CONSOLIDATED FINANCIAL STATEMENTS
TAMURA CORPORATIONAS OF MARCH 31, 2017 AND 2016

Independent Auditor’s Report
The Board of Directors
TAMURA CORPORATION
We have audited the accompanying consolidated financial statements of TAMURA CORPORATION
and its consolidated subsidiaries, which comprise the consolidated balance sheet as at March 31,
2017, and the consolidated statements of income, comprehensive income, changes in net assets, andcash flows for the year then ended and a summary of significant accounting policies and otherexplanatory information, all expressed in Japanese yen.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for designingand operating such internal control as management determines is necessary to enable the preparationand fair presentation of the consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our
audit. We conducted our audit in accordance with auditing standards generally accepted in Japan.
Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the consolidated financial statements. The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error. The purpose of an audit of the consolidated financial
statements is not to express an opinion on the effectiveness of the entity’s internal control, but inmaking these risk assessments the auditor considers internal controls relevant to the entity’s
preparation and fair presentation of the consolidated financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of accounting estimates made bymanagement, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the consolidated financial position of TAMURA CORPORATION and its consolidated
subsidiaries as at March 31, 2017, and their consolidated financial performance and cash flows forthe year then ended in conformity with accounting principles generally accepted in Japan.
Convenience Translation
We have reviewed the translation of these consolidated financial statements into U.S. dollars,presented for the convenience of readers, and, in our opinion, the accompanying consolidated
financial statements have been properly translated on the basis described in Note 1(a).

June 28, 2017
Tokyo, JapanTAMURA CORPORATION AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED BALANCE SHEET
Thousands of
U.S. dollars(Note 1(a))
March 31,2017

Millions of yen
March 31,
2017
2016
ASSETSCur rent Assets:
Cash on hand and in banks (Notes 3 and 4)¥

19,463¥

15,133$

173,777

Trade notes and accounts receivable (Note 4)

19,896

21,518

177,643

Inventories (Note 6)

10,68912,532

95,438

625

578

5,580

2,164

1,987

19,320

Deferred tax assets (Note 13)
Other current assets
Allowance for doubtful accounts

(178)

(101)

(1,589)52,65951,647

470,169

Buildings and structures

16,88718,018150,777

Machinery and equipment

25,752

27,258229,928

Total current assets
Pr oper ty, Plant and Equipm ent: (N otes 14 and 18)

Lease assets
Accumulated depreciation
Land
Construction in progress
Property, plant and equipment, net

791

1,522

7,063

43,43046,798387,768(32,323)(34,321)(288,598)

11,107

12,477

99,170

5,710

6,056

50,982

138

470

1,232

16,95519,003

151,384

2,041

1,784

18,223

Investments and Other Assets:
Investment securities in other than non-consolidated
subsidiaries and affiliates (Notes 4 and 5)

Investment securities in non-consolidated
2,090

2,149

18,661

Net defined benefit asset (Note 8)

subsidiaries and affiliates

956

245

8,536

Deferred tax assets (Note 13)

128

122

1,143

Intangible assets

858

1,195

7,661

Other assets

711

780

6,348

Allowance for doubtful accounts

(45)

(137)

(402)

Total investments and other assets

6,739

6,138

60,170Total assets¥

The accompanying notes are an integral part of these statements.

2

76,353¥76,788$681,723

Millions of yen
March 31,
2017
2016

Thousands of
U.S. dollars(Note 1(a))
March 31,2017

11,098$

L IABIL IT IES AN D NET ASSET
Cur rent L iabilities:
Trade notes and accounts payable (Note 4)¥¥

10,844

99,089

Short-term loans (Notes 4 and 7)

3,189

4,864

28,473Current portion of long-term debt (Notes 4 and 7)

3,544

5,492

31,643

225

344

2,009

1,097

1,024

9,795

Lease obligations (Notes 4 and 7)
Accrued bonuses
Accrued bonuses for directors

70

61

625

3,964

3,388

35,392

23,18726,017207,026

Long-term debt (Notes 4 and 7)

9,832

9,421

87,786

Lease obligations (Notes 4 and 7)

456

487

4,071

Deferred tax liabilities (Note 13)

426

395

3,804

3,236
628

3,251
768

28,893
5,607

14,57814,322130,161

11,82911,829105,616Additional paid-in capital

17,037

17,037

152,116

Retained earnings

10,454

7,357

93,340

(281)

(283)

(2,509)39,03935,940348,563

321

156

2,866

(1)

0

(9)

866

2,351

7,732

(1,837)(2,194)(16,402)

(651)

313

(5,813)

Share Subscription Rights

127

121

1,134

Non-controlling Interests

73

75

652

Other current liabilities (Note 13)
Total current liabilities
L ong-term L iabilities :Net defined benefit liability (Note 8)
Other long-term liabilities
Total long-term liabilities
Net Assets
Shareholders' Equity:
Common stock:
Authorized - 252,000,000 shares
Issued and outstanding – 82,771,473 shares

Treasury stock (Note 10)
Total shareholders' equity
Accumulated Other Comprehensive Income:Unrealized holding gain (loss) on securities
Deferred gain (loss) from hedging instruments(Notes 4 and 15)
Translation adjustments
Retirement benefits liability adjustments (Note 8)
Total accumulated other comprehensive income

Total net assets

38,588

T otal liabilities and net assets¥

The accompanying notes are an integral part of these statements.

3

76,35336,449¥76,788344,536$

681,723TAMURA CORPORATION AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED STATEMENT OF INCOME ANDCONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME(CONSOLIDATED STATEMENT OF INCOME)

Thousands of
U.S. dollars(Note 1(a))

Millions of yen

Year ended
March 31,

Year ended March 31,
2017
N et Sales

¥

2016

79,607¥

2017

84,642$

710,777

Cos t of Sales (Note 12)55,40860,962494,714Gross profit

24,19923,680216,063

19,082

19,414

170,375

5,117

4,266

45,688Interest and dividend income

132

124

1,179

Equity in earnings of affiliates

175

267

1,563

Interest expense

(247)

(309)

(2,205)

Foreign exchange loss

(110)

(488)

(982)

Selling, general and adm inistrative expenses(Notes 11, 12 and 19)
Operating income
Other Incom e (Expenses ):Other income
Other expenses (Note 18)

832

358

7,428

(1,114)(660)(9,948)

(332)

(708)

(2,965)

4,785

3,558

42,723Current

1,076

1,134

9,607

Deferred

(21)

641

(188)

1,055

1,775

9,419

3,730

1,783

33,304

Profit before income taxes
Incom e T axes (N ote 13)

ProfitProft attributable to:Non-controlling interests

3

Owners of parent

¥

3,727

(0)
¥

1,783

27
$

Yen

33,277
U.S. dollars

Per Share:
Basic profit attributable to owners of parent

¥

45.44

¥

21.75

$

0.41

Diluted profit attributable to owners of parent

45.19

21.62

0.40

Cash dividends per share

9.00

7.00

0.08

The accompanying notes are an integral part of these statements.

4

(CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME)

Thousands of
U.S. dollars(Note 1(a))

Millions of yen

Year ended
March 31,

Year ended March 31,
2017Profit

¥

2016

3,730

¥

2017

1,783

$

33,304

Other Com pr ehensive Incom e (Note 9):
Unrealized holding gain (loss) on securities
Deferred gain (loss) from hedging instruments
Translation adjustments
Retirement benefits liability adjustments
Share of other comprehensive income ofaffiliates accounted for by the equity method
Total other com pr ehensive incom e
Com pr ehensive incom e

165

(281)

(1)

(2)

1,473
(9)

(1,363)(868)(12,170)356(1,577)

3,179

(130)

(79)

(1,161)(973)(2,807)(8,688)

¥

2,757

¥

(1,024)$

24,616

¥

2,758

¥

(1,017)$

24,625

Total com pr ehensive incom e attributable to:
Owners of parent
Non-controlling interests(1)

The accompanying notes are an integral part of these statements.

5

(7)

(9)

TAMURA CORPORATION AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED STATEMENT OF CHANGES IN NET ASSETSFor the year ended March 31, 2017
Millions of yen
Shareholders’ equity
Number ofsharesissuedBalance at April 1, 2016

Additional
paid-inCommonstock

82,771,473¥

capital11,829¥Treasurystock(Note 10)

Total
shareholders'equity¥¥Retainedearnings

17,037

¥

7,357

(283)

35,940Changes during the year
Cash dividends paid

(656)

(656)

Profit attributable toowners of parent forthe period

3,727

3,727

Purchases of treasury stock
Disposal of treasury stock
Changes in the scope of
consolidation
Net changes in items otherthan those in shareholders’equityTotal changes during the year
Balance as of March 31, 2017

(3)

(5)

(5)

7

4

29

29
－

82,771,473－
11,829¥¥－17,037

3,097
10,454

¥

2
(281)

¥

3,099
39,039¥Millions of yen
Accumulated other comprehensive income
Unrealized

Balance at April 1, 2016Retirement

Total

benefits

accumulated

Deferredholding gain

gain (loss)

liability

other

Share

Non-

(loss) on

from hedging

Translation

adjustments

comprehensive

Subscription

controllingsecurities

instruments

adjustments(Note 8)incomerightsinterests

¥

¥

¥

156

－

2,351

¥

(2,194) ¥

313

¥

121

¥

75

Total net
assets¥36,449Changes during the year
Cash dividends paid

(656)

Profit attributable toowners of parent forthe period

3,727

Purchases of treasury stock
Disposal of treasury stock
Changes in the scope of
consolidation
Net changes in items otherthan those in shareholders’equityTotal changes during the year
Balance as of March 31, 2017

(5)
4
29
165

¥

165
321

¥

(1)

(1,485)(1)(1) ¥(1,485)
866 ¥

6

357
357
(1,837) ¥

(964)
(964)
(651) ¥

6
6
127

(2)

¥

(2)
73 ¥

(960)
2,139
38,588

For the year ended March 31, 2016

Number ofsharesissuedBalance at April 1, 2015

Millions of yen
Shareholders’ equity
Treasury
Additional
paid-in
Retained
stock
capitalearnings(Note 10)

Total
shareholders'equity¥¥Commonstock

82,771,473¥

11,82917,173Cumulative effects ofchanges in accounting
principle
Restated balance

11,829

¥

6,139

(136)

