Consolidated Financial Statements
for the year ended March 31, 2011
SWCC Showa Holdings Co., Ltd.
and Consolidated Subsidiaries

CONSOLIDATED BALANCE SHEETSSWCC SHOWA HOLDINGS CO., LTD. and Consolidated Subsidiaries
At March 31, 2010 and 2011
2010

2011

(Millions of yen)

2011
(Thousands of
U.S. dollars)(Note 4)ASSETS
Current assets:
Cash and time deposits (Notes 5 and 18)¥ 9,538¥11,025

43,922

47,217567,853

Inventories (Note 6)

19,246

19,461

234,047

Deferred tax assets (Note 17)
Other

1,031
2,760

1,062
2,844

12,772
34,203

Trade notes and accounts receivable(Note 18)

Allowance for doubtful accounts$132,592

(162)

(341)

(4,101)

76,335

81,268977,366

Buildings and structures (Note 8)

41,69841,817502,910

Machinery, equipment and tools (Note 8)

74,761

74,174

892,051

Land (Notes 8, 12 and 15)
Other24,727995

24,583614

295,646
7,384

Accumulated depreciation(91,809)(93,833)(1,128,478)

50,37247,355569,513

Total current assets
Property, plant and equipment:

Total property, plant and equipment
Intangible assets
Goodwill

338

250

3,007

1,499
1,837

1, 9362,186

23,283
26,290

7,231

7,170

86,2304

17

204

Other (Note 8)

5,450

4,798

57,703

Allowance for doubtful accounts
Total investments and other assets(493)
12,192(423)
11,562(5,087)139,050¥140,736¥142,371$1,712,219

Other (Note 8)
Total intangible assets
Investments and other assets:
Investment securities (Notes 7, 8 and 18)
Deferred tax assets (Note 17)

Total assets
See Accompanying Notes to Consolidated Financial Statements.

1

2010

2011

(Millions of yen)

2011
(Thousands of
U.S. dollars)(Note 4)

LIABILITIES AND NET ASSETS
Current liabilities:
Short-term debt (Notes 8 and 18)¥ 48,068¥50,720$609,982

22,613245

23,883322

287,228
3,872

Reserve for construction loss

-

20

241

Reserve for disaster loss

-

97

1,167

Trade notes and accounts payable (Notes 8 and 18)
Accrued income taxes

Other
Total current liabilities

10,9449,152

110,066

81,87084,194

1,012,556

12,925

13,253

159,387

796
96

709
90

8,526
1,082

2,043

1,852

22,273Long-term liabilities:
Long-term debt (Notes 8 and 18)
Accrued retirement benefits for employees (Note 10)
Accrued retirement benefits for directors and statutory auditors
Deferred tax liabilities (Note 17)
Deferred tax liabilities related
to land revaluation (Notes 12 and 17)
Other (Note 8)
Total long-term liabilities
Total liabilities

5,410

5,410

65,063

1,441
22,711

1,345
22,65916,176
272,507

104,581

106,853

1,285,063

Contingent liabilities (Note 11)
Net assets:
Shareholders’ equity:
Common stock:
Authorized - 700,000,000 shares
21,222

21,222

255,225

Capital surplus (Note 13)

Issued- 251,126,611 shares

10,6998,035

96,632Retained earnings (deficit) (Note 13)(2,490)

442

5,316

Treasury stock (Note 13)
Total shareholders’ equity(12)
29,419(13)
29,686(156)
357,017

1,405

1,243

14,949

(3)

(0)

(0)

4,338
(294)

4,352
(693)

52,339(8,334)

5,446

4,902

58,954

1,290

930

11,185

Total net assets

36,15535,518427,156

Total liabilities and net assets¥140,736¥142,371$1,712,219

Accumulated other comprehensive income:Unrealized holding gains on other securities
Deferred gains (losses) on hedges
Variance of land revaluation (Note 12)
Foreign currency translation adjustments
Total accumulated other comprehensive income
Minority interests

See Accompanying Notes to Consolidated Financial Statements.

2

CONSOLIDATED STATEMENTS OF OPERATIONSSWCC SHOWA HOLDINGS CO., LTD. and Consolidated Subsidiaries
For the years ended March 31, 2010 and 2011
2010

2011

(Millions of yen)

2011
(Thousands of
U.S. dollars)(Note 4)

Net sales¥141,398¥165,512$1,990,523

Cost of sales

122,819

145,993

1,755,779

18,57919,519234,744

18,645(66)

16,9862,533

204,281
30,463Gross profit
Selling, general and administrative expenses (Note 14)
Operating income (loss)
Other income (expenses):
Interest income
Dividend income
Subsidies for employment adjustments
Interest expense

5

8

96

133

201

2,417

160

-

-

(1,133)(1,121)(13,482)

Equity in losses of unconsolidated subsidiaries and affiliates

(48)

(86)

(1,034)Foreign currency exchange loss

(630)

(614)

(7,384)Gain on compensation for moving

-

175

2,105

Gain on sales of investment securities

3

15

180

Gain on business transfer

161

-

-

Gain on sales of fixed assets
Effect from adoption of the

86

-

-

accounting standard for Construction Contracts

61

-

-

Loss on disaster (Note 16)
Loss on sales of investment shares in an affiliate

-

(495)
(97)

(5,953)(1,167)

Allowance for doubtful accounts

-

(87)

(1,046)

Loss on devaluation of investment securities

-

(1)

(12)

Loss on adoption of accounting standard for assets retirement obligation

-

(60)

(722)

Provision for surcharge

(450)

-

-

Restructuring expenses

(384)

-

-

Loss on impairment of fixed assets (Note 15)
Loss on sales of investment in subsidiaries and affiliates

(333)
(16)

(50)
-

(601)
-

Other, net
Income (loss) before income taxes and minority interests
Income taxes (Note 17)
Current
Deferred

(616)

(172)

(2,068)(3,001)(2,384)(28,671)(3,067)

149

1,792

444

311

3,740

(266)

(147)

(1,768)
1,972

178

164

(3,245)

(15)

(180)

Minority interests

709

297

3,571

Net income (loss)¥ (2,536)¥282$3,391

Loss before minority interests

See Accompanying Notes to Consolidated Financial Statements.

3

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
SWCC SHOWA HOLDINGS CO., LTD. and Consolidated Subsidiaries
For the years ended March 31, 2010 and 2011
2010

2011

(Millions of yen)

Loss before minority interests
Other comprehensive income
Unrealized holding gains (losses) on other securities
Deferred gains (losses) on hedges
Foreign currency translation adjustments
Share of other comprehensive income of affiliates in equity method

2011(3,245)(15)(Thousands of
U.S. dollars)(Note 4)
(180)

808

(162)

(1,948)

21

4

48

(345)

(413)

(4,967)

28

(51)

(614)

512

(622)

(7,481)

Comprehensive income(2,733)(637)(7,661)

Comprehensive income attributable to
Owners of the Company(1,827)(277)(3,331)

(906)

(360)

(4,330)Total other comprehensive income

Minority interests
See Accompanying Notes to Consolidated Financial Statements.

