Note: This is an excerpt translation of the “Yukashoken-Houkokusho” for the convenience of overseas stakeholders. In cases
where any differences occur between the English version and the original Japanese version, the Japanese version shall prevail.
RIKEN TECHNOS CORPORATION assumes no responsibility for this translation or for direct, indirect or any other forms ofdamages arising from the translation.

Consolidated Financial Statements(Pursuant to Article 24, Paragraph 1 of theJapanese Financial Instruments and Exchange Act)
Business year:(89th term)

From April 1, 2017
to March 31, 2018

RIKEN TECHNOS CORPORATION
2-101, Kanda-Awajicho, Chiyoda-ku, Tokyo, Japan

Consolidated Financial Statements and Others(1) Consolidated Financial Statementsa. Consolidated Balance Sheets(Thousands of yen)
As of March 31, 2017
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Land
Leased assets
Accumulated depreciation
Leased assets, net
Construction in progress
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Leased assets
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Net defined benefit asset
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

14,508,274
23,762,379
5,731,533
558,400
4,823,450
1,133,890(129,560)
50,388,367

1

As of March 31, 2018*3

14,790,082
25,200,204
6,343,924
650,566
5,195,751
1,316,124(112,531)
53,384,121

22,118,471(12,380,694)
9,737,777
48,095,877(38,873,101)
9,222,775
6,427,165
469,525(447,065)
22,460932,233
5,479,530(4,861,376)
618,154
26,960,565

22,990,627(13,185,738)
9,804,889
49,545,762(40,319,412)
9,226,349
6,458,132
395,278(366,531)
28,746
1,336,417
5,710,286(4,969,008)
741,278
27,595,814

483,537
3,745
2,656,002
3,143,285

291,959
11,995
2,147,153
2,451,107

6,035,880
54,916502,834
659,924
603,906(3,770)7,853,691
37,957,543
88,345,910

6,571,580
54,286563,405
443,347
806,311(3,770)8,435,162
38,482,084
91,866,206

(Thousands of yen)
As of March 31, 2017
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable
Current portion of long-term loans payable
Lease obligations
Income taxes payable
Provision for bonuses
Provision for directors’ bonuses
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term loans payable
Lease obligations
Deferred tax liabilities
Provision for executive officer incentive plantrust
Net defined benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets*2

2

16,913,755
6,544,873
315,635
10,231
575,041
625,177
63,1002,529,349
27,577,165

As of March 31, 2018*3
*2

17,727,414
6,490,266
443,906
11,739569,420
656,720
70,4222,850,672
28,820,563

4,000,000
4,866,068
21,468
1,159,930

1,170,000
4,396,471
29,452
1,021,590

17,41093,575

1,069,617
310,128
127,782
11,572,407
39,149,572

1,116,690
314,607
49,054
8,191,441
37,012,004

8,514,018
6,670,465
27,137,248(3,108,532)
39,213,200

8,514,018
7,297,981
28,937,991(828,559)
43,921,432

2,785,333

3,219,427

502,996(527,469)
2,760,859
7,222,277
49,196,337
88,345,910

442,192(409,332)
3,252,287
7,680,481
54,854,201
91,866,206

b.

Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income(Thousands of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets
Impairment loss
Loss on sales of investment securities
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

Fiscal year ended
March 31, 2017

Fiscal year ended
March 31, 201888,300,159*1, *3 70,924,200
17,375,958*2, *3 11,513,287
5,862,671

94,601,133*1, *3 77,338,818
17,262,315*2, *3 11,863,007
5,399,307

32,561
127,092
102,242
261,895

27,951130,168
131,819
289,939

141,482
102,424
45,723289,630
5,834,937

183,078
74,337
21,395
278,8115,410,435

2,678
－
2,678

5,899
98,096
103,996

*4
*5

3

292
20,848
11,811－
32,9525,804,662
1,586,326
140,007
1,726,333
4,078,328
1,361,563
2,716,765*4

13,24731,658－3,000
47,9055,466,525
1,705,974(161,966)
1,544,008
3,922,517
1,384,395
2,538,121

Consolidated Statements of Comprehensive Income(Thousands of yen)
Fiscal year ended
March 31, 2017
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to noncontrolling interests*1

4

Fiscal year ended
March 31, 2018

4,078,328

3,922,517

1,084,940(519,871)
72,746
637,815
4,716,144

433,796(34,140)
122,357
522,0134,444,530*1

3,523,760

3,029,549

1,192,384

1,414,980

c. Consolidated Statements of Changes in Net Assets
Fiscal year ended March 31, 2017 (from April 1, 2016 to March 31, 2017)(Thousands of yen)
Shareholders’ equity
Capital stock
Balance at beginning ofcurrent period
Changes of items during
periodChange in ownershipinterest of parent due totransactions with noncontrolling interests

Capital surplus

8,514,018

Retained earnings

6,562,944

Treasury shares

25,026,282

Total shareholders’equity(1,941,701)(1,572)

38,161,544(1,572)

Dividends of surplus(599,750)(599,750)

Profit attributable toowners of parent

2,716,765

2,716,765

Purchase of treasury shares
Disposal of treasury shares

109,094

Other(1,428,352)(1,428,352)

261,521370,615(6,049)(6,049)Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance at end of current
period－107,5212,110,965(1,166,831)

1,051,656

8,514,018

6,670,465

27,137,248(3,108,532)

39,213,200

Non-controllinginterests

Total net assets

6,632,430

46,746,839

Accumulated other comprehensive income

Balance at beginning ofcurrent period
Changes of items during
periodChange in ownershipinterest of parent due totransactions with noncontrolling interests

Valuationdifference on
available-forsale securities

Foreigncurrencytranslation
adjustment

Remeasurementsof defined
benefit plans

Total
accumulated
othercomprehensive
income1,701,299

856,000(604,435)

1,952,864(1,572)

Dividends of surplus(599,750)

Profit attributable toowners of parent

2,716,765

Purchase of treasury shares(1,428,352)

Disposal of treasury shares

370,615

Other(6,049)Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance at end of current
period

1,084,033(353,004)

76,966807,994

589,847

1,397,842

1,084,033(353,004)

76,966807,994

589,847

2,449,498

2,785,333

502,996(527,469)

2,760,859

7,222,277

49,196,337

5

Fiscal year ended March 31, 2018 (from April 1, 2017 to March 31, 2018)(Thousands of yen)
Shareholders’ equity
Capital stock
Balance at beginning ofcurrent period
Changes of items during
periodChange in ownershipinterest of parent due totransactions with noncontrolling interests

Capital surplus

8,514,018

Retained earnings

6,670,465

Treasury shares

27,137,248

Total shareholders’equity(3,108,532)

55,571

39,213,200

55,571Dividends of surplus(718,511)(718,511)

Profit attributable toowners of parent

2,538,121

2,538,121

Purchase of treasury shares
Disposal of treasury shares

571,944

Other(137,692)(137,692)

2,417,665

2,989,610(18,867)(18,867)

Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance at end of current
period－627,5151,800,743

2,279,973

4,708,231

8,514,018

7,297,981

28,937,991(828,559)

43,921,432

Non-controllinginterests

Total net assets

7,222,277

49,196,337

Accumulated other comprehensive income

Balance at beginning ofcurrent period
Changes of items during
periodChange in ownershipinterest of parent due totransactions with noncontrolling interests

Valuationdifference on
available-forsale securities

Foreigncurrencytranslation
adjustment

Remeasurementsof defined
benefit plans

Total
accumulated
othercomprehensive
income2,785,333

502,996(527,469)

2,760,859

55,571Dividends of surplus(718,511)

Profit attributable toowners of parent

2,538,121

Purchase of treasury shares(137,692)

Disposal of treasury shares

2,989,610

Other
Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance at end of current
period(18,867)
434,093(60,803)

118,137

491,427458,204

949,631434,093(60,803)

118,137

491,427458,204

5,657,863

3,219,427

442,192(409,332)

3,252,287

7,680,481

54,854,201

6

d.

Consolidated Statements of Cash Flows(Thousands of yen)
Fiscal year ended
March 31, 2017

Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment loss
Amortization of goodwill
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for directors’
bonuses
Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in net defined benefit liability
Increase (decrease) in provision for executive officer
incentive plan trust
Interest and dividend income
Interest expenses
Loss (gain) on sales of investment securities
Loss (gain) on sales of property, plant andequipment
Loss on retirement of non-current assets
Decrease (increase) in notes and accounts receivable- tradeDecrease (increase) in inventories
Increase (decrease) in notes and accounts payable trade
Increase (decrease) in accrued consumption taxes
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant andequipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Payments of loans receivableCollection of loans receivable
Other, net
Net cash provided by (used in) investing activities

5,804,662
3,177,560
11,811
191,577
18,5405,466,525
3,434,252－
191,577
33,14633,9007,322

78,520(16,975)(14,826)(48,175)

17,41076,164(159,653)
141,482－(158,119)
183,078(95,096)(2,385)

7,347

20,84831,658(1,118,272)(1,460,571)(736,005)(1,074,829)

241,707

836,01742,727240,242
7,989,849
160,966(128,893)(1,461,586)
6,560,335(203,006)(124,997)
7,085,319
156,546(184,213)(1,386,099)
5,671,553(281)
610,300(4,167,719)(243,532)
242,057(3,421,810)

6,575

13,838(427,671)(10,016)－－
4,543(264,079)(154,343)(676)
193,772(1,000)5,108(255,411)(3,621,996)(4,248,350)

7

Fiscal year ended
March 31, 2018

(Thousands of yen)
Fiscal year ended
March 31, 2017
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Repayments of lease obligations
Proceeds from share issuance to non-controllingshareholders
Proceeds from sales of treasury shares
Purchase of treasury shares
Cash dividends paid
Dividends paid to non-controlling interests
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period*18

Fiscal year ended
March 31, 2018

(433,609)
2,250,120(502,435)(18,387)(70,228)－(313,307)(18,967)

260,324－

261,521(1,428,352)(598,806)(860,694)(1,070,320)

161,923(196)(716,911)(909,264)(1,866,952)(316,126)

