Consolidated Financial Statements
for the year ended March 31, 2017
SWCC Showa Holdings Co., Ltd.
and Consolidated Subsidiaries

CONSOLIDATED BALANCE SHEETSWCC SHOWA HOLDINGS CO., LTD. and Consolidated Subsidiaries
2016
2017
(Millions of yen)

2017
(Thousands of
U.S. dollars)(Note 3)ASSETS
Current assets:
Cash and time deposits (Notes 4 and 16)¥6,410¥5,321$47,428

Trade notes and accounts receivable (Note 16)

42,34541,453

369,489

Inventories (Note 5)

21,096

19,117

170,399

445

753

6,712

3,577

3,220

28,701

Deferred tax assets (Note 15)
Other
Allowance for doubtful accounts
Total current assets

(17)

(10)

(89)

73,85669,854

622,640

Property, plant and equipment:
Buildings and structures (Notes 7 and 14)

37,94737,850337,374

Machinery, equipment and tools (Notes 7 and 14)

70,48570,196625,689

Land (Notes 7, 11 and 14)

23,702

23,604

210,393

Other

1,430

1,588

14,155(94,503)(94,285)(840,405)

39,061

38,953

347,206

1,838

1,638

14,600

1,838

1,638

14,600

6,759

6,207

55,325

Accumulated depreciation
Total property, plant and equipment
Intangible assets
Other
Total intangible assets
Investments and other assets:
Investment securities (Notes 6, 7 and 16)
Deferred tax assets (Note 15)

13

54

481

1,293

1,201

10,706

Net defined benefit asset (Note 9)

399

1,773

15,804

Allowance for doubtful accounts

(150)

(151)

(1,346)

8,314

9,084

80,970¥123,069¥119,529$1,065,416

Other

Total investments and other assets
Total assets
See Accompanying Notes to Consolidated Financial Statements.

2016
2017
(Millions of yen)

2017
(Thousands of
U.S. dollars)(Note 3)

LIABILITIES AND NET ASSETS
Current liabilities:
Short-term debt (Notes 7 and 16)¥40,772¥35,821$319,289

Trade notes and accounts payable (Note 16)

21,261

20,895

186,247

Accrued income taxes

283

365

3,253

Provision for loss on construction contracts

162

93

829

Provision for business structure improvement expenses

13

10

89

8,128

7,982

71,147

Other accounts payable
Other
Total current liabilities

3,779

3,869

34,48674,39869,035615,340

Long-term liabilities:
Long-term debt (Notes 7 and 16)

16,711

15,598139,032

Net defined benefit liability (Note 9)

565

622

5,544

Accrued retirement benefits for directors and statutory auditors

103

116

1,034

Deferred tax liabilities (Note 15)

159

247

2,202

4,227

4,227

37,677

1,182

1,028

9,163

Total long-term liabilities

22,947

21,838

194,652

Total liabilities

97,34590,873809,992

215,902

Deferred tax liabilities related
to land revaluation (Notes 11 and 15)
Other

Contingent liabilities (Note 10)
Net assets:
Shareholders’ equity:
Common stock:
Authorized - 700,000,000 shares
Issued24,222

24,222

Capital surplus (Note 12)- 308,268,611 shares (Note 12)

5,537

5,537

49,354Retained earnings (Note 12)(9,168)(7,192)(64,105)

Treasury stock (Note 12)

(16)

(16)

(143)

20,57522,551

201,008

Unrealized holding gains(losses) on other securities

567

743

Deferred gains(losses) on hedges(1)

Total shareholders’ equity
Accumulated other comprehensive income:Variance of land revaluation (Note 11)

5,543

6,623
-

5,543

49,407

Foreign currency translation adjustments

2,173

1,617

14,413Remeasurements of defined benefit plans(3,486)(2,302)(20,519)

4,796

5,601

49,924Non-controlling interests

353

504

4,492

Total net assets

25,72428,656

255,424

Total liabilities and net assets¥123,069¥119,529$1,065,416

Total accumulated other comprehensive income

See Accompanying Notes to Consolidated Financial Statements.

CONSOLIDATED STATEMENT OF OPERATIONSSWCC SHOWA HOLDINGS CO., LTD. and Consolidated Subsidiaries
2016

2017

2017

(Millions of yen)(Thousands of
U.S. dollars)(Note 3)

Net sales¥169,713¥155,233$1,383,662

Cost of sales (Notes 5 and 13)

151,984

135,133

1,204,501

17,72920,100179,161

16,77815,865

141,412

951

4,235

37,749Gross profit
Selling, general and administrative expenses (Note 13)
Operating income

Other income (expenses):
Interest income

67

42

374

Dividend income

64

55

490

Interest expense

(966)

(852)

(7,594)Equity in losses of affiliates

(644)

(84)

(749)

Gain on bargain purchase

31

-

-

State subsidy

70

-

-

12

258

2,300

(5,996)(322)(2,870)Gain on sales of investment securities
Loss on impairment of fixed assets (Note 14)
Compensation for product

(823)

-

-

Repair work expense

(119)

(519)

(4,626)

Other, net
Income (loss) before income taxes and non-controlling interests(1,267)(411)(3,663)(9,571)(1,833)(16,338)(8,620)2,402

21,411

Income taxes (Note 15)
Current

392

535

4,769

Deferred

89

(270)

(2,406)

481

265

2,363

Income (loss)(9,101)

2,137

19,048

Income (loss) attributable to non-controlling interests

50

161

1,434

Income (loss) attributable to owners of the Company¥(9,151)¥1,976$17,614See Accompanying Notes to Consolidated Financial Statements.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
SWCC SHOWA HOLDINGS CO., LTD. and Consolidated Subsidiaries
2016

2017

2017

(Millions of yen)(Thousands of
U.S. dollars)(Note 3)

Income (Loss)(¥9,101)¥2,137$19,048

Other comprehensive income (Note 19)
Unrealized holding gains (losses) on other securities

(127)

177

1,578

Deferred gains (losses) on hedges

(1)

1

9

Variance of land revaluation

197

-

-

Foreign currency translation adjustments

(46)

(225)

(2,006)

Remeasurements of defined benefit plans(1,875)

1,184

10,554

(244)

(335)

(2,986)(2,096)

802

7,149

(¥11,197)¥2,939$26,197

Owners of the Company(¥11,245)¥2,781$24,789

Non-controlling interests

48

158

1,408

Share of other comprehensive income of affiliates in equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to

See Accompanying Notes to Consolidated Financial Statements.

CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETSSWCC SHOWA HOLDINGS CO., LTD. and Consolidated Subsidiaries(Millions of yen)

Shareholders’ equity

Commonstock

Balance at April 1, 2015
Transfer to retained earnings from
capital surplus
Income (loss) attributable toowners of the Company forthe year
Purchase of treasury stock
Changes other thanshareholder’s equity¥24,222

Balance at March 31, 2016¥24,222

CapitalsurplusRetainedearnings(losses)¥5,915¥(395)(378)

378

Accumulated other comprehensive income

Treasury
Total
stock
shareholder’sequity¥(15)¥(9,168)¥29,727¥691-

Varianceof landevaluation

Foreign currencytranslation
adjustments¥5,346¥2,464

Total
accumulated
NonRemeasurements
othercontrollingof defined benefit comprehensive interests
plans
income¥(1,611)¥6,890¥305

Total
net assets¥36,922--(1)(9,151)(1)(9,151)(1)¥(16)¥20,575(9,151)¥5,537

Unrealized
Deferredholding gains gains (losses)
on securities
on hedges

(124)

(1)

197

(291)

(1,875)(2,094)48(2,046)

¥567

¥(1)

¥5,543¥2,173¥(3,486)¥4,796¥353¥25,724(Millions of yen)

Shareholders’ equity

Commonstock

Balance at April 1, 2016
Transfer to retained earnings from
capital surplus
Income (loss) attributable toowners of the Company forthe year
Purchase of treasury stock
Changes other thanshareholder’s equity¥24,222

Balance at March 31, 2017¥24,222

Capitalsurplus¥5,537Retainedearnings(losses)Accumulated other comprehensive income

Treasury
Total
stock
shareholder’sequity¥(9,168)¥(16)¥20,575

(0)

1,976
(0)

¥(16)

¥22,551

1,976¥5,537¥(7,192)

Unrealized
Deferredholding gains gains (losses)
on securities
on hedges
¥567

¥(1)

Varianceof landevaluation

Foreign currencytranslation
adjustments¥5,543¥2,173

Total
accumulated
NonRemeasurements
othercontrollingof defined benefit comprehensive interests
plans
income¥(3,486)¥4,796¥353

Total
net assets¥25,724

1,976
(0)
176

1

-

(556)

1,184

805

151

956

¥743

¥-

¥5,543¥1,617¥(2,302)¥5,601¥504¥28,656(Thousands of U.S. dollars) (Note 3)
Shareholders’ equity

Balance at April 1, 2016
Transfer to retained earnings from
capital surplus
Income (loss) attributable toowners of the Company forthe year
Purchase of treasury stock
Changes other thanshareholder’s equity
Balance at March 31, 2017

Commonstock

CapitalsurplusRetainedearnings(losses)$215,902$49,354$(81,719)

Accumulated other comprehensive income

Treasury
Total
stock
shareholder’sequity$(143)

17,614$49,354

See Accompanying Notes to Consolidated Financial Statements.