4

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSSWCC SHOWA HOLDINGS CO., LTD. and Consolidated Subsidiaries
For the years ended March 31, 2010 and 2011
(Millions of yen)
Shareholders’ equity

Balance at March 31, 2009
Transfer from capitalsurplus to retained
earnings

Commonstock

CapitalsurplusRetainedearnings(losses)¥21,222¥15,753¥(4,813)(5,054)

5,054

Net loss for the year

DeferredForeign
Total
Unrealized
gains
Variance
currency
Treasury shareholder’s holding gains (losses)of landtranslation
stock
equityon securities on hedges evaluation adjustments¥(11)(2,536)

Change due to increase in
number of subsidiaries
for consolidation(195)

Purchase of treasury stock
Disposal of treasury stock
Changes other thanshareholder’s equity
Balance at March 31, 2010

Accumulated other comprehensive income¥10,699¥(2,490)

¥595

¥(21)

¥4,338¥(175)¥4,737

Minority
interests¥1,368Total
net assets¥38,256(2,536)(2,536)

(195)

(195)

(2)

(2)

(2)

1

1

1

0

¥21,222¥32,151

Total
accumulated
othercomprehensive
income¥(12)¥29,419810

18¥1,405¥(3)¥4,338

(119)

709

(78)

631

¥(294)¥5,446¥1,290¥36,155(Millions of yen)
Shareholders’ equity

Balance at March 31, 2010
Transfer from capitalsurplus to retained
earnings

Commonstock

CapitalsurplusRetainedearnings(losses)¥21,222¥10,699¥(2,490)(2,664)

2,664

Net income for the year

Accumulated other comprehensive income

DeferredForeign
Total
Unrealized
gains
Variance
currency
Treasury shareholder’s holding gains (losses)of landtranslation
stock
equityon securities on hedges evaluation adjustments¥(12)¥29,419¥1,405¥(3)¥4,338¥(294)

Total
accumulated
othercomprehensive
income¥5,446

Minority
interests¥1,290Total
net assets¥36,155

282

282

282

(14)

(14)

(14)

(1)

(1)

(1)

0

0

0

Transfer from variance ofland evaluation
Purchase of treasury stock
Disposal of treasury stock
Changes other thanshareholder’s equity
Balance at March 31, 2011

(0)

¥21,222¥8,035

¥442

¥(13)

¥29,686

(162)

3

14

(399)

(544)

(360)

(904)

¥1,243¥(0)¥4,352¥(693)¥4,902¥930¥35,518(Thousands of U.S. dollars) (Note 4)

Shareholders’ equity

Commonstock

CapitalsurplusRetainedearnings(losses)Accumulated other comprehensive income

DeferredForeign
Total
Unrealized
gains
Variance
currency
Treasury shareholder’s holding gains (losses)of landtranslation
stock
equityon securities on hedges evaluation adjustments

Net income for the year
Transfer from variance ofland evaluation

3,391

3,391

3,391

(168)

(168)

(168)

(12)

(12)

(12)

0

0

0

(0)

$255,225$96,632$(36)$52,171$(3,535)$65,497$15,514$434,817

32,039Purchase of treasury stock

Balance at March 31, 2011$16,897

Total
net assets$255,225 $128,671 $(29,946)

Disposal of treasury stock
Changes other thanshareholder’s equity$353,806

Minority
interests

Balance at March 31, 2010
Transfer from capitalsurplus to retained
earnings(32,039)$(144)

Total
accumulated
othercomprehensive
income$5,316$(156)$357,017

See Accompanying Notes to Consolidated Financial Statements.
5(1,948)36

168(4,799)(6,543)(4,329)(10,872)$14,949$(0)$52,339$(8,334)$58,954$11,185$427,156

CONSOLIDATED STATEMENTS OF CASH FLOWSSWCC SHOWA HOLDINGS CO., LTD. and Consolidated Subsidiaries
For the years ended March 31, 2010 and 2011
2010
2011
(Millions of yen)

2011
(Thousands of
U.S. dollars)(Note 4)

Cash flows from operating activities:
Income (loss) before income taxes and minority interests
Depreciation and amortization¥(3,067)¥149$1,792

4,506

4,216

50,703
601

Loss on impairment of fixed assets

333

50

Provision for surcharge

450

-

-

Gain on sales of investment securities

(3)

(15)

(180)

Loss on sales of investments in subsidiaries and affiliates

16

-

-

Loss on sales of shares in subsidiaries and affiliates

-

97

1,167

Gain on business transfer

(161)

-

-

Gain on sales of property, plant and equipment

(79)

(16)

(192)

Loss on disposal of property, plant and equipment

165

25

300

-

1

12

(136)

110

1,323

Loss on devaluation in investment securities
Increase (decrease) in allowance for doubtful accounts
Increase in reserve for construction loss
Decrease in accrued retirement benefits for employees

-

20

241

(132)

(88)

(1,058)Interest and dividend income

(138)

(209)

(2,514)

Interest expenses

1,133

1,121

13,482

Asset retirement obligations

-

60

722

Increase in reserve for disaster loss

-

97

1,167

(Increase) decrease in trade notes and accounts receivable

1,101(3,294)(39,615)

Increase in inventories

(20)

(215)

(2,586)

Increase in trade notes and accounts payable

2,886

1,484

17,847(Increase) decrease in other current assets

(133)

81

974

Decrease in other current liabilities(604)(1,350)(16,236)

Other
Sub-total

447
6,564

525
2,849

6,313
34,263

137

211

2,538

(1,147)(1,084)(13,037)-(450)(5,412)

(269)

(319)

(3,836)

5,285

1,207

14,516

Purchases of investment securities

(8)

(8)

(96)

Proceeds from sales of investment securities

9

17

204

Purchases of property, plant and equipment(2,669)(1,674)(20,132)

Proceeds from sales of property, plant and equipment

250

188

2,261

Expenditures for acquisition of shares in a subsidiary, net

(7)

-

-

Expenditures for acquisition of investments in an affiliate

(453)

(356)

(4,281)

Interest and dividends received
Interest paid
Surcharge paid
Income taxes paid
Net cash provided by operating activities

Cash flows from investing activities:

Proceeds from sales of investments in an affiliate

197

-

-

Expenditures for acquisition of shares of new consolidated subsidiaries

(168)

-

-

Proceeds for acquisition of shares of new consolidated subsidiaries

115

-

-

-

137

1,647

161

-

-

Proceeds from sales of investments
Gain on business transfer(Increase) decrease in short-term loans receivable
Other
Net cash used in investing activities

