May 10, 2017

Summary of Consolidated Financial Results
for the Year Ended March 2017 [Japan GAAP]
Name of Company:
KAGA ELECTRONICS CO., LTD.
Stock Code:8154
URL: http://www.taxan.co.jp/
Stock Exchange Listing:Tokyo Stock Exchange, First Section
Representative
Title: President & COO
Name: Ryoichi Kado
Contact Person
Title: Managing Director, Administration Headquarters
Name: Eiji Kawamura
Phone:+81-(0)3-5657-0111
Date of regular general meeting of shareholders:June 29, 2017 (tentative)
Date of commencement of dividend payment:
June 30, 2017 (tentative)
Date of filing of securities report:
June 29, 2017 (tentative)
Supplementary explanatory documents:
Yes
Earnings presentation:
Yes (For institutional investors)(Yen in millions, rounded down)

1. Financial results for the current fiscal year (April 1, 2016 - March 31, 2017)(1) Result of operations (Consolidated)(Percentage figures represent year on year changes)

Net sales

Operating income

Million yen%

Million yen

Profit attributableto owners of parent

Ordinary income%

Million yen%

Million yen%

Fiscal year ended March 2017

227,209

(7.4)

6,879

(11.7)

7,343

(7.1)

6,975

28.3

Fiscal year ended March 2016

245,387

(3.8)

7,788

22.4

7,908

3.2

5,437

23.1

Note: Comprehensive income: FY ended March 31, 2017: 7,320 million yen（111.1%） FY ended March 31, 2016: 3,466 million yen (-54.3%)

per share
Earnings per share Earnings(diluted)
Yen

Return on
equityYen

Ratio of ordinary
income to assets

Ratio of operating
income to net sales

%

%

%

5.9

3.0

6.3

3.2

Fiscal year ended March 2017249.43

-

10.9

Fiscal year ended March 2016

192.43-

9.0

Ref.: Share of profit/loss of entities accounted for using equity method: FY ended March 2017: - million yen

FY ended March 2016: - million yen(2) Financial Position (Consolidated)
Total assets

Net assets

Equity ratio

Net assets per share

Million yen

Million yen%

Yen

125,751

65,93252.4

2,401.00

As of March 31, 2016

124,281

61,80849.7

2,185.94

Ref.: Shareholders’ equity

FY ended March 2017: 65,872 million yen

As of March 31, 2017

FY ended March 2016: 61,764 million yen(3) Cash flow position (Consolidated)
Net cash providedby (used in)operating activities

Net cash providedby (used in)investing activities

Million yen

Net cash providedby (used in)financing activities

Million yen

Cash and cash
equivalents at endof period

Million yen

Million yen

Fiscal year ended March 2017

10,746(258)(6,118)26,021

Fiscal year ended March 2016

9,546

(1,263)(3,067)

21,8792. Dividends
Dividend per share

1Q
Yen

Fiscal year ended March 2016
Fiscal year ended March 2017
Fiscal year ending March 2018
(Forecast)
Notes:

2Q

3Q

Yen

Yen

Yearend

Full year

Yen

Yen

-

20.00
25.00

-

35.00
35.00

55.00
60.00

-

25.00

-

35.00

60.00

Annualaggregate
amountPayout ratio(Consolidated)

Dividends/
net assets(Consolidated)

Million yen

%

%

1,554
1,666

28.6
24.1

2.6
2.6

Breakdown of year-end dividend for FY3/16: Ordinary dividend: 20.00 yen; Extraordinary dividend: 15.00 yen
Breakdown of interim dividend for FY3/17: Ordinary dividend: 20.00 yen; Extraordinary dividend: 5.00 yen
Breakdown of year-end dividend for FY3/17: Ordinary dividend: 20.00 yen; Extraordinary dividend: 15.00 yen

29.9

3. Forecast for the fiscal year ending March 2018 (Consolidated, April 1, 2017 - March 31, 2018)(Percentage figures represent year on year changes)

Net salesFirst half
Full year

Operating income

Profit attributable toowners of parent

Ordinary income

Earnings
per share

Million yen%

Million yen%

Million yen%

Million yen%

Yen107,000
230,000

(2.4)
1.2

2,700
7,000

(16.0)
1.8

3,000
7,500

(1.5)
2.1

2,200
5,500

(29.3)(21.2)

80.19
200.47* Notes(1) Changes in significant subsidiaries (Changes in specified subsidiaries accompanied by changes in the scope of consolidation):
None(Note) Although not falling under a change in a specified subsidiary accompanied by changes in the scope of consolidation, during the firstquarter of the fiscal year ended March 31, 2017, our consolidated subsidiaries KAGA SOLUTION NETWORK CO., LTD. and
KAGA HIGHTECH CO., LTD. merged, with KAGA SOLUTION NETWORK as the surviving company. As a result, KAGASOLUTION NETWORK has become a specific subsidiary of the Company.
(2) Changes in accounting policies, estimates, and retrospective restatement(a) Changes due to revision of accounting standards: Yes(b) Changes other than (a): None(c) Changes in accounting estimates: None(d) Retrospective restatement: None
Note: For more information, please refer “4. Consolidated Financial Statements and Major Notes (5) Notes to consolidated financial
statements (Changes in accounting policies)” on page 13.
(3) Number of shares outstanding (common stock)(a) Shares outstanding
As of March 31, 2017:(including treasury shares)

28,702,118

As of March 31, 2016:

