Kaga Electronics Co., Ltd.
and Consolidated Subsidiaries
Consolidated Financial Statements for theYear Ended March 31, 2017
and Independent Auditors' ReportKaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Balance SheetAt March 31, 2017

Millions of Yen
2016
2017

ASSETS
CURRENT ASSETS:
Cash and bank deposits
Notes and accounts receivable-trade
Electronically recorded monetary claims
Short-term investment securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets
OthersAllowance for doubtful accounts
Total CURRENT ASSETS¥

Thousands of
U.S. Dollars(Note 1)
2017

22,516
51,5683,227
166
14,898
266
4,010
849
4,638
(179)
101,961¥ 26,423
46,774
5,234
188
14,675
365
4,284
1,340
4,562
(166)
103,684

NONCURRENT ASSETS:PROPERTY, PLANT AND EQUIPMENT
Buildings and structures
Accumulated depreciation
Buildings and structures, net ※2

7,838(2,726)
5,112

7,902
(3,043)
4,859

70,442(27,128)
43,313

Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net

5,474(3,481)
1,992

5,593
(3,579)2,014

49,854(31,901)
17,953Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net

3,843(3,029)813

3,774(3,032)742

33,648(27,028)
6,619

Land ※2
Construction in progress
Total PROPERTY, PLANT AND EQUIPMENT

4,138
012,0584,126
3
11,74536,782
27
104,697

INTANGIBLE ASSETS
Goodwill
Software
OthersTotal INTANGIBLE ASSETS

495
422
85
1,003

406
363
71
841

3,621
3,241
641
7,504

INVESTMENTS AND OTHER ASSETS:
Investment securities ※1
Deferred tax assets
Guarantee deposits
Insurance funds
OthersAllowance for doubtful accounts
Total INVESTMENTS AND OTHER ASSETS

6,519
257
739
916
1,931
(1,107)
9,257

6,761
240
735
936
1,529
(723)
9,479

60,268
2,144
6,552
8,350
13,630(6,449)84,498

Total NONCURRENT ASSETS

22,31922,067

196,699¥ 124,281¥ 125,751$ 1,120,882

Total ASSETS-1-$

235,522416,926
46,661
1,683
130,813
3,255
38,188
11,95040,667(1,485)924,182

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Balance SheetAt March 31, 2017

Millions of Yen
2016
2017

LIABILITIESCURRENT LIABILITIES:
Notes and accounts payable-trade
Short-term loans payable ※2
Accrued expenses
Income taxes payable
Provision for directors' bonuses
OthersTotal CURRENT LIABILITIES¥Thousands of
U.S. Dollars(Note 1)
2017

36,858
6,295
3,311
995
185
3,523
51,169¥ 37,553
4,883
3,387
888
204
3,325
50,242$ 334,730
43,52730,198
7,919
1,820
29,641
447,838

6,007
1,246
1,211
1,774
142
919
11,303

4,603
1,213
1,222
1,669
144
723
9,576

41,033
10,813
10,89814,882
1,288
6,446
85,36162,47259,819533,200

NET ASSETS:SHAREHOLDERS’ EQUITY
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total SHAREHOLDERS’ EQUITY

12,133
13,91235,195(539)
60,702

12,133
13,91240,476(2,040)64,481

108,151
124,008
360,781(18,185)574,756

ACCUMULATED OTHER COMPREHENSIVE INCOME
Changes in the fair value of available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit obligations
Total ACCUMULATED OTHER COMPREHENSIVE INCOME

681
4
713
(338)
1,061

1,159
0
421
(190)
1,391

10,3382
3,756(1,697)
12,39944
61,80859
65,932526
587,682¥ 124,281¥ 125,751$ 1,120,882

NONCURRENT LIABILITIES:Long-term loans payable
Deferred tax liabilities
Provision for directors' retirement benefits
Net defined benefit liabilities
Asset retirement obligations
OthersTotal NONCURRENT LIABILITIES
Total LIABILITIES

Non-controlling interests
Total NET ASSETS
Total LIABILITIES AND NET ASSETS

The accompanying notes are an integral part of these financial statements.

-2-

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Statement of Income and Comprehensive Income
For the Year Ended March 31, 2017

Millions of Yen
2016
2017
Net sales
Cost of sales ※2
Gross profit

Thousands of
U.S. Dollars(Note 1)
2017

¥ 245,387
211,739
33,648¥ 227,209
195,983
31,225$ 2,025,219
1,746,891
278,328

Selling, general and administrative expenses ※1, 2
Operating income

25,8597,788

24,3466,879

217,009
61,318

NON-OPERATING INCOME
Interest income
Dividend income
Commission fee
House rent income
OthersTotal NON-OPERATING INCOME

64
103
277
91
269
806

59
103
222
77
282
745

529
919
1,980
690
2,519
6,641

NON-OPERATING EXPENSES
Interest expenses
Foreign exchange losses
OthersTotal NON-OPERATING EXPENSES
Ordinary income

134
477
74
686
7,908

128
88
63
280
7,343

1,147
786
567
2,501
65,458EXTRAORDINARY INCOME
Gain on sales of property, plant and equipment ※3
Gain on sales of investment securities
Gain on bargain purchase
Gain on transfer of businessSettlement income received
Total EXTRAORDINARY INCOME

4
1
－
－
－
6

23
110
28
89
372
624

209
989
255
794
3,319
5,567

EXTRAORDINARY LOSS
Loss on disposal of property, plant and equipment ※4
Impairment loss
Loss on sales of investment securities
Loss on valuation of investment securities
Loss on valuation of golf club membership
Special retirement expenses
Business integration expenses
OthersTotal EXTRAORDINARY LOSS

9
31
6
9
42
43
160
33
336

15
16
31
47
11
－
－
13
¥ 136

139
148
280
424
101
－
－
121
1,215

¥

-3-

$

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Statement of Income and Comprehensive Income
For the Year Ended March 31, 2017

Millions of Yen
2016
2017
Income before income taxes¥

Thousands of
U.S. Dollars(Note 1)
2017

7,578

¥ 7,832$ 69,810

1,973
171
2,145
5,433

1,610
(768)
842
6,989

14,357(6,851)
7,505
62,304

Profit attributable to owners of the parent
Profit (loss) attributable to non-controlling interests

5,437
(3)

6,975
14

62,178125

OTHER COMPREHENSIVE INCOME
Changes in the fair value of available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit obligations, net of tax
Total OTHER COMPREHENSIVE INCOME ※5

(109)
(19)
(1,749)(87)(1,966)

479
(4)
(292)
147
330

4,271
(40)
(2,603)
1,315
2,942

¥

3,466

¥ 7,320$ 65,247

¥

3,472
(5)

¥ 7,30515$ 65,113
133

Income taxes-current
Income taxes-deferred
Total income taxes
Net income

Comprehensive income
Comprehensive income attributable to
Owners of the parent
Non-controlling interests

The accompanying notes are an integral part of these financial statements.

-4-Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Statement of Changes in Net Assets
For the Year Ended March 31, 2017
Fiscal year ended March 31, 2016
Millions of Yen
Shareholders’ equity
Capital stock

Balance at the beginning ofcurrent period
Changes of items during period
Dividends from surplus
Profit attributable to owners of
the parent
Purchase of treasury stock
Disposal of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Total

¥

Capital surplus

12,133¥Retained earnings

13,912¥

Treasury stock

31,029¥Total shareholders’equity(537 )¥(1,271)(1,271)

5,437

¥

0
13,912

¥

5,437
(1)
0

(1)
0

0

－
12,133¥4,165
35,19556,538

¥

(1)
(539)

¥

4,164
60,702Millions of Yen
Accumulated other comprehensive income
Changes in
the fair valueof availablefor-salesecurities

Balance at the beginning ofcurrent period¥
Changes of items during period
Dividends from surplus
Profit attributable to owners of
the parent
Purchase of treasury stock
Disposal of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Total
¥

790

Deferred
gains orlosses onhedgesForeigncurrencytranslation
adjustment¥¥ 2,462

23

Remeasurement ofdefinedbenefitobligations

¥

Total
accumulated
othercomprehen-sive income(250 ) ¥3,026

Noncontrollinginterests¥

Total net
assets38 ¥ 59,603(1,271)
5,437
(1)
0

(109)
(109)
681

(19)

¥

(1,748)(19)(1,748)
4 ¥
713 ¥

-5 -

(87)

(1,964)(87)(1,964)(338 ) ¥ 1,061 ¥5(1,959)52,204
44 ¥ 61,808

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Statement of Changes in Net Assets
For the Year Ended March 31, 2017
Fiscal year ended March 31, 2017
Millions of Yen
Shareholders’ equity
Capital stock

Balance at the beginning ofcurrent period
Changes of items during period
Dividends from surplus
Profit attributable to owners of
the parent
Purchase of treasury stock
Disposal of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Total

¥

Capital surplus

12,133¥Retained earnings

13,912¥

Treasury stock

35,195¥

Total shareholders’equity(539 )¥(1,695)(1,695)

6,975

¥

0
13,912¥

6,975(1,501)0(1,501)0

0－12,13360,7025,280¥ 40,476¥(1,501)(2,040)¥3,779
64,481Millions of Yen
Accumulated other comprehensive income
Changes in
the fair valueof availablefor-salesecurities