6

50

(80)

(962)

(334)

(548)

(6,591)(2,857)(2,324)(27,950)

2010
2011
(Millions of yen)

2011
(Thousands of
U.S. dollars)(Note 4)

Cash flows from financing activities:
Increase (decrease) in short-term bank borrowings(6,803)2,225

26,759Proceeds from long-term debt

9,300

8,466

101,816

Repayment of long-term debt

(8,393)(7,691)(92,495)

Repayment of corporate bonds
Other

(112)

(20)

(241)

(65)

(76)

(914)

(6,073)

2,904

34,925(3,608)Net cash (used in) provided by financing activities
Effect of exchange rate changes on cash and cash equivalents

(63)

(300)

Net increase (decrease) in cash and cash equivalents(3,708)1,487

17,883

Cash and cash equivalents at beginning of year

12,883

9,387

112,893

197--

Increase in cash and cash equivalents due to newly consolidated subsidiaries
Increase in cash and cash equivalents due tomerger with unconsolidated subsidiaries
Cash and cash equivalents at end of year (Note 5)

See Accompanying Notes to Consolidated Financial Statements.

7

15

-

-

¥9,387¥10,874$130,776

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

For the years ended March 31, 2010 and 2011

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 basisof accounting principles generally accepted in Japan, which are different in certain respects as to the applicationand disclosure 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 overwhich 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 at March 31, 2011 is 24 (25 at March 31, 2010) listed as follows:
Name

Percentage ofPaid-inequity ownership

capital(Millions)

SWCC Showa Cable Systems Co., Ltd.

100.0 %

¥10,000

SWCC Showa Device Technology Co., Ltd.

100.0

3,500

EXSYM Corporation

60.0

4,000

Unimac Ltd.

55.0

480

Fuji Electric Cable Co., Ltd.

100.0

318

Daiji Co., Ltd.

100.0

480

AXIO Corporation

100.0

310

Miyazaki Electric Wire & Cable Co., Ltd.

100.0

150

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

STEC (Showa Technical Corporation)

100.0

20

Shoukou Equipment Industry Co., Ltd.

100.0

80

Tianjin Showa Enamelled Wire Co., Ltd.

54.8

US$17.0

Hangzhou Futong Showa Wire & Devices Co., Ltd.

75.0

US$12.2

Fuqing Showa Seiko Electric Co., Ltd.

100.0

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

100.0

US$7.0

SWCC Showa (ShangHai) Co., Ltd.

100.0

US$5.2

Jiaxing Showa Interconnect Products Co., Ltd.

95.2

US$3.28SWCC Showa (H.K.) Co., Ltd.

100.0

HK$84.3

Dongguan Showa Interconnect Products Co., Ltd.

100.0

US$1.9The number of affiliates, in which investments are accounted for by the equity method, is 4 (3 at March 31,2010) listed as follows:
Percentage ofequity ownership

Paid-in
capital(Millions)Showa Science Co., Ltd.

50.0 %¥40

Hua Ho Engineering Co., Ltd.

50.0

NT$35

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

49.0

US$14.0

Hangzhou Futong Showa Copper Co., Ltd37.3

CNY¥39.9

Tonan Seisakusyou Co., Ltd, the former consolidated subsidiary, was merged by Shoukou Equipment
Industry Co., Ltd., on April 1, 2010.
Effective the year ended March 31, 2011, the equity method of accounting has been applied to Hangzhou
Futong Showa Copper Co., Ltd., which was invested by SWCC Showa Cable Systems Co., Ltd. on July 21,
2010.
(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 orother expenses 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 thecomponents of net assets excluding minority interests which are translated at their historical exchange rates.
Income and expense accounts are also translated at the applicable exchange rates at the balance sheet date.
Differences arising from the translation are presented as translation adjustments and minority interests inaccumulated other comprehensive 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 andare 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 of buildings, excluding structures attached to thebuildings, is computed primarily by the straight-line method over the estimated useful lives. Depreciation ofother property, plant and equipment is calculated principally by the declining-balance 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)
10 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.
9(h) Leases
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 therespective lease terms with a zero residential value. While, finance leases, the agreements of which do notinclude the transfer of ownership and started on or before March 31, 2008, are accounted for as operatingleases.
(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) Provision for Retirement Benefits for Employees
Accrued retirement benefits for employees have been provided based on the projected benefit obligation and thefair value of plan assets. Prior service costs are amortized as incurred by the straight-line method over the
average remaining service period of employees expected to receive benefits. Unrecognized actuarial gains andlosses are amortized in the year following the year in which the gains or losses are recognized by thestraight-line method over the average remaining service period of employees.
(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) Reserve for Construction Loss
Reserve for construction loss is provided at the estimated amount for anticipated losses on the construction
contracts in progress.
(m)Reserve for Disaster Loss
Reserve for disaster loss is provided for restoration expenses to recover the damage as a result of the Great East
Japan Earthquake.
(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,
the Company 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 deferredon 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 thetax bases of the assets and liabilities and are measured using the enacted tax rates and laws which will be ineffect when 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.

3. Accounting Standards Adopted in Fiscal Year 2011
Effective from the year ended March 31, 2011, the following new accounting standards were adopted.
10(a) Asset Retirement Obligations
Effective the year ended March 31, 2011, the Company adopted the Accounting Standard, “AccountingStandard for Asset Retirement Obligations” (“ASBJ Statement No.18” issued by the Accounting Standard
Board of Japan on March 31, 2008) and the “Guidance on Accounting Standard for Asset Retirement
Obligations” (“ASBJ Guidance No.21” issued by the Accounting Standard Board of Japan on March 31, 2008).
Under these new accounting standards, the Company records asset retirement obligations at fair value in the
period incurred. The fair value of the liability is resumed as the carrying amount of the associated asset. Thisadditional carrying amount is then depreciated over the life of the assets. The liability increases due to thepassage of time based on the time value of money until the obligation is settled. Subsequent to the initialrecognition, the obligation is revised for any changes in the expected amount of the retirement obligation, andfor accretion of the liability due to the passage of time.
As a result of the adoption of these standards, the income before income tax was decreased by ¥65 million(US$782 thousand) for the year ended March 31, 2011.
(b) Equity Method of Accounting for Investments
Effective the year ended March 31, 2011, the “Accounting Standard for Equity Method of Accounting forInvestments” (“ASBJ Statement No.16” issued by the Accounting Standard Board of Japan on March 10, 2008)
and the “Practical Solution on Unification of Accounting Policies Applied to Associates Accounted for Using
the Equity Method” (“ASBJ PITF No.24” issued by the Accounting Standard Board of Japan on March 10,2008) were adopted.
The effect of this change was immaterial to the consolidated financial statements for the year ended March 31,
2011.
(c) Business Combinations
Effective the year ended March 31, 2011, the “Accounting Standard for Business Combinations” (“ASBJ
Statement No.21” issued by the Accounting Standard Board of Japan on December 26, 2008), the “AccountingStandard for Consolidated Financial Statements” (“ASBJ Statement No.22” issued by the Accounting Standard
Board of Japan on December 26, 2008), the “Partial Amendments to Accounting Standard for Research andDevelopment Costs” (“ASBJ Statement No.3” issued by the Accounting Standard Board of Japan on December
26, 2008), the “Accounting Standard for Business Divestitures” (“ASBJ Statement No.7” issued by the
Accounting Standard Board of Japan on December 26, 2008), the “Accounting Standard for Equity method of
Accounting for investments” (“ASBJ Statement No.16” issued by the Accounting Standard Board of Japan on
December 26, 2008) and the “Guidance on Accounting Standard for Business Combinations and Business
Divestitures” (“ASBJ Guidance No.10” issued by the Accounting Standard Board of Japan on December 26,2008) were adopted.
(d) Presentation of Comprehensive Income
Effective the year ended March 31, 2011, the “Accounting Standard for Presentation of Comprehensive
Income” (“ASBJ Statement No.25” issued by the Accounting Standard Board of Japan on June 30, 2010) was
adopted.
As the result of the adoption of this standard, the Company has presented the consolidated statement ofcomprehensive income for the years ended March 31, 2010 and 2011.
4. 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 ¥83.15 = US$1.00
prevailing on March 31, 2011. 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
other rate.