$(64,105)$5,054$(9)

Varianceof landevaluation

Foreign currencytranslation
adjustments$49,407$19,369$(31,073)$42,748$3,146

17,614(0)$215,902$183,394

Unrealized
Deferredholding gains gains (losses)
on securities
on hedges

Total
accumulated
NonRemeasurements
othercontrollingof defined benefit comprehensive interests
plans
income$(143)$229,288

17,614(0)$201,008

Total
net assets

(0)
1,569
$6,623

9$-$49,407(4,956)$14,413

10,554$(20,519)

7,176$49,924

1,346$4,492

8,522$255,424

CONSOLIDATED STATEMENT OF CASH FLOWSSWCC SHOWA HOLDINGS CO., LTD. and Consolidated Subsidiaries
2016

2017

2017

(Millions of yen)(Thousands of
U.S. dollars)(Note 3)

Cash flows from operating activities:¥(8,620)¥2,402$21,411

Depreciation and amortization

Income (loss) before income taxes and non-controlling interests

3,700

2,929

26,106

Loss on impairment of fixed assets

5,996

322

2,870

Gain on sales of investment securities

(12)

(258)

(2,300)Loss on devaluation in investment securities

5

-

-

(123)

(6)

(53)

Increase (decrease) in reserve for construction loss

25

(69)

(615)

Increase (decrease) in provision for net defined benefit liability

28

56

499

Interest and dividend income

(131)

(97)

(865)

Interest expenses

966

852

7,594

Compensation for product823

Increase (decrease) in allowance for doubtful accounts(Increase) decrease in trade notes and accounts receivable(Increase) decrease in inventories

-

-

3,180

892

7,951

891

1,979

17,640(1,840)(343)(3,057)

5

131

1,168

Increase (decrease) in other current liabilities

(411)

94

838

Other

1,134

96

856

Increase (decrease) in trade notes and accounts payable(Increase) decrease in other current assets

5,616

8,980

80,043

Interest and dividends received

Sub-total

157

125

1,114

Interest paid

(965)

(854)

(7,612)Business structure improvement expenses paid

(16)

(30)

(267)

Income taxes paid

(246)

(379)

(3,379)

4,546

7,842

69,899Net cash provided by (used in) operating activities

Cash flows from investing activities:
Purchases of investment securities

(10)

(9)

(80)

Proceeds from sales of investment securities

19

525

4,680

Purchases of property, plant and equipment(24,334)(3,242)(2,730)

Proceeds from sales of property, plant and equipment

243

179

1,596

Proceeds from sales of intangible assets

(482)

(285)

(2,540)

Expenditures for acquisition of investments in an affiliate(439)(Increase) decrease in short-term loans receivable

36

Payments for execution of assets retirement obligations
Other
Net cash provided by (used in) investing activities

-

-

-

30

267

(24)

(214)

29

95

846

(3,846)(2,219)(19,779)

2016

2017

2017

(Millions of yen)(Thousands of
U.S. dollars)(Note 3)

Cash flows from financing activities:
322(3,736)

Proceeds from long-term debt

Increase (decrease) in short-term bank borrowings

7,900

7,500

66,851

Repayment of long-term debt

(9,723)(9,615)(85,703)

Cash dividends paid to non-controlling interests(33,301)

(4)

(8)

(71)

(785)

(648)

(5,776)

Net cash provided by (used in) financing activities(2,290)(6,507)(58,000)

Effect of exchange rate changes on cash and cash equivalents

(96)

(205)

(1,827)

Net increase (decrease) in cash and cash equivalents(1,686)(1,089)(9,707)

Cash and cash equivalents at beginning of year

7,968

6,282

55,995

Cash and cash equivalents at end of year (Note 4)¥6,282¥5,193$46,288

Other

See Accompanying Notes to Consolidated Financial Statements.

NOTES TO CONSOLIDATED FINANCIALSTATEMENTS
SWCC SHOWA HOLDINGS CO., LTD. and Consolidated Subsidiaries

1. Basis of Presentation
The accompanying consolidated financial statements of SWCC SHOWA HOLDINGS CO., LTD. (the“Company”) and its consolidated subsidiaries (collectively the “Companies”) have been prepared on the basis ofaccounting principles generally accepted in Japan, which are different in certain respects as to the application anddisclosure requirements of International Financial Reporting Standards, and have been compiled from theconsolidated financial statements prepared by the Company as required by the Financial Instruments andExchange Law of Japan.
In addition, the notes to the consolidated financial statements include information which is not required underaccounting principles generally accepted in Japan. Certain reclassifications have been made to present theaccompanying consolidated financial statements in a format which is familiar to readers outside Japan.

2. Summary of Significant Accounting Policies(a) Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. In
preparing the consolidated financial statements, all significant intercompany transactions, account balances andunrealized profits or losses among the Companies have been eliminated. In the elimination of investments inconsolidated subsidiaries, the assets and liabilities of the consolidated subsidiaries, including the portion
attributable to minority shareholders, are recorded based on the fair value at the time the Company acquired
control of the respective subsidiaries.
Differences between the cost of the investments in consolidated subsidiaries and the underlying equity at fairvalue of dates of acquisition have been amortized by the straight-line method over a period of five years.
The equity method of accounting has been adopted for investments in the major affiliated companies over which
the Company exercises significant influence in terms of their operating and financial policies.
The total assets, retained earnings, net sales and net income (loss) of the unconsolidated subsidiaries andaffiliated companies which are not accounted for by the equity method in the aggregate were not significant inrelation to the corresponding consolidated balances of the Companies.
The number of the consolidated subsidiaries is 22 at March 31, 2017, which are listed as follows:
Name

Percentage ofequity ownership

Paid-in
capital(Millions)

SWCC Showa Cable Systems Co., Ltd.

100.0 %

¥10,000

SWCC Showa Device Technology Co., Ltd.

100.0

3,500

Unimac Ltd.

55.0

480

Fuji Electric Cable Co., Ltd.

100.0

318

Daiji Co., Ltd.

100.0

100

AXIO Corporation

100.0

310

SWCC Showa Business Solutions Co., Ltd.

100.0

100

SDS Corporation

100.0

100

Logis-Works Co., Ltd.

100.0

95

Aomori Showa Electric Cable Co., Ltd.

100.0

80

Tamagawa Magnet Wire Co., Ltd.

100.0

46

Showa Recycle Co., Ltd.

100.0

20

Showa Technical Corporation

100.0

20

Shoukou Equipment Industry Co., Ltd.

100.0

80
US$17.0

Tianjin Showa Enamelled Wire Co., Ltd.

54.8

Fuqing Showa Precision Electronics Co., Ltd.

100.0

US$3.4SWCC Showa (VIETNAM) Co., Ltd.

100.0

US$7.0

SWCC Showa (ShangHai) Co., Ltd.

100.0

US$9.9Jiaxing Showa Interconnect Products Co., Ltd.

95.2

US$3.2SWCC Showa (H.K.) Co., Ltd.

100.0

HK$84.3

Dongguan Showa Interconnect Products Co., Ltd.

100.0

US$1.7

Showa Science Co., Ltd.

70.0

40

1

The number of affiliates, in which investments are accounted for by the equity method, is 4 at March 31, 2017,
which are listed as follows:
Percentage ofPaid-inequity ownership

capital(Millions)

Hua Ho Engineering Co., Ltd.