12

17,037

6,151

¥

(288)

34,853
(124)

(288)

34,729Changes during the year
Cash dividends paid

(574)

(574)

Profit attributable toowners of parent forthe period

1,783

1,783

Purchases of treasury stock
Disposal of treasury stock
Net changes in items otherthan those in shareholders’equityTotal changes during the year
Balance as of March 31, 2016

(0)82,771,473－
11,829¥¥(0)
17,037

(3)

1,206
7,357

¥

(8)

(8)

13

10

5
(283)

¥

1,211
35,940¥Millions of yen
Accumulated other comprehensive income
Unrealized

Balance at April 1, 2015

Retirement

Total

benefits

accumulated

Deferredholding gain

gain (loss)

liability

other

Share

Non-

(loss) on

from hedging

Translation

adjustments

comprehensive

Subscription

controllingsecurities

instruments

adjustments(Note 8)incomerightsinterests

¥

¥

¥

437

2

3,292

¥

(617) ¥

3,114

¥

115

¥

82

Total net
assets¥Cumulative effects ofchanges in accounting
principle

38,164(124)

Restated balance

437

2

3,292

(617)

3,114

115

82

38,040Changes during the year
Cash dividends paid

(574)

Profit attributable toowners of parent forthe period

1,783

Purchases of treasury stock(8)

Disposal of treasury stock
Net changes in items otherthan those in shareholders’equityTotal changes during the year
Balance as of March 31, 2016

10

¥

(281)

(2)

(941)

(1,577)(2,801)

(281)
156 ¥

(2)
0 ¥

(941)
2,351 ¥

(1,577)(2,194) ¥(2,801)
313 ¥

7

6
6
121

¥

(7)

(2,802)(7)75 ¥(1,591)36,449

For the year ended March 31, 2017

Number ofsharesissuedBalance at April 1, 2016

Commonstock

82,771,473$

105,616

Thousands of U.S. dollars (Note 1(a))
Shareholders’ equity
Treasury
Additional
paid-in
Retained
stock
capitalearnings(Note 10)

Total
shareholders'equity$$152,116$

65,688$(2,527)

320,893

Changes during the year
Cash dividends paid

(5,857)(5,857)

Profit attributable toowners of parent forthe period

33,27733,277Purchases of treasury stock
Disposal of treasury stock
Changes in the scope of
consolidation
Net changes in items otherthan those in shareholders’equityTotal changes during the year
Balance as of March 31, 2017

(27)

(45)

(45)

63

36

259

82,771,473－
105,616$$－
152,116259

27,652
93,340$$18(2,509)27,670348,563$

Thousands of U.S. dollars (Note 1(a))
Accumulated other comprehensive income
Unrealized

Balance at April 1, 2016Retirement

Total

benefits

accumulated

Deferredholding gain

gain (loss)

liability

other

Share

Non-

(loss) on

from hedging

Translation

adjustments

comprehensive

Subscription

controllingsecurities

instruments

adjustments(Note 8)incomerightsinterests

Total net
assets

$

$

$

$

$

1,393

－

20,991$(19,589)

$

2,795

$

1,080

670

325,438

Changes during the year
Cash dividends paid

(5,857)

Profit attributable toowners of parent forthe period

33,277Purchases of treasury stock
Disposal of treasury stock
Changes in the scope of
consolidation
Net changes in items otherthan those in shareholders’equityTotal changes during the year
Balance as of March 31, 2017

(45)
36
259
1,473

$

1,473
2,866

(9)

$

(9)
(9)

(13,259)$(13,259)
7,732

3,187

$

3,187
(16,402)(8,608)$The accompanying notes are an integral part of these statements.

8(8,608)(5,813)

54

$

54
1,134

(18)

$

(18)
652

(8,572)$

19,098344,536TAMURA CORPORATION AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED STATEMENT OF CASH FLOWS
Thousands of
U.S. dollars(Note 1(a))
Year ended
March 31,

Millions of yen
Year ended March 31,
2017Cash F lows fr om Operating Ac tivities :Profit before income taxes
Depreciation
Changes in accrued bonuses
Changes in accrued bonuses for directors
Changes in allowance for doubtful accounts
Changes in net defined benefit liability
Interest and dividend income
Interest expense
Foreign exchange loss (gain)
Equity in earnings of affiliates
Loss on sales of investment securities
Changes in trade receivable
Changes in inventories
Changes in trade payable
Other
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities
Cash F lows from Investing Ac tiv ities:
Purchase of tangible fixed assets
Proceeds from sale of tangible fixed assets
Purchase of investment securities
Proceeds from sale of investment securities
Other
Net cash used in investing activities
Cash F lows fr om F inanc ing Activities:
Changes in short-term loans
Increase in long-term debt
Repayment of long-term debt
Repayment of lease obligations
Purchase of treasury stock
Proceeds from sales of treasury stock
Cash dividends paid
Cash dividends paid to non-controlling shareholders
Net cash used in financing activities
Effec t of Exchange Rate Changes on Cash andCash Equivalents¥

Net Increa s e (Decrea se) in C a s h a nd C a s h Equi va lent s

Cash and Cash Equivalents at the Beginningof the YearInc rease due to inc lusion in consolidation
Cash and Cash Equivalents at the Endof the Year (N ote 3)¥

The accompanying notes are an integral part of these statements.

9

2016

4,785
2,259
73
8
(8)
(357)
(132)
247
(39)
(175)
6
460
1,283
115
547
9,072
173
(270)
(835)
8,140

¥

2017

3,558
2,659
12
(0)
(13)
(413)
(124)
309
480
(267)
－
1,120
1,416
(413)
1,215
9,539
284
(311)
(1,167)
8,345$

42,723
20,170652
71(71)(3,188)(1,179)2,205(348)(1,563)54
4,107
11,455
1,027
4,885
81,0001,545(2,411)(7,455)72,679(1,387)
999
(241)
22
(170)
(777)

(2,156)
192
(213)
－
(22)
(2,199)(12,384)
8,920(2,152)
196(1,518)(6,938)(1,394)4,203(5,754)
(364)
(5)
0
(652)
(0)
(3,966)

(824)
－
(873)
(398)
(8)
0
(572)
(0)
(2,675)(12,446)
37,527(51,376)(3,250)(45)
0(5,821)(0)(35,411)

817

(143)

7,295

4,214

3,328

37,62515,017

11,689134,080

39

－

348

19,270¥15,017$

172,053TAMURA CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Significant Accounting Policies(a) Basis of presentation of the consolidated financial statements
The accompanying consolidated financial statements of TAMURACORPORATION (the “Company”) and its consolidated subsidiaries (collectively,
the “Companies”) are prepared on the basis of accounting principles generally
accepted in Japan, which are different in certain respects as to the application anddisclosure requirements of International Financial Reporting Standards, and havebeen compiled from the consolidated financial statements prepared by theCompany as required by the Financial Instruments and Exchange Law of Japan.
Certain items presented in the consolidated financial statements submitted to the
Director of Kanto Local Finance Bureau in Japan as required by the Financial
Instruments and Exchange Law of Japan have been reclassified for theconvenience of readers outside Japan.
Amounts in U.S. dollars are included solely for the convenience of readers outside
Japan. The rate of ¥112=U.S. $1, the approximate rate of exchange on March 31,2017 has been used in translation. The inclusion of such amounts is not intended to
imply that Japanese yen have been or could be readily converted, realized or
settled in U.S. dollars at the above rate or any other rate.
(b) Principles of consolidation and accounting for investments in non-consolidated
subsidiaries and affiliates
The accompanying consolidated financial statements include the accounts of theCompany and, with the exception of entities which are not material, those of its 32
majority owned subsidiaries. All significant inter-company accounts andtransactions have been eliminated on consolidation.
Effective from the year ended March 31, 2017, TAMURA CORPORATIONVIETNAM Co., Ltd. has been included in consolidation because of increase infinancial importance.
Investments in non-consolidated subsidiaries and affiliates are carried at cost
since their total assets, net sales and the Company’s interests in their net income(loss), or retained earnings, in aggregate, do not have a material effect on the
consolidated financial statements.
The fiscal year end of the foreign consolidated subsidiaries is December 31. The
necessary adjustments for significant transactions between the fiscal year end of
the Company and the fiscal year end of the foreign consolidated subsidiaries, if any,
are made in the preparation of the consolidated financial statements.
(c) Financial instruments(1) Derivatives
All derivatives are stated at fair value, with changes in fair value included in
net profit or loss for the period in which they arise, except for derivatives
designated as “hedging instruments” (see Note 1(c)(3) Hedge accounting below).

10(2) Securities
Securities held by the Companies are classified as follows:
Available-for-sale securities with market values are stated at fair value. Net
unrealized gains and losses on these securities are reported as a separate
component of shareholders’ equity at a net-of-tax amount.
Available-for-sale securities without market values are stated at cost
determined by the moving average method, except as stated in the paragraphbelow.
In cases where the fair value of equity securities issued by non-consolidated
subsidiaries and affiliates, or available-for-sale securities, has declined
significantly and such impairment of the value is not deemed temporary, thesesecurities are written down to their fair value and the resulting losses areincluded in net profit or loss for the period.
(3) Hedge accounting
Deferral hedge accounting is adopted for derivatives which qualify as hedges,
under which unrealized gain or loss is deferred as a component of net assets.
The derivatives designated as hedging instruments by the Companies are
principally forward exchange contracts and interest rate swaps. The underlying
hedged items are trade accounts receivable and trade accounts payable
denominated in foreign currencies, forecast transactions denominated inforeign currencies and interest on long-term bank loans.
The Companies have a policy to utilize the above hedging instruments in orderto reduce the Companies’ exposure to the risk of exchange rate and interest rate
fluctuations. Thus, the Companies’ purchases of the hedging instruments arelimited to, at maximum, the amount of the hedged items.
The Companies evaluate the effectiveness of their hedging activities byreference to the accumulated gains or losses on the hedging instruments andthe underlying hedged items from the commencement of the hedges.
(d) Allowance for doubtful accounts
Allowance for doubtful accounts is provided based on past experience for normal
receivables and on an estimate of collectability of receivables from companies infinancial difficulty.
(e) Inventories
Inventories are principally stated at cost determined by the following methods:
・Finished goods and work-in-process:Electronic Components business, Electronic Chemicals business andInformation Equipment business: Mainly periodic average method(Inventories with lower profitability are written down)
FA Systems business: Specific identification method (Inventories with lower
profitability are written down)