5. Cash and Time Deposits
Information regarding cash and time deposits at March 31, 2010 and 2011 was as followings:
2010

2011
(Millions of yen)

Cash and time deposits due within 3 months
Time deposits due over 3 months
Total

2011
(Thousands of U.S. dollars)¥9,387¥10,874$130,776

151

151

1,816

¥9,538¥11,025$132,592

11

6. Inventories
The breakdown of Inventories at March 31, 2010 and 2011 was as follows:
2010

2011

2011

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

Merchandise and finished goods¥8,025¥7,763$93,361

Work in process

6,484

6,828

82,117

Raw materials and supplies

4,737

4,870

58,569¥19,246¥19,461$234,047

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, 2010 and 2011 in the amounts of ¥510 million and¥152 million (US$1,828 thousand), respectively.
7. Investment Securities(1) Information regarding marketable other securities at March 31, 2010 and 2011 was as follows:
2010
Acquisition

2011

Carrying Unrealized

cost

value

2011

Acquisition Carrying Unrealized Acquisition Carrying Unrealized

gain (loss)

cost

value

gain (loss)(Millions of yen)

cost

value

gain (loss)(Thousands of U.S. dollars)

Securities whose carrying value exceeds
their acquisition cost:
Stocks¥2,318¥4,822¥2,504¥2,471¥4,737¥2,266$29,718$56,970$27,252

Securities whose acquisition cost exceeds
their carrying value:
Stocks

1,297

1,101

(196)

1,149

910

(239)

13,818

10,944(2,874)

Total¥3,615¥5,923¥2,308¥3,620¥5,647¥2,027$43,536$67,914$24,378(2) Sales of securities classified as other securities amounted to ¥9 million and ¥2 million (US$24 thousand)with an aggregate gain of ¥3 million and ¥0 million (US$0 thousand) for the years ended March 31, 2010
and 2011, respectively.

8. Short-term and Long-term Debts
Short-term debt composes short-term borrowings and current portion of long-term borrowings, corporate bonds
and finance lease obligations. The weighted average interest rates for short-term borrowings and current portionof long-term borrowings at March 31, 2011 were 1.46% and 2.27%, respectively.
Short-term borrowings at March 31, 2010 and 2011 consisted of the following:
2010

2011

(Millions of yen)

2011
(Thousands of
U.S. dollars)

Unsecured

14,554

17,527

Secured26,042

25,295

210,788304,209¥40,596¥42,822$514,997

Long-term debt at March 31, 2010 and 2011 consisted of the following:
2010

2011

(Millions of yen)

2011
(Thousands of
U.S. dollars)

0.55% yen unsecured straight bonds due 2012

110

90

1,082

20,287302

21,061
338

253,289
4,065

Loans principally from banks and insurance companies due
serially to 2016 and predominantly collateralized,with a weighted average interest of 2.33%
Finance lease obligations due 2018
Less: portion due within one year12

(7,552)(8,003)(96,247)¥13,147¥13,486$162,189

The aggregate annual maturities of long-term debt subsequent to March 31, 2011 were as follows:Year ending March 31,(Millions of yen)(Thousands of
U.S. dollars)

2013¥4,917$59,134

2014

4,157

49,994

2015

2,582

31,052

2016 and thereafter

1,830

22,009¥13,486$162,189

At March 31, 2010 and 2011, the following assets were pledged as collateral for certain of the above debts:
2010

2011

(Millions of yen)

2011
(Thousands of
U.S. dollars)

Investment securities¥3,783¥3,534$42,502

9,133

9,045

108,779

Property, plant and equipment, at net book value:
Buildings and structures
Machinery, equipment and tools

1,082

698

8,395

Land

18,251

18,157

218,364

Other

55

193

2,321

¥32,304¥31,627$380,361

9. Leases
As lessee
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, 2010 and 2011, 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:
2010

2011

(Millions of yen)

2011
(Thousands of
U.S. dollars)

Acquisition costs
Accumulated depreciation¥3,5952,135¥2,737
1,856$32,916
22,321

Net book value¥1,460¥881$10,595

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, 2010 and 2011, for finance leases, the agreementsof which do not include the transfer of ownership and started on or before March 31, 2008, are summarized asfollows:
2010

2011

(Millions of yen)

Within one year
Over one year
Total

2011
(Thousands of
U.S. dollars)

¥579
881

¥425
456

$5,111
5,484¥1,460¥881$10,595

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, 2010 and 2011, were ¥749 million and ¥575
million (US$6,915thousand), 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, 2010 and 2011 aresummarized as follows:
13

2010

2011

(Millions of yen)

Within one year
Over one year
Total

2011
(Thousands of
U.S. dollars)

¥351
738

¥363
406

$4,366
4,882¥1,089¥769$9,248

10. Retirement Benefits for Employees
The Companies have principally defined benefit plans such as employee’s pension fund and defined benefit
corporate pension plans, lump-sum retirement benefit plans and defined contribution pension plans. Someconsolidated overseas subsidiaries have defined benefit plans.
(1) Retirement benefit obligation:
2010

2011

(Millions of yen)

2011
(Thousands of
U.S. dollars)