50.0 %

NT$35

Showa-TBEA (Shan Dong) Cable Accessories Co., Ltd

49.0

US$14

FuTong-Showa Electric Wire & Cable (HangZhou) Co., Ltd

49.0

CNY¥374

FuTong-Showa Electric Wire & Cable (TianJin) Co., Ltd

49.0

CNY¥100

Effective the year ended March 31, 2017, HangZhou FuTong Showa Interconnect Products Co., Ltd. has been
excluded from the scope of the consolidated subsidiaries since its liquidation was completed.
Effective the year ended March 31, 2017, HangZhou FuTong-Showa Electric Wire Cable Material R&D Co., Ltd
has been excluded from the scope of the equity method affiliated companies since its stocks were sold.
(b) Foreign Currency Translation
Assets and liabilities denominated in foreign currencies are translated into Japanese yen at applicable exchange
rates at the balance sheet date, and differences resulting from the translation are included in other income or otherexpenses in the consolidated statements of income.
The assets and liabilities of foreign consolidated subsidiaries and affiliates that operate in local currency aretranslated into Japanese yen at the applicable exchange rates at the balance sheet date, except for the components
of net assets excluding minority interests which are translated at their historical exchange rates. Income andexpense accounts are also translated at the applicable exchange rates at the balance sheet date. Differences arisingfrom the translation are presented as translation adjustments and minority interests in accumulated othercomprehensive income of its consolidated financial statements.
(c) Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand, cash in banks which is readily available and short-term
investments with maturities of three months or less when purchased which can easily be converted to cash and are
subject to little risk of change in value.
(d) Inventories
Inventories are primarily stated at the lower of cost determined by the average method or net realizable value.
Inventories of certain consolidated subsidiaries are stated at the lower of cost determined by the moving averagemethod or by the specific identification method or net realizable value. When the costs exceed the net realizablevalues, inventories are written down to the net realizable value.
(e) Investment Securities
Marketable securities classified as “other securities” are carried at fair value with changes in unrealized holding
gains or losses, net of the applicable income taxes, included directly in net assets. Non-marketable securities
classified as “other securities,” which have no fair values, are carried at cost determined by the moving averagemethod. Cost of securities sold is determined by the moving average method.
(f) Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation is calculated by the straight-line method over theestimated useful lives. The main estimated useful lives of property, plant and equipment are as follows:
Buildings and structures
Machinery and vehicles
Equipment and tools

31 years (3 - 50 years)
7 years (2 - 14 years)
5 years (2 - 15 years)(g) Intangible Assets
Intangible assets are amortized by the straight-line method over each of their estimated useful lives. Especially,
computer software for internal use is amortized by the straight-line method over its estimated useful lives of 5
years.
(h) Leases
Depreciation of finance lease assets that transfer ownership of the assets, mainly office equipment is calculatedby the same method applied for property, plant and equipment.
Finance leases, the agreements of which do not include the transfer of ownership, are accounted for in the samemanner as ordinary purchase transactions of fixed assets and are depreciated by straight-line method over the2respective lease terms with a zero residential value. While, finance leases, the agreements of which do not include
the transfer of ownership and started on or before March 31, 2008, are accounted for as operating leases.
(i) Allowance for Doubtful Accounts Receivable
The allowance for doubtful accounts receivable is provided based on historical default rates and additional
estimated uncollectible amounts to cover specific doubtful accounts receivable.
(j) Retirement Benefits(1) Method of attributing benefits to periods of service
When calculating retirement benefit obligations, the straight-line basis is used for attributing expected retirement
benefits to periods of service.
(2) Method of expenses for actuarial gains and losses
Actuarial gains and losses are amortized on a straight-line basis over certain periods within the averageremaining service lives of employees (mainly 13 years) from the year following that in which they arise.
(k) Provision for Retirement Benefits for Directors and Statutory Auditors
To provide for the future benefit payment for directors and statutory auditors, the Companies have provided
accrued retirement benefits based on their internal regulations.
(l) Provision for Loss on Construction Contracts
Provision for loss on construction contract is provided at the estimated amount for anticipated losses on theconstruction contracts in progress.
(m) Provision for business structure improvement Expenses
Provision for business structure improvement is proved based on an estimate of business structure improvement
expenses.
(n)Revenue and Cost of Construction Contracts
The Company recognized revenue and cost of construction contracts under the percentage-of-completion method
if the outcome of the construction activity is deemed certain during the course of the activity. Otherwise, theCompany recognized revenue and cost upon completed-contract method. The percentage of completion is
calculated at the cost incurred as a percentage of the estimated total cost.
(o) Derivative
The Companies use foreign currency forward exchange contracts and interest rate swap agreements to hedge therisk of fluctuations in foreign currency exchange rates and interest rates, respectively. Gain or loss on changes in
the fair market values of the derivative financial instruments which meet certain criteria as hedges is deferred on
the balance sheet until gain or loss on the hedged items are recognized.
However, foreign currency forward exchange contracts, which meet certain conditions, are accounted for as apart of translating foreign currency monetary assets and liabilities in the consolidated balance sheets.
In case where interest rate swap agreements are used as hedges and meet certain hedging criteria, the net
amount to be paid or received under the contract is added to or deduced from the interest on the assets or liabilities
for which the swap contract is executed.
Since commencement of hedge contracts, the Companies have assessed the effectiveness of each hedge contract
by comparing the total cash flow fluctuation or market fluctuation of hedging instruments and hedged items.
(p) Consumption Taxes
Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes.
(q) Income Taxes
Deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax
bases of the assets and liabilities and are measured using the enacted tax rates and laws which will be in effectwhen the differences are expected to reverse. The companies in Japan file the consolidated tax return. Overseas
consolidated subsidiaries are subject to income taxes in the countries in which they operate.
(Additional Information)(Application of Reserved Implementation Guidance on Recoverability of Deferred Tax Assets)
The Companies have adopted the “Revised Implementation Guidance on Recoverability of Deferred Tax Assets(ASBJ Guidance No.26, March 28, 2016) from the current fiscal year.

33. U.S. Dollar Amounts
For the convenience of the readers outside Japan, the accompanying consolidated financial statements arepresented in U.S. dollars by translating all Japanese yen amounts at the exchange rate of ¥112.19= US$1.00
prevailing on March 31, 2017. This translation should not be construed as a representation that the Japanese yenamounts actually represent, or have been or could be converted into U.S. dollar amounts at the above or any otherrate.
4. Cash and Time Deposits
Information regarding cash and time deposits at March 31, 2016 and 2017 was as follows:
2016

2017

2017

(Millions of yen)(Thousands of
U.S. dollars)

Cash and time deposits due within 3 months
Time deposits due over 3 months
Total¥6,282
128¥5,193
128$46,288
1,140¥6,410¥5,321$47,428

5. Inventories
The breakdown of Inventories at March 31, 2016 and 2017 was as follows:
2016

2017

2017

(Millions of yen)(Thousands of
U.S. dollars)

Merchandise and finished goods
Work in process
Raw materials and supplies¥9,4257,454
4,217¥8,333
6,274
4,510$74,276
55,92340,200¥21,096¥19,117$170,399

Inventories were revalued at the lower of cost or net realizable value with devaluation losses, which were
included in Cost of Sales, for the years ended March 31, 2016 and 2017 in the amounts of ¥61 million and ¥173
million (US$1,542 thousand), respectively.
6. Investment Securities(a) Information regarding marketable other securities at March 31, 2016 and 2017 was as follows:
Acquisition
cost

2016
Carrying Unrealized
value gain (loss)

2017
Acquisition Carrying Unrealized
cost
value gain (loss)(Millions of yen)2017
Acquisition Carrying Unrealized
cost
value
gain (loss)(Thousands of U.S. dollars)

Securities whose carrying value exceeds their acquisition cost:
Stocks¥862¥1,937¥1,075¥728¥1,929¥1,201$6,489$17,194$10,705

Securities whose acquisition cost exceeds their carrying value:
Stocks

877

667

(210)

756

642

(114)

6,739

5,722

(1,016)

Total¥1,739¥2,604¥865¥1,484¥2,571¥1,087$13,228$22,916$9,689(b) Sales of other securities
Information regarding other securities which have been sold out by March 31, 2016 and 2017 was as follows:
2016
Amount of the sale2017
Income of the saleAmount of the sale2017
Income of the sale(Millions of yen)

Stocks¥19¥12

Amount of the sale

Income of the sale

(Thousands of U.S. dollars)

¥525

4

¥258

$4,680$2,3007. Short-term and Long-term Debts
Short-term debt composes short-term borrowings and current portion of long-term borrowings, finance leaseobligations. The weighted average interest rates for short-term borrowings and current portion of long-termborrowings at March 31, 2017 were 1.618% and 1.591%, respectively.
Short-term borrowings and long-term borrowings at March 31, 2016 and 2017 consisted of the following:
2016

2017

(Millions of yen)

2017
(Thousands of
U.S. dollars)