11

・Merchandise and raw materials: Mainly periodic average method (Inventories
with lower profitability are written down)
・Supplies: Mainly last purchase price method (Inventories with lower
profitability are written down)(f) Property, plant and equipment, and depreciation (excluding lease assets)
Property, plant and equipment, including significant capital expenditures andadditions, are stated at cost and are principally depreciated using thedeclining-balance method at rates based on the estimated useful lives of the assets.
Repairs and maintenance expenses are charged to income as incurred.
Intangible assets are amortized by the straight-line method over their respective
estimated useful lives.
(g) Accrued bonuses
The Company and its domestic consolidated subsidiaries have provided theestimated amounts of bonus to employees.
(h) Reserve for directors’ bonus
The Company and its domestic consolidated subsidiaries have provided theestimated amounts of directors’ bonus as a reserve for directors’ bonus.
(i) Reserve for retirement benefits
The reserve for retirement benefits represents the estimated present value of
projected benefit obligations in excess of the fair value of the plan assets.
The unrecognized prior service costs are amortized on a straight-line basis over a
period of 5 to 12 years from the year in which they arise. The unrecognizedactuarial differences are amortized on a straight-line basis over a period of 5 to 12
years from the year following the year in which they arise.
(j) Reserve for loss of transfer
Reserve for loss on office transfer, etc. for consolidated subsidiaries is provided at
the estimated amount of future loss related to non-cancelable periods of real estateleasing contracts.
(k) Amortization of goodwill
Goodwill is amortized on a straight-line basis over 10 years.
(l) Income taxes
The income taxes of the Company and its domestic consolidated subsidiaries
consist of corporate income taxes, local inhabitant taxes and enterprise taxes.
Deferred income taxes were determined using the assets and liabilities approach,whereby deferred tax assets and liabilities were recognized in respect of temporary
differences between the tax basis of assets and liabilities and those as reported in
the financial statements.

12Deferred tax assets relating to tax loss carryforwards are recorded because theJapanese accounting standard requires that the benefit of tax loss carryforwards
be estimated and recorded as an asset, with deduction of a valuation allowance if it
is expected that some portion or all of the deferred tax assets will not be realized.
(m) Foreign currency translation
All monetary assets and liabilities of the Company and its domestic consolidated
subsidiaries denominated in foreign currencies, whether long-term or short-term,
are translated into Japanese yen at the exchange rates prevailing at the balance
sheets dates. The foreign exchange gains and losses from translation arerecognized in the statements of income to the extent that they are not hedged byforward exchange contracts. Revenue and expenses are translated using the
average exchange rates for the respective periods.
The balance sheet accounts of the foreign consolidated subsidiaries are translated
into yen at the rate of exchange in effect at the balance sheet date. Revenue
accounts and expense accounts of the foreign consolidated subsidiaries aretranslated into yen at the average exchange rate for the year. Differences arisingfrom the translation are presented as translation adjustments and minority
interests in the consolidated financial statements.
(n) Accounting for consumption tax
Transactions subject to consumption taxes are recorded at amounts exclusive ofconsumption taxes.
(o) Profit per share
Basic profit per share of common stock is computed on the basis of the weighted
average number of shares of common stock outstanding during the respective
years, and diluted profit per share of common stock is computed on the basis of theweighted average number of shares of common stock outstanding during therespective year after giving effect to the dilutive potential of shares of common
stock to be issued upon the exercise of stock options. Cash dividends per sharerepresent the dividends declared as applicable to the respective period.
The basis of the calculation of basic profit per share and diluted profit per share forthe years ended March 31, 2017 and 2016 were as follows:13

Thousands of
U.S. dollars

Millions of yen

Year ended
March 31,

Year ended March 31,
2017
Basic profit per share
Profit attributable to owners of parent forthe period
Amount not attributable to common stock
Total profit attributable to common stock
Average number of shares outstanding during the year
[thousands of shares]

2016

2017

¥

3,727

¥

1,783

$

33,277

¥
¥

－
3,727

¥
¥

－
1,783

$
$

－
33,27782,027

81,99582,027

466

466

466

Diluted profit per share
Increase in common stock:
Subscription rights to shares[thousands of shares]

2. Accounting Changes(Application of Practical Solution on accounting for change in depreciation method
due to TAX Reform 2016)
Effective beginning the fiscal year ended March 31, 2017, the Company and its
domestic consolidated subsidiaries adopted the "Practical Solution on accounting forchange in depreciation method due to TAX Reform 2016 (ASBJ PITF No.32 of June17, 2016)," as a result of revisions to the Corporation Tax Act of Japan. Accordingly,
the depreciation method of structures and facilities attached to buildings acquired on
or after April 1, 2016 was changed from declining-balance method to straight-line
method. The impact on the consolidated financial statements for the fiscal year ended
March 31, 2017 is immaterial.
3. Additional Information(Application of Revised Implementation Guidance on Recoverability of Deferred Tax
Assets)
Effective beginning the fiscal year ended March 31, 2017, the Company and its
domestic consolidated subsidiaries adopted the "Revised Implementation Guidanceon Recoverability of Deferred Tax Assets (ASBJ Guidance No.26 of March 28, 2016)."(Business Divestiture)
At the Board of Directors’ meeting held on October 27, 2017, the Company resolved totransfer the thermal business (thermal-links and resistors) and equity of its
consolidated sub-subsidiary company, Anzen Dengu (Huizhou) Co., Ltd., toUchihashi Estec Co., Ltd. The Company concluded the transfer agreement for thebusiness and equity on October 27, 2017 (originally scheduled date: March 31, 2017).
Although the Company made strict preparations to execute said transfer, theschedule was postponed to September 30, 2018 on the agreement of both parties
because of a lack of time.
The Company continues to proceed with its preparations for the execution of thetransfer.
(a) Overview of business divestiture(1) Business transfer
i. Name of acquirer:
Uchihashi Estec Co., Ltd.
14

ii. Details of divested business:
Assets, know-how, contractual rights and obligations, etc., related to thethermal businessiii. Date of the business divestiture
September 30, 2018 (scheduled)
iv. Overview of the business divestiture including legal form:
The Company will receive a cash consideration in return for the transfer ofthe business.
v. Name of reportable segments in which divested businesses is included:
Electronic components(2) Transfer of subsidiary's equity
i. Name of acquirer:
Uchihashi Hong Kong Limited
ii. Details of divested businesses:
Entire shares of Anzen Dengu (Huizhou) Co., Ltd., sub-subsidiary of theCompanyiii. Date of the business divestiture
September 30, 2018 (scheduled)
iv. Overview of the business divestiture including legal form
The Company will receive a cash consideration in return for the transfer ofshares.
v. Name of reportable segments in which divested businesses is included:
Electronic components(b) Reasons for carrying out the business divestiture
In line with the Company’s profit structure reform activities in accordance withthe previous medium-term management plan, effective as of April 1, 2016,
TAMURA THERMAL DEVICE Corporation, which had
expanded into the thermal business, was absorbed and merged into theCompany.
The Company is now setting its new medium-term management plan, “Biltrite
Tamura GROWING,” aiming to improve its profitability, enhance its
capital efficiency and provide the best products to its customers.
Although the Company is striving for further strengthened
competitiveness and management efficiency, the thermal market still continues
to be impacted by severe business conditions. Under the same businessconditions, Uchihashi Estec Co., Ltd., the acquirer, is a competitor in thethermal market.
Considering the above business conditions, the Company decided to carry out
the business divestiture based on its judgment that the respective acquirers,
through the integration of the know-how and management resources, would bebetter able to provide stable and continuous supplies to customers and thus
grow the thermal business.
4. Supplementary Cash Flow Information
Cash and cash equivalents in the consolidated statements of cash flows are composedof cash in hand, bank deposits with a maturity of 3 months or less and which
represent a minor risk of fluctuation in value.
As of March 31, 2017 and 2016, cash and cash equivalents consisted of the following:15

Thousands of
U.S. dollars

Millions of yen

Year ended
March 31,

Year ended March 31,
2017Cash on hand and in banks
Time deposits with maturities of over 3 months
Cash and cash equivalents¥¥

19,463(193)
19,2702016¥¥

15,133(116)
15,017

2017$$

173,777(1,724)
172,053

5. Financial Instruments
Overview(a) Policy for financial instruments
The Companies obtain necessary funding in accordance with their capital
expenditure planning. The Companies obtain medium and long-term operating
funds and funds for the purchase of equipment from banks and utilize highly liquid
financial instruments for fund management purposes.
The Companies also utilize derivative financial instruments to hedge various risks
as described in detail below and do not enter into derivatives for trading or
speculative purposes.
(b) Types of financial instruments and related risk
Operating receivables, such as notes and accounts receivable-trade, are exposed tocredit risk of customers. Operating receivables in foreign currencies are exposed toforeign currency exchange risk. Forward foreign exchange contracts are principallyused to hedge this risk.
Investment securities, the issuers of which have business relationships with theCompanies, are exposed to stock market fluctuation risk.
Maturities of operating debts, such as notes and accounts payable-trade, aremostly within six months. Though operating debts in foreign currencies are
exposed to foreign currency exchange risk, they are limited to the balances ofoperating receivables in the same foreign currency on an ongoing basis.
Loans and lease obligations related to finance leases are used mainly for operating
funds and for equipment purposes, respectively. Maturities of loans and leaseobligations recorded as of the closing date of the fiscal year are within 8 years.
Almost all long-term loans are variable interest rate loans, and are exposed tointerest rate risk. Interest rate swaps are used for certain loans in order to hedge
this risk.
In order to hedge foreign currency exchange risk associated with operating debts
and receivables in foreign currencies and interest rate risk associated with interest
expense, derivative transactions such as forward foreign exchange contracts andinterest rate swap transactions are used.
Hedging instruments, hedged items, hedging policy and effectiveness of hedgetransactions are described in “Note 1. Significant Accounting Policies, (c) Financial
instruments, (3) Hedge accounting.”

