly 1, 2011
July 1, 2012
July 1, 2013
Retirement of director
Retirement of director
Retirement of director
Condition for vestingand executive officer
and executive officer
and executive officer
Requisite service period
N.A.
N.A.
N.A.
July 1, 2011 toJuly 1, 2012 toJuly 1, 2013 to
Exercise period
June 30, 2041
June 30, 2042
June 30, 2043
Date of resolution

TAMURA CORPORATION TAMURA CORPORATION
Date of resolution

The 11th Stock Option Plan

The 12th Stock Option Plan

June 26, 2014
June 26, 2015
Directors 6
Directors 7
Title and number of grantees (Exclude outside director) (Exclude outside director)
Executive officers 6
Executive officers 5
Number of stock options
Common shares 52,000
Common shares 36,000
Grant dateJuly 1, 2014
July 1, 2015
Retirement of director
Retirement of director
Condition for vestingand executive officer
and executive officer
Requisite service period
N.A.
N.A.
July 1, 2014 to
July 1, 2015 to
Exercise period
June 30, 2044
June 30, 2045

The Company's stock option plans were designed as stock compensation to directors andexecutive officers after the directors’ retirement benefit plan was abolished in June 2005.

36

b. Stock options granted and changes
The movement in stock options for the year ended Mach 31, 2016 is presented
after conversion to number of shares.

37

Number of stock options
Date of resolution
Before vested
Previous fiscal year-end
GrantedForfeited
VestedOutstanding
After vested
Previous fiscal year-end
VestedExercised
Forfeited
Exercisable
Date of resolution
Before vested
Previous fiscal year-end
GrantedForfeited
VestedOutstanding
After vested
Previous fiscal year-end
VestedExercised
Forfeited
Exercisable
Date of resolution
Before vested
Previous fiscal year-end
GrantedForfeited
VestedOutstanding
After vested
Previous fiscal year-end
VestedExercised
Forfeited
Exercisable(Shares)
TAMURA CORPORATION TAMURA CORPORATION TAMURA CORPORATIONThe 2nd Stock Option Plan The 3rd Stock Option Plan The 4th Stock Option Plan
June 29, 2005
June 29, 2006
June 28, 2007

13,000－－－13,00013,000－－－13,00016,000－－－16,000

2,000
－
2,000
－
－

2,000
－
2,000
－
－

2,000
－
2,000
－
－

TAMURA CORPORATION TAMURA CORPORATION TAMURA CORPORATION
The 5th Stock Option Plan
The 6th Stock Option Plan The 7th Stock Option Plan
June 27, 2008
June 26, 2009
June 29, 2010

23,000－－－23,00059,000－－－59,00042,000－－－42,000

3,000
－
3,000
－
－

8,000
－
8,000
－
－

4,000
－
4,000
－
－

TAMURA CORPORATION TAMURA CORPORATION TAMURA CORPORATION
The 8th Stock Option Plan The 9th Stock Option Plan The 10th Stock Option Plan
June 29, 2011
June 28, 2012
June 27, 2013

51,000－－5,000
46,00065,000－－4,000
61,00078,000－－4,000
74,00010,000
5,000
6,000
－
9,000

7,000
4,000
7,000
－
4,000

－
4,000
－
－
4,000

TAMURA CORPORATION TAMURA CORPORATION
Date of resolution

The 11th Stock Option Plan The 12th Stock Option Plan

June 26, 2014
Before vested
Previous fiscal year-end
GrantedForfeited
VestedOutstanding
After vested
Previous fiscal year-end
VestedExercised
Forfeited
Exercisable

June 26, 2015

52,000－－2,000
50,000－36,0001,000－
35,000

－
2,000
－
－
2,000

－
－
－
－
－

38

Price information
Date of resolution(Yen)
TAMURA CORPORATIONTAMURA CORPORATIONTAMURA CORPORATIONThe 2nd Stock Option Plan