Retirement benefits obligation
Plan assets at fair value
Unfunded retirement benefit obligation
Prepaid pension cost
Unrecognized prior service cost
Unrecognized actuarial loss
Retirement benefit obligation for employees¥ (12,092)¥ (11,966)

9,826

9,446

$ (143,909)
113,602(2,266)(2,520)(30,307)(3,473)(3,245)(39,025)

8

6

72

4,935

5,050

60,734¥ (796)¥ (709)$ (8,526)

2010

2011

(2) The components of retirement benefit expenses:(Millions of yen)

2011
(Thousands of
U.S. dollars)Service cost

¥736

¥753

Interest cost

203

210

2,525

Expected return on plan assets for the year

(284)

(316)

(3,800)

Amortization of prior service cost
Amortization of actuarial loss
Total
Notes

$9,056

2

2

24

632

598

7,192

¥1,289¥1,247$14,997

1. Retirement benefit expenses for consolidated subsidiaries adopting the simplified method are included in “Service Cost.”
2. The Companies’ contribution to defined contribution pension plans is included in “Service Cost.”(3) The actuarial assumptions used in the above computations for the years ended March 31, 2010 and 2011:
a. Methods of attributing the projected benefit obligations to periods of service: straight-line basis
b. Discount rate:

2.0%

c. Expected rate of return on plan assets:

3.5%

d. The actuarial gain or loss and prior service cost are amortized by the straight-line method over 13 years, which are the estimatedaverage remaining years of service of the eligible employees.

11. Contingent Liabilities
At March 31, 2010 and 2011, the Companies were contingently liable for the following items:
2010

2011

(Millions of yen)

2011
(Thousands of
U.S. dollars)Discounted and endorsed trade notes receivable
Guarantees of indebtedness of employees
Guarantees of indebtedness of affiliates

14

¥ 825

¥1,120$13,470

36

27

324

70

-

-

¥931

¥1,147$13,79412. 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, 2010 and 2011 was lower than its carrying amount by ¥8,171 millionand ¥8,520 million (US$102,465 thousand), respectively.

13. 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, 2010 and 2011 were as follows:(a) Shares issued and treasury stock
For the year ended March 31, 2010
Types of shares

Number of shares

Increase

at March 31, 2009

Number of shares

Decrease

at March 31, 2010

Thousands of shares
Share issued:
Common stock

251,127--

251,127

77

54

38

93

Treasury stock:
Common stock

Note: Increase of 54 thousand shares in treasury stock is due to purchases of 25 thousand shares less than standard unit and increaseof 29 thousand shares of treasury stock which were owned by the consolidated subsidiaries.
Decrease of 38 thousand shares in treasury stock is due to sales of 9 thousand shares less than standard unit and decrease of 29
thousand shares of treasury stock which were owned by the consolidated subsidiaries.

For the year ended March 31, 2011
Types of shares

Number of shares

Increase

at March 31, 2010

Number of shares

Decrease

at March 31, 2011

Thousands of shares
Share issued:
Common stock

251,127--

251,127

Common stock93
50
Note: Increase of 5 thousand shares of treasury stock is due to purchases of shares less than standard unit.

98

Treasury stock:

Decrease of 0 thousand shares of treasury stock is due to sales of shares less than standard unit.

(b) Dividends
There were no dividends paid for the years ended March 31, 2010 and 2011.

14. Selling, General and Administrative Expenses
The breakdown of “Selling, General and Administrative Expenses” for the years ended March 31, 2010 and2011 was as follows:
2010

2011

(Millions of yen)

2011
(Thousands of
U.S. dollars)

Shipping charges¥1,637¥1,730$20,806

Other selling expenses

1,265

1,329

15,983

Salaries and other allowances for employees

6,790

5,955

71,617Retirement benefits expenses for employees

870

893

10,740Retirement benefits expenses for directors and statutory auditors

27

19

228

Allowance for doubtful accounts

109

47

565

Depreciation and amortization cost
Other

15

681

667

8,022

7,266

6,346

76,320¥18,645¥16,986$204,281

Research and development expensed included in “Selling, general and administrative expenses” andmanufacture costs for the year ended March 31, 2010 and 2011 amounted to ¥1,040 million and ¥201 million,¥822 million (US$9,886 thousand) and ¥157 million (US$1,888 thousand), respectively.
15. Impairment of Fixed Assets
For the years ended March 31, 2010 and 2011, the Companies recognized loss on impairment of fixed assets of¥333 million and ¥50 million (US$601 thousand).
For assessment of impairment of fixed assets, the Companies group idle assets and assets for lease based on
an individual asset, and other assets based on the categories used in the company’s managerial accounting,where gain or loss periodically monitored.
For the year ended March 31, 2010, as for idle assets located in Tianjin, China, their market value hasremarkably fallen against their carrying amount and the book value of the assets was reduced to recoverable
amount. The amount written down was ¥59 million. As for facilities related to manufacture of electric wires
located in Aomori, Japan, their profitability had remarkably declined due to market deterioration and the bookvalue of the assets was reduced to recoverable amount. The amount written down was ¥274 million.
For the year ended March 31, 2011, as for idle assets located in Fukushima, their market value hasremarkably fallen against their carrying amount and the book value of the assets was reduced to recoverable
amount. The amount written down was ¥50 million (US$601 thousand).
The recoverable amounts are their net selling prices based on estimated selling prices and the published land
price.
The amount written down was recorded as loss on impairment of fixed assets. The breakdown of loss on
impairment of fixed assets was as follows:
2010

2011

2011
(Thousands of
U.S. dollars)$601(Millions of yen)
Land

¥ 15

¥50

Machinery, equipment and tools

289

0Finance lease assets

29

0

0

¥333

¥50

$601

0

16. Loss on disaster
Details of loss on disaster due to temporary operating cease of Sendai factory of SWCC Showa Cable Systems
Co., Ltd. and the head factory of Tamagawa Magnet Wire Co., Ltd. caused by the Great East Japan Earthquake
on March 11, 2011 are shown as follows:
2011

2011

(Millions of yen)Fixed expenses due to non-operating(Thousands of
U.S. dollars)¥224$2,694

Loss on disposal of property, plant and equipment

39

469

Loss on disposal of inventories

52

625

Restoration expenses and others
Total

180

2,165

¥495

$5,953

17. Income Taxes
Significant components of the Companies’ deferred taxes at March 31, 2010 and 2011 were as follows:
2010

2011

(Millions of yen)

2011
(Thousands of
U.S. dollars)

Deferred tax assets:
Loss carry-forwards¥7,073¥7,294$87,721

Unrealized gain on real estates

621

621

7,468

Accrued bonuses

660

587

7,060

Depreciation

384

341

4,101

-

303

3,644

401

-

-

311
2,059

1,937

23,295Land devaluation
Other accounts payable
Retirement benefits
Other
Subtotal deferred tax assets
Valuation allowance
Total deferred tax assets
16