16

(c) Risk management for financial instruments(1) Monitoring of credit risk (the risk that customers or counterparties may
default)
To screen and reduce unrecoverable risk of operating receivables, the Company
regularly monitors major customers’ credit status and manages the due dates
and balances for each customer in accordance with customer credit
management rules at the sales section in each operating division. Consolidated
subsidiaries also act based on the Company’s customer credit management
rules.
The Companies do not anticipate losses resulting from default of counterparties
to derivative transactions as these are limited to major financial institutions
with sound credit ratings.
(2) Monitoring of market risks (the risks arising from fluctuations in foreignexchange rates, interest rates and others)
The Company and certain consolidated subsidiaries principally use forward
foreign exchange contracts to hedge the foreign currency exchange risk ofoperating debts and receivables in foreign currencies, which are evaluatedmonthly for each currency. The Company uses interest rate swap transactions
to hedge interest rate risk associated with interest expense.
The Company regularly monitors the financial condition of stock issuers andstock market fluctuations and continuously reviews shareholdings considering
the market status and business relationship with the Company.
Derivative transactions entered into by the Company are implemented andcontrolled based on internal rules established by the board of directors. The
rules which stipulate transaction purpose, nature of transaction, name ofcounterparty, transaction item, loss limitation and reporting system of risk
amount. A derivative transaction which exceeds the limitation amount under
the rule requires the approval of the board meeting.
(3) Monitoring of liquidity risk (the risk that the Companies may not be able tomeet its obligations on scheduled due dates)
The Company timely formulates and updates the financing plan and controls
liquidity risk by managing ready liquidity on the basis of reports from eachdivision to the accounting department of the head office.
(d) Supplementary explanation of the fair value of financial instruments
Fair value of financial instruments is measured based on the quoted market price,
if available, or a reasonably assessed value if a quoted market price is not available.
Fair value of financial instruments is calculated based on certain valuation
assumptions and the fair value might differ if different factors are used. In
addition, the contract amount of the derivative transactions described below in“Derivative Transactions” does not represent the market risk of the derivativetransactions.

17Fair value of financial instruments
The book value on the consolidated balance sheets, fair value and difference as ofMarch 31, 2017 and 2016 were as follows. In addition, financial instruments, forwhich it is extremely difficult to measure the fair value, are not included (see “2.
Financial instruments for which the fair value is extremely difficult to measure”).
As of March 31, 2017
Millions of yen
Book value
Fair value

Difference

Cash on hand and in banks
Trade notes and accounts receivable
Investment securities
Other securities
Total assets¥¥

Trade notes and accounts payable
Short-term loans
Current portion of long-term debt
Long-term debt
Lease obligations
Total liabilities

¥

¥

¥

Derivatives (*)
Hedge accounting is not applied
Hedge accounting is applied
Total derivatives¥¥

19,46319,8962,030
41,389¥¥

11,098
3,189
3,544
9,832
681
28,344

¥

0
(1)
(1)

¥

¥

¥

19,46319,8962,030
41,389¥

11,098
3,189
3,567
9,908
660
28,422

¥

0
(1)
(1)

¥

¥

¥

－
－
－
－
－
－
23
76
(21)
78

－
－
－

As of March 31, 2016
Millions of yen
Book value
Fair value

Difference

Cash on hand and in banks
Trade notes and accounts receivable
Investment securities
Other securities
Total assets¥¥

Trade notes and accounts payable
Short-term loans
Current portion of long-term debt
Long-term debt
Lease obligations
Total liabilities

¥

¥

¥

Derivatives (*)
Hedge accounting is not applied
Hedge accounting is applied
Total derivatives

¥
¥

18

15,13321,518
1,772
38,423¥¥

10,844
4,864
5,492
9,421
831
31,452

¥

－
0
0

¥

¥

¥

15,13321,518
1,772
38,423¥

10,844
4,864
5,524
9,570
815
31,617

¥

－
0
0

¥

¥

¥

－
－
－
－
－
－
32
149
(16)
165

－
－
－

As of March 31, 2017
Thousands of U.S. dollars
Book value
Fair value
Difference
Cash on hand and in banks
Trade notes and accounts receivable
Investment securities
Other securities
Total assets$

Trade notes and accounts payable
Short-term loans
Current portion of long-term debt
Long-term debt
Lease obligations
Total liabilities

$

$

$

Derivatives (*)
Hedge accounting is not applied
Hedge accounting is applied
Total derivatives$$

173,777
177,643
18,125369,545$$

99,08928,47331,64387,786
6,080
253,071

$

0
(9)
(9)

$

$

$

173,777
177,643
18,125369,545$$

99,08928,47331,84888,464
5,893
253,767

$

0
(9)
(9)

$

$

$

－
－
－
－
－
－
205
678
(187)
696

－
－
－

(*) The amount is the net balance of total transactions. Amounts reported
as liabilities are shown in parentheses.

Notes:
1. Methods to determine the fair value of financial instruments and other mattersrelated to securities and derivative transactions
AssetsCash and bank deposits and notes and accounts receivable-trade
The book value approximates fair value because of the short maturity ofthese instruments.
Investment securities
The fair value of investment securities equals quoted market price. The fairvalue of debt securities is measured at the price provided by financial
institutions. Investment securities based on holding purpose are described in“Note 5. Securities”.
Liabilities
Notes and accounts payable-trade and short-term loans
The book value approximates fair value because of the short maturity ofthese instruments.
Current portion of long-term debt and long-term debt
The fair value of current portion of long-term debt and long-term debt isbased on the present value of future cash flows discounted using the current
borrowing rate for similar debt contracts of comparable maturity.
Lease obligations
The fair value of lease obligations is based on the present value of future cash
flows discounted using the current interest rate for similar lease contracts ofcomparable maturity and contract conditions.
Derivative transactions
See “Note 15. Derivative Financial Instruments”.

19

2. Financial instruments for which the fair value is extremely difficult to measure
as of March 31, 2017 and 2016 were as follows:
Thousands of
U.S. dollars
2017

Millions of yen
2017
2016
Available-for-sale securities withoutmarket quotations:
Unlisted securities
Total

¥
¥

2,101
2,101

¥
¥

2,160
2,160

$
$

18,75918,759Because no quoted market price is available and it is extremely difficult todetermine the fair value, the above financial instruments are not included in thepreceding table.
3. The aggregate maturities of monetary claims and held-to-maturity securities asof March 31, 2017 and 2016 were as follows:
As of March 31, 2017
Millions of yen
Due after 1 year
Due within
1 yearthrough 5 years
Cash on hand and in banks
Trade notes and accounts receivable¥¥

19,46319,89639,359¥¥－－－As of March 31, 2016
Millions of yen
Due after 1 year
Due within
1 yearthrough 5 years
Cash on hand and in banks
Trade notes and accounts receivable¥¥

15,13321,51836,651¥¥－－－

As of March 31, 2017
Thousands of U.S. dollars
Due after 1 year
Due within
1 yearthrough 5 years
Cash on hand and in banks
Trade notes and accounts receivable$$

173,777
177,643
351,420

$
$

－
－
－

4. The redemption schedules for long-term debt and lease obligations weredisclosed in “Note 7. Short-term Loans and Long-term Debt”.

20

6. Securities(a) As of March 31, 2017 and 2016, securities consisted of the following:Thousands of
U.S. dollars
2017

Millions of yen
2017
2016
Available-for-sale securities for whichmarket quotations are available
Acquisition cost
Book value
Unrealized gain

¥
¥

1,549
2,030
481

¥
¥

1,458
1,772
314

$
$

13,83018,1254,295(b) Sales of securities classified as other securities and the aggregate gain and loss forthe years ended March 31, 2017 and 2016 were as follows:
Thousands of
U.S. dollars
2017

Millions of yen
2017
2016
Sales proceeds
Available-for-sale securities
Aggregate gain
Available-for-sale securities
Aggregate loss
Available-for-sale securities

¥

22

¥

－

$

196

¥

0

¥

－

$

0

¥

7

¥

－

$

63

7. Inventories
As of March 31, 2017 and 2016, inventories consisted of the following:

Millions of yen
2017
2016
Merchandise
Finished goods
Work in process
Raw materials and supplies
Total

¥

3,342
1,077
1,536
4,734
10,689

¥

21

¥

¥

4,215
1,325
1,805
5,187
12,532Thousands of
U.S. dollars
2017
$

$

29,8409,616
13,71442,26895,438

8. Short-term Loans and Long-term Debt
Short-term loans as of March 31, 2017 and 2016 were principally bank overdrafts andshort-term notes bearing interest at annual average interest rates of 1.05% and1.08%, respectively.
As of March 31, 2017 and 2016, long-term debt consisted of the following:Thousands of
U.S. dollars
2017

Millions of yen
2017Long-term loans, principally from banks (*)
Lease obligations¥

Less: current portion - Long-term loans
Less: current portion - Lease obligations
Total

¥

2016

13,376681
14,057(3,544)(225)
10,288¥¥14,913831
15,744(5,492)
(344)
9,908

$

$

119,429
6,080
125,509(31,643)(2,009)91,857(*) As of March 31, 2017 and 2016, long-term loans and lease obligations consisted of
the following:Thousands of
U.S. dollars
2017

Millions of yen
2017
2016
Long-term loans, at an annual average rateof 1.18
Lease obligations, at an annual average rateof 2.02
Current portion- Long-term loans, at an annual
average rate of 1.20
Current portion- Lease obligations, at an annual
average rate of 1.97

¥

¥

9,832

¥

9,421

$

87,786

456

487

4,071

3,544

5,492

31,643

225

344

2,009

14,057¥

15,744$

125,509

The aggregate annual maturities of long-term debt and lease obligations as of March
31, 2017 were as follows:
Millions of yen
Long-term
Lease
Year ending March 31,
2019
2020
2021
2022
After above year