Balance at the beginning ofcurrent period
Changes of items during period
Dividends from surplus
Profit attributable to owners of
the parent
Purchase of treasury stock
Disposal of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Total

¥

681

Deferred
gains orlosses onhedges¥Foreigncurrencytranslation
adjustment

4

¥

713

Remeasurement ofdefinedbenefitobligations¥(338 )

Total
accumulated
othercomprehen-sive income¥ 1,061

Noncontrollinginterests¥

44

Total net
assets¥ 61,808(1,695)
6,975(1,501)0

478
478¥ 1,159

(4)

¥

(4)
0

-6 -

¥

(292)

147

329

(292)
421

147
¥ (190 )329¥ 1,391

15

¥

(344)

15
4,123
59 ¥ 65,932

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Statement of Changes in Net Assets
For the Year Ended March 31, 2017
Fiscal year ended March 31, 2017
Thousands of U.S. Dollars (Note 1)
Shareholders’ equity
Balance at the beginning ofcurrent period
Changes of items during period
Dividends from surplus
Profit attributable to owners of
the parent
Purchase of treasury stock
Disposal of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Total

Capital stock

Capital surplus$$

108,151

Retained earnings

124,007$

Total shareholders’equityTreasury stock

313,713$(4,805 )$(15,110)(15,110)

62,178$$0
124,008

62,178(13,381)0(13,381)00－108,151$

541,068

47,068360,781$(13,381)(18,185)$

33,688574,756

Accumulated other comprehensive income

Balance at the beginning ofcurrent period
Changes of items during period
Dividends from surplus
Profit attributable to owners of
the parent
Purchase of treasury stock
Disposal of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Total

Changes in
the fair valueof availablefor-salesecurities

Deferred
gains orlosses onhedgesForeigncurrencytranslation
adjustment

Remeasurement ofdefinedbenefitobligations

Total
accumulated
othercomprehen-sive income$ 6,073$$ 6,360$ (3,012 )$ 9,46443

Noncontrollinginterests

Total net
assets$$550,925

392(15,110)
62,178(13,381)
0
4,266

(40)

(2,602)

1,315

2,936

133

3,069

4,266

(40)

(2,602)

1,315

2,936

133

36,756$ 10,338$ 2$ 3,756$ (1,697 )$ 12,399

The accompanying notes are an integral part of these financial statements.

-7 -$ 526 $ 587,682

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Statement of Cash Flows
For the Year Ended March 31, 2017

Millions of Yen
2016
2017
NET CASH PROVIDED BY OPERATING ACTIVITIESIncome before income taxes
Depreciation and amortization
Impairment loss
Amortization of goodwill
Increase in net defined benefit liability(Decrease) increase in provision for directors' retirement benefits(Decrease) increase in provision for directors' bonuses
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expenses
Gain on sales of property, plant and equipment
Loss on retirement of property, plant and equipment
Loss (gain) on sales of investment securities
Loss on valuation of investment securities
Decrease in notes and accounts receivable-trade
Decrease (increase) in inventories(Decrease) increase in notes and accounts payable-trade(Increase) in accounts receivable-other
Increase in accrued expenses(Increase) decrease in advance payments
Decrease in consumption taxes refund receivable(Increase) decrease in other current assets
Increase (decrease) in other current liabilities
Others, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Others, net
Net cash provided by operating activities

-8 -

¥

¥

7,578
1,604
31
151
17
(289)
(6)
18
(167)
134
(4)
9
4
9
2,187
2,677
(2,407)
(24)
22
(335)
195
(59)
452
(24)
11,774169(134)(2,257)(5)
9,546¥ 7,832
1,452
16
88
124
14
18
(11)
(162)
128
(18)
15
(79)
47
2,602
(240)
933
(390)
45
143
92
89
(94)
(138)
12,509164(128)(1,792)(5)¥ 10,746

Thousands of
U.S. Dollars(Note 1)
2017$

69,81012,944
148
793
1,107
131
167
(105)
(1,449)
1,147
(163)
139
(709)
424
23,196(2,147)
8,317(3,482)
402
1,279
820
801
(840)
(1,233)
111,501
1,464(1,143)(15,979)(52)$ 95,791

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Statement of Cash Flows
For the Year Ended March 31, 2017
Thousands of
U.S. Dollars(Note 1)
2017

Millions of Yen
2016
2017
NET CASH USED IN INVESTING ACTIVITIESPayments for time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
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 receivableCollection of short-term loans receivable
Purchase of insurance funds
Proceeds from cancellation of insurance funds
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
Other payments
Other proceeds
Net cash used in investing activities

¥

(560)
412
(1,393)
437
(261)
(510)
159

¥

(630)
854
(967)
119
(109)
(387)
855

$

(5,619)7,620(8,620)1,067(979)(3,451)
7,624

8

20

181

(3)
2
(17)
375
(25)
74
(177)
217
(1,263)

(2)
5
(17)
2
(15)
22
(90)
81
(258)

(24)
45
(153)
25
(140)
200
(804)
722
(2,307)NET CASH USED IN FINANCING ACTIVITIES
Decrease in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Purchase of treasury stock
Cash dividends paid
Others, net
Net cash used in financing activities

(429)
182
(1,428)(1)(1,270)(120)(3,067)(397)
66(2,428)(1,501)(1,693)(164)(6,118)(3,547)594(21,641)(13,381)(15,093)(1,469)(54,538)

Effect of exchange rate change on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents-beginning balance
Cash and cash equivalents-ending balance ※1

(905)
4,310
17,56921,879(227)
4,141
21,87926,021(2,026)36,918
195,023
231,942

The accompanying note is an integral part of these financial statements.

-9 -

¥

¥

$

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements
For the Year Ended March 31, 2017
1.

BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements have been prepared in accordance with the provisions set forth in theJapanese Financial Instruments and Exchange Act and its related accounting regulations, and in conformity withaccounting principles generally accepted in Japan ("Japanese GAAP"), which are different in certain respects as
to application and disclosure requirements of International Financial Reporting Standards.
The consolidated financial statements are stated in Japanese yen, the currency of the country in which Kaga
Electronics Co., Ltd. (the "Company") is incorporated and operates. Amounts less than ¥1 million have been
omitted. As a result, the total shown in the consolidated financial statements and notes thereto do not necessarily
agree with the sum of the individual account balances. The translations of Japanese yen amounts into U.S.
dollar amounts are included solely for the convenience of readers outside Japan and have been made at the rateof ¥112.19 to $1, the rate of exchange at March 31, 2017. Such translations should not be construed as
representations that the Japanese yen amounts could be converted into U.S. dollars at that or any other rate.

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa. Consolidation
The consolidated financial statements include the accounts of the Company and all of its subsidiaries (49 in2016 and 45 in 2017) (together, the "Group").
Under the control and influence concept, those companies in which the Company, directly or indirectly, isable to exercise control over operations are fully consolidated, and those companies over which theCompany has the ability to exercise significant influence are accounted for by the equity method.
The Group does not have any unconsolidated subsidiaries or affiliated companies to which the equity
method is applied. Two affiliated companies to which the equity method is not applied were excluded fromaffiliated companies with the current fiscal year because their shares were sold.
.
All significant intercompany balances and transactions have been eliminated in consolidation. All material
unrealized profit included in assets resulting from transactions within the Group is eliminated.
The fiscal year-end of some of the Company's consolidated subsidiaries (12 in 2016 and 13 in 2017) is
December 31. The consolidated financial statements incorporate accounts of these companies withadjustments for significant transactions arising during the period from January 1 to March 31.
b.

Cash Equivalents
Cash equivalents are short-term investments that are readily convertible into cash and that are exposed toinsignificant risk of changes in value. Cash equivalents include time deposits and short-term investments, allof which mature or become due within three months of the date of acquisition.

c.

Inventories
The Company and its domestic subsidiaries state specific merchandise inventories ordered by customers at
the lower of cost, determined by the specific identification method, or market value and that othermerchandise inventories at the lower of cost, determined principally by the moving-average method, ormarket value.
The overseas subsidiaries state inventories at the lower of cost, determined principally by the first-in,
first-out method, or market value.

-10 -

d.

Marketable and Investment Securities
Marketable and investment securities are classified and accounted for, depending on management's intent, as
follows: (1) trading securities, which are held for the purpose of earning capital gains in the near term aremeasured at fair value, and the related unrealized gains and losses are included in earnings, and(2) available-for-sale securities, which are measured at fair value, with unrealized gains and losses, net of
applicable taxes, reported in a component of other comprehensive income.
Non-marketable available-for-sale securities are stated at cost as determined by the moving-average method.
For other than temporary declines in fair value, investment securities are reduced to net realizable value by
charging to income.

e.

Property, Plant and Equipment
Property, plant and equipment are stated at cost. Significant replacements and additions are capitalized;
maintenance and repairs, and minor replacements and improvements are charged to income as incurred.
Depreciation of property, plant and equipment of the Company and its consolidated domestic subsidiaries iscomputed substantially by the declining-balance method at rates based on the estimated useful lives of theassets, while the straight-line method is applied to buildings acquired after April 1, 1998, facilities attached
to buildings and structures acquired after April 1, 2016, lease assets of the Company and its consolidated
domestic subsidiaries, and all property, plant and equipment of foreign subsidiaries.
Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures

3 to 50 years
5 to 12 years
2 to 20 yearsf.