Short-term borrowings
Unsecured
SecuredLong-term borrowings
Unsecured
Secured¥11,436
19,557¥8,431
18,836$75,149
167,894¥30,993¥27,267$243,043¥15,292
9,365¥13,897
8,645$123,870
77,057¥24,657¥22,542$200,927

Long-term debt at March 31, 2016 and 2017 consisted of the following:
2016

2017

(Millions of yen)

2017
(Thousands of
U.S. dollars)

Loans principally from banks and insurance companies due
serially to 2024 and predominantly collateralized,with a weighted average interest of 1.517%
Finance lease obligations due 2025
Less: portion due within one year

¥24,657
1,833(9,779)¥22,542
1,610(8,554)$200,927
14,351(76,246)¥16,711¥15,598$139,032

The aggregate annual maturities of long-term debt subsequent to March 31, 2017 were as follows:Year ending March 31,(Millions of yen)(Thousands of
U.S. dollars)

2018¥6,807$60,673

2019

4,807

42,847

2020

2,593

23,1132021 and thereafter

1,391

12,399¥15,598$139,032

At March 31, 2016 and 2017, the following assets were pledged as collateral for certain of the above debts:
2016

2017

(Millions of yen)

2017
(Thousands of
U.S. dollars)

Investment securities¥892¥1,042$9,288

4,038

3,995

35,609

586

867

7,728

Land

18,152

18,180162,047

Other

67

86

767

¥23,735¥24,170$215,439

Property, plant and equipment, at net book value:
Buildings and structures
Machinery, equipment and tools58. Leases
The following pro forma amounts represent the acquisition costs, accumulated depreciation and net book valueof finance leases, the agreements of which do not include the transfer of ownership and started on or before March
31, 2008, as of March 31, 2016 and 2017, which would have been reflected in the consolidated balance sheets if
the leases had been accounted for in the same manner as ordinary purchase transactions of fixed assets:
2016

2017

(Millions of yen)

Acquisition costs
Accumulated depreciation
Net book value

2017(Thousands of
U.S. dollars)

¥169
162

¥-

$-

¥7

¥-

$-

Note: Assumed acquisition costs include the capitalized interest thereon, as the proportion of future minimum lease payments to total property,
plant and equipment at fiscal year-end is immaterial.

Future minimum lease payments subsequent to March 31, 2016 and 2017, for finance leases, the agreements ofwhich do not include the transfer of ownership and started on or before March 31, 2008, are summarized asfollows:
2016

2017

(Millions of yen)

Within one year
Over one year
Total

2017
(Thousands of
U.S. dollars)

¥7
-

¥-

$-

¥7

¥-

$-

Note: Assumed future minimum lease payments for finance leases include the capitalized interest thereon, as the proportion of future minimum
lease payments to total property, plant and equipment at fiscal year-end is immaterial.

Lease payments under such leases for the years ended March 31, 2016 and 2017, were ¥44 million and ¥7
million (US$62 thousand), respectively. These lease payments were equal to the depreciation of leased assets
computed by the straight-line method over the respective lease terms with a zero residential value.
In addition, the future minimum payment for operating leases subsequent to March 31, 2016 and 2017 aresummarized as follows:
2016

2017

(Millions of yen)

Within one year
Over one year
Total

2017
(Thousands of
U.S. dollars)

¥64
528

¥62
465

$553
4,144

¥592

¥527

$4,697

9. Retirement Benefits for Employees
Parent company and domestic consolidated subsidiaries are providing defined benefit corporate pension plans as
defined benefit plans and lump-sum retirement benefit plans and defined contribution pension plans. In addition,
the parent company and certain consolidated subsidiaries set the employee retirement benefit trust.
Defined benefit corporate pension plan and lump sum retirement benefit plan with certain subsidiaries calculated
defined benefit liabilities and retirement benefit costs by the simplified method.
(a) Defined benefit plans (excluding plans applying the simplified method)(1) Movements in retirement benefit obligations
2016

2017

(Millions of yen)

2017
(ThousandsofU.S. dollars)

Beginning balance
Service cost
Interest cost
Actuarial gains and losses
Benefits paid
Ending balance

6¥12,516
486
102
1,310
(640)

¥13,774
537
28
(208)
(609)

$122,774
4,786
250(1,854)(5,428)¥13,774¥13,522$120,528

(2) Movements in plan assets
2016

2017

2017

(Millions of yen)(ThousandsofU.S. dollars)

Beginning balance
Expected return on plan assets
Actuarial gains and losses
Contributions paid by the employer
Benefits paid

¥14,791
518
(902)
257
(640)

¥14,024
491
605
615
(609)

$125,002
4,376
5,393
5,482
(5,428)Ending balance¥14,024¥15,126$134,825(3) Reconciliation from retirement benefit obligations and plan assets to net defined benefit liabilities (assets) inthe consolidated balance sheets
2016

2017

2017

(Millions of yen)(ThousandsofU.S. dollars)

Funded retirement benefit obligations
Plan assets¥13,774(14,024)¥13,522(15,126)$120,528(134,825)

Total net defined benefit liabilities (assets)¥ (250)¥ (1,604)$(14,297)

Net defined benefit liabilities¥ (250)¥ (1,604)$(14,297)

Total net defined benefit liabilities (assets)¥ (250)¥ (1,604)$(14,297)(4) Retirement benefit costs
2016

2017

2017

(Millions of yen)(ThousandsofU.S. dollars)Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial gains and losses

¥486
102
(518)
315

¥537
28
(491)
324

$4,786250(4,376)
2,888

Total retirement benefit costs

¥385

¥398

$3,548(5) Remeasurements of defined benefit plans (before tax)
2016

2017

2017

(Millions of yen)(ThousandsofU.S. dollars)

Actuarial gains and losses¥(1,897)¥1,136$10,126

Total¥(1,897)¥1,136$10,126(6) Accumulated remeasurements of defined benefit plans (before tax)
2016

2017

2017

(Millions of yen)(ThousandsofU.S. dollars)

Unrecognized actuarial gains and losses
Total¥4,213¥3,076$27,418¥4,213¥3,076$27,418(7) Plan assets
1) Plan assets at March 31, 2016 and 2017 comprise the following :Life insurance company general accounts
Domestic bonds
Domestic equity securities
Foreign bonds
Foreign equity securities
Other assets
Total

2016

2017

27.0%
12.5%
31.6%
7.2%
8.4%
13.3%

27.4%
9.7%
35.9%
6.7%
9.0%
11.3%

100％

100％

Note: In the above plan assets, the percentage of the retirement benefit trust for the years ended March 31, 2016 and 2017 was 22.7% and 26.6%, respectively.

72) Long-term expected rate of return
Current and target asset allocations, current and expected returns on various categories of plan assets have been
considered in determining the long-term expected rate of return.
(8) Actuarial assumptions
The principal actuarial assumptions at March 31, 2016 and 2017 are as follows:
Discount rateLong-term expected rate of return
Assumed salary increase rate

2016

2017

0.2%
3.5%
2.7~3.4%

0.3%
3.5%
2.6~3.3%(b) Defined benefit plans applying the simplified method(1) Movements in defined benefit liabilities applying the simplified method
2016

2017

2017

(Millions of yen)(ThousandsofU.S. dollars)

Beginning balance
Retirement benefit costs
Benefits paid
Contributions paid by the employer
Foreign currency translation adjustments
Ending balance

¥396
333
(125)
(186)
(1)

¥417
241
(108)
(95)
(2)

$3,717
2,148
(963)
(846)
(18)

¥417

¥453

$4,038(2) Reconciliation from retirement benefit obligations and plan assets to net defined benefit liabilities (assets)
applying the simplified method in the consolidated balance sheets
2016

2017

2017

(Millions of yen)(ThousandsofU.S. dollars)

Funded retirement benefit obligations
Plan assets
Unfunded retirement benefit obligations¥1,250(1,134)301¥1,340(1,197)309$11,944(10,699)
2,755

Total net defined benefit liabilities (assets)

¥417

¥453

$4,038Net defined benefit liabilities
Net defined benefit assets

¥565
(148)

¥622
(168)

$5,544(1,497)

Total net defined benefit liabilities (assets)

¥417

¥453

$4,038(3) Retirement benefit cost calculated by the simplified method
2016

2017

2017

(Millions of yen)(ThousandsofU.S. dollars)

Retirement benefit cost

¥333

¥241

$2,148(c) Defined contribution plans
The amount of contributions to the defined contribution plans of the Company and its consolidated subsidiaries
at March 31, 2016 and 2017 were ¥200million and ¥221 (US$1,970 thousand), respectively.