¥

5,969
303
－
3,560
－

¥

22

181
95
67
44
69

Thousands of U.S. dollars
Long-term
Lease obligations$

53,295
2,705－
31,786
－

$

1,616
848
598
393
616

9. Retirement Benefit Plan(a) Outline of employee retirement benefits
The Company and certain consolidated subsidiaries have defined benefit
retirement plans covering substantially all employees. Benefits under the plans
are covered by two plans. One is governed by the regulations of the Defined Benefit
Corporate Pension Law and the other is a severance indemnity by the Companies.
KOHA Co., Ltd. (KOHA) also has defined benefit retirement plans covering
substantially all employees. Benefits under the plans are covered by three plans.
One is an employees’ pension fund, the second is governed by the regulations of theDefined Benefit Corporate Pension Law, and the third is a severance indemnity by
KOHA.
Certain foreign consolidated subsidiaries have defined benefit pension plans anddefined benefit lump-sum payment plans. The Company also has employee
retirement benefit trusts.
During the year ended March 31, 2011, the Company and some of its domestic
consolidated subsidiaries have changed a part of their retirement benefit plansfrom defined benefit plans to defined contribution plans.
Certain foreign consolidated subsidiaries have introduced their own defined
contribution plans.
(b) Contributory defined benefit retirement plan
(1) The changes in the defined benefit obligation and fair value of plan assets
except plans for which the simplified method is applied for calculating
retirement benefit obligations adopted by certain consolidated subsidiaries,
during the years ended March 31, 2017 and 2016 were as follows:
Thousands of
U.S. dollars
2017

Millions of yen
2017

2016

Change in benefit obligations:Benefit obligation, the beginning of the year
Service cost
Interest cost
Actuarial loss (gain)
Benefit payments
Effects of changes in foreignexchange rates
Other
Benefit obligation, the end of the year¥

12,751
464
75
517
(634)

¥

(434)
¥

1
12,74011,658
426
175
1,117
(580)

$

(78)
¥

33
12,751

113,848
4,143
670
4,616
(5,661)(3,875)$

9
113,750

Change in fair value of plan assets:
Plan assets, the beginning of the year
Expected return on plan assets
Actuarial gain
Employer contributions
Benefit payments
Effects of changes in foreignexchange rates
Other
Plan assets, the end of the year

¥

¥

23

9,853
213
568
741
(483)

¥

9,916
224
(565)
771
(447)

$

87,973
1,902
5,071
6,617
(4,313)

(322)

(46)

(2,875)(0)
10,570

－
9,853

(0)
94,375¥$

(2) Changes in the defined benefit obligation and fair value of plan assets
estimated by the simplified method for calculating retirement benefit
obligations for the years ended March 31, 2017 and 2016.
Thousands of
U.S. dollars
2017

Millions of yen
2017

2016

Change in net defined benefit liability
Net defined benefit liability,
the beginning of the year
Service cost
Benefit payments
Other
Benefit obligation, the end of the year

¥

107

¥

13
(10)
－
110

¥

118

¥

12
(7)
(16)
107

$

955

$

116
(89)
－
982

(3) Reconciliation of the projected benefit obligation and plan assets with net
defined benefit liability and asset reflected on the consolidated balance sheets
as of march 31, 2017 and 2016.
Thousands of
U.S. dollars
2017

Millions of yen
2017
Funded projected benefit obligation
Plan assets¥

12,389(10,570)
1,819
461

¥

¥

2,280

¥
¥

¥
Unfunded projected benefit obligation
Net of liability and asset reported on
the consolidated balance sheets
Net defined benefit liability
Net defined benefit asset
Net of liability and asset reported on
the consolidated balance sheets

2016
12,366(9,853)
2,513
493

$

¥

3,006

$

20,357

3,236
(956)

¥

3,251
(245)

$

28,893(8,536)

2,280

¥

3,006

$

20,357¥$

110,616(94,375)
16,2414,116(4) Components of pension expense for the years ended March 31, 2017 and 2016.
Thousands of
U.S. dollars
2017

Millions of yen
2017Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial differences
Amortization of prior service cost
Other
Net pension expense

¥

¥

24

478
75
(213)
302
(29)
111
724

2016
¥

¥

439
175
(224)
78
(29)
211
650

$

$

4,268
670
(1,902)
2,696
(259)
991
6,464

(5) Remeasurements of defined benefit plans
The components of remeasurements of defined benefit plans (before tax effect)in accumulated other comprehensive income and other comprehensive income
were as follows for the years ended march 31, 2017 and 2016.
Thousands of
U.S. dollars
2017

Millions of yen
2017
Prior service cost
Net actuarial difference
Total

¥
¥

2016

29
(381)
(352)

¥

29
1,558
1,587

¥

$
$

Thousands of
U.S. dollars
2017

Millions of yen
2017
Unrecognized prior service cost
Unrecognized actuarial difference
Total

¥
¥

(164)
2,001
1,837

2016
¥

(193)
2,383
2,190

¥

259
(3,402)(3,143)$$(1,464)
17,866
16,402(6) Matters related to pension assets
i. Major components of pension assets
The fair values of plan assets, by major category, as a percentage of total plan
assets as of March 31, 2017 and 2016 were as follows.
2017
Bonds
Equity securities
Life insurance company
general accounts
Cash and cash equivalents
Other

2016

32 %
46

35 %
44

12

12

1
9
100 %

1
8
100 %

*Of total plan assets, 22% and 19% were included in a retirement benefit
trust (stocks, cash and bank deposits) established for the corporate pension
plan as of March 31, 2017 and 2016, respectively.
ii. Method for expected long-term rate of return on pension plan
The Companies determine the expected long-term rate of return on pension
plan assets based on the current and expected asset allocation, as well as thecurrent and expected long-term rate of return from various assets whichconstitute the plan assets.

25

(7) Assumptions used in actuarial calculations
The assumptions used in accounting for the above plans for the years ended
March 31, 2017 and 2016 were as follows.

Discount rates
Expected rate of long-term
return on plan assets
Expected rates of salary

2017

2016

0.0 ~ 5.3 %0.0 ~ 5.3 %1.8 ~ 3.3

1.8 ~ 3.1

3.9 ~ 5.0

3.9 ~ 5.0(c) Defined contribution plans
The required contributions by the Companies were ¥171 million ($1,527 thousand)and ¥185 million as of March 31, 2017 and 2016, respectively.

26

10. Other Comprehensive Income
Reclassification adjustments and the related tax effects for components of othercomprehensive income for the years ended March 31, 2017 and 2016 were as follows:
Thousands of
U.S. dollars
2017

Millions of yen
2017

2016

Unrealized holding gain (loss) on securities
Amount arising during the period
Reclassification adjustments for gains andlosses included in net income
Before tax effectTax effectUnrealized holding gain (loss) on securities
Deferred gain (loss) from hedging instruments
Amount arising during the period
Reclassification adjustments for gains andlosses included in net income
Before tax effectTax effect
Deferred gain (loss) from hedging instruments
Translation adjustments
Amount arising during the period
Reclassification adjustments for gains andlosses included in net income
Before tax effectTax effectTranslation adjustments
Retirement benefits liability adjustments
Amount arising during the period
Reclassification adjustments for gains andlosses included in net income
Before tax effectTax effect
Retirement benefits liability adjustments
Share of other comprehensive income ofaffiliates accounted for by the equity method
Amount arising during the period
Total amount of other comprehensive income

27

¥

¥

174

¥

(336)

$

1,554

(7)

－

(63)

167
(2)
165

(336)
55
(281)

1,491
(18)
1,473

(1)

(3)

(9)

－

－

－

(1)
0
(1)

(3)
1
(2)

(9)
0
(9)

(1,356)(868)(12,107)－－－(1,356)(7)(1,363)

(868)
－
(868)

(12,107)(63)(12,170)

34(1,636)

304

318

48

2,839

352
4
356

(1,588)
11(1,577)

3,143
36
3,179

(130)

(79)

(1,161)(973)¥(2,807)$(8,688)

11. Treasury Stock
The Company had 759 thousand shares and 775 thousand shares of treasury stock asof March 31, 2017 and 2016, respectively, in order to prepare for the exercise of stock
options granted to certain directors and executive officers, subject to the approval of
the General Meeting of Shareholders.
The amount of treasury stock is stated at cost and is presented as a separate
component of shareholders’ equity.
12. Selling, General and Administrative Expenses
For the years ended March 31, 2017 and 2016, the significant components of selling,
general and administrative expenses were as follows:

Millions of yen
2017
Salaries
Pension expense
Research and development expense
Freight
Reserve for directors’ bonuses
Accrued bonuses

¥

5,888
597
1,166
1,843
64
717

2016
¥

5,941
449
1,182
1,942
65
637

Thousands of
U.S. dollars
2017$

52,571
5,330
10,411
16,455571
6,402

13. Research and Development Expenses
Total research and development expenses included in manufacturing costs andselling, general and administrative expenses amounted to ¥1,209 million($10,795thousand) and ¥1,240 million for the years ended March 31, 2017 and 2016,
respectively.

28

14. Income Taxes
As of March 31, 2017 and 2016, the significant components of deferred tax assets andliabilities were as follows:
Millions of yen
2017
Deferred tax assets:
Accrued enterprise taxes
Accrued bonuses
Net defined benefit liability
Tax loss carryforwards
Loss on valuation of investment securities
Loss on impairment of fixed assets
Other
Total
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Unrealized holding gain (loss) on securities
Other
Total deferred tax liabilities
Net deferred tax assets

¥

¥

¥

¥

2016

62
348
915
2,229
334
99
604
4,591
(3,674)
917

¥

119
479
598
319

¥

¥

Thousands of
U.S. dollars
2017

53
318
969
2,374
280
142
504
4,640
(3,778)
862

$

117
440
557
305

$

¥

$

554
3,107
8,170
19,902
2,982
884
5,392
40,991(32,804)
8,187

1,063
4,276
5,339
2,848

$

The reconciliation between the statutory tax rate and the effective tax rate for theyears ended March 31, 2017 and 2016 was as follows:2017
Statutory tax rate
Effect of:
Non-deductible expenses
Non-taxable items
Inhabitant tax on per capita basis
Amortization of goodwill
Equity in earnings of affiliates
Tax rate difference applied forforeign subsidiaries
Change in valuation allowance
Foreign income taxes
Adjustment on deferred tax assets
due to change in income tax rate
Others
Effective tax rate

29

2016

30.9 %

33.0 %

1.3
(4.1)
0.6
0.5
(1.1)

2.0
(0.3)
0.9
1.0
(2.5)

(5.8)

(2.2)

(4.8)
1.4

(1.6)
8.7

－

1.2

3.2
22.1 %

9.7
49.9 %

15. Leases
Finance lease transactions (lessee)(a) Finance lease transactions with ownership transfer
Lease assets;
・Property, plant and equipment: Not applicable・Intangible fixed assets: Software
Lease assets are depreciated using the same method as fixed assets.
(b) Finance lease transactions without ownership transfer
Lease assets;
・Property, plant and equipment: Building and structures, machinery andequipment in connection with Electronic Components business, tools andfixtures in connection with IT, and warehouse facilities
・Intangible fixed assets: Software
Lease assets are depreciated by the straight-line method over the respective
lease terms, assuming no residual value.
Operating lease transactions (lessee)
The future payments under non-cancelable operating leases as of March 31, 2017and 2016 were as follows:
Millions of yen
2017
Due within one year
Due after one year