Goodwill
Goodwill is amortized by the straight-line method over the estimated useful lives, principally 5 years.

g.

Software
Software is recorded in other assets and is amortized using the straight-line method over its estimated usefullife.
Internal use software
Software for sale

5 years
3 yearsh.

Retirement and Pension Plans
To prepare for disbursement of employees’ retirement benefits under the defined benefit plan, a defined
benefit liability, which is the amount of defined benefit obligations less plan assets based on the expected
benefit obligation at the end of the fiscal year, is recognized. The retirement benefit obligations arecalculated by allocating the estimated retirement benefit amount until the end of the current fiscal year on
the benefit formula basis. Past service cost is primarily amortized on a straight-line method over a 10-year
period, which is shorter than the average remaining years of service of the eligible employees. Net actuarial
gain or loss is primarily amortized from the following year on a straight-line method over a 10-year period,
which is shorter than the average remaining years of service of the eligible employees. Actuarial gain andloss and past service costs that are yet to be recognized as gains or losses are recorded as remeasurementsof defined benefit obligations presented in other comprehensive income, after being adjusted for tax effects.

i.

LeasesThe Company applies the lease accounting standard, which requires all finance lease transactions becapitalized in the balance sheet. However, the Company accounts for the leases which existed before March
31, 2008 without transferring ownership of the leased property to the lessee as operating lease transactions.
This treatment is also permitted by the lease accounting standard.

j.

Allowance for doubtful accounts
The Company and its consolidated subsidiaries provide for doubtful accounts principally at an amountbased on the historical bad debt ratio during a certain reference period in addition to an estimateduncollectible amount based on the analysis of certain individual accounts.

k.

Provision for directors’ bonuses
Bonuses to directors and corporate auditors are accrued during the year in which such bonuses are
attributable.

-11 -

l.

Provision for directors’ retirement benefits
The Company accrues liabilities related to retirement benefit obligations for directors and corporate
auditors, which is, in general, based upon the amounts required by the internal rules.

m. Translation of Foreign Currencies
Receivables and payables denominated in foreign currencies are translated into yen at the exchange rates
prevailing at the balance sheet date, and differences arising from the translation are charged or credited toincome.
Assets and liabilities of the foreign subsidiaries are translated into yen at the exchange rates prevailing at
the balance sheet date, and revenue and expense accounts are translated at the average rates of exchange in
effect during the year. Differences arising from the translation are presented as foreign currency translation
adjustments after being adjusted for non-controlling interests and tax effects.
n.

Derivatives and Hedging Activities(1) Hedge accounting method
The Company applies the deferred hedge method. The Company, however, adopts the allocation
method to account for forward exchange contracts if the requirements for the allocation method aremet. The Company also adopts the special method to account for interest rate swaps, which meet therequirements for specific matching criteria.
(2) Hedging instruments and hedged items(Hedging instruments)
Foreign currency forward contract transactions
NDF transactions
Interest rate swaps(Hedged items)
Assets and liabilities denominated in foreign currencies
Interest rates on long-term loans payable(3) Hedging policy
The Company determines the hedging policy based on the internal rules. Foreign currency forward
contracts where there is expected risk such as fluctuation in foreign exchange are used Interest rate
swaps where there is expected risk such as fluctuation in interest rates on long-term loans payable areused(4) Assessment of hedge effectivenessHedge effectiveness is assessed by comparing the changing ratio of cash flows arising from the hedged
items to the hedging instruments during the periods from the respective start dates of the hedges to theassessment dates. Also, regarding interest rate swaps, the Company omits assessment of hedge
effectiveness based upon the fulfillment of the requirements for specific matching criteria.

o.

Accounting for consumption tax
Consumption tax on goods and services is not included in the revenue and expense amounts.

p.

Application of Consolidated Taxation regime
The Company and some of its domestic subsidiaries obtained approval from Commissioner of the National
Tax Agency of Japan to adopt the consolidated taxation system which is effective for the fiscal year ending
March 31, 2018. As a result, the Group has applied in the current fiscal year “Practical Solution on
Tentative Treatment of Tax Effect Accounting Under Consolidated Taxation System (Part 1)” (AccountingStandards Board of Japan Practical Issues Task Force (PITF) No. 5, issued on January 16, 2015) and“Practical Solution on Tentative Treatment of Tax Effect Accounting Under Consolidated Taxation System(Part 2)” (Accounting Standards Board of Japan PITF No. 7, issued on January 16, 2015).

q.

Changes in Accounting Policies(Application of Practical Solution on a change in depreciation method due to Tax Reform 2016)
Effective April 1, 2016, the Company and its domestic subsidiaries adopted ”Practical Solution on a change
in depreciation method due to Tax Reform 2016” (Accounting Standards Board of Japan (“ASBJ”) Practical
Issues Task Force (PITF) No. 32, issued on June 17, 2016) following amendments to the Corporation Tax
Act of Japan. Accordingly, the Company and its domestic subsidiaries have changed the depreciation
method for facilities attached to buildings and structures acquired on or after April 1, 2016 from thedeclining-balance method to the straight-line method.
The application of these accounting standards had a negligible effect on the consolidated financial
statements.

-12 -

r.

Changes in presentation(Consolidated Balance Sheet)
Since ”Electronically recorded monetary claims” that were included in “Notes and accounts receivabletrade” within “Current Assets” for the fiscal year ended March 31, 2016 increased significantly, theCompany decided to present this item separately for the fiscal year ended March 31, 2017. In order toreflect this change, the comparative figure in the consolidated financial statements were reclassified.
Consequently, ¥54,795 million that was included in “Notes and accounts receivable-trade” within “Current
Assets” in the consolidated balance sheet for the fiscal year ended March 31, 2016 was reclassified as¥3,227 million in “Electronically recorded monetary claims” and ¥51,568 million in “Notes and accounts
receivable-trade”.
(Consolidated Statement of Income and Comprehensive Income)Since “Loss on sales of investment securities” that were included in “Others” within “Extraordinary Loss”
for the fiscal year ended March 31, 2016 resulted in more than 10% of the total value of Extraordinary Lossin the fiscal year ended March 31, 2017, the Company decided to present this item separately for the fiscal
year ended March 31, 2017. In order to reflect this change, the comparative figure in the consolidated
financial statements were reclassified. Consequently, ¥39 million that was included in “Others” within“Extraordinary Loss” in the consolidated Statement of Income and Comprehensive Income for the fiscal
year ended March 31, 2016 was reclassified as ¥6 million in “Loss on sales of investment securities” and¥33 million in “Others”.
(Consolidated Statement of Cash Flows)
Since “Proceeds from withdrawal of time deposits” that were included in “Other Proceeds” within “Net
Cash Used In Investing Activities” for the fiscal year ended March 31, 2016 increased significantly, theCompany decided to present this item separately for the fiscal year ended March 31, 2017. In order toreflect this change, the comparative figure in the consolidated financial statements were reclassified.
Consequently, ¥629 million that was included in “Other Proceeds” within “Net Cash Used In Investing
Activities” in the Consolidated Statement of Cash Flows for the fiscal year ended March 31, 2016 wasreclassified as ¥412 million in “Proceeds from withdrawal of time deposits” and ¥217 million in “Other
Proceeds”.

s.

Additional information(Application of “Implementation Guidance on Recoverability of Deferred Tax Assets”)
Beginning with the current fiscal year, the Company has adopted “Implementation Guidance on
Recoverability of Deferred Tax Assets” (ASBJ Guidance No.26, March 28, 2016).

-13 -

3.
※1.

NOTES TO CONSOLIDATED BALANCE SHEETInvestment securities
Investment securities include the following accounts of affiliated companies.

Millions of Yen
2016
2017
Capital stock
Bonds
※2.

¥

¥

0
0

Thousands of
U.S. Dollars
2017

－
－

$

－
－

Assets pledged as collateral and liabilities with collateral
Details of assets pledged as collateralThousands of
U.S. Dollars
2017

Millions of Yen
2016
2017
Buildings and structures
Land

¥

2,298
3,030

¥

2,187
3,030

$

19,49427,012

Total

¥

5,329

¥

5,217

$

46,506

Details of liabilities with collateralThousands of
U.S. Dollars
2017

Millions of Yen
2016
2017
Long-term loans
including current portion of long-term loans payable
3.

¥

753

¥

325

$

2,896

Contingent liabilities
Contingent liabilities for guaranteed employees' loans amounted to ¥32 million and ¥29 million($259 thousand) at March 31, 2016 and 2017, respectively.

※4.

Commitment line contract
The Company is under a commitment line contract to four banks for effective fund-raising:Millions of Yen
2016
2017
Total limit of contract
Loan balances
Available amounts

¥
¥

-14 -

10,000－10,000¥¥10,000－10,000Thousands of
U.S. Dollars
2017$ 89,134－$ 89,134

4.
※1.

NOTES TO CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME
Selling, general and administrative expenses
Major items and the amounts under “Selling, general and administrative expenses” are as follows:
Thousands ofMillions of Yen
U.S. Dollars
2016
2017
2017
Salaries and bonuses
Retirement benefit expenses
Provision for directors’ retirement benefits
Provision for directors’ bonuses
Provision of allowance for doubtful accounts※2.