28,702,118(b) Treasury shares

As of March 31, 2017:

1,266,468

As of March 31, 2016:

446,824(c) Average number of shares
outstanding during the year

As of March 31, 2017:27,967,362

As of March 31, 2016:

28,255,634(Reference) Non-consolidated Financial Results
1. Financial results for the fiscal year ended March 2017 (April 1, 2016 – March 31, 2017)(1) Result of operations (Non-consolidated)(Percentage figures represent year on year changes)

Net sales
Fiscal year ended March 2017
Fiscal year ended March 2016

Operating income

Ordinary income

ProfitMillion yen%

Million yen%

Million yen%

Million yen%

75,66685,723(11.7)
(4.9)

31
1,077

(97.1)
231.8

2,550
3,513

(27.4)
23.5

2,955
2,856

3.4
59.6

Earnings per share

Earnings per share(diluted)

Yen

Fiscal year ended March 2017
Fiscal year ended March 2016

105.67101.11

Yen-(2) Financial Position (Non-consolidated)
Total assets
As of March 31, 2017
As of March 31, 2016

Net assets

Equity ratio

Net assets per share

Million yen

Million yen%

Yen

69,78470,39638,88538,68055.7
54.9

1,417.34
1,368.97

Ref.: Shareholders’ equity
Fiscal year ended March 2017: 38,885 million yen

Fiscal year ended March 2016: 38,680 million yen* The audit procedures are not applicable to this Financial Results report.
* Cautionary statement regarding forecasts of operating results and special notes
Forward-looking statements in these materials are based on information available to management at the time this report was prepared andassumptions that management believes are reasonable. Actual results may differ significantly from these statements for a number of reasons.
For information about the forecasts, please see “1. Results of Operations (4) Future outlook” on page 3 of Supplementary Information.

Index for Supplementary Information
1. Results of Operations ....................................................................................................................................................................2(1) Overview of consolidated business performance ..................................................................................................................2(2) Overview of financial condition............................................................................................................................................2(3) Cash flows ............................................................................................................................................................................3(4) Future outlook.......................................................................................................................................................................3(5) Basic policy for earnings allocations and dividends in the current and next fiscal years ......................................................3
2. Corporate Group............................................................................................................................................................................4
3. Basic Approach to the Selection of Accounting Standards ..........................................................................................................4
4. Consolidated Financial Statements and Major Notes ...................................................................................................................5(1) Consolidated balance sheet ...................................................................................................................................................5(2) Consolidated statements of income and comprehensive income ..........................................................................................7(3) Consolidated statement of changes in equity ........................................................................................................................9(4) Consolidated statement of cash flows .................................................................................................................................11(5) Notes to consolidated financial statements .........................................................................................................................13(Notes to going concern assumptions) ................................................................................................................................13(Changes in accounting policies) ........................................................................................................................................13(Additional information) .....................................................................................................................................................13(Segment information, etc.) ................................................................................................................................................13(Per-share information) .......................................................................................................................................................16(Subsequent events) ............................................................................................................................................................16
5. Non-consolidated Financial Statements.......................................................................................................................................17(1) Balance sheet ......................................................................................................................................................................17(2) Statement of income ...........................................................................................................................................................19(3) Statement of changes in equity ...........................................................................................................................................20

1

1. Results of Operations(1) Overview of consolidated business performance
In the fiscal year ended March 31, 2017, the Japanese economy showed a gradual recovery due to improvement in
employment and income environment, supported by the government’s economic stimulus measures and the monetary
policies of the Bank of Japan. However, economic uncertainty lingered as there were concerns over potential impact on
corporate earnings of fluctuations in stock and foreign exchange markets due to overseas situations including economic
slowdown in China and other emerging countries, the policy trend of the new Administration in the U.S., and the U.K.’s
exit from the EU.
In the electronics industry, the principal sector of operations of the KAGA ELECTRONICS Group (“the Group”), market
conditions were challenging mainly due to continuing soft demands in the mobile device market for PCs and smartphones
and amusement machines market. On the other hand, there were growing demands in automotive devices markets with anincreasing use of electronics in automobiles and new markets for IoT (Note 1), big data, and artificial intelligence.
Under such environment, based on our corporate philosophy of “Everything we do is for our customers,” the Group has
improved management efficiency through business integration and reorganization and proactively invested resources ingrowing sectors in order to increase sales to major existing customers and expand overseas businesses. However,
performance was impacted by production adjustments by major customers in Japan and overseas and changes incommercial distribution of products.
Consolidated net sales decreased 7.4% from the previous fiscal year to 227,209 million yen, operating income decreased
11.7% to 6,879 million yen, and ordinary income fell 7.1% to 7,343 million yen. Profit attributable to owners of parent
increased 28.3% to 6,975 million yen mainly due to a decrease in income taxes caused by tax effect accounting.
(Note 1) Internet of Things: New services and business models, or technologies that connect all things through the Internet.