The 3rd Stock Option Plan

The 4th Stock Option Plan

June 29, 2005

June 29, 2006

June 28, 2007

1
241
－

Exercise price
Average stock price at exercise
Fair value at the grant date

Date of resolution

TAMURA CORPORATIONTAMURA CORPORATION

The 5th Stock Option Plan

The 6th Stock Option Plan

The 7th Stock Option Plan

June 27, 2008

June 26, 2009

June 29, 2010

1
241
426

Average stock price at exercise
Fair value at the grant date

1
415
348

1
241
203

TAMURA CORPORATIONTAMURA CORPORATIONTAMURA CORPORATION

The 8th Stock Option Plan

The 9th Stock Option Plan

The 10th Stock Option Plan

June 29, 2011

June 28, 2012

June 27, 2013

1
241
203

Exercise price
Average stock price at exercise
Fair value at the grant date

Date of resolution

1
241
653

TAMURA CORPORATION

Exercise priceDate of resolution

1
241
464

1
241
151

TAMURA CORPORATIONTAMURA CORPORATION

The 11th Stock Option Plan

The 12th Stock Option Plan

June 26, 2014

June 26, 2015

1
－
321

Exercise price
Average stock price at exercise
Fair value at the grant date

1
－
423

(c) Valuation technique used to determine the fair value of stock options
TAMURA CORPORATION The 12th plan stock options granted in the fiscal year
were valued using the following valuation technique.
Valuation technique: Black-Scholes option-pricing model
Principal assumptions used in the option-pricing model:

TAMURA CORPORATION
Date of resolution

The 12th Stock Option Plan

June 26, 2015
Expected volatility(*1)
Average expected life(*2)
Expected dividends(*3)
Risk-free interest rate(*4)

43.31%
10 years
7 yen per share
0.45%(*1) Calculated based on the actual stock prices from April 2005 to June 2015.
(*2) The average expected life could not be estimated rationally as data wasinsufficient. Therefore, it was estimated assuming that the options were
exercised at the 1/3 point of the exercise period.
(*3) Calculated based on actual dividends on common stock for the fiscal year
ended March 31, 2015, the dividend policy of the Company and prior years’
actual dividends.
(*4) Japanese government bond yield corresponding to the average expected life.

39

1
－
163

(d) Method of estimating number of stock options forfeited
Only the actual number of forfeited stock options is reflected because it is difficult
to rationally estimate the actual number of stock options that will be forfeited in
the future.

20. Segment Information(a) Overview of reportable segments
The reportable segments of the Companies are components for which separate
financial information is available and which are reviewed regularly by the boardof directors in deciding resource allocation and in assessing performance.
Each business division develops comprehensive business strategies for products
in Japan and overseas and conducts business activities.
Accordingly, the Company consists of three reportable segments, identified by the
products and based on the business divisions, which are classified as the“Electronic Components” business, the “Electronic Chemicals / FA Systems”
business and the “Information Equipment” business.
The “Electronic Components” business manufactures transformers, AC adaptors,
switching supply units, piezoceramic products and LED products. The “Electronic
Chemicals / FA Systems” business manufactures flux, solder paste, solder resist
and automatic soldering equipment. The “Information Equipment” business
manufactures network equipment, broadband equipment, wireless microphone
and information equipment.
(b) Calculation method for net sales, segment income or loss, and other items of thereportable segments
The accounting policies of the segments are substantially the same as thosedescribed in Significant Accounting Policies.
Segment income is based on operating income.
Inter-segment sales are recorded at the same prices used in transactions withthird parties.

40

(c) Information on net sales, income or loss, assets and liabilities, and other items by
the reportable segment

Year ended March 31, 2016
Millions of yen

Components

Reportable segments
Electronic
Chemicals / Information
FA Systems Equipment¥

54,602
24
54,626

¥

¥

974

¥
Amortization of
goodwill¥
Increase in tangible
and intangible
fixed assets¥

Electronic
Net Sales
SalesCustomers
Inter-segment
Segment
income (loss)
Other items
Depreciation andamortization

24,742130
24,872

¥

¥

3,182

1,377

¥

105

1,539

Other
(*1)

Subtotal

5,251
32
5,283

¥

84,595
186
84,781

¥

¥

678

¥

4,834

1071

¥

136

¥

¥

－

¥

－

¥

632

¥

159

Total

Adjustments

(*2)

47
627
674

¥

84,642813
85,455

¥

¥

(14)

¥

4,820

2,584

¥

26

¥

¥

105

¥

－

¥

2,330

¥

52

Consoli－
dated
(*3)

－
(813)
(813)

¥

84,642

¥

(554)