¥

11,160
673
46
185
53

¥

10,766
725
73
203
(7)

$

95,963
6,462
656
1,815
(67)

Research and development costs
Research and development costs charged to income are ¥572 million and ¥271 million ($2,423 thousand)for the years ended March 31, 2016 and 2017, respectively.

※3.

Gain on sales of property, plant and equipment
Details of gain on sales of property, plant and equipment are as follows:
Millions of Yen
2016
2017

※4.

Thousands of
U.S. Dollars
2017

Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures

¥

－
3
1

¥

13
5
4

$

118
51
39

Total

¥

4

¥

23

$

209

Loss on disposal of property, plant and equipment
Details of loss on disposal of property, plant and equipment are as follows:
Millions of Yen
2016
2017

Thousands of
U.S. Dollars
2017

Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures
Software
Other intangible assets

¥

3
1
3
0
0

¥

2
10
3
0
－

$

18
92
27
1
－

Total

¥

9

¥

15

$

139

-15 -

※5.

Amount of reclassification and income tax effect associated with other comprehensive income

Millions of Yen
2016
2017
Net unrealized gain or loss on securities
Amount arising during the period
Amount of reclassification
Net gain before income tax effect
Income tax effectNet unrealized gain or loss on securities, net of
TaxDeferred gains or losses on hedges
Amount arising during the period
Amount of reclassification
Net gain before income tax effect
Income tax effect
Deferred gains or losses on hedges
Foreign currency translation adjustment
Amount arising during the period
Amount of reclassification
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Amount arising during the period
Amount of reclassification
Net gain before income tax effect
Income tax effectRemeasurements of defined benefit plans
Total other comprehensive income

-16 -

¥

(157)
7
(149)
39

¥

690
(20)
669
(190)

Thousands of
U.S. Dollars
2017

$

6,151
(184)
5,967
(1,696)

(109)

479

4,271

8
(35)
(27)
8
(19)

0
(8)
(7)
3
(4)

6
(74)
(67)
27
(40)

(1,771)21(1,749)

(292)
0
(292)

(2,604)1(2,603)

(230)
112
(117)
29
(87)
¥ (1,966)

87
124
212
(65)
147
330

782
1,112
1,895
(580)
1,315
2,942

¥

$

5.

NOTES TO CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETSFor the year ended March 31, 2016
1. Type and number of issued shares of common stock and treasury stock
Number of shares
as of April 1, 2015

Increase in thenumber of shares

Decrease in thenumber of shares

Number of shares
as of March 31, 2016

28,702,118－－

28,702,118

446,040829

45446,824

Number of outstanding shares
Common stock
Number of treasury stocks
Common stock (Note)

Note:
The breakdown of the increase and decrease of common stock is as follows:
Increase as a result of fractional share repurchases: 829 shares
Decrease as a result of the disposition of fractional share: 45 shares

2. Dividends(1) Amount of dividends paid
Resolution

Generalshareholders’meeting held on
June 26, 2015
Board of Directors'
meeting held on
November 4, 2015

Type of share

Amount of dividends(Millions of yen)

Dividend per share(Yen)

Record date

Effective dateCommon stock

706

25

March 31, 2015

June 29, 2015

Common stock

565

20

September 30, 2015

December 4, 2015

(2) Dividends whose effective date is after March 31, 2016 and record date is included in the year ended March 31,
2016.
Resolution

Type of share

Generalshareholders’meeting held on
June 29, 2016

Common stock

Amount of dividends(Millions of yen)

988

Source ofdividends

Retainedearnings-17 -Dividend pershare (Yen)35

Record date

Effective date

March 31, 2016

June 30, 2016

For the year ended March 31, 2017
1. Type and number of issued shares of common stock and treasury stock
Number of shares
as of April 1, 2016

Increase in thenumber of shares

Decrease in thenumber of shares

Number of shares
as of March 31, 2017

28,702,118－－

28,702,118

446,824

819,68945

1,266,468

Number of outstanding shares
Common stock
Number of treasury stocks
Common stock (Note)

Note:
The breakdown of the increase and decrease of common stock is as follows:
Increase as a result of fractional share repurchases: 819,689 shares
Decrease as a result of the disposition of fractional share: 45 shares
2. Dividends(1) Amount of dividends paid
Resolution

Generalshareholders’meeting held on
June 29, 2016
Board of Directors'
meeting held on
November 1, 2016

Type of share

Amount of dividends(Millions of yen)

Dividend per share(Yen)

Record date

Effective dateCommon stock988(US$8,814 thousand)35(US$0.31)

March 31, 2016

June 30, 2016

Common stock706(US$6,296 thousand)25(US$0.22)

September 30, 2016

December 2, 2016

(2) Dividends whose effective date is after March 31, 2017 and record date is included in the year ended March 31,
2017.
Resolution

Type of share

Generalshareholders’meeting held on
June 29, 2017

Common stock

6.
※1.

Amount of dividends(Millions of yen)

Source ofdividends

960(US$8,559 thousand)

Retainedearnings

Dividend pershare (Yen)35(US$0.31)

Record date

Effective date

March 31, 2017

June 30, 2017

NOTES TO CONSOLIDATED STATEMENT OF CASH FLOWSCash and cash equivalents at March 31, 2016 and 2017 are reconciled to the accounts reported in the
consolidated balance sheet as follows:
Thousands ofMillions of Yen
U.S. Dollars
2016
2017
2017
Cash and bank deposits
Time deposits with a deposit period of more than 3 months¥ 22,516(636)¥ 26,423(401)$ 235,522(3,579)Cash and cash equivalents¥ 21,879¥ 26,021$ 231,942

-18 -

7.

LEASES
Finance leases that do not transfer ownership of the leased assets to lessees.
Leased assets:
The Group leases buildings, machinery, equipment and vehicles and other assets.
As described in Note 2.i, the lease accounting standard requires that all finance lease transactions should becapitalized to recognize lease assets and lease obligations in the balance sheet.
Future lease payments under non-cancelable operating leases at March 31, 2016 and 2017 were as follows:

Millions of Yen
2016
2017

8.

Thousands of
U.S. Dollars
2017

Due within one year
Due after one year

¥

160
86

¥

12
18

$

110
167

Total

¥

247

¥

31

$

278

FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES(1) Group Policy for Financial Instruments
The Group has financial instruments, mainly debt from financial institutions, consistent with its capitalfinancing plan. Cash surpluses, if any, are invested in low risk financial assets. Derivatives are not used
for speculative purposes, but rather to manage exposure to foreign exchange risks.
(2) Nature and Extent of Risks Arising from Financial Instruments
Receivables and Payables in foreign currencies are exposed to the risk of fluctuation in foreign currency
exchange rates.
(3) Risk Management for Financial Instruments
Credit risk management
The Company manages its credit risk from receivables on the basis of internal guidelines, which include
monitoring the payment terms and balances of major customers by each business administration
department to identify the default risk of customers in an early stage.
Market risk management (foreign exchange risk)
Foreign currency trade receivables and payables are exposed to market risk resulting from fluctuations inforeign currency exchange rates. Such foreign exchange risk is hedged principally by forward foreign
currency contracts.
Marketable and investment securities are managed by monitoring market values and financial position ofissuers on a regular basis.
(4) Fair Values of Financial Instruments
Fair values of financial instruments are based on quoted prices in active markets. If quoted prices are notavailable, other rational valuation techniques are used. Please see Note 10. for the detail of fair value forderivatives.
Cash and cash equivalents, receivables and payables, short-term bank loans, accrued expenses, income
taxes payables
The carrying value of the above accounts approximate fair value because of their short maturities.
-19 -Guarantee deposits
The fair value of guaranteed deposits is calculated by the contract amount supplier presented or calculated
from past experience and discounted by a risk free rate.
Marketable and investment securities
The fair values of marketable and investment securities are measured at the quoted market price for theequity instruments, and at the quoted price obtained from the financial institution for certain debt
instruments. The information of the fair value for the marketable and investment securities by classification
is included in Note 9.
Long-term loans payable
The fair value of long-term loans payable is determined by discounting the cash flows related to the debt at
the Group's assumed corporate borrowing rate.
Derivatives
The information of the fair value for derivatives is included in Note 10.