Business segment performance was as follows.
(a) Electronic components (Development, manufacture and sale of semiconductors, general electronic components andother products, the electronics manufacturing service (EMS (Note 2) ), and other activities)
The volume of semiconductors decreased due to production adjustments by major customers in Japan and overseas,stagnant amusement machines business, and a change in the agency policy by semiconductor manufacturers. As aresult, net sales decreased 9.6% to 171,227 million yen and segment income decreased 24.5% to 4,917 million yen.
(Note 2) Electronics Manufacturing Service: Provision of product development and manufacturing services on an outsourcing basis(b) Information equipment (Sales of PCs, PC peripherals, home electric appliances, photograph and imaging products,
original brand products, and other products)
The volume of information equipment increased due to favorable growth in sales of housing-related products as well as
reinforced marketing campaigns for PCs and other consumer products. We also strived to improve management
efficiency through reorganization of the Group companies with an aim to improve operating margin. As a result, net
sales increased 4.1% to 42,547 million yen, and segment income rose 83.8% to 1,491 million yen.
(c) Software (Production of computer graphics, planning and development of amusement products, and other activities)
The segment focused on production of computer graphics for animation and development of various kinds of software.
As a result, net sales increased 9.0% to 3,159 million yen, but segment income decreased 24.0% to 528 million yen.
(d) Others (Repair and supports for electronics equipment, and sales of amusement equipment and sports goods, and others)
Sales of arcade amusement machines and golf products in Japan were sluggish due to a downturn in consumer
spending. As a result, net sales decreased 15.3% to 10,274 million yen, and operating loss was 212 million yen(operating loss of 343 million yen in the previous fiscal year).

(2) Overview of financial condition
Assets, liabilities and net assets
Total assets as of March 31, 2017 increased 1,470 million yen to 125,751 million yen mainly due to increase in cash
and deposits.
Liabilities decreased 2,653 million yen to 59,819million yen mainly due to repayments of long-term loans payable.
Net assets increased 4,123 million yen to 65,932 million yen as a result of recording profit attributable to owners ofparent.

2

(3) Cash flows
Cash and cash equivalents as of March 31, 2017 increased 4,141 million yen from March 31, 2016 to 26,021 million
yen.
(Operating activities)
Net cash provided by operating activities was 10,746 million yen (9,546 million yen provided in the previous fiscal
year) mainly due to recording profit before income taxes.
(Investing activities)
Net cash used in investing activities was 258 million yen (1,263 million yen used in the previous fiscal year) mainly
due to purchase of property, plant and equipment.
(Financing activities)
Net cash used by financing activities was 6,118 million yen (3,067 million yen used in the previous fiscal year) mainly
due to repayments of long-term loans payable, cash dividends paid, and purchase of treasury shares.

(4) Future outlook
For the fiscal year ending March 31, 2018, the outlook of the electronics industry will be uncertain mainly due to signs ofslowdown in mobile device market while automotive devices market and medical/healthcare market are expected to expand
and emerging markets are expected to grow.
Under such circumstances, the Group will strive to expand existing businesses as well as focus on expansion of valueadded business, mainly in EMS, through further reinforcement of sales activities in growing sectors including automotive
devices.
Based on this outlook, the current forecast for the consolidated performance in the fiscal year ending March 31, 2018 is asfollows:(Consolidated performance forecast) (Year on year)
Net sales
230,000 million yen
Operating income
7,000 million yen
Ordinary income
7,500 million yen
Profit attributable to owners of parent
5,500 million yen(up 1.2%)(up 1.8%)(up 2.1%)(down 21.2%)(5) Basic policy for earnings allocations and dividends in the current and next fiscal years
Our basic policy is to maintain stable and continuous payment of dividends that reflect consolidated performance as well as
to strengthen financial position and management foundation from a long-term perspective.
Based on this policy, the Medium-term Management Plan 2018, announced on November 4, 2015, includes the goal of
paying a stable dividend while maintaining a consolidated payout ratio of 25% to 35%.
Consequently, we plan to pay a year-end dividend of 35 yen per share, the sum of an ordinary dividend of 20 yen and an
extraordinary dividend of 15 yen reflecting results of operations for the fiscal year ended March 31, 2017. As a result,annual dividend, including the interim dividend of 25 yen per share, amounts to 60 yen per share.
For the fiscal year ending on March 31, 2018, a dividend per share of 60 yen, including an interim dividend of 25 yen, isplanned.

3

2. Corporate GroupThe KAGA ELECTRONICS Group (“the Group”) consists of KAGA ELECTRONICS CO., LTD. (“the Company”), 45
consolidated subsidiaries (17 in Japan, 28 overseas). These companies are engaged primarily in the following activities: theelectronic components segment includes the development, manufacture and sale of semiconductors, general electronic
components and other products, the electronics manufacturing service (EMS), and other activities. The informationequipment segment includes sales of PCs, PC peripherals, home electric appliances, photograph and imaging products,
original brand products, and other products. The software segment includes the production of computer graphics, planningand development of amusement products, and other activities. The others segment includes the repair and supports forelectronics equipment, and sales of amusement equipment and sports goods, and others.
For the fiscal year ended March 31, 2017, changes in subsidiaries and associates in each segment are as follows.
(Electronic components)- On January 13, 2017, TAXAN MEXICO S.A. de C.V. was established in San Luis Potosí, Mexico as a consolidated
subsidiary of the Company with the aim of expanding business with local subsidiaries of Japanese corporations.
(Information equipment)- On April 1, 2016, KAGA HIGHTECH CO., LTD. and KAGA AGENCY CO., LTD., an indirect subsidiary, merged, with
KAGA HIGHTECH as the surviving company. Also, KAGA SOLUTION NETWORK CO., LTD. and KAGAEDUCATIONAL MARKETING CO., LTD., an indirect subsidiary, merged, with KAGA SOLUTION NETWORK as thesurviving company. On the same day, KAGA SOLUTION NETWORK and KAGA HIGHTECH merged, with KAGASOLUTION NETWORK as the surviving company.
(Software)- On May 6, 2016, the liquidation of CyberFront Corporation, a consolidated subsidiary of the Company until March 31,
2016, was completed.
- On March 21, 2017, the liquidation of WORKBIT CORPORATION, a consolidated subsidiary of the Company until
March 31, 2016, was completed.
(Others)- On April 20, 2016, the liquidation of KAGA CREATE CO., LTD., a consolidated subsidiary of the Company until March
31, 2016, was completed.
- On November 1, 2016, SANKOH Engineering Corporation, engaged in contracted computer repair business and worker
dispatch business, became a subsidiary of Micro Solution CO., LTD., a consolidated subsidiary of the Company.
* In addition to the above, on January 31, 2017, KAGA DEVICES CO., LTD., a consolidated subsidiary of the Company,
sold Explay Japan Co., Ltd., the Company’s associate not accounted for using the equity method until March 31, 2016. As
a result, X.D.M LTD., a subsidiary of Explay Japan, was also excluded from the scope of the Company’s associates notaccounted for using the equity method.