10. Contingent Liabilities
At March 31, 2016 and 2017, the Companies were contingently liable for the following items:
2016

2017

(Millions of yen)

2017
(Thousands of
U.S. dollars)Discounted and endorsed trade notes receivable
Guarantees of indebtedness of employees

8¥2,043¥1,961$17,4795

3

27¥2,048¥1,964$17,50611. Land Revaluation
In accordance with the Law Concerning Revaluation of Land enacted on March 31, 1998 and the Law whichrevises a part of Law Concerning Revaluation of Land enacted on March 31, 2001, land owned by the Company
used for business was revalued, and the unrealized gain on the revaluation of land, net of deferred tax, wasreported as “Variance of land revaluation” within net assets, and the relevant deferred tax was included inliabilities as “Deferred taxes related to land revaluation” at March 31, 2002.
The fair value of the land at March 31, 2016 and 2017 was lower than its carrying amount by ¥8,933 million and¥8,807 million (US$78,501 thousand), respectively.
12. Net Assets
The Japanese Corporate Law (the “Law”) provides that amounts from capital surplus and retained earnings may
be distributed to the shareholders at any time by resolution of the shareholders or by the Board of Directors if
certain provisions are met subject to the extent of applicable sources of such distributions.
The Law further provides that amounts equal to 10% of such distributions be transferred to the capital reserve
included in capital surplus or the legal reserve included in retained earnings based on the applicable sources ofsuch distributions until the sum of the capital reserve and the legal reserve equals 25% of common stock.
Information regarding changes in net assets for the years ended March 31, 2016 and 2017 was as follows:(a) Shares issued and treasury stock
For the year ended March 31, 2016
Types of shares

Number of sharesat April 1, 2015

Increase

Number of shares
at March 31, 2016

Decrease

Thousands of shares
Share issued:
Common stock
308,269
Treasury stock:
Common stock
126
7
Note: Increase of 7 thousand shares in treasury stock is due to purchases of shares less than standard unit.

308,269133

For the year ended March 31, 2017
Types of shares

Number of sharesat April 1, 2016

Increase

Number of shares
at March 31, 2017

Decrease

Thousands of shares
Share issued:
Common stock
308,269
Treasury stock:
Common stock133
5
Note: Increase of 5 thousand shares in treasury stock is due to purchases of shares less than standard unit.

308,269138(b) Dividends
There were no dividends paid to owners of the Company for the years ended March 31, 2016 and 2017.

13. Selling, General and Administrative Expenses
The breakdown of “Selling, General and Administrative Expenses” for the years ended March 31, 2016 and 2017
was as follows:
2016

2017

(Millions of yen)

2017
(Thousands of
U.S. dollars)

Shipping charges
Other selling expenses
Salaries and other allowances for employees
Retirement benefits expenses for employees
Retirement benefits expenses for directors and statutory auditors
Allowance for doubtful accounts
Depreciation and amortization cost
Other

¥1,345
448
6,844
472
28
(47)
1,037
6,651

¥1,153
361
6,691
421
24
(3)
970
6,248

$10,277
3,218
59,640
3,753
214
(27)
8,646
55,691¥16,778¥15,865$141,412

Research and development expensed included in “Selling, general and administrative expenses” and manufacture
costs for the year ended March 31, 2016 and 2017 amounted to ¥830 million and ¥216 million, ¥746 million(US$6,649 thousand) and ¥182 million (US$1,622 thousand), respectively.
914. Impairment of Fixed Assets
For assessment of impairment of fixed assets, the Companies group idle assets and leased assets based on an
individual asset, and other assets based on the categories used in the company’s managerial accounting, where
gain or loss is periodically monitored.
In relation to seismic isolation device manufacturing equipment, the profitability from the business has been
worsened and the book value of the asset was reduced to the recoverable amount.
In relation to the fixed assets for business offices which are scheduled to be relocated, not expected to be usedin the future, and likely to be disposed of, the book value of the assets was reduced to the recoverable amount.
The recoverable amounts are determined at their net selling prices and based on the estimated selling prices. For
the seismic isolation device manufacturing equipment and the office equipment, the recoverable amounts are thenet selling prices, which are stated at the fair market value.
The amounts written down were recorded as losses on impairment of fixed assets. The breakdown of losses on
impairment of fixed assets was as follows:
2016

2017
(Millions of yen)

Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures
Land
Lease assets
Other

Location

Asset Group¥2,357
2,643
95
253
553
95
¥5,996
Fixed Assets

2017(Thousands of
U.S. dollars)

¥238
46
6
32
¥322
2016

$2,122410
53285$2,8702017

2017(Thousandsof U.S.

(Millions of yen)dollars)

Tokyo

Kanagawa

Miyagi

Miyagi

Aichi

Okayama

Kanagawa

Tianjin
China
Aichi

Office equipment
Seismic isolation
device manufacturing
equipment
Overhead transmission
line manufacturing
equipment
Communication cablemanufacturing
equipment
Electric power cablemanufacturing
equipment
Wire harness
manufacturing
equipment
Rubber coated wire
manufacturing
equipment
Winding wire
manufacturing
equipment
Idle assets
Total:

Buildings and structures,
tools, furniture and fixtures, lease assets
Buildings and structures, machinery,equipment and vehicles, tools, furniture andfixtures, lease assets and others
Buildings and structures, machinery,equipment and vehicles, tools, furniture andfixtures, lease assets and others
Buildings and structures, machinery,equipment and vehicles, tools, furniture andfixtures, lease assets and others
Buildings and structures, machinery,equipment and vehicles, tools, furniture andfixtures and lease assets
Buildings and structures, machinery,equipment and vehicles, land, tools, furnitureand fixtures, lease assets and others
Buildings and structures, machinery,equipment and vehicles, tools, furniture andfixtures and others
Buildings and structures, machinery,equipment and vehicles, tools, furniture andfixtures and lease assets
Buildings and structures, land

10

¥-

¥276

$2,460

1,650

46

410

1,069

-

-

1,040

-

-

853

-

-

520

-

-

476

-

-

336

-

-

52
¥5,996¥322$2,87015. Income Taxes
Significant components of deferred taxes at March 31, 2016 and 2017 were as follows:
2016

2017

2017

(Millions of yen)(Thousands of
U.S. dollars)¥2,601
621
464
2,655
2,401

¥2,492
620
499
2,104
2,223

$22,212
5,526
4,448
18,754
19,815

8,742(7,619)
1,123

7,938
(6,454)
1,484

70,755(57,527)
13,228

(46)
(300)
(149)
(329)

(52)
(344)
(149)
(379)

(464)
(3,066)(1,329)(3,378)

Total deferred tax liabilities

(824)

(924)

(8,237)

Net deferred tax assets (liabilities):

¥299

¥560

$4,991

1,212(1,212)(4,227)(4,227)¥ (4,227)

1,212(1,212)(4,227)(4,227)¥(4,227)

10,803(10,803)(37,677)(37,677)$(37,677)

Deferred tax assets:
Loss carry-forwards
Unrealized gain on real estate
Accrued bonuses
Depreciation
Other
Subtotal deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Net defined benefit asset
Unrealized holding gains on securities
Profit and loss adjustment of group company transaction
Other

Deferred tax assets related to land revaluation:
Valuation allowance
Total deferred tax assets related to land revaluation
Deferred tax liabilities related to land revaluation:
Total deferred tax assets (liabilities) related to land revaluation
Net deferred tax liabilities related to land revaluation:

The differences between the statutory tax rate and the effective tax rate were summarized as follows:
2016

2017

(%)

(%)

Legal effective tax rate
30.9
The items which are never counted in loss of money such as donations
1.9
△47.0
The amount of increase and decrease of the amount of evaluation-related mortgage△3.5
The items which are never counted in loss of money such as receipt dividend
Residence tax per capita rate
3.5
The amount of foreign tax
4.6
Investment loss by the equity method
1.1
Retained earnings of subsidiary companies
4.5
Other
15.0
Effective tax rate
11.0
Note: The description above in 2016 was omitted because loss before income taxes and non-controlling interests were recorded.