-20 -(a) Fair Value of Financial Instruments

March 31, 2016
Cash and bank deposits
Notes and accounts receivable-trade
Electronically recorded monetary claims
Allowance for doubtful accounts ※1

Carrying
AmountMillions of Yen
Fair
Value

Unrealized
Loss
¥

－

¥ 22,516

Short-term investment securities
Investment securities
Guarantee deposits¥ 22,516
51,5683,227(179)
54,615
166
5,616
447

54,615
166
5,616
367

－
－
－
(79 )

Total

¥ 83,362¥ 83,282¥ (79 )

Notes and accounts payable-trade
Short-term loans payable
Accrued expenses
Income taxes payable
Long-term loans payable¥ 36,858
6,295
3,311
995
6,007

¥ 36,858
6,295
3,311
995
6,023

¥

Total

¥ 53,468¥ 53,483¥ (15 )

Derivatives ※2

¥

¥

¥

18

18

－
－
－
－
(15 )

－

※1 Allowance for doubtful accounts is deducted from Notes and accounts receivables-trade andelectronically recorded monetary claims.
※2 The value of assets and liabilities arising from derivatives is shown at net value, with net
liability position shown in parentheses.
Millions of Yen
Carrying
Fair
Unrealized
March 31, 2017
AmountValue
Loss
Cash and bank deposits
Notes and accounts receivable-trade
Electronically recorded monetary claims
Allowance for doubtful accounts ※1¥－¥ 26,423

Short-term investment securities
Investment securities
Guarantee deposits¥ 26,423
46,774
5,234(166)
51,843
188
5,705
413

51,843
188
5,705
329

－
－
－
(83 )

Total

¥ 84,574¥ 84,491¥ (83 )

Notes and accounts payable-trade
Short-term loans payable
Accrued expenses
Income taxes payable
Long-term loans payable¥ 37,553
4,883
3,387
888
4,603

¥ 37,553
4,883
3,387
888
4,607

¥

－
－
－
－
(4 )

Total

¥ 51,316¥ 51,321¥(4 )Derivatives ※2

¥

¥

¥

－

1

1

※1 Allowance for doubtful accounts is deducted from Notes and accounts receivables-trade andelectronically recorded monetary claims.
※2 The value of assets and liabilities arising from derivatives is shown at net value, with net
liability position shown in parentheses.
-21 -CarryingAmountCash and bank deposits
Notes and accounts receivable-trade
Electronically recorded monetary claims
Allowance for doubtful accounts ※1

Thousands of U.S. Dollars
Fair
Unrealized
Value
Loss
－

$

$ 235,522

Short-term investment securities
Investment securities
Guarantee deposits$ 235,522
416,926
46,661(1,485)462,102
1,683
50,859
3,686

Total

$ 753,854$ 753,107

$

(746)

Notes and accounts payable-trade
Short-term loans payable
Accrued expenses
Income taxes payable
Long-term loans payable$ 334,730
43,52730,198
7,919
41,033$ 334,730
43,52730,198
7,919
41,071

$

－
－
－
－
(38)

Total

$ 457,409$ 457,447$(38)

Derivatives ※2

$

$

$

－

－
－
－
(746)

462,102
1,683
50,859
2,940

10

10

※1 Allowance for doubtful accounts is deducted from Notes and accounts receivables-trade andelectronically recorded monetary claims.
※2 The value of assets and liabilities arising from derivatives is shown at net value, with net
liability position shown in parentheses.
(b) Financial Instruments whose Fair Value cannot be reliably determined
Carrying AmountThousands ofMillions of Yen
U.S. Dollars
2016
2017
2017
Investments in equity instruments that
do not have a quoted market price inan active market
Guarantee deposits that do not have aquoted market price in an active market

(5)

¥

902

¥ 1,056

292

321

$

9,416
2,866

Redemption Schedule of Monetary Assets and Securities with Contractual Maturities
March 31, 2016
Millions of Yen
Over 1 year
Over 5 years
Within 1 year within 5 years within 10 years Over 10 years
¥
－
¥
－
¥
－
Cash and bank deposits¥
22,516－－－
Notes and accounts receivable-trade51,568
Electronically recorded monetary－－－claims3,227－－－
Investment securities with maturities
99
Guarantee deposits
9
1
129
224
Total

¥
-22 -

77,321

¥

1

¥

229

¥

224

March 31, 2017
Millions of Yen
Over 1 year
Over 5 years
Within 1 year within 5 years within 10 years Over 10 years
¥
－
¥
－
¥
－
Cash and bank deposits¥
26,423－－－
Notes and accounts receivable-trade
46,774
Electronically recorded monetary－－－claims5,234－－－
Investment securities with maturities
97－
Guarantee deposits
9
131
191
Total

¥

78,442

－

¥

¥

229

¥

191

Thousands of U.S. Dollars
Over 1 year
Over 5 years
Within 1 year within 5 years within 10 years Over 10 years
$
－
$
－
$
－
Cash and bank deposits$ 235,522－－－
Notes and accounts receivable-trade416,926
Electronically recorded monetary－－－claims
46,661－－－
Investment securities with maturities
870－
Guarantee deposits
86
1,171
1,703
Total

(6)

$

699,196

－

$

$

2,041

$

1,703

The payment schedule for bonds, long-term loans, lease obligations and other interest-bearing
liabilities by payment due date at March 31, 2016 and 2017 is as follows:
March 31, 2016
Millions of Yen
Within1 yearShort-term loans
Long-term loans
Including current portion of longterm loans payable

¥

Total

¥

Over 1 year Over 2 years Over 3 years Over 4 years
within 2 years within 3 years within 4 years within 5 years

3,867 ¥

－ ¥

－ ¥

－ ¥

Over
5 years

－ ¥

－

2,428

1,448

1,247

1,247

1,247

817

6,295 ¥

1,448 ¥

1,247 ¥

1,247 ¥

1,247 ¥

817

March 31, 2017
Millions of Yen
Within1 yearShort-term loans
Long-term loans
Including current portion of longterm loans payable

¥

Total

¥

Over 1 year Over 2 years Over 3 years Over 4 years
within 2 years within 3 years within 4 years within 5 years

3,412 ¥

－ ¥

－ ¥

－ ¥

Over
5 years

－ ¥

－

1,470

1,451

1,269

1,247

635

－

4,883 ¥

1,451 ¥

1,269 ¥

1,247 ¥

635 ¥－Thousands of U.S. Dollars
Within1 yearOver 1 year Over 2 years Over 3 years Over 4 years
within 2 years within 3 years within 4 years within 5 years

－ $

－ $

－ $

－ $

Over
5 years－

Short-term loans
Long-term loans
Including current portion of longterm loans payable$ 30,285 $

13,052

12,883

11,264

11,066

5,639

－

Total

$ 43,338 $

12,883 $11,264 $11,066 $5,639 $

－

-23 -

9.

MARKETABLE AND INVESTMENT SECURITIESMarketable and investment securities as of March 31, 2016 and 2017 consisted of the following:(1) Current-Marketable equity securities
Thousands of
U.S. Dollars
2017

Millions of Yen
2016
Unrealized gains included in net income forthe year

2017
¥

38

¥

22

$

202

(2) Investment securities with a readily determinable fair value
March 31, 2016
Carrying
amountMillions of Yen
Acquisition
cost

Difference

Securities for which the carrying
amount exceeds the acquisition costs
Non-current:
Marketable equity securities
Government and corporate bonds
Subtotal¥ 3,55010¥ 3,561¥ 2,04210¥ 2,052

Securities for which the carrying
amount does not exceed the acquisition costs
Non-current:
Marketable equity securities
Government and corporate bonds
OthersSubtotal

1,047
89
918
¥ 2,055

1,300
102
1,003
¥ 2,405

¥

(252)
(13)
(84)
(350)

¥ 5,616¥ 4,458

¥

1,157

Total

¥

1,508
0
¥ 1,508

Note:
Non-marketable equity securities of ¥846 million, and Investments in associated companies of ¥56 million are
not included in the above because it is not practicable to estimate their fair value due to difficulty inestimating fair value as market price is not available.
March 31, 2017
Carrying
amountMillions of Yen
Acquisition
cost

Securities for which the carrying
amount exceeds the acquisition costs
Non-current:
Marketable equity securities
Government and corporate bonds
Subtotal¥ 4,01310¥ 4,023¥ 1,89110¥ 1,901

Securities for which the carrying
amount does not exceed the acquisition costs
Non-current:
Marketable equity securities
Government and corporate bonds
OthersSubtotal

800
87
794
¥ 1,682¥ 5,705

Total

-24 -

Difference

¥
¥

2,122
0
2,122

1,005
102
865
¥ 1,972

¥

(204)
(15)
(70)
(290)

¥ 3,873¥

1,832

Thousands of
U.S. Dollars
Acquisition
cost

Carrying
amountDifference

Securities for which the carrying
amount exceeds the acquisition costs
Non-current:
Marketable equity securities
Government and corporate bonds
Subtotal$ 35,772
93$ 35,865$ 16,85689$ 16,945$ 18,915
3$ 18,919

Securities for which the carrying
amount does not exceed the acquisition costs
Non-current:
Marketable equity securities
Government and corporate bonds
OthersSubtotal

7,134
777
7,082
$ 14,994

8,960
913
7,710
$ 17,584$(1,825)(136)(627)(2,589)$ 50,859$ 34,530$ 16,329

Total

Note:
Non-marketable equity securities of ¥1,016 million ($9,057 thousand), and Investments in associatedcompanies of ¥40 million ($359 thousand) are not included in the above because it is not practicable toestimate their fair value due to difficulty in estimating fair value as market price is not available.
(3) Investment securities sold during 2016 and 2017
March 31, 2016
Millions of Yen
Amounts sold¥Investment securities
Government and corporate bonds
Others
Total

Gains on sales
19
－
－
19

¥

Loss on sales

¥

1
－
－
1

¥

¥

6
－
－
6

¥

March 31, 2017
Millions of Yen
Amounts soldInvestment securities
Government and corporate bonds
Others
Total¥

Gains on sales
608
－
112
720

¥

¥

Loss on sales
108
－
2
110

¥

¥

(0)
－
(31)
(31)

¥

Thousands of
U.S. Dollars
Amounts soldInvestment securities
Government and corporate bonds
Others
Total$$