3. Basic Approach to the Selection of Accounting Standards
The KAGA ELECTRONICS Group prepares consolidated financial statements based on Japanese accounting standards.
Going forward, we will consider adopting IFRS standards with due consideration to financial market trends, share of foreign
investors, and the organizational costs resulting from the adoption of IFRS standards.

44. Consolidated Financial Statements and Major Notes(1) Consolidated balance sheet(Million yen)
FY 2016(As of March 31, 2016)

FY 2017(As of March 31, 2017)

ASSETS
Current assets
Cash and deposits

22,516

26,423

Notes and accounts receivable - trade51,56846,774

Electronically recorded monetary claims - operating

3,227

5,234

166

188

14,898

14,675

266

365

4,010

4,284

849

1,340

4,638

4,562

(179)

(166)

101,961

103,684

7,838

7,902

(2,726)(3,043)

Buildings and structures, net

5,112

4,859

Machinery, equipment and vehicles

5,474

5,593

Accumulated depreciation(3,481)(3,579)Machinery, equipment and vehicles, net

1,992

2,014

Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets
Other
Noncurrent
assetsAllowance for
doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation

Tools, furniture and fixtures

3,843

3,774

Accumulated depreciation(3,029)(3,032)Tools, furniture and fixtures, net
Land

813

742

4,138

4,126

0

3

12,058

11,745

Goodwill

495

406

Software422

363

Construction in progress
Total property, plant and equipment
Intangible assets

85

71

1,003

841

Investment securities

6,519

6,761

Deferred tax assets

257

240

Guarantee deposits

739

735

Insurance funds
Other

916

936

1,931

1,529

Allowance for doubtful accounts(1,107)

(723)

Other
Total intangible assets
Investments and other assets

Total investments and other assets

9,257

9,479

Total non-current assets

22,31922,067124,281

125,751

Total assets

5

(Million yen)
FY 2016(As of March 31, 2016)

FY 2017(As of March 31, 2017)

LIABILITIESCurrent liabilities
Notes and accounts payable - trade36,85837,553

Short-term loans payable

6,295

4,883

Accrued expenses

3,311

3,387

Income taxes payable

995

888

Provision for directors’ bonuses

185

204

Other

3,523

3,325

Total current liabilities

51,16950,242Long-term loans payable

6,007

4,603

Deferred tax liabilities

1,246

1,213

Provision for directors’ retirement benefits

1,211

1,222

Net defined benefit liability

1,774

1,669

Asset retirement obligations

142

144

Other

919

723

11,303

9,576

62,47259,819

Capital stock

12,133

12,133

Capital surplus

13,912

13,912Retained earnings

35,19540,476

Treasury shares(539)(2,040)Total shareholders’ equity

60,70264,481

681

1,159

4

0

713

421

Non-current liabilities

Total non-current liabilities
Total liabilities
NET ASSETS
Shareholders’ equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans

(338)

(190)

Total accumulated other comprehensive income

1,061

1,391

44

59

61,80865,932

124,281

125,751

Non-controlling interests
Total net assets
Total liabilities and net assets

6

(2) Consolidated statements of income and comprehensive income(Million yen)
FY 2016(April 1, 2015 –March 31, 2016)

FY 2017(April 1, 2016 –March 31, 2017)

Net sales

245,387

227,209

Cost of sales

211,739

195,983

Gross profit

33,64831,225

Selling, general, and administrative expenses

25,85924,346

Operating income

7,788

6,879

Interest income

6459

Dividends income

103

103

Commission fee

277

222

Non-operating income

House rent income

91

77

Other

269

282

Total non-operating income

806

745

Interest expenses

134

128

Foreign exchange losses

477

88

Other

74

63

Non-operating expenses

686

280

7,908

7,343

Gain on sales of non-current assets

423Gain on sales of investment securities

1

110

Gain on bargain purchase-

28

Gain on transfer of business-89

Settlement received-

372

Total extraordinary income

6624

Loss on retirement of non-current assets

915

Impairment loss

31

16

Loss on sales of investment securities

631

Loss on valuation of investment securities

947

Loss on valuation of golf club membership

42

11

Merger expenses

160-

Special retirement expenses

43-

Total non-operating expenses
Ordinary income
Extraordinary income

Extraordinary loss

Other

33

13

Total extraordinary loss

336

136

Profit before income taxes

7,578

7,832

Income taxes - current

1,973

1,610

Income taxes - deferred

171

(768)