11,50911,083

133,289(9,840)(9,454)(113,698)

1,669

1,629

19,591

Deferred tax liabilities:
Prepaid pension cost

(1,372)(1,260)

Unrealized holding gains on securities

(876)

(784)

(15,153)(9,429)

Other

(429)

(359)

(4,317)

Total deferred tax liabilities(2,677)(2,403)(28,899)

Net deferred tax assets (liabilities):¥(1,008)¥(774)$(9,308)

Deferred tax assets related to land revaluation:

1,559

1,554

18,689Valuation allowance
Total deferred tax assets related to land revaluation(1,559)-(1,554)-(18,689)-

Deferred tax liabilities related to land revaluation:(5,410)(5,410)(65,063)(5,410)(5,410)(65,063)¥ (5,410)¥(5,410)$(65,063)

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

Reconciliation of the difference between the statutory tax rate and effective rate on taxable income for the year
ended March 31, 2010 is not presented since the Company recorded loss before income taxes and minority
interests.
The significant differences between the statutory tax rate and the effective tax rate for the year ended March 31,
2011 are summarized as follows:
2011
Statutory tax rate

39.5%

Change in valuation allowance(258.2)

Inhabitant tax per capita

50.8

Expenses not deductible for tax purposes

227.1

Equity in earnings of affiliates

22.8

Foreign taxes

22.5

Other

5.3
109.9%

Effective tax rate

18. 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 necessary funds for finance investment are primarily borrowed throughbank loans. Derivative transactions are only used for hedging risk of the significant fluctuations in interest rates
and foreign currency exchange rates, not for 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 among the Companies are exposed to exchange rate fluctuation risk, which ishedged through foreign currency forward exchange contracts. Investment securities are composed primarily ofequity 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, they
are constantly controlled within the amount of foreign-currency trade receivables. Corporate bonds andlong-term debts, which have maturity dates within five years and two months, are primarily utilized to secure
financing for equipment. Certain bonds and borrowings which are based on variable interest rates are exposed
to interest rate fluctuation risk. However, they are hedged through derivative transactions, i.e. interest rate swap
agreements. It is possible that long-term debts under syndicated loan contracts which are decided by thefinancial regulatory conditions will lose term benefit if any contradictions occurred.
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 incorporate bonds and borrowings. As hedging policy, appropriate hedge instruments shall be selected per risk
category. Evaluation of hedge effectiveness is performed through comparing market value of hedge items or theamounts of cash flows with market value of hedge instruments or the amounts of cash flows.
(c) Risks management system associated with financial instruments
1) Credit risk management (Risk of default on payment by counterparts, etc.)
The Companies manage payment term and payment balance per trade transaction in order to control andmitigate credit risks due to financial situation difficulties in accordance with the Companies’ credit
management policy.
17

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 in foreign currency. On the other hand, interest rate
swap agreements are utilized to hedge the interest rate fluctuation risk associated with corporate 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, manages fund of the group companies. The finance department
prepares and updates financing plans periodically based on the group companies’ necessaries and keeps acertain amount of cash in hand for the purpose of liquidity risk management.
(d) Other supplementary in the fair value of financial instruments
The fair values of financial instruments are based on the markets prices or reasonable estimated fair values
when the fair 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, 2010 and 2011 is shown as follows:
2010

2011

2011

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

Other securities
Stocks and investments in unlisted companies¥1,308¥1,523$18,316¥1,308¥1,523$18,316

The carrying amounts and fair values of the financial instruments on the consolidated balance sheet as of March
31, 2010 and March 31, 2011 are summarized as follows.
2010
Carrying
amounts(1) Cash and time deposits

2011

Fair

Differences

Carrying

Values(Millions of yen)amounts

2011

Fair

Differences

Carrying

Values(Millions of yen)

Fair

Differences

amounts
Values(Thousands of U.S.dollars)¥9,538¥9,538¥-¥11,025¥ 11,025¥-$132,592$132,592$-

43,922

43,870(52)

47,217--567,853

-

-

-

-

-

(307)

-

-

(3,692)--

43,922

43,870(52)

46,91046,849(61)

564,161

563,427

(734)

5,923

5,923

-

5,647

5,647

-

67,914

67,914(337)(2) Trade notes andaccounts receivable
Allowance for doubtful
accounts(3) Investment securities
and other securities(4) Trade notes andaccounts payable(22,613)(22,601)(12)(23,883)(23,855)(28)(287,228)(286,891)(5) Short-term borrowings(40,596)(40,596)-(42,822)(42,822)-(514,997)(514,997)

-

(110)

(106)

(4)

(90)

(88)

(2)

(1,082)(1,058)(24)(20,287)(20,194)(93)(21,061)(21,129)

68(253,289)(254,107)

818

(30)

(30)

-

(15)

(15)

-

(180)

(180)

-

(4)

(4)

-

(0)

(0)

-

(0)

(0)

-

(6) Corporate bonds(7) Long-term borrowings(8) Derivative transactions(i) Hedge accounting notapplicable(ii) Hedge accounting
applicable18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 and other securities(4)

Trade notes and accounts payable

The fair value of investment securities is based on quoted market price.
The fair value of trade notes and accounts payable is estimated based on the present value of future cash flows using appropriate
current discount rate which is decided upon recovery term and credit risk too.
(5)

Short-term debts
The carrying amount approximates fair value due to the short maturity of these instruments. Long-term debts within one year arerecorded in long-term debts.

(6)

Corporate bonds and (7) Long-term debts
The fair value of corporate bonds and long-term debts are based on the current discounted interest rates which are borrowed withthe same conditions. Corporate bonds and long-term debts with the maturity term within one year are involved.