Gains on sales

5,424
－
999
6,424

$

$

Loss on sales
968
－
20
989

$

$

0
－
(279)
(280)

(4) The impairment losses of Investment securities are as follows:
Thousands of
U.S. Dollars

Millions of Yen
2016

2017
¥

-25 -

9

2017
¥

47

$

424

10. DERIVATIVES
Derivative Transactions to Which Hedge Accounting Is Applied(1) Currency related transactions

March 31, 2016

Hedged Item

Foreign currency forward contracts:
Selling US$
Buying US$
Buying Euro

Receivables
PayablesPayablesTotal

Millions of Yen
Contract
AmountContract
Due after
AmountOne Year

Fair
Value

992
1,353
12

¥

－
－
－

¥

24
(16)
0

¥ 2,358

¥

－

¥

8

Millions of Yen
Contract
AmountDue after
One Year¥March 31, 2017

Hedged Item

Contract
AmountForeign currency forward contracts:
Selling US$
Buying US$
Buying Euro
Buying Swiss franc

Receivables
PayablesPayablesPayables¥ 1,555
2,297
6
7

¥

－
－
－
－

¥

3
(2)
(0)
(0)

¥ 3,867

¥

－

¥

0

Total

Foreign currency forward contracts:
Selling US$
Buying US$
Buying Euro
Buying Swiss franc

Fair
Value

Hedged Item

Thousands of U.S. Dollars
Contract
AmountContract
Fair
Due after
AmountOne YearValue

Receivables
PayablesPayablesPayables$ 13,865
20,482
57
68

$

－
－
－
－

$

33
(24)
(0)
(1)

$ 34,473

$

－

$

6

Total

The fair value of derivative transactions is measured at the quoted price obtained from the financial institutions.
The contract or notional amounts of derivatives which are shown in the above table do not represent the amounts
exchanged by the parties and do not measure the Group's exposure to credit or market risk.

-26 -(2) Interest related transactions
For the year ended March 31, 2016

Hedge
Accounting
MethodSpecialtreatment
for interest
rate swap

Type ofTransaction
Interest rate
swap
Receivefloating,
pay fixed

Hedged Item
Long-termloans payable

Contract
AmountMillions of Yen
Contract
AmountDue after
One Year

Fair
Value

¥

¥

(Note)

1,550

1,550

Note:
Specific matching criteria for interest rate swap is accounted for together with long-term loans payable designatedas the hedge item. Therefore, their fair values are included in the fair value of the long-term loans payable.

For the year ended March 31, 2017

Hedge
Accounting
MethodSpecialtreatment
for interest
rate swap

Type ofTransaction
Interest rate
swap
Receivefloating,
pay fixed

Hedged Item
Long-termloans payable

Millions of Yen, Thousands of U.S. Dollars
Contract
AmountContract
Fair
Due after
AmountOne YearValue¥ 1,550($ 13,815)¥ 1,356($ 12,088)(Note)

Note:
Specific matching criteria for interest rate swap is accounted for together with long-term loans payable designatedas the hedge item. Therefore, their fair values are included in the fair value of the long-term loans payable.

-27 -11. RETIREMENT BENEFITS(1) Outline of retirement benefits plans
Under the pension plans, employees terminating their employment are, in most circumstances, entitled topension payments based on their average pay during their employment, length of service and certain otherfactors. The defined benefit plans and lump-sum payment plans of some of the consolidated subsidiaries arecalculated using simplified methods.
(2) Defined benefit pension plans(a) Changes in the retirement benefit obligation for the years ended March 31, 2016 and 2017 (excluding
plans applying the simplified method) are as follows:

Millions of Yen
2016
2017

Thousands of
U.S. Dollars
2017

Retirement benefit obligation at the beginning of the year
Service cost
Interest cost
Actuarial gains (losses)
Benefits paid
Past service cost
Others¥ 3,656
292
27
237
(165)
(10 )
(5)

¥ 4,032
313
15
(94)
(94)
－
1

$ 35,946
2,790
138
(842)
(838)
－
13

Retirement benefit obligation at the end of the year

¥ 4,032¥ 4,174$ 37,209(b) Changes in the plan assets for the years ended March 31, 2016 and 2017 (excluding plans applying thesimplified method) are as follows:

Millions of Yen
2016
2017

Thousands of
U.S. Dollars
2017

Plan assets at fair value at the beginning of the year
Expected return on plan assets
Actuarial gains (losses)
Contributions by the employer
Benefits paid
Others¥ 3,019
54
7
344
(165)
(2)

¥ 3,257
58
(4)
338
(91)
0

$ 29,038
522
(41)
3,013
(819)
4

Plan assets at fair value at the end of the year

¥ 3,257¥ 3,558$ 31,718(c) Changes in net defined benefit liabilities for plans which applied the simplified method for the years
ended March 31, 2016 and 2017 are as follows:

Millions of Yen
2016
2017
Net defined benefit liabilities at the beginning of the year
Retirement benefit expenses
Retirement benefits paid
Contributions to plan

¥ 1,006
137
(132)
(11)

¥

Net defined benefit liabilities at the end of the year

¥ 999

¥ 1,053

-28 -

999
149
(83)
(12)

Thousands of
U.S. Dollars
2017$ 8,912
1,332
(743)
(110)
$

9,391

(d) Reconciliation between the funded status of the plans (retirement benefit obligation and plan assets) andthe amounts recognized in the consolidated balance sheet (net defined benefit liabilities and net defined
benefit assets) as of March 31, 2016 and 2017 are as follows:

Millions of Yen
2016
2017
Retirement benefit obligation of funded plans
Plan assets
Retirement benefit obligation of unfunded plans
Net liabilities recorded in the consolidatedbalance sheet
Net defined benefit liabilities
Net liabilities recorded in the consolidatedbalance sheet

Thousands of
U.S. Dollars
2017¥ 4,276(3,371)904
870¥ 4,430(3,680)749
919$ 39,490(32,806)
6,684
8,198

¥ 1,774¥ 1,669$ 14,882

1,774

1,669

14,882¥ 1,774¥ 1,669$ 14,882(e) Components of retirement benefit expenses for the years ended March 31, 2016 and 2017 are as follows:

Millions of Yen
2016
2017
Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial loss
Amortization of prior service cost
OthersThousands of
U.S. Dollars
2017

¥

298
27
(53)
48
54
11

¥

342
15
(58)
58
64
13

$ 3,049
138
(519)
519
578
118

Retirement benefit expenses for defined benefit pension plans ¥

385

¥

435

$

3,884

(f) Remeasurements of defined benefit plans, net of tax for the years ended March 31, 2016 and 2017 are as
follows:
Components of remeasurements of defined benefit obligations, net of tax before income tax effectadjustment

Millions of Yen
2016
2017

Thousands of
U.S. Dollars
2017

Prior service cost
Actuarial gains and losses

¥

64
(182)

¥

64
147

$

Total

¥ (117)¥212$ 1,895

-29 -

578
1,316

(g) Remeasurements of defined benefit obligations as of March 31, 2016 and 2017 are as follows:
Components of remeasurements of accumulated defined benefit obligations before income tax effectadjustment

Millions of Yen
2016
2017

Thousands of
U.S. Dollars
2017

Unrecognized prior service cost
Unrecognized actuarial gains or losses

¥

113
373

¥

48
225

$

434
2,012

Total

¥

487

¥

274

$ 2,446(h) Items for plan assets
Components of plan assets
Ratio of primary components to total plan assets

General accounts
Other
Total

2016

2017

95.83%
4.17%

96.03%
3.97%

100%

100%

Determining expected long-term rate of return
In determining the long-term rate of return for plan assets, the Company considers the current andprojected asset allocations, as well as the current and expected long-term investment returns from thevarious assets that constitute the plan assets.
(i) Items related to the basis of actuarial calculation
Items that form the primary basis for actuarial calculations using the weighted average method
2016
2017
Discount rate
Expected long-term rate of return

0.38%
1.80%

0.46%
2.20%

(3) Defined contribution pension plans
Contributions to defined contribution pension plans by the Company and its consolidated subsidiaries
Thousands ofMillions of Yen
U.S. Dollars
2016
2017
2017
¥

-30 -

190

¥

186

$ 1,663

12.

INCOME TAXES(1) The tax effects of significant temporary differences and tax loss carryforwards which resulted in deferred
tax assets and liabilities at March 31, 2016 and 2017 are as follows:
Thousands ofMillions of Yen
U.S. Dollars
2016
2017
2017
Deferred tax assets:
Loss on revaluation of investment securities
Retirement benefits for directors and corporate auditors
Allowance for doubtful accounts
Accrued bonuses
Net defined benefit liability
Operating losses of subsidiaries
Tax loss carryforwards
Devaluation of inventories
Impairment loss
OthersSub-total
Less valuation allowance

¥

267
373
379
520
559
318
3,000
254
194
¥ 926
6,795
(4,997)

¥

217
375
284
524
528
403
2,341
239
196
911
6,022
(3,401)

$

1,935
3,350
2,537
4,673
4,710
3,593
20,867
2,138
1,748
8,127
53,682(30,315 )Deferred tax assets—total

1,798

2,621

23,366

Deferred tax liabilities:
Undistributed earnings of overseas subsidiaries
Unrealized gain on property and equipment
Unrealized gain on available-for-sale securities
Advanced depreciation on fixed assets
Others(1,147)
(86)
(464)
(183)
(56)

(1,236 )(97 )(654 )(196 )(68 )(11,017)(868)(5,834)(1,754)(610)

Deferred tax liabilities—total(1,938)(2,253 )(20,084)

Net deferred tax assets¥ (140)368$ (3,282)

Millions of Yen
2016
2017

Thousands of
U.S. Dollars
2017¥(Note) Net deferred tax assets recorded in the consolidated balance sheet

Current assets-Deferred tax assets
Non-current assets-Deferred tax assets
Current liabilities-Deferred tax liabilities
Non-current liabilities-Deferred tax liabilities

¥

-31 -

849
257
(0)
(1,246)¥ 1,340240―(1,213)$ 11,950
2,144―(10,813)

(2) A reconciliation between the effective statutory tax rate and the actual effective tax rate reflected in theaccompanying consolidated statements of operations for the years ended March 31, 2016 and 2017 is asfollows:

13.