Total income taxes

2,145

842

Profit

5,433

6,989

Profit attributable to owners of parent

5,437

6,975

(3)

14

Profit (loss) attributable to non-controlling interests

7

(Million yen)
FY 2016(April 1, 2015 –March 31, 2016)

FY 2017(April 1, 2016 –March 31, 2017)

Valuation difference on available-for-sale securities

(109)

479

Deferred gains or losses on hedges

(19)

(4)

(1,749)

(292)

(87)

147

(1,966)330

Comprehensive income

3,466

7,320

Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

3,472

7,305

(5)

15

Other comprehensive income

Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income8(3) Consolidated statement of changes in equity
For the fiscal year ended March 2016 (April 1, 2015 – March 31, 2016)(Million yen)
Shareholders’equity
CapitalsurplusCapital stock

Balance at the beginning of current period

12,133Retainedearnings

13,912

Total
shareholders’equityTreasuryshares31,029(537)

56,538Changes of items during period
Dividends of surplus(1,271)(1,271)

Profit attributable to owners of parent

5,437

5,437

Purchase of treasury shares
Disposal of treasury shares

0

(1)

(1)

0

0

Net changes of items other thanshareholders’ equity
Total changes of items during period

-

0

4,165

(1)

4,164

Balance at the end of current period

12,133

13,91235,195(539)

60,702

Accumulated other comprehensive income
Valuationdifference on
availablefor-salesecurities
Balance at the beginningof current period

790

Deferred
gains orlosses onhedges23

Foreigncurrencytranslation
adjustment

Remeasurements ofdefinedbenefit plans

Total
accumulated
othercomprehensive
incomeNoncontrollinginterests

Total net
assets

2,462

(250)

3,026

38

59,603

Changes of items during
periodDividends ofsurplus(1,271)

Profit attributable toowners of parent

5,437

Purchase of treasury
shares(1)

Disposal of treasury
shares0

Net changes of
items other thanshareholders’ equity

(109)

(19)

(1,748)(87)(1,964)

5(1,959)Total changes of items
during period

(109)

(19)

(1,748)(87)(1,964)5

2,204

Balance at the end ofcurrent period

681

4

713

(338)

1,061

44

61,8089

For the fiscal year ended March 2017 (April 1, 2016 –March 31, 2017)(Million yen)
Shareholders’equity
CapitalsurplusCapital stock

Balance at the beginning of current period

12,133Retainedearnings

13,912

Total
shareholders’equityTreasuryshares35,195(539)

60,702

Changes of items during period
Dividends of surplus(1,695)(1,695)

Profit attributable to owners of parent

6,975

6,975

Purchase of treasury shares
Disposal of treasury shares(1,501)(1,501)000

Net changes of items other thanshareholders’ equity
Total changes of items during period

-

0

5,280

(1,501)

3,779

Balance at the end of current period

12,133

13,91240,476(2,040)64,481

Accumulated other comprehensive income
Valuationdifference on
availablefor-salesecurities
Balance at the beginningof current period

681

Deferred
gains orlosses onhedges4

Foreigncurrencytranslation
adjustment

Remeasurements ofdefinedbenefit plans

Total
accumulated
othercomprehensive
incomeNoncontrollinginterests

Total net
assets

713

(338)

1,061

44

61,808Changes of items during
periodDividends ofsurplus(1,695)

Profit attributable toowners of parent

6,975

Purchase of treasury
shares(1,501)

Disposal of treasury
shares0

Net changes of
items other thanshareholders’ equity

478

(4)

(292)

147

329

15

344

Total changes of items
during period

478

(4)

(292)

147

329

15

4,123

Balance at the end ofcurrent period

1,159

0

421

(190)

1,391

59

65,93210

(4) Consolidated statement of cash flows(Million yen)
FY 2016(April 1, 2015 –March 31, 2016)

FY 2017(April 1, 2016 –March 31, 2017)

Profit before income taxes

7,578

7,832

Depreciation

1,604

1,452

Impairment loss

31

16

Amortization of goodwill

151

88

Increase (decrease) in net defined benefit liability
Increase (decrease) in provision for directors’
retirement benefits
Increase (decrease) in provision for directors’
bonuses
Increase (decrease) in allowance for doubtful
accounts
Interest and dividend income

17

124

(289)

14

(6)

18

18

(11)

(167)

(162)

Interest expenses

134

128

Loss (gain) on sales of property, plant and equipment

(4)

(18)

Loss on retirement of non-current assets

915

Loss (gain) on sales of investment securities

4

(79)

Loss (gain) on valuation of investment securities

947

Decrease (increase) in notes and accounts receivable trade

2,187

2,602

Decrease (increase) in inventories

2,677

(240)

(2,407)

933

(24)

(390)

Increase (decrease) in accrued expenses

22

45

Decrease (increase) in advance payments

(335)

143

195

92

(59)

89

Cash flows from operating activities

Increase (decrease) in notes and accounts payable trade
Decrease (increase) in accounts receivable - other

Decrease (increase) in consumption taxes refund
receivable
Decrease (increase) in other current assets
Increase (decrease) in other current liabilities

452

(94)

Other, net

(24)

(138)

Subtotal

11,774

12,509169

164

Interest and dividend income received
Interest expenses paid
Income taxes paid
Other, net
Net cash provided by (used in) operating activities