103,487925,538
13,444,325
14,369,863

286,091
14,369,863
14,655,955*1

Notes to Consolidated Financial Statements
Significant Matters in Preparing Consolidated Financial Statements
1. Basis of presentation of consolidated financial statements
The accompanying consolidated financial statements of RIKEN TECHNOS CORPORATION (the“Company”) and its consolidated subsidiaries have been prepared in accordance with the provisions set
forth in the Japanese Financial Instruments and Exchange Act and its related accounting regulations, andin 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 (“IFRS”).
In addition, amounts are rounded down to the nearest thousand yen.
2. Scope of consolidation(a) Number of consolidated subsidiaries: 20 as of March 31, 201721 as of March 31, 2018
In the fiscal year ended March 31, 2018, two U.S. subsidiaries (RIMTEC CORPORATION and
RIKEN ELASTOMERS CORPORATION) have been reorganized into three (RIKEN AMERICASCORPORATION, RIMTEC CORPORATION and RIKEN ELASTOMERS CORPORATION). As aresult, the number of consolidated subsidiaries included in the scope of consolidation increased by one.
For detail of the reorganization, please see “Business Combinations.”
Names of principal consolidated subsidiaries are as follows:
Fiscal year ended March 31, 2017 (from April 1, 2016 to March 31, 2017)
Company nameSHINKO ELECTRIC WIRE CO., LTD.
KYOEI PLASTIC MFG CO., LTD.
RIKEN TECHNOS INTERNATIONAL CORPORATIONRIKEN CHEMICAL PRODUCTS CORPORATIONRIKEN FABRO CORPORATIONRIKEN (THAILAND) CO., LTD.
RIKEN ELASTOMERS (THAILAND) CO., LTD.
RIKEN TECHNOS INTERNATIONAL (THAILAND) CO., LTD.
PT. RIKEN INDONESIASHANGHAI RIKEN TECHNOS CORPORATIONRIKEN TECHNOS (JIANG SU) CORPORATIONRIKEN (SHANGHAI) CORPORATIONRIKEN TECHNOS INTERNATIONAL PTE. LTD.
RIKEN TECHNOS INTERNATIONAL KOREA CORPORATIONRIKEN VIETNAM CO., LTD.
RIKEN TECHNOS INTERNATIONAL VIETNAM CO., LTD.
RIKEN U.S.A. CORPORATIONRIMTEC CORPORATIONRIKEN ELASTOMERS CORPORATIONRIKEN TECHNOS EUROPE B.V.

9

Fiscal year ended March 31, 2018 (from April 1, 2017 to March 31, 2018)
Company nameSHINKO ELECTRIC WIRE CO., LTD.
KYOEI PLASTIC MFG CO., LTD.
RIKEN TECHNOS INTERNATIONAL CORPORATIONRIKEN CHEMICAL PRODUCTS CORPORATIONRIKEN FABRO CORPORATIONRIKEN (THAILAND) CO., LTD.
RIKEN ELASTOMERS (THAILAND) CO., LTD.
RIKEN TECHNOS INTERNATIONAL (THAILAND) CO., LTD.
PT. RIKEN INDONESIASHANGHAI RIKEN TECHNOS CORPORATIONRIKEN TECHNOS (JIANG SU) CORPORATIONRIKEN (SHANGHAI) CORPORATIONRIKEN TECHNOS INTERNATIONAL PTE. LTD.
RIKEN TECHNOS INTERNATIONAL KOREA CORPORATIONRIKEN VIETNAM CO., LTD.
RIKEN TECHNOS INTERNATIONAL VIETNAM CO., LTD.
RIKEN U.S.A. CORPORATIONRIKEN AMERICAS CORPORATIONRIMTEC CORPORATIONRIKEN ELASTOMERS CORPORATIONRIKEN TECHNOS EUROPE B.V.

(b) The Company has no unconsolidated subsidiaries.
3. Application of equity method
The Company has no associates.
4. Fiscal year-end of consolidated subsidiaries
The consolidated subsidiaries whose balance sheet date is different from the consolidated balance sheet
date are as follows:
Fiscal year ended March 31, 2017 (from April 1, 2016 to March 31, 2017)
Company name
Balance sheet date
SHINKO ELECTRIC WIRE CO., LTD.
December 31 *1
KYOEI PLASTIC MFG CO., LTD.
December 31 *1
RIKEN TECHNOS INTERNATIONAL CORPORATION
December 31 *1
RIKEN CHEMICAL PRODUCTS CORPORATION
December 31 *1
RIKEN FABRO CORPORATION
December 31 *1
RIKEN (THAILAND) CO., LTD.
December 31 *1
RIKEN ELASTOMERS (THAILAND) CO., LTD.
December 31 *1
RIKEN TECHNOS INTERNATIONAL (THAILAND) CO., LTD.
December 31 *1
PT. RIKEN INDONESIA
December 31 *1
SHANGHAI RIKEN TECHNOS CORPORATION
December 31 *1
RIKEN TECHNOS (JIANG SU) CORPORATION
December 31 *1
RIKEN (SHANGHAI) CORPORATION
December 31 *1
RIKEN TECHNOS INTERNATIONAL PTE. LTD.
December 31 *1
RIKEN TECHNOS INTERNATIONAL KOREA CORPORATION
December 31 *1
RIKEN VIETNAM CO., LTD.
December 31 *1
RIKEN TECHNOS INTERNATIONAL VIETNAM CO., LTD.
December 31 *1
RIKEN U.S.A. CORPORATION
December 31 *1
RIMTEC CORPORATION
December 31 *1
RIKEN ELASTOMERS CORPORATION
December 31 *1
RIKEN TECHNOS EUROPE B.V.
December 31 *1*1. The financial statements as of the balance sheet date of the consolidated subsidiaries are used. However, formajor transactions that occurred between that date and the consolidated balance sheet date, the necessary
adjustments are made in the consolidated financial statements.

10

Fiscal year ended March 31, 2018 (from April 1, 2017 to March 31, 2018)
Company name
Balance sheet date
SHINKO ELECTRIC WIRE CO., LTD.
December 31 *1
KYOEI PLASTIC MFG CO., LTD.
December 31 *1
RIKEN TECHNOS INTERNATIONAL CORPORATION
December 31 *1
RIKEN CHEMICAL PRODUCTS CORPORATION
December 31 *1
RIKEN FABRO CORPORATION
December 31 *1
RIKEN (THAILAND) CO., LTD.
December 31 *1
RIKEN ELASTOMERS (THAILAND) CO., LTD.
December 31 *1
RIKEN TECHNOS INTERNATIONAL (THAILAND) CO., LTD.
December 31 *1
PT. RIKEN INDONESIA
December 31 *1
SHANGHAI RIKEN TECHNOS CORPORATION
December 31 *1
RIKEN TECHNOS (JIANG SU) CORPORATION
December 31 *1
RIKEN (SHANGHAI) CORPORATION
December 31 *1
RIKEN TECHNOS INTERNATIONAL PTE. LTD.
December 31 *1
RIKEN TECHNOS INTERNATIONAL KOREA CORPORATION
December 31 *1
RIKEN VIETNAM CO., LTD.
December 31 *1
RIKEN TECHNOS INTERNATIONAL VIETNAM CO., LTD.
December 31 *1
RIKEN U.S.A. CORPORATION
December 31 *1
RIKEN AMERICAS CORPORATION
December 31 *1
RIMTEC CORPORATION
December 31 *1
RIKEN ELASTOMERS CORPORATION
December 31 *1
RIKEN TECHNOS EUROPE B.V.
December 31 *1*1. The financial statements as of the balance sheet date of the consolidated subsidiaries are used. However, formajor transactions that occurred between that date and the consolidated balance sheet date, the necessary
adjustments are made in the consolidated financial statements.

5. Accounting policies(a) Valuation methods for significant assetsi) Securities(1) Held-to-maturity bonds
Stated at amortized cost (straight-line method).
(2) Available-for-sale securities
With market value
Stated at fair value based on market price and other fair values as of the balance sheet date(unrealized gains and losses, net of applicable taxes, are reported in a separate component of
net assets, and costs of securities sold are determined by the moving-average method).
Without market value
Stated at cost determined by the moving-average method.
ii) Derivatives
Stated at fair value.
iii) Inventories
Inventories of the Company and domestic consolidated subsidiaries are mainly stated at cost
determined by the moving-average method (the carrying amounts in the consolidated balance sheets
are written down due to a decline in profitability). Inventories of overseas consolidated subsidiaries
are mainly stated at the lower of cost or market, determined by the average method.
(b) Depreciation and amortization of significant assetsi) Property, plant and equipment (excluding leased assets)
The Company and domestic consolidated subsidiaries mainly apply the declining-balance method.
However, buildings acquired on or after April 1, 1998 (excluding facilities attached to buildings) aredepreciated by the straight-line method. Overseas consolidated subsidiaries apply the straight-line
method.
The estimated useful lives of major items are as follows:11Buildings and structures

3 to 47 years

Machinery, equipment and vehicles

4 to 10 yearsii) Intangible assets (excluding leased assets)
The Company and domestic consolidated subsidiaries apply the straight-line method.
Internal use software is amortized by the straight-line method over its estimated useful life asinternally determined (five years).
iii) Leased assets
The Company and domestic consolidated subsidiaries apply the straight-line method assuming thelease periods as useful lives with no residual value.
(c) Significant allowancesi) Allowance for doubtful accounts
To cover losses from bad debts for notes and accounts receivable - trade, loans receivable and others,
an allowance for doubtful accounts is provided based on historical experience of bad debts forgeneral receivables. For specific receivables, such as highly doubtful receivables, the collectibility is
individually considered and the estimated amount of uncollectible accounts is provided as theallowance.
ii) Provision for bonuses
To cover bonus payments to employees, a provision for bonuses is provided in the amount to be paid
for services rendered by employees during the fiscal year based mainly on the estimated amount of
future bonus payment.
iii) Provision for directors’ bonuses
To cover bonus payments to directors (excluding directors serving as audit & supervisory committee
members) and executive officers, the Company records a provision for directors’ bonuses in theamount of the portion applicable to the fiscal year, based on the estimated amount of future bonus
payment.
iv) Provision for executive officer incentive plan trust
To cover provision of shares in the Company to directors and executive officers, the Company
records a provision for executive officer incentive plan trust based on the estimated amount of shareprovision obligations as of the end of the current fiscal year.
(d) Method of recognizing retirement benefitsi) Method of attributing estimated retirement benefits to periods
For the purpose of attributing estimated retirement benefits to periods up to the end of the current
fiscal year in the calculation of retirement benefit obligations, the benefit formula method is applied.
ii) Method of amortizing actuarial differences and past service cost
Past service cost is amortized by the straight-line method over a certain term within the averageremaining service period of the eligible employees (13 years).
With regard to actuarial differences, the amount is amortized by the straight-line method over acertain term within the average remaining service period of the eligible employees (13 years) for
each applicable fiscal year, and expensed from the year following the year in which the gain or loss
is recognized.
iii) Method of accounting for unrecognized actuarial differences and unrecognized past service cost
Unrecognized actuarial differences and unrecognized past service cost are recognized inremeasurements of defined benefit plans under accumulated other comprehensive income in net
assets after adjusting for tax effects.
iv) Application of simplified accounting method at small companies
Some consolidated subsidiaries apply a simplified accounting method in which the net defined
benefit liability and retirement benefit expenses are calculated by using a method in which theamount of retirement benefits to be paid in cases where all eligible employees retired at the fiscal