2016

2017

Effective statutory tax rate
Expenses not deductible for income tax purposesTax benefits not recognized on operating losses of subsidiaries
Difference in tax rates of foreign subsidiaries
Dividends from overseas subsidiaries and deferred income taxes
on retained profits of overseas subsidiaries
Change in valuation allowances
Impact of adoption of consolidated tax payment system
Others, net

33.1%
1.4
(0.8)
(6.8)

30.9%
1.3
(1.1)
(5.4)

1.8
0.2
―
(0.5)

2.3
(19.1)(1.2)
3.0

Actual effective tax rate

28.3

10.8

BUSINESS COMBINATIONSBusiness combinations involving entities under common control(Merger of Kaga Solution Network Co., Ltd. and Kaga Educational Marketing Co., Ltd.)(1) Overview of transaction(a) Name of the parties and their business description
Name of the merger company: Kaga Solution Network Co., Ltd.
Business description: Sales of electronic products and information equipment.
Development, designing, operation and maintenance of computer network systems.
Name of the merged company: Kaga Educational Marketing Co., Ltd.
Business description: Sales and support of computer devices and software.
(b) Date of business combination
April 1, 2016(c) Type of business combination
Kaga Educational Marketing Co., Ltd. was merged into Kaga Solution Network Co., Ltd.
(d) Name of merging company after business combination
Kaga Solution Network Co., Ltd.
(e) Other matters
To improve strength efficiency and rationalization for group management(2) Overview of accounting treatment
This transaction was accounted for as a business combination involving entities under common control, in
accordance with "Accounting Standard for Business Combinations" and "Guidance on Accounting Standard forBusiness Combinations and Accounting Standard for Business Divestitures."(Merger of Kaga Solution Network Co., Ltd. and Kaga Hightec Co., Ltd.)(1) Overview of transaction(a) Name of the parties and their business description
Name of the merger company: Kaga Solution Network Co., Ltd.
Business description: Sales of electronic products and information equipment.
Development, designing, operation and maintenance of computer network systems.
Name of the merged company: Kaga Hightec Co., Ltd.
Business description: Manufacturing and sales of information equipment, film, optic devices and image
software. Designing and operation of darkroom and projection room.
(b) Date of business combination
April 1, 2016(c) Type of business combination
Kaga Hightec Co., Ltd. was merged into Kaga Solution Network Co., Ltd.
(d) Name of merging company after business combination
Kaga Solution Network Co., Ltd.
-32 -(e) Other matters
To improve strength efficiency and rationalization for group management(2) Overview of accounting treatment
This transaction was accounted for as a business combination involving entities under common control, in
accordance with "Accounting Standard for Business Combinations" and "Guidance on Accounting Standard
for Business Combinations and Accounting Standard for Business Divestitures."
14.

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 areallocated among the Group. The Group has four reporting segments that are made of different categories of
products and services: electronic components, information equipment, software and other. The electronic
components segment includes the development, manufacture and sale of semiconductors, generalelectronic components and other products, the electronics manufacturing service (EMS), and otheractivities. The information equipment segment includes sales of PCs, PC peripherals, photograph andimaging 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 other segment includes the fix and support of electronic components, the manufacture and sale ofamusement equipment, sales of sports goods and other activities.
(2)

Methods of measurement for the amounts of sales, profit (loss), assets, liabilities and other items for eachreportable segment
The accounting policies of each reportable segment are consistent to those disclosed in Note 2.,"SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES".

-33 -

(3)

Information about sales, profit (loss), assets and other items is as follows:
Millions of Yen
2016
Reportable Segment
Electronic
Components

Information
Equipment

Software

Other

Total

Reconciliations(Note 1)

245,387¥

Consolidated(Note 2)

Sales:
Sales toexternal customers
Inter segment sales
or transfers¥

Total sales¥

190,456 ¥

41,482 ¥ 6,340 ¥ 14,348¥

252,628¥(7,240)¥245,387

Segment profit (loss)¥
Segment assets
Others:Depreciation
Increase in-property,
plant and equipment
and intangible assets

6,515 ¥
110,317811 ¥695 ¥ (343)
14,581
2,776
5,831

¥

7,679
133,507¥109(9,226)¥

7,788
124,281

189,486 ¥970

40,880 ¥ 2,897 ¥ 12,123
602

3,442

¥

2,225

－

7,240

¥

245,387－(7,240)

1,042

68

106

103

1,321

(15)

1,305

1,055

75

124

605

1,860

(205)

1,655

Millions of Yen
2017
Reportable Segment
Electronic
Components

Information
Equipment

Software

Other

Sales:
Sales toexternal customers
Inter segment sales
or transfers¥

Total sales¥

171,923 ¥

43,065 ¥ 4,714 ¥ 12,885

Segment profit (loss)¥
Segment assets
Others:Depreciation
Increase in-property,
plant and equipment
and intangible assets

4,917 ¥
109,053

1,491 ¥
528 ¥ (212)
14,3202,083
5,185

171,227 ¥695

42,547 ¥ 3,159 ¥ 10,274
518

1,555

¥

2,611

Total

Reconciliations(Note 1)

227,209¥－

Consolidated(Note 2)¥

227,209－

5,380(5,380)¥232,589¥ (5,380)¥

227,209¥6,724
130,642

154(4,890)¥6,879
125,751

¥

898

70

98

94

1,162

(11)

1,151

855

86

86

85

1,114

(37)

1,076

-34 -

Thousands of U.S. Dollars
2017
Reportable Segment
Electronic
Components

Information
Equipment

Sales:
Sales toexternal customers
Inter segment sales
or transfers$ 1,526,231 $Total sales$ 1,532,433 $6,201

Segment profit (loss)$
Segment assets
Others:Depreciation
Increase in-property,
plant and equipment
and intangible assets

43,832 $972,041

Software

Other

Reconciliations(Note 1)

Total

Consolidated(Note 2)－

$ 2,025,219

47,956(47,956)－

383,862 $ 42,025 $ 114,854 $ 2,073,176$ (47,956)$ 2,025,219

13,298 $ 4,707 $ (1,896) $59,942
127,642
18,572
46,217
1,164,474$ 1,376(43,592)379,243 $ 28,163
4,618

13,861$ 91,580 $ 2,025,219 $
23,274$61,3181,120,882

8,012

631

875

840

10,359(98)

10,261

7,624

770

774

766

9,935

(336)

9,599

Note: 1. The adjustment for segment operating income is as follows:(1) Segment income
Millions of Yen
2016
2017

Thousands of
U.S. Dollars
2017

Elimination of inter-segment trade
Amortization of goodwill

¥ 147
(38)

¥ 154
－

$

1,376
－

Total

¥ 109

¥ 154

$

1,376

(2) Segment assets
Millions of Yen
2016
2017
Elimination of inter-segment trade
Reconciliations¥ (11,363 )
2,137

Total

¥

(9,226 )Thousands of
U.S. Dollars
2017¥ (6,945)
2,054¥(4,890 )$ (61,904)
18,312$(43,592)

Note: Total corporate assets principally consist of surplus funds of the Companies under management (cashand securities).
(3) Depreciation and amortization
Millions of Yen
2016
2017

Thousands of
U.S. Dollars
2017

Elimination of inter-segment trade¥ (15 )¥ (11 )$ (98)Total¥ (15 )¥ (11 )$ (98)-35 -(4) Increase amount of tangible and intangible fixed assets
Millions of Yen
2016
2017

Thousands of
U.S. Dollars
2017

Elimination of inter-segment trade¥ (205)¥ (37)$ (336)Total¥ (205)¥ (37)$ (336)

2. Segment income is adjusted for operating income in the consolidated statement of income andcomprehensive income.
Associated Information
For the year ended March 31, 2016(1) Information about individual products and services
This information is not presented because the Group prepares reports in accordance with a management
approach based on individual products and services.
(2) Geographic information(a) Sales

Japan

North America¥ 167,914

Millions of Yen
2016
EuropeEast Asia

Total¥ 2,662¥ 68,970¥ 245,387¥ 5,840

Note: Sales are classified in countries or regions based on the location of customers.
(b) Property, plant and equipment

Japan¥ 9,243
Notes:

North America

Millions of Yen
2016
Europe¥ 38¥ 65

East Asia

Total¥ 2,711¥ 12,058

1. Countries and regions are classified according to geographical proximity.
2. Countries and regions outside Japan are broken down into the following geographicalareas:(1) North America:(2) Europe:(3) East Asia:

United States
United Kingdom, Czech Republic, and Russia
Hong Kong, Singapore, Taiwan, Korea, China, Malaysia,
Thailand, India and Indonesia

3. Information about major customers
This information is not presented because no sales to any individual customer were morethan 10% of consolidated sales.