11

(134)

(128)

(2,257)(1,792)

(5)

(5)

9,546

10,746

(Million yen)
FY 2016(April 1, 2015 –March 31, 2016)

FY 2017(April 1, 2016 –March 31, 2017)

Payments into time deposits

(560)

(630)

Proceeds from withdrawal of time deposits

412

854

Purchase of property, plant and equipment

Cash flows from investing activities(1,393)(967)

Proceeds from sales of property, plant and equipment

437

119

Purchase of intangible assets

(261)

(109)

Purchase of investment securities

(510)

(387)

Proceeds from sales of investment securities
Proceeds from purchase of shares of subsidiaries
resulting in change in scope of consolidation
Payments of short-term loans receivable

159

855

8

20

(3)

(2)

Collection of short-term loans receivable
Purchase of insurance funds

2

5

(17)

(17)

Proceeds from cancellation of insurance funds

375

2

Payments for guarantee deposits

(25)

(15)

Proceeds from collection of guarantee deposits
Other payments
Other proceeds

74

22

(177)

(90)

217

81

(1,263)(258)

Increase (decrease) in short-term loans payable

(429)

(397)

Proceeds from long-term loans payable

182

66

Repayments of long-term loans payable(1,428)(2,428)(1)(1,501)(1,270)(1,693)

(120)

(164)

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(3,067)(6,118)

(905)

(227)

4,310

4,141

Cash and cash equivalents at beginning of period

17,56921,879Cash and cash equivalents at end of period

21,87926,021

Net cash provided by (used in) investing activities
Cash flows from financing activities

Purchase of treasury shares
Cash dividends paid
Other, net

12(5) Notes to consolidated financial statements(Notes to going concern assumptions)Not applicable(Changes in accounting policies)(Application of Practical Solution on a change in depreciation method due to Tax Reform 2016)
Following the revisions to the Corporate Tax Law, the Company has applied Practical Solution on a change in depreciation
method due to Tax Reform 2016 (Practical Issues Task Force No. 32, June 17, 2016) effective April 1, 2016. As a result,the depreciation method for leasehold improvements and structures acquired on or after April 1, 2016 was changed fromthe declining-balance method to the straight-line method.
The impact of the revision on earnings was insignificant.
(Additional information)(Application of Revised Implementation Guidance on Recoverability of Deferred Tax Assets)
Beginning with the current fiscal year, the Company is using Revised Implementation Guidance on Recoverability ofDeferred Tax Assets (ASBJ Implementation Guidance No. 26, March 28, 2016).

(Segment information, etc.)
a. Segment information
1. Description of reportable segments
The Group’s reportable segments are those for which separate financial information is available and regular evaluation by
the Company’s management is being performed in order to decide how resources are allocated among the Group. The
Company classifies subsidiaries and associates according to their products and services, and implements comprehensive
strategies in Japan and overseas. Consequently, the Group has four reportable segments that are made of different
categories of products and services: electronic components, information equipment, software and others. The electronic
components segment includes the development, manufacture and sale of semiconductors, general electronic components
and other products, the electronics manufacturing service (EMS), and other activities. The information equipment segment
includes sales of PCs, PC peripherals, home electric appliances, photograph and imaging products, original brand products,
and other products. The software segment includes the production of computer graphics, planning and development of
amusement products, and other activities. The others segment includes the repair and supports for electronics equipment,
and sales of amusement equipment and sports goods, and others.
2. Methods of measurement for the amounts of net sales, profit (loss), assets, and other items for each reportable segment
The accounting policies of each reportable segment are consistent to the accounting standards adopted to prepare
consolidated financial statements.

13

3. Information about net sales, profit (loss), assets, and other items is as follows:
For the fiscal year ended March 2016 (April 1, 2015 – March 31, 2016)(Million yen)

Reportable segments
Adjustment*1

Consolidated*2245,387-

245,387

2,225

7,240

(7,240)-6,340

14,348

252,628(7,240)245,387

811

695

(343)

7,679

109

7,788

110,317

14,581

2,776

5,831

133,507(9,226)124,281

Depreciation

1,042

68

106

103

1,321

(15)

1,305

Increase inproperty, plant andequipment andintangible assets

1,055

75

124

605

1,860

(205)

1,655

Electronic
components

Informationequipment

Software

OthersTotal

189,486

40,8802,897

12,123

970

602

3,442

190,456

41,482

Segment income(loss)

6,515

Segment assets

Net sales:
Sales to externalcustomers
Inter-segment sales
or transfers
Total

OthersFor the fiscal year ended March 2017 (April 1, 2016 – March 31, 2017)(Million yen)

Reporting segments
Adjustment*1

Consolidated*2

227,209-227,209

2,611

5,380

(5,380)-4,714

12,885232,589(5,380)227,209

1,491

528

(212)

6,724

154

6,879

14,320

2,083

5,185

130,642(4,890)125,751

70

98

94

1,162

(11)

1,151

86

86

85

1,114

(37)

1,076

Electronic
components

Informationequipment

Software

OthersTotal

171,227

42,547

3,159

10,274

695

518

1,555

171,923

43,065

4,917

Net sales:
Sales to externalcustomers
Inter-segment sales
or transfers
Total
Segment income(loss)

109,053
Segment assets

OthersDepreciation

898

Increase inproperty, plant and855
equipment andintangible assets
Notes:
1. The adjustment is as follows:14(1) Segment income(Million yen)
Fiscal year ended March 2016