¥

179
328
507

¥

30

2016
¥
¥

239
516
755

Thousands of
U.S. dollars
2017
$
$

1,598
2,929
4,527

16. Derivative Financial Instruments
The Companies do not hold or issue derivatives for trading purposes and it is theCompanies’ policy to use derivatives only for the purpose of reducing exposure tomarket risks and financing costs in accordance with internal policies.
The Companies do not anticipate any losses resulting from default of thecounterparties as these are limited to major financial institutions with sound credit
ratings.
As of March 31, 2016, there was no derivative transaction outstanding for which
hedge accounting has not been applied. As of March 31, 2017, for which hedge
accounting has not been applied is summarized as follows:(a) Foreign currency-related transactions
As of March 31, 2017
Millions of yen
Contract
amountDerivative transactions

Portion maturing
over one year

Fair value

Difference

Transactions outside the market:
Forward foreignexchange contracts:
Buy
USD

¥

186

¥

－

¥

0

¥

0

As of March 31, 2017
Thousands of U.S. dollars
Contract
amountDerivative transactions

Portion maturing
over one year

Fair value

Difference

Transactions outside the market:
Forward foreignexchange contracts:
Buy
USD

$

1,661

$

－

$

0

$

0

The notional amounts and the fair value of the derivative instruments outstanding asof March 31, 2017 and 2016, for which hedge accounting has been applied aresummarized as follows:31

As of March 31, 2017
Millions of yen
Derivative transactions

Main hedged
items

Contract
amountPortion maturing
over one year

Fair value

Foreign exchange allocation method:
Forward foreignexchange contracts:
Sell
USD
EUR

Trade
accounts
receivable

¥

2,169

¥

－

¥

[*1]

45

－

[*1]

1,688

－

[*1]

Contracts
outstanding

5

－

(0)

Contracts
outstanding

137

－

(1)

Buy
USD

Trade
accounts
payableDeferral hedge accounting:
Forward foreignexchange contracts:
Sell
USD
Buy
USD
Total

¥

32

4,044

¥

－

¥

(1)

As of March 31, 2016
Millions of yen
Derivative transactions

Main hedged
items

Contract
amountPortion maturing
over one year

Fair value

Foreign exchange allocation method:
Forward foreignexchange contracts:
Sell
USD
EUR

Trade
accounts
receivable

¥

1,860

¥

－

¥

[*1]

45

－

[*1]

1,368

－

[*1]

Contracts
outstanding

9

－

0

Contracts
outstanding

12

－

(0)

Buy
USD

Trade
accounts
payableDeferral hedge accounting:
Forward foreignexchange contracts:
Sell
USD
Buy
USD
Total

¥

33

3,294

¥

－

¥

0

As of March 31, 2017
Thousands of U.S. dollars
Derivative transactions

Main hedged
items

Contract
amountPortion maturing

Fair value

over one year

Foreign exchange allocation method:
Forward foreignexchange contracts:
Sell
USD
EUR

Trade
accounts
receivable$

19,366

$

－

$

[*1]

402

－

[*1]

15,071－[*1]

Contracts
outstanding

45

－

(0)

Contracts
outstanding

1,223

－

(9)

Buy
USD

Trade
accounts
payableDeferral hedge accounting:
Forward foreignexchange contracts:
Sell
USD
Buy
USD
Total

$

36,107

$

－

$

(9)

[*1] The fair value is included in the fair value of the accounts receivable-trade since theforward foreign exchange contracts are accounted for as part of accounts receivable under the
allocation method for hedge accounting.
[*2] Price provided by financial institutions.

[*1] The fair value is included in the fair value of the accounts receivable-trade and theaccounts payable-trade since the forward foreign exchange contracts are accounted
for as part of accounts receivable and payable under the allocation method forhedge accounting.
[*2] Price provided by financial institutions.

(b) Interest rate-related transactions
As of March 31, 2017
Millions of yen
Derivativetransactions

Main hedged
itemsInterest-rate swaps:
Pay fixed and receive
variableLong-term
debt

Contract
amount

¥

34

8,522

Portion maturing
over one year

¥

5,691

Fair value¥[*]As of March 31, 2016
Millions of yen
Derivativetransactions

Main hedged
itemsInterest-rate swaps:
Pay fixed and receive
variableLong-term
debt

Contract
amount¥Portion maturing

Fair value

over one year

11,862

¥

7,022

¥

[*]

As of March 31, 2017
Thousands of U.S. dollars
Derivativetransactions

Main hedged
itemsInterest-rate swaps:
Pay fixed and receive
variableLong-term
debt

Contract
amount$76,089Portion maturing
over one year$

50,813

Fair value$[*][*] The fair value is included in the fair value of long-term debt since the short-cut
method is applied.

17. Contingent Liabilities(a) Financial guarantees
As of March 31, 2017, the Company is contingently liable as a guarantor ofborrowings for non-consolidated subsidiaries (TE Energy Co., Ltd. and Novel
Crystal Technology, Inc.) in the amounts of ¥297 million ($2,652 thousand) and¥27 million ($241 thousand), respectively.
As of March 31, 2017, the Company was contingently liable as a guarantor ofborrowings for non-consolidated subsidiaries (TE Energy Co., Ltd. and Novel
Crystal Technology, Inc.) in the amounts of ¥300 million and ¥30 million,
respectively.
(b) Litigation
Bombardier Transportation Sweden AB (“BT”) made a request for arbitration
against Tamura Europe Limited (“Tamura-Europe”), consolidated subsidiary of theCompany, in the International Chamber of Commerce for damages concerning
malfunctions of certain products ordered by said company. Tamura-Europe
received notice of the acceptance of the request for arbitration on January 16,
2017.
Tamura-Europe believes that it is not liable against BT for damages and iscurrently investigating the situation. Tamura-Europe intends to clearly state its
claims during the arbitration process.
An outline of the arbitration is as follows;(1) Location of request for arbitration and others- Location: Zurich (Switzerland)- Rules governing arbitration:
Rules of Arbitration of the International Chamber of Commerce- Governing laws: Laws of Switzerland- Date of request for arbitration: December 23, 201635

(2) Name of entity requesting arbitration
Bombardier Transportation Sweden AB (Vasteras, Sweden)(3) Details of the request for arbitration and amount of damage claims- Details of request:
Payment for damages concerning malfunctioning products delivered by
Tamura-Europe- Amount claimed: 7,630,816 Euro (¥936 million as of December 31, 2016)(4) Outlook
Tamura-Europe believes that it is not liable against BT for damages andintends to clearly state its claims during the arbitration process. Although it isconceivable that a loss or other impact may occur as a result of this matter, at
this stage it is not possible to make a realistic assessment of what any suchimpact may be, and as such no effect is included in the consolidated financial
statements.
18. Loan Commitment
In order to achieve more efficient and flexible financing, the Company has concluded
loan commitment contracts with five financial institutions.
The status of these contracts as of March 31, 2017 and 2016 is summarized asfollows:
Millions of yen
2017
Maximum overdraft amountand total amount of loan commitment
Executed loan amounts
Net amount2016

Thousands of
U.S. dollars
2017

¥

2,500

¥

2,500

$

22,321

¥

－
2,500

¥

－
2,500

$

－
22,321

19. Loss on Impairment of Fixed Assets
The Companies recognized impairment losses for the following group of assets during
the year ended March 31, 2016.
For the year ended March 31, 2016
Business division
Electronic
Components

Location
Hamamatsu-shi,
Shizuoka, Japan

Use

Facilities

Category
Buildings and structures,
machinery and equipment,
investments and other assets

Millions of yen¥

76

Loss on impairment of fixed assets:
At the Board of Directors meeting held on January 27, 2016, the Company resolved toclose a factory of a consolidated subsidiary, Koha, in Hamamatsu.
As a result an impairment loss was recognized on certain fixed assets.

36

(Asset categories)
Machinery and vehicles: ¥8million
Equipment: ¥1million
Investment: ¥57million
Relocation expenses and other: ¥10 million
Asset grouping:
Assets are generally grouped by the smallest level that generates independent cash
flows, based on the business segmentation.
Estimation of the recoverable amount:
The amount recoverable is measured by the net selling amount based on appraisal
value.
The Companies recognized impairment losses for the following group of assets during
the year ended March 31, 2017.
For the year ended March 31, 2017
Thousands ofBusiness division

Location

Use

Category

Millions of yen

U.S. dollars¥$

Electronic
Components

Sakado-shi, Saitama,Japan

Facilities

Buildings and structures,
machinery and equipment

Electronic
Components

Kurihara-shi, Miyagi,
Japan

Facilities

Buildings and structures

80

714

Systems

Taipei City, Taiwan

Facilities

Buildings and structures

65

580

Electronic
Components

Sakado-shi, Saitama,Japan

Business assets

Goodwill

61

545Electronic
Components

Selangor, Malaysia

Business assets

Goodwill

52

464Electronic
Components

Numata-shi, Gunma,Japan

Idle properties

Land

93

830

Electronic
Components

Hamamatsu-shi,
Shizuoka, Japan

Investment
properties

Investments and otherassets246

2,197

Electronic
Chemicals / FA

Total

¥

34
631

$

304
5,634

Loss on impairment of fixed assets:
The Company resolved the project of rebuilding factories in Saitama and Miyagi. As aresult, an impairment loss was recognized on certainfacilities.
The Company resolved to dispose a factory in Taiwan due to aging. As a result, an
impairment loss was recognized on certainfacilities.
The Company found it difficult to achieve the assumed earnings due to thereconsideration of the business plan, an impairment loss was recognized on certain
business assets.
As the idle properties significantly decreased inmarket value, a loss on impairment
was also recognized by writing-down the book value to a recoverable amount.
As the investment properties decided to be sold, a loss on impairment was recognizedby writing-down the book value to a recoverable amount.
37