Redemption schedules for cash and trade receivables after March 31, 2010 and March 31, 2011 are summarized
as follows:
Within 1 year

Over 1 year

Over 5 years

Within 1

Over 1 year

Over 5 years

and within 5

and within

year

and within 5

and within 10years

10 years

years

years

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

2010
Cash and time deposits¥9,538¥-¥-Trade notes andaccounts receivable

38,512

5,410-

Total of the amounts¥48,050¥5,410¥-¥11,025

¥-

¥-

2011
Cash and time deposits$132,592$-$-

Trade notes andaccounts receivable

39,7907,427-

478,532

89,321-

Total of the amounts¥50,815¥7,427¥-$611,124$89,321$-

Redemption schedules for trade payables, corporate bonds and long-term borrowings after March 31, 2010
and March 31, 2011 are summarized as follows:
Within 1 year

Over 1 year

Over 5 years

Within 1

Over 1 year

Over 5 years

and within 5

and within 10

year

and within 5

and within 10

years

years

years

years

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

2010
Trade notes and¥22,396¥217¥-

accounts payable
Corporate bonds

20

90

-

Long-term borrowings

7,452

11,995840

Total of the amounts¥29,868¥12,302¥840¥23,321

¥562

¥-

2011
Trade notes and$280,469$6,759$-accounts payable
Corporate bonds

20

70

-

241

842

-

Long-term borrowings

7,878

12,883300

94,744

154,937

3,608

Total of the amounts¥31,219¥13,515¥300$375,454$162,538$3,60819. Derivatives
The following is a summary of the derivative contracts which do not meet the criteria for hedge accounting:19

(a) Currency-related Transactions
2011

2010

2011

Contracted

Fair

RecognizedContracted

Fair

RecognizedContracted

Fair

Recognizedamountvalue

gain (loss)

amountvalue

gain (loss)

amountvalue

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

Forward foreignexchange contracts(Sell-USD)¥3,078¥ (32)¥ (32)¥4,226

¥(14)

¥(14)

$50,824$ (168)$(168)(Sell-QAR)

-

-

-

1,410

(0)

(0)

16,957

(0)

(0)

¥212

¥2

¥2

¥-

¥-

¥-

$-

$-

$-

Forward foreignexchange contracts(Buy-USD)

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

(b) Interest-related Transactions
2010

2011

2011

Contracted

Fair

RecognizedContracted

Fair

RecognizedContracted

Fair

Recognizedamountvalue

gain (loss)

amountvalue

gain (loss)

amountvalue

gain (loss)(Millions of yen)(Thousands of U.S. dollars)Interest rate swap contracts
Pay/fixed andReceive/floating

¥200

¥0

¥0

¥-

¥-

¥-

$-

$-

$-

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
2010

2011

2011

Contracted

Fair

Contracted

Fair

Contracted

Fair

amountvalue

amountvalue

amountValue(Millions of yen)

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

Forward foreign exchange contracts
under hedge exposure (Sell)
USD

¥113

¥-

¥-

¥-

$-

$-

EUR

8

-

-

-

-

-

QAR

633

-

354

-

4,258

-

AED

37

-

-

-

-

-

KWD

780

-

-

-

-

-

SGD

11

-

4

-

48

-

USD

¥19

¥(1)

¥-

¥-

$-

$-

EUR

8

-

8

(0)

96

(0)

QAR

87

(3)

-

-

-

-

SGD

11

-

-

-

-

-

Forward foreign exchange contracts
under deferral hedge (Sell)

Total¥1,707
¥(4)
¥366
¥(0)
$4,402$(0)Note: Fair value of the forward foreign exchange contracts is included in the fair value of the accounts receivable which are hedged..

(b) Interest-related Transactions
2010

2011

Contracted

Fair

Contracted

Contracted

Fair

Contracted

Contracted

Fair

amountamount overvalue

amountamount overvalue

amountamount overvalue

1 year(Millions of yen)Interest rate swaps
Pay/fixed andReceive/floating
Long-term debt

2011

Contracted

1 year(Millions of yen)

1 year(Thousands of U.S. dollars)¥11,949¥6,368¥¥9,998¥4,452¥$120,241
Note: Fair value of the interest rate swaps transaction is included in the fair value of the long-term debts.
20$53,542$-20. Per Share Information
Net income (loss) and net assets per share for the years ended March 31, 2010 and 2011 were as follows:
2010

2011

2011

(Yen)

(U.S. dollars)

Net income (loss) per share¥ (10.10)¥ 1.12$0.013

Net assets per share¥138.89¥ 137.79$1.657

Net income (loss) per share is calculated based on the net income (loss) and the weighted average number ofshares outstanding during each year. Net assets per share are calculated based on the net assets excluding theminority interests and the number of shares outstanding at the year end.
The basis for calculation of basic net income per share was as follows:
2010

2011

2011

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

Net income (loss)¥(2,536)¥282$3,391

Net income (loss) attributable to shares of common stock¥(2,536)¥282$3,391

Weighted average number of shares for basic net income

251,015251,031-(Thousands of shares)

21. Segment Information
Business Segments
The businesses of the Company are divided based on the similarity in products and service categories into fiveclassifications whose financial information are separately available for the management to make decisions
regarding management resources allocation and evaluate each business segments result regularly.
The Companies primarily operate in the following five reportable business segments:(1) Electric Wire operations:
Bare conductors, insulated wires(2) Power System operations:Electric power cables, aluminum wires, power cable construction and power accessories(3) Manet Wire operations:
Magnet wires(4) Communication System operations:
Optical fiber cables, communication cables, communication cable construction, network solution
and fiber photonics products(5) Device operations:
Precision devices, vibration controlling devices and wire harnesses
The business segment “Others” which is not stated as reportable business segment, includes the businesses ofselling superconducting wires, logistics and other operations.
Reportable segment performance 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, 2010 is summarized asfollows:
2010
Segment Information

Reportable Business Segments
Electric

Power

MagnetCommunication

Wire

SystemWire

SystemOthersDeviceTotal

Eliminations

Consolidated(Millions of yen)
Net sales
Outside Customers¥44,560¥41,773¥16,354¥22,919¥14,063¥1,729¥141,398¥-

Inter segment

15,961

119

516

1,414

249

9,917

28,176(28,176)-

Total¥60,521¥41,892¥16,870¥24,333¥14,312¥11,646¥169,574¥(28,176)¥141,398¥141,398

Operating income orloss
Segment Assets
Depreciation
Investments in equity

¥739

¥122

¥(150)¥(94)¥(333)¥(260)

¥24

¥(90)

¥(66)

¥32,300¥44,026¥13,754¥21,922¥11,942¥8,068¥132,012¥8,724¥140,736

957

1,252

539

750

541

505

4,544

(38)

4,506

-

504

-

-

121

-

625

-

625

536

403

687

424

239

625

2,914

(123)

2,791

method affiliates
Increase in fix assets

21Notes:(1) Segment income or loss included in Eliminations of ¥90 million, mainly consisted of unrealized gain of ¥134 million and amortization of
goodwill of ¥92 million.
(2) Segment assets included in Eliminations amounted to ¥8,724 million, mainly consisted of the common assets not allocated to any
segment of ¥16,250 million, elimination of inter-segment transactions of ¥5,734 million and unrealized gain of ¥2,048 million. The
common assets not allocated to any segment mainly consisted of cash, time deposits and investment securities.
(3) Segment depreciation corresponds to unrealized gain.
(4) Segment increase in fixed assets corresponds to unrealized gain.
(5) Segment income or loss corresponds to consolidated operating loss.