16. Financial Instruments(a) Policy for financial instruments
According to the fund management policy of the Company, temporary surplus funds will be invested into thehighly secured financial assets, and fund procurement is primarily made by bank loans. Derivative transactions are
only used for hedging risk of the significant fluctuations in interest rates and foreign currency exchange rates, notfor speculative purpose.
(b) Financial instruments and accompanying risks
Trade notes and accounts receivable are exposed to customer credit risk. Trade receivables in foreign currencies
and foreign-currency loans to the group companies are exposed to exchange rate fluctuation risk, which is hedged
through foreign currency forward exchange contracts. Investment securities are composed primarily of equity
securities of customers and exposed to the market value fluctuation risk.
Trade notes and accounts payable normally have payment terms of less than one year. Although part of theabove trade payables and foreign-currency borrowings are exposed to the risk of exchange rate fluctuation, thebalances are constantly monitored to be within the balance of foreign-currency trade receivables. Long-term debts,
which have maturity dates within seven years, are primarily utilized to secure financing for equipment. Long-termborrowings which are based on variable interest rates are exposed to interest rate fluctuation risk. However, they11are hedged through derivative transactions, i.e. interest rate swap agreements.
Derivative transactions consist mainly of foreign currency forward exchange contracts which are used forhedging the risk of exchange rate fluctuations in trade receivables and payables denominated in foreign currency,
and interest rate swap contracts which are used for hedging the risk of interest rate fluctuations in borrowings. As
hedging policy, appropriate hedge instruments shall be selected depending on category of risks. Evaluation ofhedge effectiveness is performed by comparing cumulative fluctuation of market value or of cash flows of hedged
items with that of market value or of cash flows of hedging instruments.
(c) Risk management system associated with financial instruments
1) Credit risk management (Risk of default on the receivable from counterparties, etc.)
The Companies manage payment term and payment balance by customer in order to control and mitigate
credit risks for financial difficulties in accordance with the Companies’ credit management policy.
When dealing with the derivative transactions, the Companies only trade with highly rated financial
institutions to minimize the counterparty’s credit risks.
2) Market risk management (Risk of exchange rate and interest rate fluctuation, etc.)
The Company utilizes foreign currency forward exchange contracts to hedge the risk of exchange rate
fluctuation. Depending on the situation of foreign currency exchange market, the Companies use foreignforward exchange contracts for trade receivables denominated in foreign currency. On the other hand,interest rate swap agreements are utilized to hedge the interest rate fluctuation risk associated withcorporate bonds and borrowings.
The Company periodically reviews the fair values of financial instruments, such as marketable securities
and investment securities, and the financial position of the issuers. Based on this information andrelationship with the issuers, the Company evaluates whether the securities should be maintained or not.
Derivative transactions are performed and managed in accordance with the Companies’ credit management
policy.
3) Liquidity risk management on financing activities (Risk of inability to repay on due date)
The Company, as parent company, procures fund for the group companies. The finance department
prepares and updates financing plans periodically based on the group companies’ demand for fund andkeeps a certain amount of cash in hand for the purpose of liquidity risk management.
(d) Other supplemental information on in the fair value of financial instruments
The fair values of financial instruments are determined at the markets prices or reasonable estimated fair values
when the market values are not available. The estimated fair values will fluctuate due to variety of factors andassumptions.
Information regarding non-marketable other securities, for which it is extremely difficult to determine the fairvalue at March 31, 2016 and 2017 is shown as follows:
2016

2017

2017

Carrying amounts(Millions of yen)(Thousands of
U.S. dollars)

Other securities
Investments in unlisted companies¥4,155¥3,636$32,409¥4,155¥3,636$32,409

The carrying amounts and fair values of the financial instruments as of March 31, 2016 and 2017 are summarized
as follows:
2016
Carrying
amounts(1) Cash and time deposits(2) Trade notes andaccounts receivable
Allowance for
doubtful accounts(3) Investment securities
Other securities

2017

Fair
ValuesDifferences

Carrying
amounts(Millions of yen)¥¥5,321¥6,410¥6,41042,345--(15)
42,33042,326

2,604

2,604

2017

Fair
ValuesDifferences

Carrying
Fair
Differences
amounts
Values(Thousands of U.S. dollars)$47,428$47,428$-¥5,321¥-

41,453--

369,489

-

-

(4)

(10)
41,44341,441(2)(89)
369,400

369,382

(18)

-

2,571

2,571

-

22,916

22,916-12

(4) Trade notes andaccounts payable(21,261)(21,261)(20,895)(20,895)(186,247)(186,247)(5) Short-term borrowings(30,992)(30,992)(27,267)(27,267)(243,043)(243,043)(6) Long-term borrowings(24,657)(24,546)(111)(22,542)(22,488)(54)(200,927)(200,446)(481)(7) Derivative transactions(i) Hedge accounting
not applicable
(10)
(10)
(3)
(3)
(27)
(27)
(ii) Hedge accounting
applicable1
1
Notes:(1) Cash and time deposits
The carrying amount approximates fair value due to the short maturity of these instruments.
(2) Trade notes and accounts receivable
The fair value of trade notes and accounts receivable is based on the present value using appropriate current discount rate decided
upon the recovery term and the credit risk.
(3) Investment securities
The fair value of investment securities is based on quoted market price.
(4) Trade notes and accounts payable
The carrying amount approximates fair value due to the short maturity of these instruments.
(5) Short-term borrowings
The carrying amount approximates fair value due to the short maturity of these instruments. Long-term borrowings within one year
are recorded in long-term borrowings.
(6) Long-term borrowings
The fair value of long-term borrowings are based on the current discounted interest rates for the borrowings with the same
conditions. Long-term borrowings with the maturity term within one year are included.

Redemption schedules for cash and trade receivables after March 31, 2016 and 2017 are summarized as follows:
Within 1 year

Over 1 year
and within 5
yearsOver 5 years
and within
10 yearsWithin 1
year(Millions of yen)
2016
Cash and time deposits
Trade notes andaccounts receivable
Total of the amounts
2017
Cash and time deposits
Trade notes andaccounts receivable
Total of the amounts

Over 1 year
and within 5
yearsOver 5 years
and within 10
years(Thousands of U.S. dollars)¥6,410¥-¥-40,685¥47,095

1,660¥1,660¥-¥5,321¥-¥-$47,428$-$-

40,179¥45,500

1,274¥1,274¥-358,133$405,561

11,356$11,356$-

Redemption schedules for trade payables, short-term and long-term borrowings after March 31, 2016 and 2017
are summarized as follows:
Within 1 year

Over 1 year
and within 5
yearsOver 5 years
and within 10
years

Within 1
year(Millions of yen)
2016
Trade notes and accounts
payableShort-term borrowings
Long-term borrowings
Total of the amounts
2017
Trade notes and accounts
payableShort-term borrowings
Long-term borrowings
Total of the amounts

Over 1 year
and within 5
yearsOver 5 years
and within 10
years(Thousands of U.S. dollars)¥21,261¥-¥-

30,992
9,269¥61,522

15,301¥15,301

87¥87¥20,895¥-¥-$186,247$-$-

27,267
8,050¥56,212

14,407¥14,40785¥85

243,043
71,753$501,043

128,416$128,416

758
$758

13

17. Derivatives
The following is a summary of the derivative contracts which do not meet the criteria for hedge accounting:Currency-related Transactions
2016

2017

2017

Contracted

Fair

RecognizedContracted

Fair

RecognizedContracted

Fair

Recognizedamountvalue

gain (loss)

amountvalue

gain (loss)

amountvalue

gain (loss)(Millions of yen)

Forward foreignexchange contracts(Sell-USD)

¥145

¥10

¥10

(Thousands of U.S. dollars)

¥347

¥(3)

¥(3)

$3,093

$(27)

$(27)

Note: Fair value is based on the quoted market values provided by financial institutions.

The following is a summary of the derivative contracts which meet the criteria for hedge accounting:(a) Currency-related Transactions
2016

2017

2017

Contracted

Fair

RecognizedContracted

Fair

RecognizedContracted

Fair

Recognizedamountvalue

gain (loss)

amountvalue

gain (loss)

amountvalue

gain (loss)(Millions of yen)

Forward foreignexchange contracts(Buy-EUR)

¥38

¥(1)

¥(1)

(Thousands of U.S. dollars)

¥-

¥-

¥-

$-

$-

$-

Note: Fair value is based on the quoted market values provided by financial institutions.

(b) Interest-related Transactions
2016
Contracted
amountContracted
amount over
1 year

2017
Fair
value

Interest rate swaps
Pay/fixed andReceive/floating
Long-term debt

Contracted
amount2017

Contracted
amount over
1 yearFair
value(Millions of yen)Contracted
amountContracted
amount over
1 yearFair
value(Thousands of U.S. dollars)¥13,965¥9,436¥¥13,246¥8,731¥$118,068
Note: Fair value of the interest rate swaps transaction is included in the fair value of the long-term debts.