12

year-end date is regarded as retirement benefit obligations.
(e) Significant hedge accountingi) Hedge accounting
For foreign currency-denominated monetary receivables and others that have been hedged byforward exchange contracts, the allocation method is used. For interest rate swap contracts, theCompany and its domestic consolidated subsidiaries apply the method in which the amount paid or
received under the swap contract is added to or deducted from the interest on the hedged assets andliabilities (the exceptional accrual method), in cases where the requirements for the method aresatisfied.
ii) Hedging instruments and hedged items
 Hedging instruments
Forward exchange contracts and interest rate swap contracts
 Hedged items
Foreign currency-denominated accounts receivable - trade related to exports of finished goods andinterest on loans payableiii) Hedging policy
Forward exchange contracts are only used within the scope of actual need in order to hedge the riskof fluctuations in foreign exchange rates. Interest rate swap contracts are used to hedge the interest
rate fluctuation risk. Entering into derivative transactions for trading or speculative purposes is
prohibited.
iv) Assessment of hedge effectivenessAn assessment of hedge effectiveness is omitted for forward exchange contracts to which theallocation method is applied and interest rate swap contracts that satisfy the requirements for the
exceptional accrual method.
(f) Method and period for amortization of goodwill
Goodwill is amortized evenly over the period, not exceeding 20 years, during which the goodwill has
an effect. However, when the amount of goodwill is insignificant, it is charged to income at the date ofoccurrence.
(g) Scope of cash and cash equivalents in consolidated statements of cash flows
Funds (cash and cash equivalents) in the consolidated statements of cash flows consist of cash on hand,readily available deposits, and highly liquid short-term investments with original maturities of threemonths or less that are subject to an insignificant risk of changes in value.
(h) Other significant matters in preparing consolidated financial statementsi) Accounting for deferred assets
Bond issuance cost is expensed as paid.
ii) Accounting for consumption taxes
Transactions subject to consumption tax and local consumption tax are recorded at amounts
exclusive of taxes.

13Accounting Standards Issued but Not Yet Applied“Accounting Standard for Revenue Recognition” (Accounting Standards Board of Japan (ASBJ) Statement
No. 29, March 30, 2018)“Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No. 30,
March 30, 2018)(1) Overview
It is a comprehensive accounting standard for revenue recognition. Revenue is recognized by applying thefollowing five steps:
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation(2) Scheduled date of adoption
The Company expects to adopt the accounting standard and the implementation guidance from the
beginning of the fiscal year ending March 31, 2022.
(3) Effects of adoption of the accounting standards
The Company is currently assessing the effect of the adoption of the accounting standard and theimplementation guidance on its consolidated financial statements.
Change in Presentation
Changes in line with the early adoption of the “Partial Amendments to Accounting Standard for Tax EffectAccounting, etc.”
As the “Partial Amendments to Accounting Standard for Tax Effect Accounting, etc.” (ASBJ Statement
No. 28, February 16, 2018; hereinafter referred to as the “Partial Amendments to Tax EffectAccounting Standard”) can be applied starting from the consolidated financial statements as of the endof the current fiscal year, effective from the current fiscal year, the Company has applied the Partial
Amendments to Tax Effect Accounting Standard, thereby presenting deferred tax assets as acomponent of investments and other assets, while presenting deferred tax liabilities under non-current
liabilities.
As a result of the changes in presentation, in the consolidated balance sheet as of March 31, 2017,“deferred tax assets” of 429,567 thousand yen under “current assets” have been included in “deferred
tax assets” of 659,924 thousand yen under “investments and other assets.”
In addition, in the note to Income Taxes, we added the contents described in the annotation (Note 8)(excluding total valuation allowance) and the annotation (Note 9), both for the “Accounting Standard
for Tax Effect Accounting,” stipulated in Paragraph 3 through Paragraph 5 of the Partial Amendments
to Tax Effect Accounting Standard. However, of these contents, information concerning the previous
fiscal year is not described pursuant to the transitional treatment stipulated in Paragraph 7 of the Partial
Amendments to Tax Effect Accounting Standard.

14

Additional Information(Transactions of delivering the Company’s own stock to employees etc. through trusts)(1) Board Benefit Trust (BBT)In accordance with the resolution at the 87th ordinary general meeting of shareholders dated June 24,
2016, the Company introduced a new stock-based compensation plan “Board Benefit Trust (BBT)” on
September 14, 2016, for the purpose of raising the awareness of directors who administer business
operations (excluding directors serving as audit & supervisory committee members) and executive
officers toward their contributions to improving the mid- to long-term corporate performance andincreasing the corporate value, and enhancing the contribution of directors who do not administerbusiness operations (excluding directors serving as audit & supervisory committee members) anddirectors serving as audit & supervisory committee members to increasing the mid- to long-term
corporate value through supervision or audits.
(a) Overview of transactions
Based on the officers’ stock benefit plan which was established in advance, the Company and its
group companies (the “Group”) grant points to directors etc. (directors and executive officers). At thetime of their retirement, the Group provides shares in the Company to the directors etc. who satisfy
requirements for beneficiaries in proportion to the points which the Group has granted to them. With
regard to the shares which will be provided in the future, a trust bank acquires the Company’streasury shares through third-party allotment by using the money contributed by the Company. Suchshares are managed as trust assets separately.
(b) Shares in the Company remaining at the trust
The shares in the Company remaining at the trust are recorded as the treasury shares in net assets withthe book value (excluding associated costs) at the trust. The book value and number of these treasury
shares as of the end of the previous fiscal year were 209,960 thousand yen and 476 thousand shares,
respectively, while those as of the end of the current fiscal year were 209,960 thousand yen and 476
thousand shares, respectively.
(c) Book value of loans payable recorded due to the application of the gross method
Not applicable.
(2) Stock Benefit Trust (Employee Stockholding Association Purchase-type)
For the purpose of promoting welfare benefits for employees and giving incentives pertaining to theimprovement of corporate value of the Company, the Company introduced “Stock Benefit Trust(Employee Stockholding Association Purchase-type)” (hereinafter referred to as the “Plan”), pursuant to
the resolution at the Board of Directors meeting held on May 24, 2017.
(a) Overview of transactions
The Plan is an incentive plan under which the benefits of a rise in the Company’s stock price arepassed along to all the employees who are members of the “RIKEN TECHNOS Employee
Stockholding Association” (hereinafter referred to as the “Stockholding Association”).
A trust bank as the trustee of the Plan acquires shares in the Company that are expected to beacquired by the Stockholding Association over the five years after the establishment of the trust, en
bloc in advance, and sells those shares in the Company to the Stockholding Association as needed
when it acquires the shares. If the amount equivalent to gain on sales of shares by the trust bank was
accumulated in trust assets by the termination of this trust through the sale of shares to the
Stockholding Association, the accumulated amount is distributed as residual assets to the members of
the Company’s employee Stockholding Association who satisfy eligibility requirements forbeneficiaries. The Company has guaranteed loans that the trust bank received to acquire shares in the
Company. Therefore, if there is remaining loan amount that is equivalent to loss on sales of shares in
the Company due to a decline in the Company’s stock price at the time of termination of the trust, theCompany is required to pay the remaining loan amount under the guarantee agreement.

15

(b) Shares in the Company remaining at the trust
The shares in the Company remaining at the trust are recorded as the treasury shares in net assets withthe book value (excluding associated costs) at the trust. The book value and number of these treasury
shares as of the end of the current fiscal year were 115,390 thousand yen and 209 thousand shares,
respectively.
(c) Book value of loans payable recorded due to the application of the gross method
114,683 thousand yen as of the end of the current fiscal year

16

Notes to Consolidated Balance Sheets
1. Notes endorsed
As of March 31, 2017
Notes endorsed(Thousands of yen)
As of March 31, 2018

1,666

1,110

*2. Overdraft agreements and unused overdraft facility balanceTo efficiently secure equipment funds, the Company and its domestic consolidated subsidiaries haveentered into overdraft agreements with banks with which they do business. The unused balance of theseprescribed limit agreements at the fiscal year-end is as follows:
As of March 31, 2017

(Thousands of yen)
As of March 31, 2018

Total overdraft facility limit
Outstanding borrowings within the limit

11,030,000
4,015,000

11,130,000
3,927,500

Unused balance

7,015,000

7,202,500*3. The notes maturing on the balance sheet date are accounted for as if they were settled on the maturity date.
As the balance sheet date fell on a holiday of financial institutions, the following notes matured on thebalance sheet date were accounted for as if they were settled on the maturity date.
As of March 31, 2017
Notes receivable - trade
Notes payable - trade(Thousands of yen)
As of March 31, 2018-862,874
1,789

Notes to Consolidated Statements of Income*1. The inventory balance at the fiscal year-end is presented after book values were written down due to a
decline in profitability of assets and the following losses (gains) on valuation of inventories are included
in cost of sales.
(Thousands of yen)
Fiscal year ended March 31, 2018

Fiscal year ended March 31, 2017
475,021330,435*2. Main components of selling, general and administrative expenses are as follows:
Fiscal year ended
March 31, 2017
2,848,686
1,049,678
2,340,287
140,658
183,218
63,100(25,244)931,699

Freightage expenses
Commission fees
Salaries and bonuses
Provision for bonuses
Retirement benefit expenses
Provision for directors’ bonuses
Provision of allowance for doubtful accounts
Research and development expenses(Thousands of yen)
Fiscal year ended
March 31, 2018
3,039,433
934,598
2,311,598
159,300
262,533
70,422(13,527)
1,004,609*3. Research and development expenses included in selling, general and administrative expenses and cost of
sales are as follows:(Thousands of yen)
Fiscal year ended March 31, 2018

Fiscal year ended March 31, 2017
1,309,115

1,396,25117

*4. The breakdown of loss on retirement of non-current assets is as follows:
Fiscal year ended
March 31, 2017
7,239
9,671
3,938

Buildings and structures
Machinery, equipment and vehicles
Other
Total

20,848*5. The breakdown of impairment loss is as follows:

Fiscal year ended March 31, 2017 (from April 1, 2016 to March 31, 2017)
This information has been omitted due to its insignificance.
Fiscal year ended March 31, 2018 (from April 1, 2017 to March 31, 2018)
Not applicable.