(Asset categories)
Buildings and structures: ¥385 million ($3,438 thousand)Equipment: ¥6 million ($54 thousand)
Land: ¥93 million ($830 thousand)
Goodwill: ¥113 million ($1,009thousand)
Investment: ¥33 million ($295 thousand)Expense of real estate appraiser: ¥1 million ($8 thousand)Asset grouping:
Assets are generally grouped by the smallest level that generates independent cash
flows, based on the business segmentation.
Estimation of the recoverable amount:
The amount recoverable is measured by the net selling amount based on appraisal
value.
20. Stock Options(a) Stock options expenses recognized in selling, general and administrative
expenses for the years ended March 31, 2017 and 2016
Thousands of
U.S. dollars
2017

Millions of yen
2017
Selling, general and administrative expenses¥(b) Outline of stock options and changes
a. Outline of stock options

38

2016
11

¥

15

$

98

TAMURA CORPORATION TAMURA CORPORATION TAMURA CORPORATIONThe 2nd Stock Option Plan The 3rd Stock Option Plan The 4th Stock Option Plan
June 29, 2005
June 29, 2006
June 28, 2007
Directors 6
Directors 6
Directors 6
Title and number of grantees (Exclude outside director) (Exclude outside director) (Exclude outside director)
Executive officers 9
Executive officers 6
Executive officers 7
Number of stock options
Common shares 35,000
Common shares 28,000
Common shares 30,000
Grant dateJuly 1, 2005
July 1, 2006
July 1, 2007
Retirement of director
Retirement of director
Retirement of director
Condition for vestingand executive officer
and executive officer
and executive officer
Requisite service period
N.A.
N.A.
N.A.
For the period of five
July 1, 2006 to
July 1, 2007 to
years from the next day of
Exercise period
retirement of director andJune 30, 2036
June 30, 2037
executive officer
Date of resolution

TAMURA CORPORATION TAMURA CORPORATION TAMURA CORPORATION
The 5th Stock Option Plan The 6th Stock Option Plan The 7th Stock Option Plan
June 27, 2008
June 26, 2009
June 29, 2010
Directors 6
Directors 6
Directors 6
Title and number of grantees (Exclude outside director) (Exclude outside director) (Exclude outside director)
Executive officers 6
Executive officers 4
Executive officers 6
Number of stock options
Common shares 42,000
Common shares 77,000
Common shares 52,000
Grant dateJuly 1, 2008
July 1, 2009
July 1, 2010Retirement of director
Retirement of director
Retirement of director
Condition for vestingand executive officer
and executive officer
and executive officer
Requisite service period
N.A.
N.A.
N.A.
July 1, 2008 to
July 1, 2009 to
July 1, 2010 to
Exercise period
June 30, 2038
June 30, 2039
June 30, 2040
Date of resolution

TAMURA CORPORATION TAMURA CORPORATION TAMURA CORPORATION
The 8th Stock Option Plan The 9th Stock Option Plan The 10th Stock Option Plan
June 29, 2011
June 28, 2012
June 27, 2013
Directors 6
Directors 6
Directors 6
Title and number of grantees (Exclude outside director) (Exclude outside director) (Exclude outside director)
Executive officers 6
Executive officers 6
Executive officers 6
Number of stock options
Common shares 65,000
Common shares 72,000
Common shares 78,000
Grant dateJuly 1, 2011
July 1, 2012
July 1, 2013
Retirement of director
Retirement of director
Retirement of director
Condition for vestingand executive officer
and executive officer
and executive officer
Requisite service period
N.A.
N.A.
N.A.
July 1, 2011 toJuly 1, 2012 toJuly 1, 2013 to
Exercise period
June 30, 2041
June 30, 2042
June 30, 2043
Date of resolution

TAMURA CORPORATION TAMURA CORPORATION TAMURA CORPORATION
Date of resolution

The 11th Stock Option Plan The 12th Stock Option Plan

The 13th Stock Option Plan

June 26, 2014
June 26, 2015
June 28, 2016
Directors 6
Directors 7
Directors 6
Title and number of grantees (Exclude outside director) (Exclude outside director) (Exclude outside director)
Executive officers 6
Executive officers 5
Executive officers 5
Number of stock options
Common shares 52,000
Common shares 36,000
Common shares 50,000
Grant dateJuly 1, 2014
July 1, 2015
July 1, 2016Retirement of director
Retirement of director
Retirement of director
Condition for vestingand executive officer
and executive officer
and executive officer
Requisite service period
N.A.
N.A.
N.A.
July 1, 2014 to
July 1, 2015 toJuly 1, 2016 to
Exercise period
June 30, 2044
June 30, 2045
June 30, 2046

The Company's stock option plans were designed as stock compensation to directors andexecutive officers after the directors’ retirement benefit plan was abolished in June 2005.

39

b. Stock options granted and changes
The movement in stock options for the year ended Mach 31, 2017 is presented
after conversion to number of shares.
Number of stock options
Date of resolution
Before vested
Previous fiscal year-end
GrantedForfeited
VestedOutstanding
After vested
Previous fiscal year-end
VestedExercised
Forfeited
Exercisable
Date of resolution
Before vested
Previous fiscal year-end
GrantedForfeited
VestedOutstanding
After vested
Previous fiscal year-end
VestedExercised
Forfeited
Exercisable
Date of resolution
Before vested
Previous fiscal year-end
GrantedForfeited
VestedOutstanding
After vested
Previous fiscal year-end
VestedExercised
Forfeited
Exercisable(Shares)
TAMURA CORPORATION TAMURA CORPORATION TAMURA CORPORATIONThe 2nd Stock Option Plan The 3rd Stock Option Plan The 4th Stock Option Plan
June 29, 2005
June 29, 2006
June 28, 2007

13,000－－－13,00013,000－－－13,00016,000－－－16,000

－
－
－
－
－

－
－
－
－
－

－
－
－
－
－

TAMURA CORPORATION TAMURA CORPORATION TAMURA CORPORATION
The 5th Stock Option Plan
The 6th Stock Option Plan The 7th Stock Option Plan
June 27, 2008
June 26, 2009
June 29, 2010

23,000－－－23,00059,000－－－59,00042,000－－－42,000

－
－
－
－
－

－
－
－
－
－

－
－
－
－
－

TAMURA CORPORATION TAMURA CORPORATION TAMURA CORPORATION
The 8th Stock Option Plan The 9th Stock Option Plan The 10th Stock Option Plan
June 29, 2011
June 28, 2012
June 27, 2013

46,000－－－46,00061,000－－－61,00074,000－－－74,000

9,000
－
9,000
－
－

4,000
－
4,000
－
－

4,000
－
4,000
－
－

TAMURA CORPORATION TAMURA CORPORATION TAMURA CORPORATION
Date of resolution
Before vested
Previous fiscal year-end
GrantedForfeited
VestedOutstanding
After vested
Previous fiscal year-end
VestedExercised
Forfeited
Exercisable

The 11th Stock Option Plan

The 12th Stock Option Plan

The 13th Stock Option Plan

June 26, 2014

June 26, 2015

June 28, 2016

50,000－－－50,00035,000－－2,000
33,000－50,000－－50,000

2,000
－
2,000
－
－

－
2,000
2,000
－
－

－
－
－
－
－

40

Price information(Yen)

Date of resolution

TAMURA CORPORATION TAMURA CORPORATION TAMURA CORPORATIONThe 2nd Stock Option Plan The 3rd Stock Option Plan The 4th Stock Option Plan
June 29, 2005
June 29, 2006
June 28, 2007

1－－

Exercise price
Average stock price at exercise

Fair value at the grant date
Date of resolution

1
－
653

TAMURA CORPORATION TAMURA CORPORATION TAMURA CORPORATION
The 5th Stock Option Plan
The 6th Stock Option Plan The 7th Stock Option Plan
June 27, 2008
June 26, 2009
June 29, 2010

1
－
426

Exercise price
Average stock price at exercise

Fair value at the grant date
Date of resolution

1
－
464

1
－
348

1
－
203

TAMURA CORPORATION TAMURA CORPORATION TAMURA CORPORATION
The 8th Stock Option Plan The 9th Stock Option Plan The 10th Stock Option Plan
June 29, 2011
June 28, 2012
June 27, 2013

Average stock price at exercise

1
275

1
258

1
258

Fair value at the grant date

203

151

163

Exercise price

TAMURA CORPORATION TAMURA CORPORATION TAMURA CORPORATION
Date of resolution

The 11th Stock Option Plan The 12th Stock Option Plan

June 26, 2014
Exercise price
Average stock price at exercise

Fair value at the grant dateJune 26, 2015

1
258
321

The 13th Stock Option Plan

June 28, 2016

1
280
423

1
－
229

(c) Valuation technique used to determine the fair value of stock options
TAMURA CORPORATION The 13th plan stock options granted in the fiscal year
were valued using the following valuation technique.
Valuation technique: Black-Scholes option-pricing model
Principal assumptions used in the option-pricing model:
TAMURA CORPORATION
Date of resolution

The 13th Stock Option Plan

June 28, 2016
Expected volatility(*1)
Average expected life(*2)
Expected dividends(*3)
Risk-free interest rate(*4)

44.34%
10 years
7 yen per share-0.24%(*1) Calculated based on the actual stock prices from April 2006 to June 2016.
(*2) The average expected life could not be estimated rationally as data wasinsufficient. Therefore, it was estimated assuming that the options were
exercised at the 1/3 point of the exercise period.
(*3) Calculated based on actual dividends on common stock for the year ended
March 31, 2016, the dividend policy of the Company and prior years’ actual
dividends.
(*4) Japanese government bond yield corresponding to the average expected life.

41

(d) Method of estimating number of stock options forfeited
Only the actual number of forfeited stock options is reflected because it is difficult
to rationally estimate the actual number of stock options that will be forfeited in
the future.
21. Segment Information(a) Overview of reportable segments
The reportable segments of the Companies are components for which separate
financial information is available and which are reviewed regularly by the boardof directors in deciding resource allocation and in assessing performance.
Each business division develops comprehensive business strategies for products
in Japan and overseas and conducts business activities.
Accordingly, the Company consists of three reportable segments, identified by the
products and based on the business divisions, which are classified as the“Electronic Components” business, the “Electronic Chemicals / FA Systems”
business and the “Information Equipment” business.
The “Electronic Components” business manufactures transformers, AC adaptors,
switching supply units, piezoceramic products and LED products. The “Electronic
Chemicals / FA Systems” business manufactures flux, solder paste, solder resist
and automatic soldering equipment. The “Information Equipment” business
manufactures network equipment, broadband equipment, wireless microphone
and information equipment.
(b) Calculation method for net sales, segment income or loss, and other items of thereportable segments
The accounting policies of the segments are substantially the same as thosedescribed in Significant Accounting Policies.
Segment income is based on operating income.
Inter-segment sales are recorded at the same prices used in transactions withthird parties.