$77,823$-

18. Per Share Information
Income (loss) and net assets per share for the years ended March 31, 2016 and 2017 were as follows:
2016

2017
(Yen)

Income (loss) attributable to owners of the Company per share
Net assets per share¥(29.7)¥82.342017(U.S. dollars)¥6.41¥ 91.36$0.057$0.814

Income (loss) attributable to owners of the Company per share is calculated based on the income (loss)
attributable to owners of the Company and the weighted average number of shares outstanding during each year.
Net assets per share are calculated based on the net assets excluding the non-controlling interests and the numberof shares outstanding at the year end.
The basis for calculation of basic net income per share was as follows:
2016

2017

(Millions of yen)

Income (loss) attributable to owners of the Company
Income (loss) attributable to shares of common stock¥(9,151)¥(9,151)

Weighted average number of shares of common stock

308,139¥1,976¥1,976(Thousands of shares)

14308,133

2017(Thousands of
U.S. dollars)$17,614$17,61419. Other Comprehensive Income
Reclassification adjustments and tax benefit included in other comprehensive income are shown as follows:
2016

2017

(Millions of yen)

Net unrealized holding gains (losses) on other securities
Increase (decrease) during the year¥(133)
Reclassification adjustments(11)
Subtotal before tax(144)
Tax effect17
Net unrealized holding gains (losses) on other securities(127)
Deferred gains (losses) on hedges
Increase (decrease) during the year(1)
Net deferred gains (losses) on hedges(1)
Variance of land revaluation
Tax effect197
Foreign currency translation adjustments
Increase (decrease) during the year(46)
Remeasurements of defined benefit plans
Increase (decrease) during the year
(2,212)
Reclassification adjustments
315
Subtotal before tax(1,897)
Tax effect22
Net remeasurements of defined benefit plans(1,875)
Share of other comprehensive income of affiliates in equity method
Increase (decrease) during the year(244)
Total other comprehensive income¥(2,096)2017(Thousands of
U.S. dollars)

¥480
(259)
221
(44)
177

$4,279(2,309)
1,970
(392)
1,578

1
1

9
9

-

-

(225)

(2,006)

813
323
1,136
48
1,184

7,247
2,879
10,126428
10,554(335)¥802(2,986)$7,14920. Segment Information
Business Segments
The businesses of the Companies are divided based on the similarity in products and service into fiveclassifications whose financial information is separately available for the management to make decisions
regarding management resources allocation and evaluate each business segment results regularly.
The Companies primarily operate in the following five reportable business segments:(1) Electric Wire operations:
Bare conductors, rubber, plastic insulated wires, power distribution equipment, bus, overhead transmission
line(2) Power System operations:Electric power cables, electric power appliance, power cable constructions(3) Magnet Wire operations:
Magnet wires(4) Communication System operations:
Optical fiber cables, communication cables, communication accessories, optical components, connector,
communication cable construction, network solution system(5) Device operations:
Wire harnesses, seismic isolation, vibration controlling and noise controlling devices, copier and printerdeviceDue to change of the quality control system, certain electric power cables included in electric wire operations
have been transferred into power system operations from this first quarter. By changing the belonging oftransactions in order to perform profit management properly, certain material transactions included in electric wire
operations have been transferred into communication system operations from this third quarter.
The business segment “Others” which is not stated as reportable business segment, includes the businesses ofsuperconducting wires, logistics and other operations.
Reportable segment income (loss) is evaluated based on operating income or loss. The intersegment sales andtransfers between segments are made at arm’s length prices.
The business segment information for the Companies for the year ended March 31, 2016 is summarized asfollows:

15

2016

Reportable Business Segments

Segment Information

Electric

Power System

Wire

MagnetCommunication

Wire

SystemOthersDevice

Total

Adjustments

Consolidated(Millions of yen)
Net sales¥79,348

Outside customers¥23,483¥21,959¥21,713¥21,224¥1,986¥169,713¥-¥169,713

Inter segment

18,030

140

1,266

1,603

276

10,11931,434(31,434)-

Total¥97,378¥23,623¥23,225¥23,316¥21,500¥12,105¥201,147¥(31,434)¥169,713

Segment income ( loss)¥1,000¥(464)

¥15

¥799

¥(68)

¥(430)

¥852

¥99

¥951

Segment assets¥46,807¥24,139¥12,903¥17,052¥12,433¥10,961¥124,295¥(1,226)¥123,069

747

431

449

565

671

953

3,816

(116)

3,700

method affiliates

2,458

985

-

-

-

105

3,548

-

3,548

Increase in fix assets

865

326

357

524

499

1,505

4,076

(93)

3,983

Depreciation
Investments in equity

Notes:(1) Segment income (loss) included in Adjustments of ¥99 million, mainly consisted of unrealized gain of ¥82 million.
(2) Segment assets included in Adjustments amounting to ¥1,226 million, mainly consisted of the common assets not allocated toany segment of ¥9,471 million, elimination of inter-segment transactions of ¥8,555 million and unrealized gain of ¥2,143
million. The common assets not allocated to any segment mainly consisted of cash, time deposits and investment securities.
(3) Depreciation in Adjustments corresponds to unrealized gain.
(4) Increase in fixed assets in Adjustments corresponds to unrealized gain.
(5) Segment income (loss) corresponds to consolidated operating income.
The consolidated company of SWCC Showa Cable Systems Co., Ltd. additionally increased capital of affiliated company
accounted for by the equity-method of FuTong-Showa Electric Wire & Cable (HangZhou) Co., Ltd for the year ended March
31, 2016. As a result of this acquisition, gain on bargain purchase of ¥31 million was recognized.

The business segment information for the Companies for the year ended March 31, 2017 is summarized as follows:
2017

Reportable Business Segments

Segment Information

Electric
Wire

Power
SystemMagnetWire

Communication
SystemOthersDevice

Total

Adjustments

Consolidated(Millions of yen)
Net sales
Outside customers¥69,564¥23,841¥19,790¥20,361¥19,890¥1,787¥155,233¥-¥155,233

Inter segment

13,253

75

1,573

1,102

27

9,733

25,763(25,763)-

Total¥82,817¥23,916¥21,363¥21,463¥19,917¥11,520¥180,996¥(25,763)¥155,233

Segment income (loss)¥1,469¥782¥246¥1,069¥991¥(292)¥4,265¥(30)¥4,235

Segment assets¥44,744¥24,995¥11,831¥17,015¥12,480¥10,222¥121,287¥(1,758)¥119,529

692

263

392

415

286

976

3,024

(95)

2,929

method affiliates

2,121

917

-

-

-

-

3,038

-

3,038

Increase in fix assets

796

371

441

613

274

797

3,292

(48)

3,244

Depreciation
Investments in equity

2017

Reportable Business Segments

Segment Information

Electric Wire

Power
SystemMagnetWire

Communication
SystemDeviceOthers

Total

Adjustments

Consolidated(Thousands of U.S. dollars)
Net sales
Outside customers$620,055$212,506$176,397$181,487$177,289$15,928$1,383,662$-$1,383,662

Inter segment

118,130669

14,0219,823

24186,753229,637(229,637)

-

Total

$738,185$213,175$190,418$191,310$177,530$102,681$1,613,299$(229,637)$1,383,662

Segment income (loss)$13,094$6,970$2,193$9,528$8,833$(2,603)$38,015$(266)$37,749

Segment assets$398,823$222,792$105,455$151,662$111,240$91,114$1,081,086$(15,670)$1,065,416

6,168

2,344

3,494

3,699

2,549

8,700

26,954(848)

26,106

method affiliates

18,905

8,174

-

-

-

-

27,079-27,079

Increase in fix assets

7,095

3,307

3,931

5,464

2,442

7,104

29,343(428)

28,915

Depreciation
Investments in equity

Notes:(1) Segment income (loss) included in Adjustments of ¥30 million (US$266 thousand), mainly consisted of unrealized gain of16

¥15 million (US$134 thousand).
(2) Segment assets included in Adjustments amounting to ¥1,758 million (US$15,670 thousand), mainly consisted of thecommon assets not allocated to any segment of ¥8,040million (US$71,664 thousand), elimination of inter-segment
transactions of ¥7,842 million (US$69,899thousand) and unrealized gain of ¥2,104 million (US$18,754 thousand). The
common assets not allocated to any segment mainly consisted of cash, time deposits and investment securities.
(3) Depreciation in Adjustments corresponds to unrealized gain.
(4) Increase in fixed assets in Adjustments corresponds to unrealized gain.
(5) Segment income (loss) corresponds to consolidated operating income.