Fiscal year ended March 2017

Elimination of inter-segment trade

147

154

Amortization of goodwill

(38)

-

Total

109

154

(2) Segment assets(Million yen)
Fiscal year ended March 2016

Fiscal year ended March 2017(11,363)(6,945)

Corporate *

2,137

2,054

Total

(9,226)(4,890)Elimination of inter-segment trade* Total corporate assets principally consist of surplus funds of the Company under management (cash and securities, etc.).
(3) Depreciation(Million yen)
Fiscal year ended March 2016

Fiscal year ended March 2017

Elimination of inter-segment trade

(15)

(11)

Total

(15)

(11)

(4) Increase in property, plant and equipment and intangible assets(Million yen)
Fiscal year ended March 2016

Fiscal year ended March 2017

Elimination of inter-segment trade

(205)

(37)

Total

(205)

(37)

2. Segment income is adjusted with operating income on the consolidated statements of income and comprehensive income.
b. Associated information
For the fiscal year ended March 2016 (April 1, 2015 – March 31, 2016)
Geographic information
Net sales
Japan

North America

EuropeEast Asia

167,914
5,840
2,662
68,970Notes: 1. Net sales are classified according to the customers’ geographic locations.
2. Countries and regions are classified according to geographical proximity.
3. Countries and regions outside Japan are broken down into the following geographical areas:(1) North America: United States(2) Europe: United Kingdom, Czech Republic, and Russia(3) East Asia: Hong Kong, Singapore, Taiwan, Korea, China, Malaysia, Thailand, India, and Indonesia

15(Million yen)Total
245,387

For the fiscal year ended March 2017 (April 1, 2016 – March 31, 2017)
Geographic information
Net sales
Japan

North America

EuropeEast Asia

151,912
5,995
2,518
66,783
Notes: 1. Net sales are classified according to the customers’ geographic locations.
2. Countries and regions are classified according to geographical proximity.
3. Countries and regions outside Japan are broken down into the following geographical areas:(1) North America: United States(2) Europe: United Kingdom, Czech Republic, and Russia(3) East Asia: Hong Kong, Singapore, Taiwan, Korea, China, Malaysia, Thailand, India, and Indonesia(Million yen)Total
227,209(Per-share information)(Yen)
FY 2016(April 1, 2015 – March 31, 2016)

FY 2017(April 1, 2016 – March 31, 2017)

Net assets per share

2,185.94

2,401.00

Earnings per share

192.43249.43

Note: 1. Earnings per share (diluted) have not been disclosed because there were no potentially dilutive shares.
2. The basis of calculation of earnings per share is as follows.
FY 2016(April 1, 2015 – March 31, 2016)

FY 2017(April 1, 2016 – March 31, 2017)

5,437

6,975

-

-

5,437

6,975

28,255,634

27,967,362

Earnings per share
Profit attributable to owners of parent(million yen)
Profit not attributable to commonshareholders (million yen)
Profit attributable to owners of parent
allocated to common stock (million yen)
Average number of common stock
outstanding during the fiscal year

(Subsequent events)
Not applicable165. Non-consolidated Financial Statements(1) Balance sheet(Million yen)
FY 2017(As of March 31, 2017)

FY 2016(As of March 31, 2016)
ASSETS
Current assets
Cash and deposits
Notes receivable - trade
Electronically recorded monetary claims - operating
Accounts receivable - trade
Securities
MerchandiseWork in process
Supplies
Advance payments - trade
Prepaid expenses
Deferred tax assets
Short-term loans receivable from subsidiaries andassociates
Accounts receivable - other
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Structures
VehiclesTools, furniture and fixtures
Land
Lease assets
Total property, plant and equipment
Intangible assets
Trademark right
Software
Other
Total intangible assets
Investments and other assets
Investment securities
Shares of subsidiaries and associates
Investments in capital
Investments in capital of subsidiaries andassociates
Long-term loans receivable from subsidiaries
and associates
Claims provable in bankruptcy, claims provablein rehabilitation and other
Long-term prepaid expenses
Deferred tax assets
Other
Allowance for doubtful accounts
Allowance for investment loss
Total investments and other assets
Total non-current assets
Total assets

17

9,600
904
2,381
19,830
166
3,866
5
34
633
129
427

11,706977
3,792
17,027
188
3,699
40
4
566
132
463

14,302

11,784

2,294
318(6,428)48,4662,192
203(5,445)47,334

2,772
19
7
298
3,412
79
6,590

2,631
16
0
197
3,411
77
6,334

4
186
70
261

4
139
57
201

5,866
7,658
27

6,058
7,923
26

13

13

987

637

1,949

1,930

156
193
1,622
(2,562)(836)
15,077
21,92970,396

214
126
1,629
(2,308)(340)
15,91322,44969,784

(Million yen)
FY 2016(As of March 31, 2016)
LIABILITIESCurrent liabilities
Notes payable - trade
Accounts payable - trade
Short-term loans payable
Short-term loans payable to subsidiaries andassociates
Current portion of long-term loans payable
Lease obligations
Accounts payable - otherAccrued expenses
Income taxes payable
Advances received
Deposits received
Provision for directors’ bonuses
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Lease obligations
Provision for retirement benefits
Provision for directors’ retirement benefits
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
NET ASSETS
Shareholders’ equity
Capital stock
Capital surplus
Legal capital surplus
Other capital surplus
Total capital surplus
Retained earnings
Legal retained earnings
Other retained earnings
General reserve
Retained earnings brought forward
Total retained earnings
Treasury shares
Total shareholders’ equity
Valuation and translation adjustments
Valuation differences on available-for-salesecurities
Deferred gains or losses on hedges
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