18(Thousands of yen)
Fiscal year ended
March 31, 2018
26,0284,666
962
31,658

Notes to Consolidated Statements of Comprehensive Income*1. Reclassification adjustments and tax effects related to other comprehensive income(Thousands of yen)
Fiscal year ended
March 31, 2018

Fiscal year ended
March 31, 2017
Valuation difference on available-for-sale securities:
Amount arising during the period
Reclassification adjustments

1,502,611－

731,466(98,096)

Before tax effect adjustments
Tax effect amount

1,502,611(417,670)

633,370(199,574)

Valuation difference on available-for-sale securities

1,084,940

433,796(519,871)(30,145)

－

－

－
－

(30,145)(3,994)Foreign currency translation adjustment(519,871)(34,140)

Remeasurements of defined benefit plans, net of tax
Amount arising during the period
Reclassification adjustments

10,642
95,25035,924
136,160

105,892(33,146)

172,085(49,728)

72,746

122,357

637,815522,013

Foreign currency translation adjustment:
Amount arising during the period
Reclassification adjustments
Before tax effect adjustments
Tax effect amount

Before tax effect adjustments
Tax effect amountRemeasurements of defined benefit plans, net of tax
Total other comprehensive income

19Notes to Consolidated Statements of Changes in Net Assets
Fiscal year ended March 31, 2017 (from April 1, 2016 to March 31, 2017)
1. Type and total number of issued shares and type and number of treasury shares
Number of sharesat the beginning of
the fiscal year

Increase(Thousands of shares)
Number of sharesat the end of
the fiscal year

Decrease

Issued shares
Common stock

66,113––

66,113

Total

66,113––

66,113

Common stock (Notes)

6,151

2,229

301

8,079

Total

6,151

2,229

301

8,079

Treasury shares(Notes) 1. The Company resolved at the Board of Directors meeting held on October 24, 2011 to introduce the “Stock Benefit
Trust (Employee Stockholding Association Purchase-type)” and transferred 591 thousand shares of treasury shares
to Trust Account E as of March 14, 2012. However, since the Company and Trust Account E are recognized as aunit, assets and liabilities including shares in the Company as well as expenses and income of Trust Account E are
included in the consolidated balance sheets, the consolidated statements of income and the consolidated statementsof changes in net assets. The number of treasury shares includes 476 thousand shares in the Company that were held
by Trust Account E at the end of the current fiscal year.
2. The increase of 2,229 thousand shares of treasury shares of common stock is due to the purchase of treasury sharesof 2,229 thousand shares in accordance with the resolution at the Board of Directors meeting held on October 24,
2016 and the purchase of shares less than one unit of 0 thousand shares.
3. The decrease of 301 thousand shares of treasury shares of common stock is due to the sale of the shares from Trust
Account E to the Company’s employee stockholding association.

2. Subscription rights to shares and treasury subscription rights to shares
Not applicable.
3. Dividends(1) Dividends paid
(Resolution)

Type of shares

Total dividends
Dividends per share(Thousands of yen)
(Yen)

Cut-off date

Effective dateOrdinary general
meeting ofCommon stock
299,810
5
March 31, 2016
June 27, 2016
shareholders held on
June 24, 2016
(Note) Total dividends do not include 1,506 thousand yen of dividends to Trust Account E. This is because shares in the
Company held by Trust Account E are recognized as treasury shares.
Total dividends
Dividends per share(Resolution)
Type of shares
Cut-off date
Effective date(Thousands of yen)
(Yen)
Board of Directors
meeting held on
Common stock
299,939
5 September 30, 2016 December 2, 2016
November 7, 2016
(Note)

Total dividends do not include 3,757 thousand yen of dividends to Trust Account E. This is because shares in the
Company held by Trust Account E are recognized as treasury shares.

20

(2) Dividends whose cut-off date is in the current fiscal year and whose effective date is in the following
fiscal year
(Resolution)

Type of shares

Ordinary general
meeting ofshareholders heldon June 23, 2017

Common stock(Note)

Total dividends(Thousands ofyen)

Dividends per
share
(Yen)

Source ofdividends

348,203 Retained earnings

6

Cut-off date

Effective date

March 31, 2017

June 26, 2017

Total dividends do not include 2,856 thousand yen of dividends to Trust Account E. This is because shares in the
Company held by Trust Account E are recognized as treasury shares.

Fiscal year ended March 31, 2018 (from April 1, 2017 to March 31, 2018)
1. Type and total number of issued shares and type and number of treasury shares
Number of sharesat the beginning of
the fiscal year

Increase(Thousands of shares)
Number of sharesat the end of
the fiscal year

Decrease

Issued shares
Common stock

66,113––

66,113

Total

66,113––

66,113

Common stock (Notes)

8,079

0

6,074

2,005

Total

8,079

0

6,074

2,005

Treasury shares(Notes) 1. The Company resolved at the Board of Directors meeting held on August 29, 2016 to introduce “Board Benefit
Trust (BBT)” and transferred 476 thousand shares of treasury shares to Trust Account E as of September 14, 2016.
However, since the Company and Trust Account E are recognized as a unit, assets and liabilities including shares in
the Company as well as expenses and income of Trust Account E are included in the consolidated balance sheets,the consolidated statements of income and the consolidated statements of changes in net assets. The number oftreasury shares includes 476 thousand shares in the Company that were held by Trust Account E at the beginningand the end of the current fiscal year.
2. The Company resolved at the Board of Directors meeting held on May 24, 2017 to introduce the “Stock Benefit
Trust (Employee Stockholding Association Purchase-type)” and transferred 250 thousand shares of treasury shares
to Trust Account E as of June 12, 2017. However, since the Company and Trust Account E are recognized as a unit,
assets and liabilities including shares in the Company as well as expenses and income of Trust Account E are
included in the consolidated balance sheets, the consolidated statements of income and the consolidated statementsof changes in net assets. The number of treasury shares includes 209 thousand shares in the Company that were held
by Trust Account E at the end of the current fiscal year.
3. The increase of 0 thousand shares of treasury shares of common stock is due to the purchase of shares less than one
unit.
4. The decrease of 6,074 thousand shares of treasury shares of common stock is due to a decrease of 6,034 thousand
shares through conversion of convertible bond-type bonds with subscription rights to shares, and the sale of 40
thousand shares from Trust Account E to the Company’s employee stockholding association.

2. Subscription rights to shares and treasury subscription rights to shares
Not applicable.

213. Dividends(1) Dividends paid
(Resolution)

Type of shares

Total dividends
Dividends per share(Thousands of yen)
(Yen)

Cut-off date

Effective dateOrdinary general
meeting ofCommon stock
348,203
6
March 31, 2017
June 26, 2017
shareholders held on
June 23, 2017
(Note) Total dividends do not include 2,856 thousand yen of dividends to Trust Account E. This is because shares in the
Company held by Trust Account E are recognized as treasury shares.
(Resolution)

Type of shares

Board of Directors
meeting held on
November 6, 2017

Common stock(Note)

Total dividends
Dividends per share(Thousands of yen)
(Yen)
370,307

6

Cut-off date

Effective date

September 30, 2017

December 4, 2017

Total dividends do not include 4,255 thousand yen of dividends to Trust Account E. This is because shares in the
Company held by Trust Account E are recognized as treasury shares.

(2) Dividends whose cut-off date is in the current fiscal year and whose effective date is in the following
fiscal year
(Resolution)

Type of shares

Ordinary general
meeting ofshareholders heldon June 22, 2018

Common stock(Note)

Total dividends(Thousands ofyen)

Source ofdividends

Dividends per
share
(Yen)

384,647 Retained earnings

6

Cut-off date

Effective date

March 31, 2018

June 25, 2018

Total dividends do not include 4,115 thousand yen of dividends to Trust Account E. This is because shares in the
Company held by Trust Account E are recognized as treasury shares.

Notes to Consolidated Statements of Cash Flows*1. Reconciliation between “Cash and cash equivalents at end of period” in the consolidated statements ofcash flows and “Cash and deposits” in the consolidated balance sheets
Fiscal year ended
March 31, 2017
Cash and deposits
Time deposits with maturities over 3 months
Cash and cash equivalents(Thousands of yen)
Fiscal year ended
March 31, 2018

14,508,274

14,790,082(138,410)(134,126)

14,369,863

14,655,955

Lease Transactions(As Lessee)
1. Finance lease transactions
Finance lease transactions that do not transfer ownership(1) Details of leased assetsi) Property, plant and equipment
Mainly, production equipment and others in the compound businessii) Intangible assets
Software(2) Depreciation method for leased assets
The depreciation method for leased assets is as stated in “5. Accounting policies (b) Depreciation
and amortization of significant assets” under “Significant Matters in Preparing Consolidated
Financial Statements.”22

2. Operating lease transactions
Future lease payments under non-cancelable operating leases(Thousands of yen)
As of March 31, 2018