¥

4,266

2,610

¥

49

¥

2,659

¥

105

¥

－

¥

105

¥

2,382

¥

7

¥

2,389

－
84,642

Year ended March 31, 2015
Millions of yen

Components

Reportable segments
Electronic
Chemicals / Information
FA Systems Equipment¥

57,739057,739

¥

¥

1,487

¥
Amortization of
goodwill¥
Increase in tangible
and intangible
fixed assets¥

Electronic
Net Sales
SalesCustomers
Inter-segment
Segment
income (loss)
Other items
Depreciation andamortization

24,36574
24,439

¥

¥

2,940

1,299

¥

117

1,764

Other
(*1)

Subtotal

4,123
60
4,183

¥

86,227
134
86,361

¥

¥

379

¥

4,806

910

¥

88

¥

¥

0

¥

－

¥

1,154

¥

70

41

Total

Adjustments

(*2)

21
668
689

¥

86,248802
87,050

¥

¥

(43)

¥

4,763

2,297

¥

39

¥

¥

117

¥

－

¥

2,988

¥

16

Consoli－
dated
(*3)

－
(802)
(802)

¥

86,248

¥

(734)

¥

4,029

2,336

¥

16

¥

2,352

¥

117

¥

－

¥

117

¥

3,004

¥

0

¥

3,004

－
86,248

Year ended March 31, 2016
Thousands of U.S. dollars
Reportable segments
Electronic
Electronic Chemicals / Information
Components FA Systems Equipment
Net Sales
SalesCustomers
Inter-segment$ 483,203
213
483,416$ 218,956
1,150
220,106

$

$

8,619

$

28,159$Amortization of
goodwill$
Increase in tangible
and intangible
fixed assets$

12,186$929

13,619Segment
income (loss)
Other items
Depreciation andamortization

Other
(*1)

Subtotal

46,469283
46,752$

748,6281,646
750,274

$

$

6,000

$

42,778

9,478

$

1,203

$

$

－

$

－

$

5,593

$

1,407

Total

Adjustments

(*2)

416
5,548
5,964

$

749,0447,194
756,238

$

$

(124)

$

42,654

22,867

$

230

$

$

929

$

－

$

20,619$460

Consoli－
dated
(*3)

－
(7,194)(7,194)$

749,044$(4,902)$37,75223,097$433$

23,530

$

929

$

－

$

929

$

21,079$62$

21,141－
749,044(*1) “Other” includes businesses not included in the reportable segments, which
includes the transportation, warehouse businesses in the fiscal year ended
March 31, 2016.
(*2) Adjustments for segment income (loss) were as follows:
Thousands ofMillions of yen
2016
2015
Inter-segment eliminations
Corporate costs (*)
Total

¥
¥

62
(617)
(555)

¥
¥

54
(788)
(734)

U.S. dollars
2016
$
$

548
(5,457)(4,909)* Corporate costs are mainly future R&D expenses at the head office, which are notallocated to the reportable segments.

(*3) Segment income is adjusted with operating income in the consolidated
statements of income.
(*4) Adjustments for “Depreciation and amortization” and “Increase in tangible andintangible fixed assets” are mainly capital investment and depreciation
relating to future R&D assets at the head office, which are not allocated to thereportable segments.
(*5) Assets of the Company are not allocated to the business segments.

42

(Application of “Accounting Standard for Business Combinations” and others)
As noted in the previous section, “Change in Accounting Policies”, the Company has
applied “Business Combinations Accounting Standard” and other standards from thefiscal year ended March 31, 2016. Accordingly, the accounting methods have beenchanged to record the difference arising from changes in equity in subsidiaries which
the Company continues to control in capital surplus, and to record businessacquisition costs as expenses for the fiscal year in which they are incurred.
As a result of this change, segment income in the Electronic Components businessand in the Electronic Chemicals/FA Systems business increased by ¥20 million ($177
thousand) and ¥0million ($0 thousand), respectively for the year ended March 31,
2016.

(d) Related information(1) Information by product and service

Year ended March 31, 2016
Millions of yen
Electronic
Electronic Chemicals / Information
Components FA Systems Equipment
Other
SalesCustomers¥

54,602¥

24,742

¥

5,251

¥

47

Year ended March 31, 2015
Millions of yen
Electronic
Electronic Chemicals / Information
Components FA Systems Equipment
Other
SalesCustomers¥

57,739¥24,365

¥

4,123

¥

21

Year ended March 31, 2016
Thousands of U.S. dollars
Electronic
Electronic Chemicals / Information
Components FA Systems Equipment
Other
SalesCustomers$ 483,203$ 218,956