-36 -For the year ended March 31, 2017(1) Information about individual products and services
This information is not presented because the Group prepares reports in accordance with a management
approach based on individual products and services.
(2) Geographic information(a) Sales

Japan

North America

Millions of Yen
2017
Europe¥ 151,912¥ 5,995¥ 2,518

Thousands of U.S. Dollars
2017North America
EuropeJapan$ 1,354,065$ 53,441$ 22,446

East Asia

Total¥ 66,783¥ 227,209

East Asia

Total$ 595,266$ 2,025,219

Note: Sales are classified in countries or regions based on the location of customers.
(b) Property, plant and equipment

Japan

North America¥ 8,850

Japan$ 78,888
Notes:¥

2

North America$

Millions of Yen
2017
Europe¥ 145
Thousands of U.S. Dollars
2017
Europe23$1,296

East Asia
¥

Total

2,747

¥ 11,745

East Asia

Total$ 24,488$ 104,697

1. Countries and regions are classified according to geographical proximity.
2. Countries and regions outside Japan are broken down into the following geographicalareas:(1) North America:(2) Europe:(3) East Asia:

United States
United Kingdom, Czech Republic, and Russia
Hong Kong, Singapore, Taiwan, Korea, China, Malaysia,
Thailand, India and Indonesia

3. Information about major customers
This information is not presented because no sales to any individual customer were morethan 10% of consolidated sales.

-37 -Information of impairment loss on fixed assets of reportable segments
For the year ended March 31, 2016

Impairment loss

Millions of Yen
2016
Reportable Segment
Information
SoftEquipment
ware
¥ 5
¥ 25

Other
¥ 0

Total
¥ 31

Electronic
Components¥ －Millions of Yen
2017
Reportable Segment
Information
SoftEquipment
ware
¥ －
¥ －

Other
¥ 16

Total
¥ 16

Electronic
Components$ －Thousands of U.S. Dollars
2017
Reportable Segment
Information
SoftEquipment
ware
Other
$ －
$ －
$ 148

Total
$ 148

Electronic
Components¥ －For the year ended March 31, 2017

Impairment loss

Impairment loss

Information of amortization of goodwill and balance of goodwill of reportable segments
For the year ended March 31, 2016

Electronic
Components
Amortization of goodwill
for fiscal year
¥ 109
Balance of goodwill at theend of fiscal year
483

Millions of Yen
Reportable Segment
Information
SoftEquipment
ware
Other

Total

Reconciliations

Consolidated

¥ －

¥ 3

¥ －

¥ 112

¥ 38

¥ 151

－

12

－

495

－

495

For the year ended March 31, 2017

Electronic
Components
Amortization of goodwill
for fiscal year
¥ 85
Balance of goodwill at theend of fiscal year
397

Electronic
Components
Amortization of goodwill
for fiscal year
$ 762
Balance of goodwill at theend of fiscal year
3,544

Millions of Yen
Reportable Segment
Information
SoftEquipment
ware
Other

Total

Reconciliations

Consolidated

¥ －

¥ 3

¥ －

¥ 88

¥ －

¥ 88

－

8

－

406

－

406

Thousands of U.S. Dollars
Reportable Segment
Information
SoftEquipment
ware
Other
Total

Reconciliations

Consolidated

$ －

$ 30

$ －

$ 793

$ －

$ 793

－

76

－

3,621

－

3,621

-38 -

Information of gain on bargain purchase by reportable segments
For the year ended March 31, 2016
No significant items to be reported.
For the year ended March 31, 2017
Not applicable.

15.

RELATED PARTY TRANSACTIONS
For the year ended March 31, 2016
Principal transactions between the Company and its related party for the year ended March 31, 2016 aresummarized as follows:Type

Company
Name

Head
OfficeMajor
stockholder

SankyoCo., Ltd.

Shibuya-ku,
Tokyo

CapitalStockBusiness
Activities

Percentage
forPossession of
Voting Rights¥14,840

Manufacturing andsales ofgame
machines

Owned
directly
13.57%

RelationshipWith Related
Party

Content ofTransaction

Sales offinishedproducts

Sales offinishedproducts(Note)(Amount unit: Millions of yen)AmountAmount for
Title ofas ofTransaction
Account
March
31, 2016¥10,686

Accounts
receivable¥3,870Note:
Trade condition and policy
Sales contracts are entered into between Sankyo and the Company, and the sales price of products is determinedbased on the discussions between those two parties.
For the year ended March 31, 2017
Principal transactions between the Company and its related party for the year ended March 31, 2017 aresummarized as follows:Type

Company
Name

Head
OfficeCapitalStockBusiness
Activities

Percentage
forPossession of
Voting Rights

Major
stockholder

SankyoCo., Ltd.

Shibuya-ku,
Tokyo¥14,840($132,275)

Manufacturing andsales ofgame
machines

Owned
directly
13.97%

RelationshipWith Related
Party
Sales offinishedproducts(Amount unit: Millions of yen, Thousands of U.S. dollars)
Amountas ofContent of
Amount for
Title of
March
Transaction
Transaction
Account
31, 2017
Sales offinishedproducts(Note)¥6,908($61,576)

Accounts
receivable¥2,793($24,895)

Note:
Trade condition and policy
Sales contracts are entered into between Sankyo Co., Ltd. and the Company, and the sales price of products isdetermined based on the discussions between those two parties.

-39 -

16.

PER SHARE INFORMATIONYen

Net assets per share
Net income per share

U.S. Dollars
2017

2016

2017

¥ 2,185.94
192.43¥ 2,401.00
249.43$ 21.40
2.22

Notes 1. Diluted net income per share has not been disclosed because there were no potentially dilutive
Shares.
2. The basis for computation of net income per share is as follows:

Thousands of
U.S. Dollars
2017

Millions of Yen
2016
Net income per share
Profit attributable to owners of the parent
Net income unallocated to common stock
Profit attributable to owners of the parent
allocated to common stock
Average number of common stock
outstanding during the fiscal year (Share)

¥

2017

6,975
－

$ 62,178
－

5,437

6,975

62,17828,255,634

27,967,362－－

Outline of the residual securities whichwere not included in the calculation of
the diluted net income per share because
there was no dilutive effect.

5,437
－

¥

4. The basis for computation of net assets per share is as follows:
Thousands of
U.S. Dollars
2017

Millions of Yen
2016
Net assets per share
Total net assets
Amount deducted from total net assets(Non-controlling interests)
Net assets corresponding to common stockat the end of the fiscal year
Number of common stock shares used forthe calculation of net assets per share(Share)17.

¥

SIGNIFICANT SUBSEQUENT EVENT
Not applicable

-40 -

2017

61,80844(44)¥65,93259(59)$ 587,682
526
(526)

61,76465,872

587,155

28,255,294

27,435,650

18.

CONSOLIDATED SUPPLEMENTARY SCHEDULE(1) Schedule of bonds
Not applicable.
(2) Schedule of loans

Category
Short-term loans payable
Current portion of longterm loans payable
Current portion of leaseobligations
Long-term loans payable(excluding current portion)
Lease obligations(excluding current portion)
Other interest-bearing debt
Total

Thousands of U.S.
Dollars
Balance as ofMarch 31, 2017

Millions of Yen
Balance as of
Balance as ofApril 1, 2016
March 31, 2017

Interest
rate (%)

Maturity¥ 3,867¥ 3,412$ 30,418

0.72%

－

2,428

1,470

13,109

0.91%

－

106

126

1,128

2.83%

－

6,007

4,603

41,0330.72%

2018 to 2021

329

192

1,715

2.22%

2018 to 2021

－

－

－

－

¥ 12,739¥ 9,805$ 87,404－

Notes:
1. Interest rates are stated at weighted average interest rates based on the average balance of borrowings for the year.
2. The repayment schedule of long-term loans payable and lease obligations (excluding current portion) per year for
5 years subsequent to March 31, 2017 is summarized as follows:
Category
Long-term loans payable
Lease obligations
Total

Category
Long-term loans payable
Lease obligations
Total

Over 1 year
within 2 years¥ 1,45180¥ 1,532

Millions of Yen
Over 2 years
within 3 years¥ 1,269
68¥ 1,338

Over 3 years
within 4 years¥ 1,24737¥ 1,284

Over 4 years
within 5 years
¥ 635
5
¥ 640

Over 1 year
within 2 years$ 12,940
719$ 13,658

Thousands of U.S. Dollars
Over 2 years
within 3 years$ 11,314
614$ 11,928

Over 3 years
within 4 years$ 11,115
335$ 11,451

Over 4 years
within 5 years$ 5,66447$ 5,712(3) Schedule of asset retirement obligations
According to the Article 92-2 of the “Regulations for Consolidated Financial Statements,” schedule of asset
retirement obligations are abbreviated, as the amount of “asset retirement obligations” is less than 1 percent of thetotal amount of liabilities and net assets.

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