As of March 31, 2017
Within 1 year
Over 1 year
Total

9,255
21,53730,792

23

18,842
18,36437,206

Financial Instruments
1. Overview(1) Policy for financial instruments
The Company and its group companies (the “Group”) procure necessary funds primarily through bankloans in light of its capital expenditure plan. The Group invests its excess funds in financial instrumentswith low risks, giving the highest priority to safety by reference to external ratings and others whileconsidering liquidity. In addition, certain short-term operating funds are procured through bank loans.
The Group, by policy, limits derivative transactions to hedging risks associated with substantial
transactions and does not enter into them for speculative purposes.
(2) Description of financial instruments and related risks
Notes and accounts receivable - trade, which are operating receivables, involve credit risk of eachcustomer. Operating receivables denominated in foreign currencies are exposed to exchange rate
fluctuation risk.
Investment securities are exposed to market price fluctuation risk.
Notes and accounts payable - trade, which are operating payables, are primarily due within three to fivemonths. Loans payable and finance lease obligations are primarily intended for raising funds for capital
investment, and certain loans payable are for operating funds. These loans payable are exposed tointerest rate fluctuation risk.
As for derivative transactions, the Group uses forward exchange contracts to hedge exchange rate
fluctuation risk associated with operating receivables denominated in foreign currencies. For hedging
instruments and hedged items, hedging policy, assessment of hedge effectiveness and others related tohedge accounting, please refer to “5. Accounting policies, (e) Significant hedge accounting” under“Significant Matters in Preparing Consolidated Financial Statements” described above.
(3) Risk management system related to financial instruments
1) Management of credit risk (default risk of business partners)
The Group reduces customer credit risk associated with notes and accounts receivable - trade, which
are operating receivables, by monitoring customer credit in conformity with standards such as credit
control regulations and by periodic review.
As for credit risk associated with issues involving transactions with repurchase/resale agreements,
the Company invests in low-risk issues in conformity with its asset management regulations byreference to external ratings and others. The consolidated subsidiaries establish management systems
pursuant to the system of the Company.
2) Management of market risk (exchange rate and interest rate fluctuation risks)
Certain operating receivables denominated in foreign currencies are hedged by forward exchange
contracts. The Group enters into derivative transactions only with highly rated financial institutions
for the purpose of hedging risks associated with substantial transactions in conformity with its asset
management regulations and does not enter into derivative transactions for speculative purposes.
Furthermore, officers in charge approve derivative transactions, and accounting departments executeand manage the transactions.
As for investment securities, the Group holds listed stocks mainly for the purpose of holding themfor the long term, and evaluates them on a fair value basis each quarterly period and obtains thefinancial information of the issuers (business partners). For those other than held-to-maturity bonds,
the Group consistently reviews the holding status taking into account the market conditions andrelationships with business partners.
3) Management of liquidity risk associated with funds procurement (risk of failure to pay on due dates)
The departments in charge appropriately distribute funds by periodically collecting information
about their account activity in an integrated manner and understanding the situation while holding
some as funds on hand taking into account the necessary liquidity.
(4) Supplemental remarks on fair values of financial instruments
The fair values of financial instruments include values based on market prices as well as values that arereasonably calculated when market prices do not exist. As the calculation of those values includes
variable factors, the values may vary if different assumptions and others are applied. The contract
amount related to derivative transactions in “Derivative Transactions” under “Notes to Consolidated
Financial Statements” does not represent market risk associated with the derivative transactions.

24

2. Fair values of financial instruments
The carrying amounts in the consolidated balance sheets and the fair values, and difference between them
are shown below. However, items for which it is considered extremely difficult to determine the fairvalues are not included (See note 2).
As of March 31, 2017
(Thousands of yen)
Carrying amount inconsolidated balance sheets(1) Cash and deposits(2) Notes and accounts receivable trade
Allowance for doubtful accounts(3) Investment securities(4) Long-term loans receivable
Total assets(1) Notes and accounts payable - trade(2) Short-term loans payable(3) Current portion of long-term loans
payable(4) Lease obligations (Current
liabilities)(5) Income taxes payable(6) Bonds payable(7) Long-term loans payable(8) Lease obligations (Non-current
liabilities)
Total liabilities
Derivative transactions

Fair value

Difference

14,508,274–(129,560)
23,632,818
5,890,996
54,91644,087,005

23,676,156
5,890,996
54,91644,130,343

43,337–043,337

16,913,755
6,544,873

16,913,755
6,544,873–
0315,635

359,73144,095

10,231

10,2310

575,041
4,000,000
4,866,068

575,041
4,021,557
4,701,235–
21,557(164,833)

21,46821,468033,247,076–

33,147,896–(99,180)–

14,508,274
23,762,379

As of March 31, 2018
(Thousands of yen)
Carrying amount inconsolidated balance sheets(1) Cash and deposits(2) Notes and accounts receivable trade
Allowance for doubtful accounts(3) Investment securities(4) Long-term loans receivable
Total assets(1) Notes and accounts payable - trade(2) Short-term loans payable(3) Current portion of long-term loans
payable(4) Lease obligations (Current
liabilities)(5) Income taxes payable(6) Bonds payable(7) Long-term loans payable(8) Lease obligations (Non-current
liabilities)
Total liabilities
Derivative transactions

Fair value

Difference

14,790,082–(112,531)
25,087,673
6,437,664
54,28646,369,705

25,115,590
6,437,664
54,286
46,397,623

27,917－
0
27,917

17,727,414
6,490,266

17,727,414
6,490,266－
0443,906

520,988

77,082

11,73911,7390569,420
1,170,000
4,396,471

569,420
1,173,212
4,206,252－
3,212(190,219)

29,452

29,452030,838,671–

30,728,746–(109,924)–

14,790,082
25,200,204

25

(Notes) 1. Method of measurement of fair values of financial instruments and matters concerning securities and derivativetransactions
Assets(1) Cash and deposits, (2) Notes and accounts receivable - trade
The fair values are based on the book values since these assets are settled in a short period of time and their fairvalues approximate their book values.
(3) Investment securities
The fair values of stocks and others are based on the prices on exchanges, while those of bonds are based on theprices on exchanges or prices provided by counterparty financial institutions and others. For information on
securities by holding purpose, please refer to “Securities” under “Notes to Consolidated Financial Statements.”(4) Long-term loans receivable
The fair value is calculated based on the present value by discounting the total amount of principal and interest
using an interest rate that is assumed to be applied to a new loan.
Liabilities(1) Notes and accounts payable - trade, (5) Income taxes payable
The fair values are based on the book values since these liabilities are settled in a short period of time and theirfair values approximate their book values.
(2) Short-term loans payable, (4) Lease obligations (Current liabilities), (8) Lease obligations (Non-current
liabilities)
The fair values are calculated based on the present value by discounting the total amount of principal and interest
using an interest rate that is assumed to be applied to a similar new borrowing or lease transaction.
(3) Current portion of long-term loans payable, (7) Long-term loans payable
The fair values are calculated based on the present value by discounting the total amount of principal and interest
using an interest rate that is assumed to be applied to a similar new borrowing. Long-term loans payable withvariable interest rates meet certain criteria to adopt the exceptional accrual method for interest rate swaps, andthe fair values of the loans payable are calculated by discounting the total amounts of principal and interest thatare accounted for with the interest rate swaps using interest rates that are reasonably estimated for similarborrowings.
(6) Bonds payable
The fair value of bonds payable issued by the Company is calculated based on the present value by discounting
the total amount of principal and interest using an interest rate that takes into consideration remaining maturitiesof the Company’s bonds payable and associated credit risk.
Derivative transactions
Please refer to “Derivative Transactions” under “Notes to Consolidated Financial Statements.”
2. Financial instruments for which it is considered extremely difficult to determine fair values
Category

As of March 31, 2017

Unlisted stocks

144,884(Thousands of yen)
As of March 31, 2018
133,916

As unlisted stocks have no market prices and it is considered to be extremely difficult to determine their fair values,
they are not included in “(3) Investment securities.”26

3. Expected redemption amounts of monetary receivables and securities with maturity dates subsequent to theconsolidated balance sheet date
As of March 31, 2017
(Thousands of yen)

(1) Cash and deposits(2) Notes and accounts
receivable - trade

Within 1 year

Over 1 year
to 5 years

Over 5 years
to 10 years

Over 10 years

14,503,154

–

–

–

23,762,379

–

–

–

–

53,560523

832

38,265,533

53,560523

832

Within 1 year

Over 1 year
to 5 years

Over 5 years
to 10 years

Over 10 years

14,784,791

–

–

–

25,200,204

–

–

–

–

52,722845

717

39,984,996

52,722845

717(3) Long-term loans receivable
Total
As of March 31, 2018

(Thousands of yen)

(1) Cash and deposits(2) Notes and accounts
receivable - trade(3) Long-term loans receivable
Total

4. Projected repayment amounts of loans payable, bonds payable and lease obligations subsequent to the consolidatedbalance sheet date
As of March 31, 2017
Within 1
year(1) Short-term loans payable(2) Bonds payable(3) Long-term loans payable(4) Lease obligations
Total(Thousands of yen)Over 1 year Over 2 years Over 3 years Over 4 years
Over 5 years
to 2 years
to 3 years
to 4 years
to 5 years

6,544,873

–

–

–

–

–

–

–

4,000,000–––

315,635

300,872

293,372

290,872

290,872

3,690,078

10,231

10,532

3,620

3,534

3,534

246

6,870,741

311,404

4,296,993

294,406

294,406

3,690,325

As of March 31, 2018
Within 1
year(Thousands of yen)Over 1 year Over 2 years Over 3 years Over 4 years
Over 5 years
to 2 years
to 3 years
to 4 years
to 5 years

6,490,266

–

–

–

–

–

–

1,170,000

–

–

–

–

(3) Long-term loans payable

443,906

315,964

313,464

336,882

283,042

3,147,118(4) Lease obligations

11,73910,549

7,262

7,071

3,281

1,286

6,945,912

1,496,514

320,726

343,954286,323

3,148,404(1) Short-term loans payable(2) Bonds payable

Total

27

Securities
1. Available-for-sale securities
As of March 31, 2017
(Thousands of yen)

Securities whose carrying amount on the
consolidated balance sheets exceeds theiracquisition cost
StocksSubtotal
Securities whose carrying amount on the
consolidated balance sheets does not exceed theiracquisition cost
StocksSubtotal
Total(Note)

Carrying amounton the consolidatedbalance sheets

Acquisition cost

5,890,996
5,890,996

2,138,628
2,138,628

3,752,368
3,752,368––
5,890,996––
2,138,628––
3,752,368

Unrealized gain (loss)

As unlisted stocks (144,884 thousand yen reported on the consolidated balance sheets) have no market prices and it isconsidered to be extremely difficult to determine their fair values, they are not included in the table above of“Available-for-sale securities.”