42

(c) Information on net sales, income or loss, assets and liabilities, and other items by
the reportable segment
Year ended March 31, 2017
Millions of yen

Electronic
Components

Reportable segments
Electronic
Chemicals /Information
FA Systems
Equipment

¥

¥

Other
(*1)

Subtotal

Total

Adjustments(*2)

79,607¥

Consoli－
dated
(*3)

Net Sales
SalesCustomers
Inter-segment
Segment
income (loss)

51,94923,568

¥

4,031

¥

79,548

¥

59

¥

－

¥

79,607

6

137

23

166

615

781

(781)

－

51,95523,705

4,054

79,714674

80,388(781)

79,607

¥

2,445

¥

2,970

¥

321

¥

5,736

¥

(48)

¥

5,688

¥

(571)

¥

5,117

¥

1,255

¥

841

¥

126

¥

2,222

¥

20

¥

2,242

¥

17

¥

2,259

¥

76

¥

－

¥

－

¥

76

¥

－

¥

76

¥

－

¥

76

¥

1,217

¥

366

¥

26

¥

1,609

¥

13

¥

1,622

¥

36

¥

1,658

Other items
Depreciation andamortization
Amortization of
goodwill
Increase in tangible
and intangible
fixed assets

Year ended March 31, 2016
Millions of yen

Electronic
Components

Reportable segments
Electronic
Chemicals /Information
FA Systems
Equipment¥

54,602
24
54,626

¥

¥

974

¥

Other
(*1)

Subtotal

Total

Adjustments(*2)

84,642813
85,455¥

Consoli－
dated
(*3)

Net Sales
SalesCustomers
Inter-segment
Segment
income (loss)

24,742130
24,872

¥

5,251
32
5,283

¥

84,595
186
84,781

¥

¥

3,183

1,377

¥

¥

105

¥

1,539

47
627
674

¥

¥

678

¥

4,835

1,071

¥

135

¥

¥

－

¥

－

¥

631

¥

159

－
(813)
(813)

¥

¥

(14)

¥

4,821

2,583

¥

27

¥

¥

105

¥

－

¥

2,329

¥

53

84,642

¥

(555)

¥

4,266

2,610

¥

49

¥

2,659

¥

105

¥

－

¥

105

¥

2,382

¥

7

¥

2,389

－
84,642Other items
Depreciation andamortization
Amortization of
goodwill
Increase in tangible
and intangible
fixed assets

43

Year ended March 31, 2017
Thousands of U.S. dollars

Electronic
Components

Reportable segments
Electronic
Chemicals /Information
FA Systems
Equipment

$

$

Other
(*1)

Subtotal

Total

Adjustments(*2)

710,777$

Consoli－
dated
(*3)

Net Sales
SalesCustomers
Inter-segment
Segment
income (loss)

463,830

210,429$

35,991$

710,250

$

527

$

－

$

710,777

54

1,223

205

1,482

5,491

6,973

(6,973)－463,884

211,652

36,196

711,732

6,018

717,750(6,973)

710,777$

21,830$26,518

$

2,866

$

51,214

$

(428)

$

50,786$(5,098)$45,688$

11,205

$

7,509

$

1,125

$

19,839$179$

20,018$152$

20,170

$

679

$

－

$

－

$

679

$

－

$

679

$

－

$

679

$

10,866

$

3,268

$

232

$

14,366$116$

14,482$322$

14,804

Other items
Depreciation andamortization
Amortization of
goodwill
Increase in tangible
and intangible
fixed assets(*1) “Other” includes businesses not included in the reportable segments, which
includes the transportation, warehouse businesses in the years ended March
31, 2017 and 2016.
(*2) Adjustments for segment income (loss) were as follows:
Millions of yen
2017Inter-segment eliminations
Corporate costs (*)
Total

¥

78
(649)
(571)

¥

2016
¥
¥

62
(616)
(554)

Thousands of
U.S. dollars
2017
$
$

697
(5,795)(5,098)* Corporate costs are mainly future R&D expenses at the head office, which are notallocated to the reportable segments.

(*3) Segment income is adjusted with operating income in the consolidated
statement of income.
(*4) Adjustments for “Depreciation and amortization” and “Increase in tangible andintangible fixed assets” are mainly capital investment and depreciation
relating to future R&D assets at the head office, which are not allocated to thereportable segments.
(*5) Assets of the Company are not allocated to the business segments.

44

(d) Related information(1) Information by product and service

SalesCustomers

SalesCustomers

SalesCustomers

Electronic
Components

Year ended March 31, 2017
Millions of yen
Electronic
Chemicals /Information
FA Systems
Equipment
Other

Consolidated

¥

¥

¥

51,94923,568

¥

4,031

¥

59

79,607

Electronic
Components

Year ended March 31, 2016
Millions of yen
Electronic
Chemicals /Information
FA Systems
Equipment
Other

Consolidated

¥

¥

¥

54,602

24,742

¥

5,251

¥

47

Electronic
Components

Year ended March 31, 2017
Thousands of U.S. dollars
Electronic
Chemicals /Information
FA Systems
Equipment
Other

$

$

463,830

210,429$

35,991$

84,642

Consolidated

527$

710,777(2) Information by geographical area
i. SalesJapan
Net Sales¥

35,467¥

Japan
Net Sales¥

36,563¥

Asia

Year ended March 31, 2017
Millions of yen
North andSouth
EuropeAmerica

34,650¥Asia

Year ended March 31, 2016
Millions of yen
North andSouth
EuropeAmerica

38,554

¥

45

5,804

5,881

¥

¥

3,360

3,643

Consoli－
dated

Other
¥

326

¥

Consoli－
dated

Other
¥

79,607

1¥

84,642

Asia

Year ended March 31, 2017
Thousands of U.S. dollars
North andSouth
EuropeAmerica

309,375$

Japan
Net Sales$

316,670$

51,821$

Consoli－
dated

Other

30,000

$

2,911

$

710,777

ii. Property, plant and equipment
Year ended March 31, 2017
Millions of yen
North and
South
Asia
EuropeAmericaJapan
Property, plantand equipment¥

10,689¥¥11,593¥$

95,437

275

¥

189

¥

6,826

¥

379

¥

205

$

51,804

$

2,455

$

1,688

16,955

Consoli－dated¥Year ended March 31, 2017
Thousands of U.S. dollars
North and
South
Asia
EuropeAmericaJapan
Property, plantand equipment¥

Year ended March 31, 2016
Millions of yen
North and
South
Asia
EuropeAmericaJapan
Property, plantand equipment

5,802

Consoli－
dated

19,003

Consoli－
dated$

151,384(3) Information by major customer
This information has been omitted because there is no specific customer
representing 10% or more of net sales recorded in the consolidated statements
of income for the years ended March 31, 2017 and 2016.

46

(e) Information about impairment loss on fixed assets for each reportable segment

Impairment loss

Impairment loss

Impairment loss

Electronic
Components

Year ended March 31, 2017
Millions of yen
Electronic
Chemicals /Information
FA Systems
Equipment
Other

¥

¥

566

65

¥

¥

－

Electronic
Components
¥

¥

¥

－

¥

－

Electronic
Components
$

$

580

$

$

－

631

Consolidated¥－

Year ended March 31, 2017
Thousands of U.S. dollars
Electronic
Chemicals /Information
FA Systems
Equipment
Other

5,054

¥

－

Year ended March 31, 2016
Millions of yen
Electronic
Chemicals /Information
FA Systems
Equipment
Other

76

Consolidated

76

Consolidated
$

－

5,634

(f) Information about amortization and balance of goodwill for each reportablesegment:

Amortization
Balance as ofMarch 31

Amortization
Balance as ofMarch 31

Electronic
Components

Year ended March 31, 2017
Millions of yen
Electronic
Chemicals /Information
FA Systems
Equipment
Other

¥

¥

76
204

－

¥

－

－

¥

－

Electronic
Components
¥

¥

462

－
－

47

¥

－
－

－

¥

¥

76
204

－

Year ended March 31, 2016
Millions of yen
Electronic
Chemicals /Information
FA Systems
Equipment
Other

105

Consolidated

Consolidated
－
－

¥

105
462

Amortization
Balance as ofMarch 31

Electronic
Components

Year ended March 31, 2017
Thousands of U.S. dollars
Electronic
Chemicals /Information
FA Systems
Equipment
Other

$

$

679

－

1,821

$

－

－

$

Consolidated
－

－

$

679
1,821

－

(g) Information about gains on negative goodwill for each reportable segment
Fiscal years ended March 31, 2017 and 2016: Not applicable
22. Related Party Transactions

RelatedParty
ClosefamilymemberRelatedParty
ClosefamilymemberName

Location

CapitalItsuyaTamura－－Name

Location

CapitalItsuyaTamura－－Year ended March 31, 2017
Ownership
Ratio ofBusiness or
VotingRelationOccupation
Rightsship

Detail ofTransaction

Executive
adviser

Payment ofadvisory fee(Owened)Direct: 0.0%－

Transaction
Amount¥14 million( $125 thousand )Year ended March 31, 2016
Ownership
Ratio ofBusiness or
VotingRelationOccupation
Rightsship

Detail ofTransaction

Transaction
AmountExecutive
adviser

Payment ofadvisory fee¥10 million(Owened)Direct: 0.0%－(*1) Itsuya Tamura, the executive advisor of the Company, is the father of Naoki
Tamura, the representative director of the Company. The Company believes
that management systems can be further strengthened by receiving Mr. Itsuya
Tamura’s advice on overall management based on his long business experience,
profound insight and strong connections gained through his involvement inmanagement as the representative director and the chairman of the Company
at past.
Remuneration is determined in accordance with the Company’s internal rules.
(*2)“Amount of transaction” excludes consumption taxes, while “Ending balance” isreported inclusive of consumption taxes.
23. Subsequent Events
There were no significant subsequent events for the years ended March 31, 2017and 2016.

48