43$

46,469$416

Consolidated¥

84,642

Consolidated¥

86,248

Consolidated$

749,044(2) Information by geographical areaJapan
Net Sales¥Asia

36,563¥Japan
Net Sales

Net Sales¥Year ended March 31, 2016
Millions of yen
North andSouth
EuropeAmerica

38,554¥36,561

Asia$ 323,566$ 341,186

11,594¥¥

11,742

¥

¥

7,723

¥

2,958

$

52,044$32,239

1

¥

4

6,826

¥

379

¥

205

¥

7,342

44

¥

459

¥

219

9

¥

19,004

Consoli－
dated¥

86,248$ 749,044

Consoli－
dated¥

84,642

Consoli－
dated

Other
$

¥

Consoli－
dated

Other

Year ended March 31, 2015
Millions of yen
North and
South
Asia
EuropeAmericaJapan
Property, plantand equipment

3,643

Year ended March 31, 2016
Millions of yen
North and
South
Asia
EuropeAmerica

Japan
¥

¥

Year ended March 31, 2016
Thousands of U.S. dollars
North andSouth
EuropeAmericaJapan

Property, plantand equipment

5,881

Year ended March 31, 2015
Millions of yen
North andSouth
EuropeAmericaAsia

39,002¥

Consoli－
dated

Other

19,762

JapanProperty, plantand equipment$ 102,602$

Year ended March 31, 2016
Thousands of U.S. dollars
North and
South
Asia
EuropeAmerica

Consoli－
dated

60,407$ 168,177

$

3,354

$

1,814

(3) Information by major customer
This information has been omitted because there is no specific customer
representing 10% or more of net sales recorded in the consolidated statements
of income for the years ended March 31, 2016 and 2015.

(e) Information about impairment loss on fixed assets for each reportable segment
Fiscal years ended March 31, 2015: Not applicableYear ended March 31, 2016
Millions of yen

Impairment loss

Electronic
Components

Electronic
Chemicals /FA Systems

Information
Equipment

¥

¥

¥

76

－

－

Other
¥

Consolidated
－

¥

76

Year ended March 31, 2016

Impairment loss

Electronic
Components

Thousands of U.S. dollars
Electronic
Chemicals /Information
FA Systems
Equipment
Other

$

$

673

－

45

$

－

$

Consolidated
－

$

673

(f) Information about amortization and balance of goodwill for each reportablesegment:

Amortization
Balance at
March 31

Amortization
Balance at
March 31

Amortization
Balance at
March 31

Year ended March 31, 2016
Millions of yen
Electronic
Electronic Chemicals / Information
Components FA Systems Equipment
Other

Consolidated

¥

¥

105

¥

－

462

¥

－

－

¥

－

－

105
462

－

Year ended March 31, 2015
Millions of yen
Electronic
Electronic Chemicals / Information
Components FA Systems Equipment
Other

Consolidated

¥

¥

117

¥

0

719

¥

2

－

¥

－

－

117
721

－

Year ended March 31, 2016
Thousands of U.S. dollars
Electronic
Electronic Chemicals / Information
Components FA Systems Equipment
Other

Consolidated

$

$

929

$

－

4,088

－

$

－

$

－

－
－

(g) Information about gains on negative goodwill for each reportable segment
Fiscal years ended March 31, 2016 and 2015: Not applicable

46

929
4,088

21. Related Party Transactions
Fiscal years ended March 31, 2015: Not applicableYear ended March 31, 2016
Ownership

RelatedParty
ClosefamilymemberName

Location

CapitalItsuyaTamura--Business or
Occupation

Ratio ofRelation-

Voting Rights

ship

Executive
adviser(Owened)Direct: 0.0%-

Detail ofTransaction

Transaction
AmountPayment ofadvisory fee¥10 million( $88 thousand )(*1) Itsuya Tamura, the executive advisor of the Company, is the father of Naoki
Tamura, the Representative Director of the Company. The Company believes
that its management systems can be further strengthened by receiving Mr.
Tamura’s advice on its overall management based on his long businessexperience, profound insight and strong connections gained through his
involvement in management as the Representative Director and the Chairmanof the Company.
Remuneration is determined in accordance with the Company’s internal rules.
(*2)“Amount of transaction” excludes consumption taxes, while “Ending balance” isreported inclusive of consumption taxes.

22. Subsequent Events
There were no significant subsequent events for the years ended March 31, 2016
and 2015.

47