As of March 31, 2018
(Thousands of yen)

Securities whose carrying amount on the
consolidated balance sheets exceeds theiracquisition cost
StocksSubtotal
Securities whose carrying amount on the
consolidated balance sheets does not exceed theiracquisition cost
StocksSubtotal
Total(Note)

Carrying amounton the consolidatedbalance sheets

Acquisition cost

6,437,664
6,437,664

2,055,295
2,055,295

4,382,369
4,382,369––
6,437,664––
2,055,295––
4,382,369

Unrealized gain (loss)

As unlisted stocks (133,916 thousand yen reported on the consolidated balance sheets) have no market prices and it isconsidered to be extremely difficult to determine their fair values, they are not included in the table above of“Available-for-sale securities.”

2. Available-for-sale securities that were sold during the fiscal year
Fiscal year ended March 31, 2017 (from April 1, 2016 to March 31, 2017)
Not applicable.
Fiscal year ended March 31, 2018 (from April 1, 2017 to March 31, 2018)(Thousands of yen)Type
StocksProceeds from sales

Total gain on sales

Total loss on sales

193,772

98,0963,000

28

3. Impairment loss on securities
Fiscal year ended March 31, 2017 (from April 1, 2016 to March 31, 2017)
Not applicable.
Fiscal year ended March 31, 2018 (from April 1, 2017 to March 31, 2018)
Not applicable.

Derivative Transactions
1. Derivative transactions to which hedge accounting is not applied
Not applicable.
2. Derivative transactions to which hedge accounting is applied(1) Currency-related transactions
As of March 31, 2017
(Thousands of yen)
Hedge accounting
methodAllocation
method forforwardexchange
contracts(Note)

Type of derivativetransaction

Principal hedged item

Contract amountContract amountdue after 1 year

Fair value

Forward exchange
contracts
Sell:

Accounts receivable trade120,252–(Note)

USD

Since items subject to the allocation method for forward exchange contracts are accounted for together with theaccounts receivable - trade that are the hedged items, the fair values thereof are included in the fair values of thecorresponding accounts receivable - trade.

As of March 31, 2018
(Thousands of yen)
Hedge accounting
methodAllocation
method forforwardexchange
contracts(Note)

Type of derivativetransaction

Principal hedged item

Contract amountContract amountdue after 1 year

Fair value

Forward exchange
contracts
Sell:

Accounts receivable trade53,176–(Note)

USD

Since items subject to the allocation method for forward exchange contracts are accounted for together with theaccounts receivable - trade that are the hedged items, the fair values thereof are included in the fair values of thecorresponding accounts receivable - trade.

29

(2) Interest rate-related transactions
As of March 31, 2017
(Thousands of yen)
Hedge accounting
methodType of derivativetransaction

Exceptional
accrual method
for interest rate
swaps

Interest rate swap
contracts(Note)

Receive floating/ Pay fixed

Principal hedged item

Long-term loans
payableContract amountContract amountdue after 1 year

2,279,260

2,185,031

Fair value(Note)

Since items subject to the exceptional accrual method for interest rate swaps are accounted for together with the longterm loans payable that are the hedged items, the fair values thereof are included in the fair values of the corresponding
long-term loans payable.

As of March 31, 2018
(Thousands of yen)
Hedge accounting
methodType of derivativetransaction

Exceptional
accrual method
for interest rate
swaps

Interest rate swap
contracts(Note)

Receive floating/ Pay fixed

Principal hedged item

Long-term loans
payableContract amountContract amountdue after 1 year

2,124,349

1,841,306

Fair value(Note)

Since items subject to the exceptional accrual method for interest rate swaps are accounted for together with the longterm loans payable that are the hedged items, the fair values thereof are included in the fair values of the corresponding
long-term loans payable.

Retirement Benefits
1. Summary of retirement benefit plans adopted
To cover retirement benefits to employees, the Company and its consolidated subsidiaries have adopted
funded and unfunded defined-benefit plans.
Under the defined-benefit corporate pension plans, all of which are funded plans, lump-sum benefits or
pensions are paid based on salary and service period.
Under the retirement lump-sum payment plans, all of which are unfunded plans, lump-sum benefits arepaid as retirement benefits based on salary and service period. A retirement benefit trust has been
established for the retirement lump-sum payment plans, all of which are unfunded plans, since May
2015.
For defined-benefit corporate pension plans and retirement lump-sum payment plans held by someconsolidated subsidiaries, net defined benefit liability and retirement benefit expenses are calculated bya simplified method.

30

2. Defined-benefit plans(1) Reconciliation between balance of retirement benefit obligations at the beginning of period and thatat the end of period(Thousands of yen)
Fiscal year ended Fiscal year ended
March 31, 2017
March 31, 2018
5,922,099

5,970,671

Service cost

380,624

425,014

Interest cost

24,76032,738Actuarial differences

12,260(90,336)Retirement benefits paid

(358,426)(313,045)

Other(10,647)(1,835)5,970,671

6,023,207

Retirement benefit obligations at the beginning of period

Retirement benefit obligations at the end of period(2) Reconciliation between balance of plan assets at the beginning of period and that at the end of period
Fiscal year ended
March 31, 2017

(Thousands of yen)
Fiscal year ended
March 31, 2018

Plan assets at the beginning of period

5,163,205

5,403,887

Expected return on plan assets

191,556

133,766

Actuarial differences

22,903(88,155)

Contribution by employer

127,878

173,524

Retirement benefits paid

(104,526)(159,556)

Other
Plan assets at the end of period

2,871

6,455

5,403,887

5,469,922(3) Reconciliation between balance of retirement benefit obligations and plan assets at the end of period
and that of net defined benefit liability and net defined benefit asset recorded in the consolidatedbalance sheets
Fiscal year ended
March 31, 2017

(Thousands of yen)
Fiscal year ended
March 31, 2018

Retirement benefit obligations from funded plans

4,907,543

2,867,872

Plan assets(5,403,887)(3,418,433)(496,344)(550,561)

Retirement benefit obligations on unfunded plans

1,063,127

1,103,846

Net amount of liability and asset recorded in consolidated balance sheets

566,783

553,285

Net defined benefit asset(502,834)(563,405)

Net defined benefit liability

1,069,617

1,116,690

566,783

553,285

Net amount of liability and asset recorded in consolidated balance sheets31

(4) Retirement benefit expenses
Fiscal year ended
March 31, 2017

(Thousands of yen)
Fiscal year ended
March 31, 2018

Service cost

380,624

425,014

Interest cost

24,76032,738(191,556)(133,766)

Amortization of actuarial differences

98,460172,523

Amortization of past service cost

(2,619)(2,619)－(21,749)

309,670

472,140

Expected return on plan assets

Other
Retirement benefit expenses on defined-benefit plans(5) Remeasurements of defined benefit plans
The components of remeasurements of defined benefit plans (before deducting tax effect) are as
follows:
Fiscal year ended
March 31, 2017

(Thousands of yen)
Fiscal year ended
March 31, 2018

2,619

2,619

Actuarial differences(108,511)(174,704)

Total(105,892)(172,085)

Past service cost(6) Remeasurements of defined benefit plans (Accumulated other comprehensive income)The components of remeasurements of defined benefit plans (before deducting tax effect) are as
follows:
As ofMarch 31, 2017

(Thousands of yen)
As ofMarch 31, 2018

Unrecognized past service cost

(2,619)－Unrecognized actuarial differences

767,922589,985

Total

765,302589,985(7) Plan assetsi) Main components of plan assets
The ratios of components to total plan assets by major category are as follows:
As ofMarch 31, 2017

As ofMarch 31, 2018

Bonds

8.6%

10.1%

Stocks

16.3%

16.1%

Cash and deposits

5.2%

5.0%

Insurance assets (general accounts)

7.5%

7.4%

Investment trust

37.4%

37.5%

Shared operating assets

25.0%

23.8%

Total

100.0%

100.0%(Note) Total plan assets includes the retirement benefit trust established for the retirement lump-sum payment
plans, which accounts for 37.4% and 37.5% of the total amount as of March 31, 2017 and March 31, 2018,
respectively.

32ii) Method for establishing long-term expected rate of return on plan assets
To establish the long-term expected rate of return on plan assets, the current and forecasted
allocation of plan assets and the current and expected future long-term rate of return from thevarious assets constituting the plan assets are taken into consideration.
(8) Calculation basis for actuarial assumptions
The main calculation basis for actuarial assumptions are as follows:
Fiscal year ended
March 31, 2017

Fiscal year ended
March 31, 2018

Discount rate

0.04%

0.02%

Long-term expected rate of return

3.72%

4.20%

Expected rate of salary increase

3.80%

3.80%

Income Taxes
1. Significant components of deferred tax assets and liabilities(Thousands of yen)
As of March 31, 2018

As of March 31, 2017
Deferred tax assets
Allowance for doubtful accounts
Net defined benefit liability
Impairment loss
Provision for bonuses
Loss on valuation of investment securities
Asset retirement obligations
Net operating losses carryforward (Note)
Other
Subtotal of deferred tax assets
Valuation allowance related to net operating losses
carryforward (Note)
Valuation allowance related to total deductible temporary
difference, etc.
Subtotal of valuation allowance
Total deferred tax assets
Deferred tax liabilities
Valuation difference on available-for-sale securities
Net defined benefit asset
Reserve for advanced depreciation of non-current assets
Reserve for special depreciation
Property, plant and equipment (asset retirement
obligations)
Reserved profit of overseas consolidated subsidiaries
Other
Total deferred tax liabilities
Net deferred tax assets (liabilities)

41,061
844,292
479,747
177,907
196,849
48,220260,975
539,5732,588,626－

35,089881,788418,561
183,227
196,849
49,033
66,162
512,140
2,342,854(6,363)－(509,003)(708,607)
1,880,019(515,366)
1,827,487(967,549)(147,483)(117,355)(23,020)(31,460)(1,167,327)(167,399)(93,575)(15,307)(29,538)(408,948)(684,205)(2,380,024)(500,005)(455,544)(477,037)(2,405,730)(578,242)(Note) Amounts of tax loss carryforward and related deferred tax assets by carryforward period
As of March 31, 2018
Within 1
year(Thousands of yen)Over 1 year Over 2 years Over 3 years Over 4 years
Over 5 years
Total
to 2 years
to 3 years
to 4 years
to 5 years

Tax loss carryforward (a)

－

－

－

－

5,108

61,054

66,162

Valuation allowance

－

－

－

－

(5,108)(1,254)(6,363)

Deferred tax assets

－

－

－

－

－

59,799(b) 59,799(a) Figures for tax loss carryforward are the amounts multiplied by effective statutory tax rate.
(b) For the tax loss carryforward of 66,162 thousand yen (amount multiplied by effective statutory tax rate), deferred tax assetsof 59,799 thousand yen have been recorded. The deferred tax assets of 59,799 thousand yen have been recognized primarily

33

for the balance of tax loss carryforward in the amount of 56,663 thousand yen (amount multiplied by effective statutory tax
rate) of RIKEN ELASTOMERS CORPORATION, a consolidated subsidiary. The tax loss carryforward of the consolidated
subsidiary RIKEN ELASTOMERS CORPORATION accrued as a result of using immediate expensing system for the fiscal
year ended December 31, 2017. The said tax loss carryforward was determined to be recoverable as future taxable income isanticipated, and therefore valuation allowance has not been recognized.