Geographical Segments
Geographical segment sales for the years ended March 31, 2016 and 2017 are summarized as follows:Year ended March 31, 2016

Japan

Asia

Other

Total

¥150,729¥18,700¥284¥169,713

Japan

Asia

Other

Total

¥137,429¥17,554¥250¥155,233

Japan

Asia

Other

Total

(Millions of yen)

Sales

Year ended March 31, 2017

(Millions of yen)

Sales

Year ended March 31, 2017

(Thousands of U.S. dollars)

Sales$1,224,967$156,467$2,228$1,383,662

Note: Countries and area are segmented based on the customers’ geographical locations.

Major Customer Information
2016
Major customer

Sales (Millions of yen)Segments

SENSHU ELECTRIC CO.,LTD.

¥17,254

Electric Wire and Communication System

2017
Major customer

Sales (Millions of yen)Segments

SENSHU ELECTRIC CO.,LTD.

¥16,145

Electric Wire and Communication System

2017
Major customer

Sales (Thousands of U.S. dollars)

Segments

SENSHU ELECTRIC CO.,LTD.

$143,908

Electric Wire and Communication System

Segment information on impairment losses on fixed assets for the years ended March 31, 2016 and 2017 aresummarized as follows:
Reportable Business Segments
Year ended March

Electric

Power

MagnetCommunication

31, 2016

Wire

SystemWire

SystemDeviceOthersEliminations

Total

¥(17)

¥5,996(Millions of yen)
Impairment losses of¥1,545¥854¥336¥1,040¥2,186¥52

fixed assets
Note: “Others” for the year ended March 31, 2016 is related to the idled leased assets which are owned by the company engaged in administrative managementbusiness.

17

Reportable Business Segments
Year ended March

Electric

Power

MagnetCommunication

31, 2017

Wire

SystemWire

System

¥-Impairment losses of(Millions of yen)¥-¥-

Device¥-¥46

Others¥276

Eliminations

¥-

Total

¥322

fixed assets
Reportable Business Segments
Year ended March

Electric

Power

MagnetCommunication

31, 2017

Wire

SystemWire

SystemDeviceOthersEliminations

Total

$-

$2,870(Thousands of U.S. dollars)

Impairment losses of

$-

$-

$-

$-

$410

$2,460fixed assets
Note: “Others” for the year ended March 31, 2017 is related to the idled assets, mainly which are owned by the company engaged in administrative managementbusiness.

21. Subsequent Events(a) Merger of SWCC Showa Cable Systems Co., Ltd., SWCC Showa Device Technologies Co., Ltd. and SWCC
Showa Business Solutions Co., Ltd.
The Company’s two subsidiaries, SWCC Showa Device Technologies Co., Ltd. and SWCC Showa Business
Solutions Co., Ltd. were merged into the Company’s subsidiary, SWCC Showa Cable Systems Co., Ltd., on
April 1, 2017.
(1) Transactions summary(i) Name of companies and description of business involved in business combination
Name of merging company: SWCC Showa Cable Systems Co., Ltd.
Description of business: Manufacture and sales of electric wires, cables, optical fiber cables
Name of merged company: SWCC Showa Device Technologies Co., Ltd.
Description of business: Manufacture and sales of information devices and rubber and plastic processing
products
Name of merged company: SWCC Showa Business Solutions Co., Ltd.
Description of business: Support services for group businesses(ii) Date of the merger
April 1, 2017(iii) Legal form of the merger
Absorption-type merger, with SWCC Showa Cable Systems Co., Ltd. as the surviving company, and
SWCC Showa Device Technologies Co., Ltd. and SWCC Showa Business Solutions Co., Ltd. as theabsorbed companies.
(iv) Name of company after the merger
SWCC Showa Cable Systems Co., Ltd.
(v) Other transactions summary
To promote implementing organizational reforms and focusing our efforts on growth areas, which are theprimary measures of the Company’s “Mid-term business plan 2016-2018”, above companies were merged
into SWCC Showa Cable Systems Co., Ltd. with the objectives of improving the productivity by increasing
the efficiency of the organization and strengthening the responsiveness for customer needs by concentrating
management resources.
(2)Accounting summary
Pursuant to the “Accounting Standard for Business Combination” (ASBJ Statement No.21 issued on
September 13, 2013) and Guidance on Accounting Standard for Business Combination and for Business
Divestitures (ASBJ Guidance No.10 issued on September 13, 2013), the transaction was accounted for astransactions under common control.
(b) Reduction of the amount of capital reserve
On May 18, 2017, the Company’s board of directors decided to propose at 121st annual general shareholders’meeting to be held at June 23, 2017 that the capital reserve should be transferred to other capital surplus. The
proposal was resolved at the general shareholders’ meeting.
18

(1)Purpose of reduction of capital reserve
To provide for the mobile and flexible capital policy, the capital reserve is reduced and the corresponding
amount is transferred to other capital surplus.
(2)Description of reduction of capital reserve
Based on the Article 448, paragraph 1 of the Companies Act, total amount of capital reserve was reversed andthe amount was transferred to other capital surplus.
(i) Reserve to be reduced and the amount
Capital reserve ¥5,530,650,174 (US$49,297,176)(ii) Other capital surplus to be increased
Other capital surplus ¥5,530,650,174 (US$49,297,176)(3)Schedule on reduction of capital reserve(i)
May 18, 2017
Resolution of the board of directors on the reduction of capital reserve(ii) May 19, 2017
First day of creditors’ formal objection(iii) June 20, 2017
Final day of creditors’ formal objection(iv) June 23, 2017
Effective date of reduction of capital reserve(4) Other
Since this is the transfer of account within the Net assets, there is no change in the Company’s Net assets.
Accordingly, this does not have any impact on the Company’s income.
(c) Change in number of share unit and reverse split
On May 22, 2017, the Company’s board of directors decided to propose at 121st annual general shareholders’meeting to be held at June 23, 2017 the reverse split and the partial change in the articles of corporation
including change in the number of the unit shares. The proposal was resolved at the general shareholders’meeting.
(1)Purpose of change of the number of the unit shares and the reverse split
The stock exchanges in Japan announced "the action plan for the consolidation of the trading unit shares" andaim at unifying the trading unit shares of the common stocks issued by domestic companies listed on the Stock
Exchange to 100 unit shares.
The Company respects this idea as a company listed on Tokyo Stock Exchange and changes the trading unit ofshares from 1,000 to 100 and decides to perform a reverse split to consolidate ten shares into one share for the
purpose of maintaining the prices (within the range of ¥50,000 to ¥500,000) of the trading unit as requested bystock exchanges.
(2)Change of the number of the unit shares
The Company changes the number of the unit shares from 1,000 to 100.
(3)Contents of the reverse split(i) Type of shares subject to the reverse split
Common stock(ii) Rate of the reverse split
On October 1, 2017, the Company will consolidate at the rate of one per ten the stocks owned by shareholders
listed in the shareholders' list at September 30, 2017.
(iii) The number of shares to be reduced through the reverse split
The number of issued shares before the reverse split(as of March 31, 2017)308,268,611shares

The number of the shares to be reduced through the reverse split

277,441,750shares

The number of issued shares after the reverse split

30,826,861shares

Note: “The number of the shares to be reduced through the reverse split” and “The number of issued shares after the reverse split” are the theoretical numbers
calculated by multiplying the reverse split ratio by “The number of issued shares before the reverse split”(iv) Processing of the fraction of less than one stock
When the fraction less than one stock is generated as a result of reverse split, in accordance with Article 235,
Paragraph 1 of the Companies Act, the Company disposes of the whole of such fraction and distributes it toshareholders of the fraction according to the ratio of fraction.
(4)Schedule of change of the number of the unit stocks and reverse split
Resolution date of board of directors
May 22, 2017
Resolution date of regular general meeting of shareholders
June 23, 2017
Effective date of change of the number of the unit shares and reverse split
October 1, 201719

(5)Impact on per share information
Supposing that the reverse split had been carried out in the beginning of previous fiscal year, the information of
per share in previous fiscal year and current fiscal year is follows.
2016

2017

Net assets per share2017¥823.37¥913.60$8.143¥(296.98)¥64.14$0.571

Income (loss) attributable toowners of the Company per share

Note: The diluted income (loss) attributable to owners of the Company per share of common stock is not presented, since there were no shares with dilutive effectoutstanding through the period.

(d) Free exchange of power electric components
Late in May 2017, SWCC Showa Cable Systems Co., Ltd.(consolidated subsidiary) was required to replace
power electric components from its client as to the power cable laying, which was ordered in the Middle East
in 2009. As a result of the negotiation, the Company will fill the client’s need for the free exchange and bookthe extraordinary loss of approximately ¥800 million (US$7,131 thousand) for the year ending March 31,
2018.
The above amount was estimated in June 2017, so there’s a possibility that it will change due to fluctuationsin the exchange rate, etc.

20