The business segment information for the Companies for the year ended March 31, 2011 is summarized asfollows:
2011

Reportable Business Segments

Segment Information

Electric

Power

MagnetCommunication

Wire

SystemWire

SystemOthersDeviceTotal

Eliminations

Consolidated(Millions of yen)
Net sales
Outside Customers¥56,075¥43,384¥21,041¥26,064¥16,320¥2,628¥165,512-Inter segment

20,721

982

897

1,975

976

8,266

33,817(33,817)-

Total¥76,796¥44,366¥21,938¥28,039¥17,296¥10,894¥199,329¥(33,817)¥165,512¥165,512

Operating income or
loss

¥974

¥(196)¥369¥1,238¥568¥(185)¥2,768¥(235)¥2,533¥37,140¥44,218¥14,275¥20,744¥12,059¥8,559¥136,995¥5,376¥142,371

Depreciation

835

1,272

518

696

448

510

4,279

(63)

4,216

Investments in equity

183

573

-

-

85

-

841

-

841

259

290

492

313

254

752

2,360

(153)

2,207

Segment Assets

method affiliates
Increase in fix assets
2011

Reportable Business Segments

Segment Information

Electric

Power

MagnetCommunication

Wire

SystemWire

SystemDeviceOthersTotal

Eliminations

Consolidated(Thousands of U.S. dollars)

Net sales
Outside Customers$674,384$521,756$253,048$313,458$196,272$31,605$1,990,523-

Inter segment249,200

11,81010,78823,752

11,73899,411

406,699(406,699)$1,990,523
-

Total

$923,584$533,566$263,836$337,210$208,010$131,016$2,397,222$ (406,699)$1,990,523

Operating income or$11,714$(2,357)$4,438$14,888$6,831$(2,225)$33,289$(2,826)$30,463

Segment Assets$446,663$531,786$171,678$249,477$145,027$102,934$1,647,565$64,654$1,712,219

Depreciation

10,042

15,298

6,230

8,370

5,388

6,133

51,461(758)

50,703

Investments in equity

2,201

6,891

-

-

1,022

-

10,114-

10,114

3,115

3,488

5,917

3,764

3,055

9,043

28,382(1,840)26,542

loss

method affiliates
Increase in fix assets
Notes:(1) Segment income or loss included in Eliminations of ¥235 million (US$2,826 thousand), mainly consisted of unrealized profits of ¥119
million (US$1,431 thousand) and amortization of goodwill of ¥88 million (US$1,058 thousand).
(2) Segment assets included in Eliminations amounted to ¥5,376million (US$64,654 thousand), mainly consisted of the common assets notallocated to any segment of ¥17,515 million (US$210,643 thousand), elimination of inter-segment transactions of ¥10,186 million(US$122,502 thousand) and unrealized gain of ¥2,153 million (US$25,893thousand). The common assets not allocated to any segment
mainly consisted of cash, time deposits and investment securities.
(3) Segment depreciation corresponds to unrealized gain.
(4) Segment increase in fixed assets corresponds to unrealized gain.
(5) Segment income or loss corresponds to consolidated operating income.

Related Information
Effective the year ended March 31, 2011, the Company adopted the “Accounting Standard for Disclosure
about segments of an Enterprise and Related Information” (“ASBJ Statement No.17” issued on March 27,2009) and the “Guidance on Accounting Standard for Disclosures about Segments of an Enterprise and RelatedInformation” (“ASBJ Guidance No.20” issued on March 21, 2008).
22

Geographical Segments
Geographical segment information of the Companies for the year ended March 31, 2010 has been omitted
because both of total sales and assets of the domestic segment were more than 90% of the total sales and assetsof all segments.
Overseas sales of the Companies for the year ended March 31, 2010 are summarized as follows:Year ended March 31, 2010

Asia

Other

Total

(Millions of yen)Overseas sales¥17,067¥611¥17,678

Consolidated net sales

141,398

Overseas sales as a percentage ofconsolidated net sales

12.1%

0.4%

12.5%

Notes:
1. Countries and area are segmented based on their geographical proximity.
2. Major countries or areas in Asia are China, Qatar, and UAE, etc.
3. Overseas sales consist of sales of Companies in countries and areas other than Japan.

Geographical segment sales for the year ended March 31, 2011 are summarized as follows:Year ended March 31, 2011

Japan

Asia

Other

Total

(Millions of yen)Sales

¥143,603

Year ended March 31, 2011

¥21,543¥366¥165,512

Asia

Other

Total

Japan

(Thousands of U.S. dollars)

Sales$1,727,035$259,086$4,402$1,990,523

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

Segment information on impairment losses on fixed assets for the year ended March 31, 2011 are summarized
as follows:
Reportable Business Segments
Year ended March

Electric

Power

Magnet31, 2011

Wire

SystemWire

Communication

DeviceOthers36

14

DeviceOthers433

168

Eliminations

Total

System(Millions of yen)

Impairment losses of

-

-

-

-

-

50

fixed assets
Reportable Business Segments
Year ended March

Electric

Power

MagnetCommunication

31, 2011

Wire

SystemWire

SystemEliminations

Total(Thousands of U.S. dollars)

Impairment losses of

-

-

-

-

-

601

fixed assets
Notes: Impairment losses of fixed assets in other segment is related to the idled assets which are owned by the company engaged in administrative managementbusiness.

22. Subsequent Events
On May 13, 2011, the Board of Directors approved a business cooperation agreement with Futong Group Co.,
Ltd. and agreed to issue new shares attributable to a third-party, Futong Group (Hong Kong) Co., Ltd., a wholly
owned subsidiary of Futong Group Co., Ltd.
(a) Business partnership
1) Together with Futong Goup Co., Ltd, the Company will invest to set up joint ventures in China andother emerging nations, where are expected to keep continuous economic growth, to expand business
operations in the infrastructure field. The primary cooperative businesses include:23i) Copper wire rod businessii) Industrial electronic wire cable business2) Together with Futong Goup Co., Ltd, the Company will establish Research and Development Centre
in China, where materials market continues remarkable growth, to supplement and strengthen thisbusiness cooperation.
3) Through this business cooperation, the Company and Futong Group will utilize each other’s sales
routes to strengthen supply chains, and then boost price competitiveness.
4) Through this business cooperation, the Company and Futong Group will promote the exchange ofexperienced persons with each other.
(b) Allocation of new shares to a third-party
Type and number
of issued shares:
Common stocks 57,142,000
Issue price per share:
105 yenTotal amounts:
5,999,910,000 yen
Capital:52.5 yen per share
Capital surplus:
52.5 yen per share
Issue method:
Allocation of new shares to a third-party
Shareholder:
Futong Group (Hong Kong) Co., Ltd
Payment term:
From June 17, 2011 to September 20, 2011
Capital utilization:i) Investments in new businesses in China or other emerging nationsii) Research and development for environmental productions for the low-carbon
societyiii) Investments for enhancing operating bases in Japan

24