2. Reconciliation between the effective statutory tax rate and the effective tax rate
As ofMarch 31, 201730.9%

Effective statutory tax rate
Adjustments
Expenses not deductible permanently such as entertainment
expenses
Income not taxable permanently such as dividends income
Foreign withholding taxes
Change in valuation allowance
Tax rate differences from overseas consolidated
subsidiaries
Other
Effective tax rate

As ofMarch 31, 2018
30.9%

0.5

0.6

(0.7)
2.4
(1.1)

(0.7)
0.5
(0.2)

(4.0)

(4.0)

1.7
29.7

1.3
28.2

3. Revision in the amounts of deferred tax assets and deferred tax liabilities due to changes in corporate tax
rate, etc.
Following the enactment of the Tax Cuts and Jobs Act in the U.S. on December 22, 2017, the federal
corporate tax rate applied to the consolidated subsidiaries located in the U.S. will be reduced to 21% fromthe current 35%.
Due to this rate change, deferred tax assets (after offsetting deferred tax liabilities) decreased 166,535
thousand yen, while income taxes - deferred increased 166,535 thousand yen for the current fiscal year.

34

Business Combinations
Transactions, etc. under common control(1) Overview of transactions(a) Name of subject business and its business activities
Name of business: Compound manufacture and sales businessBusiness activities: Manufacture and sales of compounds(b) Date of business combination
April 1, 2017(c) Legal form of business combination
1)

Company split

Splitting company

Successor company

Purpose of company split

RIMTEC CORPORATIONRIMTEC MANUFACTURING
CORPORATION

To split the manufacturing division andhave the successor company succeed toit

RIKEN ELASTOMERSCORPORATIONREC MANUFACTURING
CORPORATION

Same as above

2)

MergerSurviving company

Merged company

Purpose of merger

RIMTEC CORPORATION

To integrate the sales divisions into thesurviving company

Before change of trade name

After change of trade name

Functions of company

RIKEN ELASTOMERSCORPORATIONREC MANUFACTURING
CORPORATIONRIKEN AMERICASCORPORATIONRIKEN ELASTOMERSCORPORATIONRIKEN ELASTOMERSCORPORATION

3)

Change of trade nameSales and controlling company
Change of trade name of manufacturing
company(d) Name of company after business combination
RIKEN AMERICAS CORPORATION (consolidated subsidiary of the Company)
RIKEN ELASTOMERS CORPORATION (consolidated subsidiary of the Company)
RIMTEC MANUFACTURING CORPORATION (consolidated subsidiary of the Company)(e) Other matters concerning overview of transactions
To unify points of contact for customers and flexibly utilize manufacturing equipment as demandrequires in the North American business, subsidiaries have been reorganized into two
manufacturing subsidiaries and one controlling company that engages in sales.
(2) Overview of accounting treatments
Pursuant to the “Revised Accounting Standard for Business Combinations” (ASBJ Statement No. 21,
September 13, 2013) and the “Revised Guidance on Accounting Standard for Business Combinations
and Accounting Standard for Business Divestitures” (ASBJ Guidance No. 10, September 13, 2013),
transactions were accounted for as those under common control.
Asset retirement obligations
This information has been omitted due to its insignificance.
Rental properties and other real estateThis information has been omitted due to its insignificance.

35

Segment Information and Others
Segment Information
1. Summary of reportable segments
The Group’s reportable segments are components of the Group for which separate financial information isavailable and that are evaluated regularly by the Board of Directors to determine allocation ofmanagement resources and assess performance.
The Company has business divisions by product at the head office. Each business division plans its own
domestic and overseas comprehensive strategies and conducts business activities for the product that thedivision handles.
Accordingly, the Group has classified the reportable segments in consideration of product categories
based on business divisions and subsidiaries and has three reportable segments, “compound,” “film” and“food wrapping film.”
The “compound” segment is engaged in the manufacturing and sales of mixed synthetic resins, which aremostly pellet-type, as intermediate materials of plastic molding. The “film” segment is engaged in the
manufacturing and sales of films processed from base film of synthetic resins and those products withdecorative and functionality. The “food wrapping film” segment is mainly engaged in the manufacturing
and sales of thin synthetic resin films for food packaging.
2. Method for calculating net sales, profit or loss, assets, liabilities and other items by reportable segment
Accounting policies of reported business segments are mostly consistent with those disclosed in“Significant Matters in Preparing Consolidated Financial Statements.”
Segment profit is calculated on an operating income basis.
Intersegment sales and transfers are based on actual market prices.

36

3. Information about net sales, profit or loss, assets, liabilities and other items by reportable segment
Fiscal year ended March 31, 2017 (from April 1, 2016 to March 31, 2017)(Thousands of yen)
Reportable segment

Net sales(1) Sales to externalcustomers(2) Intersegment sales
or transfers
Total
Segment profit (loss)
Segment assets
Segment liabilities
OthersDepreciation
Amortization of goodwill

Amountrecorded ontheAdjustment
consolidated(Note 2)
financialstatements(Note 3)Compound

Film

Food
wrapping
film

Total

Other
(Note 1)

Total

61,285,494

12,205,919

11,369,479

84,860,893

3,439,266

88,300,159－

88,300,159

194,046773－

194,820

489,116

683,937(683,937)－

12,206,692 11,369,479(254,831) 1,086,321
9,225,497
7,593,872
2,930,835
3,737,199

85,055,713
5,999,583
62,972,062
28,018,927

3,928,383
10,5681,980,696
2,071,248

88,984,096
6,010,152
64,952,758
30,090,176

2,286,841
178,61742,917
12,9602,329,758
191,577

847,801－

61,479,541
5,168,092
46,152,692
21,350,893
1,639,632
1,455

371,260－

275,949
177,162(683,937) 88,300,159(147,480) 5,862,671
23,393,152 88,345,910
9,059,396 39,149,572
3,177,560
191,577

Extraordinary income

689

－

－

689

－

689

1,989

2,678

Extraordinary losses[Impairment loss]
Increase in property,
plant and equipment andintangible assets

25,040[11,811]

2,324
[–]

1,824
[–]

29,190[11,811]－[–]

29,190[11,811]

3,762
[–]

32,952[11,811]3,202,041

290,985

233,685

3,726,713

37,352

3,764,066

606,075

4,370,141(Notes) 1. The “Other” category is the business segment that is not included in the reportable segments, and represents the
manufacturing and sales of synthetic resin molding products and electric wire as well as the purchase and sales ofmerchandise.
2. The adjustment to segment profit (loss) represents negative 147,480 thousand yen in inter-segment eliminations.
The adjustment to segment assets represents negative 10,536,391 thousand yen in inter-segment eliminations and33,929,543 thousand yen in corporate assets. The corporate assets mainly include funds to manage surplus assets(cash and deposits), long-term investment funds (investment securities) and assets related to the administration
division.
The adjustment to segment liabilities represents negative 607,651 thousand yen in inter-segment eliminations and9,667,048 thousand yen in corporate liabilities. The corporate liabilities mainly include loans payable that are not
attributable to the reportable segments and liabilities related to the administration division.
3. Segment profit (loss) is adjusted to operating income in the consolidated statements of income.

37

Fiscal year ended March 31, 2018 (from April 1, 2017 to March 31, 2018)(Thousands of yen)
Reportable segment

Net sales(1) Sales to externalcustomers(2) Intersegment sales
or transfers
Total
Segment profit (loss)
Segment assets
Segment liabilities
OthersDepreciation
Amortization of goodwill

Amountrecorded ontheAdjustment
consolidated(Note 2)
financialstatements(Note 3)Compound

Film

Food
wrapping
film

Total

Other
(Note 1)

Total

66,279,670

13,064,571

11,481,226

90,825,468

3,775,665

94,601,133－

94,601,133

264,688

47,721

387

312,797

816,157

1,128,954(1,128,954)－

13,112,293 11,481,613(239,401)
790,795
10,205,868
7,633,436
3,169,321
3,552,892

91,138,265
5,660,279
67,199,972
28,712,443

66,544,358
5,108,885
49,360,668
21,990,229
1,817,923
1,455

375,786－

298,491
177,162

4,591,822 95,730,087(43,356) 5,616,922
2,867,693 70,067,666
2,941,623 31,654,067

2,492,200
178,617

43,123
12,960(1,128,954) 94,601,133(217,614) 5,399,307
21,798,540 91,866,206
5,357,937 37,012,004

2,535,323
191,577

898,928－

3,434,252
191,577

Extraordinary income

4,036

－

573

4,610

－

4,610

99,385

103,996

Extraordinary losses[Impairment loss]
Increase in property,
plant and equipment andintangible assets

14,183[–]27,375
[–]

1,006
[–]

42,565[–]－[–]42,565
[–]

5,340
[–]

47,905[–]2,125,665

682,628

397,978

3,206,272

60,3183,266,590

508,658

3,775,249(Notes) 1. The “Other” category is the business segment that is not included in the reportable segments, and represents the
manufacturing and sales of synthetic resin molding products and electric wire as well as the purchase and sales ofmerchandise.
2. The adjustment to segment profit (loss) represents negative 217,614 thousand yen in inter-segment eliminations.
The adjustment to segment assets represents negative 14,047,556 thousand yen in inter-segment eliminations and35,846,097 thousand yen in corporate assets. The corporate assets mainly include funds to manage surplus assets(cash and deposits), long-term investment funds (investment securities) and assets related to the administration
division.
The adjustment to segment liabilities represents negative 1,654,998 thousand yen in inter-segment eliminations and7,012,936 thousand yen in corporate liabilities. The corporate liabilities mainly include loans payable that are not
attributable to the reportable segments and liabilities related to the administration division.
3. Segment profit (loss) is adjusted to operating income in the consolidated statements of income.