18

FY 2017(As of March 31, 2017)

1,931
13,303732

1,834
13,730
1,626

2,601

3,209

2,428
59
751
1,411
65
158
107
180
309
24,038

1,448
59
499
1,326
155
264
69
200
229
24,654

5,825
110
268
1,075
97
301
7,677
31,715

4,376
65
316
1,128
98
257
6,243
30,89812,133

12,133

13,912
0
13,912

13,912
0
13,912

618

618

7,000
4,954
12,573(539)
38,0807,000
6,214
13,833(2,040)37,839

587

1,046

13
600
38,68070,396(0)
1,046
38,88569,784

(2) Statement of income(Million yen)
FY 2016(April 1, 2015 –March 31, 2016)

FY 2017(April 1, 2016 –March 31, 2017)

Net sales

85,72375,666

Cost of sales

75,733

66,739Gross profit

9,989

8,927

Selling, general and administrative expenses

8,911

8,896

Operating income

1,077

31

Interest income

108

75

Dividend income

2,108

2,083

-

99

Non-operating income

Foreign exchange gains
Other

415

394

2,633

2,653

Interest expenses

101

89

Foreign exchange losses

32-

Depreciation of assets for rent

19

15

Other

44

28

Total non-operating income
Non-operating expenses

Total non-operating expenses
Ordinary income

197

134

3,513

2,550

0

110

267

495

2

30

269

636

6

31

9

47

100

-

202
160
25
505
3,277
236
183
420
2,856

174
12
265
2,921
102
(136)
(34)
2,955

Extraordinary income
Gain on sales of investment securities
Reversal of allowance for investment loss
Other
Total extraordinary income
Extraordinary losses
Loss on sales of investment securities
Loss on valuation of investment securities
Loss on valuation of shares of subsidiaries andassociates
Provision of allowance for doubtful accounts
Merger expenses
Other
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Profit19

(3) Statement of changes in equity
For the fiscal year ended March 2016 (April 1, 2015 – March 31, 2016)(Million yen)
Shareholders’ equity
Capital surplus
Capitalstock

Retained earnings

Legal
capitalsurplus

OthercapitalsurplusTotal
capitalsurplusLegalretainedearnings

13,912-

13,912

618

Other retained
earnings

Total
retainedearnings

Generalreserve

Retainedearnings
brought
forward

7,000

3,369

10,987

Dividends of surplus(1,271)(1,271)

Profit

2,856

2,856

Balance at the beginning of current
period12,133

Changes of items during period

Purchase of treasury shares
Disposal of treasury shares

00

Net changes of items other thanshareholders' equity
Total changes of items during period

-

-

0

0

-

-

1,585

1,585

Balance at the end of current period

12,133

13,912

0

13,912

618

7,000

4,954

12,573

Shareholders’ equity

Balance at the beginning of current
periodValuation and translation adjustments

TreasurysharesTotal shareholders’equityValuationdifferenceonavailablefor-salesecurities(537)

36,496

672

Deferred
gains orlosses onhedges18

Totalvaluationandtranslation
adjustments
690

Total net
assets37,186

Changes of items during period
Dividends of surplus(1,271)(1,271)

Profit

2,856

2,856

Purchase of treasury shares

(1)

(1)

(1)

Disposal of treasury shares

0

0

0

Net changes of items other thanshareholders’ equity

(84)

(5)

(90)

(90)

Total changes of items during period

(1)

1,584

(84)

(5)

(90)

1,493

Balance at the end of current period(539)

38,080

587

13

600

38,68020

For the fiscal year ended March 2017 (April 1, 2016 –March 31, 2017)(Million yen)
Shareholders’ equity
Retained earnings

Capital surplus
Capital
stock

Legal
capitalsurplus

OthercapitalsurplusTotal
capitalsurplusLegalretainedearnings

13,912

0

13,912

618

Other retained
earnings

Total
retainedearnings

Generalreserve

Retainedearnings
brought
forward

7,000

4,954

12,573

Dividends of surplus(1,695)(1,695)

Profit

2,955

2,955

Balance at the beginning of current
period12,133

Changes of items during period

Purchase of treasury shares
Disposal of treasury shares

00

Net changes of items other thanshareholders’ equity
Total changes of items during period

-

-

0

0

-

-

1,259

1,259

Balance at the end of current period

12,133

13,912

0

13,912

618

7,000

6,214

13,833

Shareholders’ equity

Balance at the beginning of current
periodValuation and translation adjustments

TreasurysharesTotal shareholders’equityValuationdifferenceonavailablefor-salesecurities(539)

38,080587

Deferred
gains orlosses onhedges13

Totalvaluationandtranslation
adjustments
600

Total net
assets38,680Changes of items during period
Dividends of surplus(1,695)(1,695)

Profit

2,955

2,955

Purchase of treasury shares(1,501)(1,501)(1,501)

Disposal of treasury shares

0

0

0

Net changes of items other thanshareholders’ equity

459

(13)

446

446

Total changes of items during period(1,501)

(241)

459

(13)

446

204

Balance at the end of current period(2,040)37,839

1,046

(0)

1,046

38,88521