38

Related Information
Fiscal year ended March 31, 2017 (from April 1, 2016 to March 31, 2017)
1. Information by product and service(Thousands of yen)

Sales to external customers

Compound

Film

Food
wrapping
film

61,285,494

12,205,919

11,369,479

Other

Total

3,439,266

88,300,159

2. Information by geographical area
(1) Net sales(Thousands of yen)Japan

Thailand

48,250,743

8,329,458(Note)

U.S.
10,978,721

China
6,857,716

Europe653,598

Other regions

Total

13,229,921

88,300,159

Net sales are segmented by country or region based on customer location.

(2) Property, plant and equipment(Thousands of yen)Japan

Thailand

U.S.

China

12,116,469

3,076,579

5,865,224

2,012,295

Europe286

Other regions
3,889,710

Total
26,960,565

3. Information by major customer
This information has been omitted as there is no major external customer that accounts for 10% or more of the
net sales recorded on the consolidated statements of income.
Fiscal year ended March 31, 2018 (from April 1, 2017 to March 31, 2018)
1. Information by product and service(Thousands of yen)

Sales to external customers

Compound

Film

Food
wrapping
film

66,279,670

13,064,571

11,481,226

Other

Total

3,775,665

94,601,133

2. Information by geographical area
(1) Net sales(Thousands of yen)Japan

Thailand

50,742,459

9,683,817(Note)

U.S.
11,123,981

China
7,686,700

Europe585,714

Other regions

Total

14,778,460

94,601,133

Net sales are segmented by country or region based on customer location.

(2) Property, plant and equipment(Thousands of yen)Japan

Thailand

U.S.

China

12,490,627

3,703,893

5,490,614

1,822,593

39Europe356

Other regions
4,087,729

Total
27,595,814

3. Information by major customer
This information has been omitted as there is no major external customer that accounts for 10% or more of the
net sales recorded on the consolidated statements of income.
Information about Impairment Loss on Non-current Assets by Reportable Segment
Fiscal year ended March 31, 2017 (from April 1, 2016 to March 31, 2017)
This information has been omitted as identical information is disclosed in segment information.
Fiscal year ended March 31, 2018 (from April 1, 2017 to March 31, 2018)
Not applicable.

Information about Amortization of Goodwill and Balance of Unamortized Goodwill by Reportable
Segment
Fiscal year ended March 31, 2017 (from April 1, 2016 to March 31, 2017)(Thousands of yen)
Reportable segment

CompoundBalance as of March 31,
2017

Film

–

14,550Food
wrapping
film

Total

442,906

457,457

Other

Total

26,080483,537

Amountrecorded ontheAdjustment
consolidated
financialstatements–

483,537(Note) Amortization of goodwill has been omitted, as identical information is disclosed in segment information.

Fiscal year ended March 31, 2018 (from April 1, 2017 to March 31, 2018)(Thousands of yen)
Reportable segment

CompoundBalance as of March 31,
2018(Note)

13,095

Film

–

Food
wrapping
film

Total

265,744278,839

Other

Total

13,120291,959

Amountrecorded ontheAdjustment
consolidated
financialstatements–

Amortization of goodwill has been omitted, as identical information is disclosed in segment information.

Information about Gain on Negative Goodwill by Reportable Segment
Fiscal year ended March 31, 2017 (from April 1, 2016 to March 31, 2017)
Not applicable.
Fiscal year ended March 31, 2018 (from April 1, 2017 to March 31, 2018)
Not applicable.
Information on Related Parties
Fiscal year ended March 31, 2017 (from April 1, 2016 to March 31, 2017)
Not applicable.
Fiscal year ended March 31, 2018 (from April 1, 2017 to March 31, 2018)
Not applicable.

40

291,959

Per Share Information(Yen)
Fiscal year ended
March 31, 2017

Fiscal year ended
March 31, 2018

Net assets per share

723.27735.85

Basic profit attributable to owners of parent per share

45.85

41.64

Diluted profit attributable to owners of parent per share

40.08

38.12

(Note)The basis used for calculating net assets per share, basic profit attributable to owners of parent per share and diluted
profit attributable to owners of parent per share is as follows.

(Note)The basis for calculation is as follows:
1. Net assets per share
As of March 31, 2017

As of March 31, 2018

Total net assets (Thousands of yen)

49,196,337

54,854,201

Deduction from total net assets (Thousands of yen)

7,222,277

7,680,481[7,222,277][7,680,481]

Net assets related to common stock (Thousands of yen)

41,974,060

47,173,719

Number of treasury shares of common stock (Shares)

8,079,834

2,005,873

Number of shares of common stock outstanding used for
calculation of net assets per share (Shares)

58,033,985

64,107,946[Of the above, non-controlling interests (Thousands ofyen)](Note)

Because shares in the Company held by Trust Account E are recognized as treasury shares in the consolidated financial
statements, the number of those shares has been deducted from the number of shares of common stock outstanding at
the fiscal year-end used for the calculation of net assets per share.

41

2. Profit attributable to owners of parent per share
Fiscal year ended
March 31, 2017

Fiscal year ended
March 31, 2018

Profit attributable to owners of parent (Thousands of yen)

2,716,765

2,538,121

Amount not attributable to common shareholders(Thousands of yen)
Profit attributable to owners of parent regarding
common stock (Thousands of yen)
Average number of shares of common stock outstanding
during the period (Shares)––

2,716,765

2,538,121

59,250,061

60,956,444

Adjustment on profit attributable to owners of parent––[Of the above, interest expenses (net of corresponding––

Increase in common stock (Shares)

8,528,784

5,624,077[Of the above, convertible bond-type bonds with
subscription rights to shares (Shares)]8,528,784

5,624,077––

Diluted profit attributable to owners of parent per share

tax amount) (Thousands of yen)][Of the above, subscription rights to shares (Shares)]
Outline of potential shares that were not used in
calculating diluted profit attributable to owners of parent–

per share because they have no dilutive effects(Note)

Because shares in the Company held by Trust Account E are recognized as treasury shares in the consolidated financial
statements, the number of those shares has been deducted from the average number of shares of common stock
outstanding during the period used for the calculation of basic profit attributable to owners of parent per share anddiluted profit attributable to owners of parent per share.

Significant Subsequent Events
Not applicable.

42

e. Consolidated Supporting Schedules
Detailed Statement of Bonds
Company name

Type of bondDate ofissuance

Balance as ofApril 1, 2017
(Thousands ofyen)

Balance as ofMarch 31, 2018
(Thousands of
yen)

RIKEN
TECHNOSCORPORATION

Yen-denominatedconvertible bonds
with stockacquisition rights
due 2020 (Note 1)

March 19,2015

4,000,000

Total

–

–

4,000,000

Interest
rate(%)

Collateral

Date ofmaturity

1,170,000–

None

March 19,2020

1,170,000–––(Notes) 1. The information about the bonds with stock acquisition rights is as provided below.
Yen-denominated convertible bonds withType of bondstock acquisition rights due 2020

Shares to be issued

Common stock

Issue price per stock acquisition right (Yen)

Without contribution

Issue price per share (Yen)469

Total issue value (Thousands of yen)

4,000,000

Total issue value of shares issued upon exercise of stock acquisitionrights (Thousands of yen)

2,830,000

Granting ratio of stock acquisition rights (%)

100
From March 31, 2015
to February 27, 2020

Exercise period of stock acquisition rights(at the close of bank operations in thelocal time of the location where theexercise request is received)(Note)

When there is a request from a bond holder intending to exercise the stock acquisition rights, in place of theredemption of the full amount of the bonds to which the stock acquisition rights are attached, it is deemedthat the full amount to be paid in upon exercise of the stock acquisition rights has been paid in. In addition,
when stock acquisition rights are exercised, it is deemed that the said request has been received.
2. Amounts of redemption for five years after the consolidated balance sheet date are as follows:(Thousands of yen)Over 1 year
Over 2 years
Over 3 years
Over 4 years
Within 1 year
to 2 years
to 3 years
to 4 years
to 5 years––

1,170,000

43

–

–

Detailed Statement of Loans Payable
Category

Balance as of
Balance as ofApril 1, 2017
March 31, 2018
(Thousands of yen) (Thousands of yen)

Averageinterest rate(%)

Repayment period

6,544,873

6,490,266

1.2–

Current portion of long-term loans
payable315,635

443,906

1.6–

Current portion of lease obligations

10,231

11,739––4,866,068

4,396,471

2.22019 – 2025

21,46829,452–2019 – 2024

－

－

–

–

11,758,278

11,371,836––

Short-term loans payable

Long-term loans payable(excluding current portion)
Lease obligations(excluding current portion)
Other interest-bearing debt
Total

(Notes) 1. Method of calculating average interest rates
Average interest rates are calculated using the average outstanding balance during the period.
2. The amount of lease obligations in the consolidated balance sheets includes the interest equivalent.
3. Repayment of long-term loans payable and lease obligations scheduled within five years after the balance sheet dateare as follows:(Thousands of yen)Over 1 year
Over 2 years
Over 3 years
Over 4 years
Categoryto 2 years
to 3 years
to 4 years
to 5 years
Long-term loans
315,964
313,464
336,882
283,042payableLease obligations

10,549

7,262

7,071

3,281

Detailed Statement of Asset Retirement Obligations
As the amount of asset retirement obligations as of April 1, 2017 and March 31, 2018 is not more than 1% of
the total amount of liabilities and net assets as of the same dates, this information is omitted pursuant to theprovisions of Article 92-2 of the Ordinance on Consolidated Financial Statements.

(2) Others
Quarterly information for the fiscal year ended March 31, 2018(Year-to-date period)
Net sales (Thousands of yen)
Profit before income taxes(Thousands of yen)
Profit attributable to owners ofparent (Thousands of yen)
Basic profit attributable toowners of parent per share (Yen)(Three-month period)
Basic profit attributable toowners of parent per share (Yen)

1st quarter2nd quarter3rd quarter

Fiscal year ended
March 31, 201822,831,088

45,890,214

69,678,269

94,601,133

1,336,505

2,672,506

4,091,833

5,466,525

610,328

1,202,637

1,850,113

2,538,121

10.52

20.36

30.83

41.64

1st quarter2nd quarter

10.52

9.90

44

3rd quarter
10.42

4th quarter
10.79